A new twist on an old story: renewed hope for impact from large companies
I have been lucky enough to meet the women entrepreneurs of 2 Chak Village, Sargodha district in Pakistan three times over the last two years. They tell inspiring stories of how selling high-quality hygiene products to their fellow women has brought them valuable income, but also respect and empowerment. Many of them have had extremely difficult—and sometimes tragic—lives, but they have seized the opportunity to turn things around by participating in an innovative new distribution model that is being set up by a group of multinational and large local companies.
This is such a great example of inclusive business that I have used it many times already in workshops and blogs, even though the business model still has some way to go until it is commercially sustainable at scale. And this is the catch. There are not enough success stories from large companies. We keep returning to the same few to convince ourselves that there really is evidence that intrapreneurship can have impact.
This seems to be because, over the last decade, many multinational corporations have tried to implement inclusive business models, yet very few have been successful. In a recent report, Hystra spoke to business leaders in 20 multinational companies across a variety of sectors and geographies. Despite good intentions and significant resources invested in pilots of inclusive business, very few of these could point to many business models that had reached significant scale or been replicated internationally.
There is the same message from a 2019 publication from Endeva. They suggest that large companies often struggle with building successful inclusive business models and, while encouraging examples exist, many good initiatives have not been taken forward to achieve their full potential, often due to internal challenges.
Business Fights Poverty and the League of Intrapreneurs reach the same conclusion from their interviews with 34 practitioners stating that ‘intrapreneurs still face myriad barriers along their journey to social innovation and systems change, including personal barriers linked to available resources and skills; functional barriers which inhibit collaboration; cultural barriers flowing from unsupportive organisational mindsets; and strategic barriers relating to short-term and conflicting business priorities.’
To build on these accounts, Accenture Development Partnerships have recently reviewed over 300 examples of inclusive business, searched for profit figures for over 200 and discussed this topic with over 30 practitioners in interviews. They found that many of these business models are not designed to capture and monetise data about social benefits, which means they do not manage to create a compelling business case and get ongoing investment to scale. More generally, they found that there is a focus on the early stages of innovation and on doing lots of new, exciting pilots, but much less focus on identifying what has worked best and supporting ventures to scale up, even after genuinely successful pilots.
All of the reports mentioned—plus one from Business Call to Action—were produced from a recent research initiative funded by DFID’s Business Innovation Facility. The aim was to understand better what large companies can do to improve their performance in this area. The reports were prepared separately, but there was collaboration in the form of two workshops to discuss common themes and approach. Now that they have been published, the same partners are working together to amplify the reports under the ‘Inclusive Business Boost’ initiative. This level of attention gives us reason to be hopeful.
The report findings are positive. They suggest that there are still ways for larger companies to become more successful in developing impactful and scalable inclusive business models. These all involve approaches to address the internal constraints that are currently stopping this from happening. However, the recipes they propose for baking the inclusive business cake are different.
Hystra identifies a series of practical steps that multinational companies can take. Business Call to Action looks more systematically at the management practices employed by successful companies and how these can be replicated. Business Fights Poverty and the League of Intrapreneurs consider how a company can maintain an ecosystem that enables and empowers employees to develop innovative business models. Accenture Development Partnerships suggests that companies use ‘fail fast’ innovation structures and look for profitability by learning from some of the newly emerging southern giants—such as Gojek and Jumia—that have platform and network-based business models. Finally, Endeva suggests the criteria that might apply for when a large company should look outside of itself, to buy rather than make successful social enterprises, thereby avoiding some of the internal constraints that restrict them when trying to design their own new business models.
These are all promising ideas that have emerged from talking to people within the companies that are succeeding. You don’t have to take my word for this either. As part of Inclusive Business Boost, we have had events, blogs, videos and discussions of the reports involving many multinationals. These have extended to warm words in the public domain from Pearson, RB, Medtronic and Essilor.
Of course, it will take more than warm words, but I am now very hopeful that many more women and men will benefit from the expertise, resources and scale that large companies can bring to inclusive Business in the future. And while I will not stop sharing the story of the women entrepreneurs in rural Pakistan, I believe I will soon have many more equally insightful and inspiring examples of impact to share.
The five reports can be accessed through these links:
- Hystra: The Journey of Multinational Corporations to Inclusive Business
- Business Fights Poverty and League of Intrapreneurs: The intrapreneurship ecosystem: Creating the conditions for social innovation to flourish in your company
- Endeva: Inclusive Business – Make or Buy: Corporate Impact Venturing at the Base of the Pyramid
- Accenture Development Partnerships: Reimagining Inclusive Business
- Business Call to Action and UNDP: Improving Inclusive Business Management Practices in Corporations