The Perfect DNA for Inclusive Business
“Just what kind of company has the perfect DNA to implement and scale up Inclusive Business models?” This is the million dollar (or in this case, Pound Sterling) question. This should be, or already is one of the questions we in the Business Innovation Facility (BIF) intend to answer from this pilot phase of the project which seems to be racing to the end, especially in Nigeria where we just kicked off about 60 per cent of our long term projects within last 2 months. #hectic!
BIF is a learning project and I have had the opportunity to learn loads from the Nigeria’s relatively diversified BIF portfolio. Having worked with BIF for a little over a year in Nigeria, I can categorically say that I can’t as yet propound a theorem on the problem question set out above (*Smiles*). However I will try to share some of my thoughts on the perfect company for inclusive business. I would be pleased if you could jump on this with comments and ideas that support or contradict mine. In BIF Nigeria, we have a healthy mix of companies; large brands with clout, some small companies, and a few in-between, cutting across various sectors. This is basically why I am offering these 3 hypotheses:.
As I perceive it, a company should succeed in implementing and scaling up an inclusive business model if it possesses the following characteristics:
- Innovation: The company should have innovation at its core. Innovation in this context has to do with having insight and foresight towards exploiting opportunities to develop market enhancing contacts with the BOP. In other words, the company should be able look beyond doing more of the same as a “going concern” (business as usual) in the entrepreneurial sense, seek ways to marry their social and commercial objectives and be good at proactive problem solving. This can be hard work for many companies. In BIF Nigeria, business development work has usually involved helping companies see these opportunities and selling the potential to them. I can understand why these companies don’t see the potentials. The way most companies are “wired” (think) is that dealing with the poor is costly, so innovation traditionally goes towards waste reduction and process improvements. However once a company can clearly see the commercial advantage of inclusive business, inclusive business automatically becomes a “front burner” activity in strategic decision making.
- The Risk-Scale Balance: Entrepreneurial success can come down to a company’s willingness and appetite to take considered risks. In my own words the company should be “Big but small and small but big”. Typically you may assume that a big company will be most suited to implement an inclusive business model (Indeed I did) but I am learning that size can be an advantage (size , scale, impact) and also be a disadvantage; The size of a big company can slowdown the implementation of the project as it has to go through various decision making processes and gateways before it can be approved. This increases the risks of the ensuing BIF model not seeing the light of day. However if and when the decision is made to go forward with the inclusive project, big companies have the capacity and experience to implement and scale up the model rapidly. Inclusive business requires an entrepreneurial spirit that is willing to take risk, while most big companies are risk averse smaller companies tend to stomach more risks. They tend to move quicker in decision-making, but their limited scale can be major hindrance to perceptions of success in the implementation of the project. The financial constraint for implementing inclusive business affects both small and big companies but the challenge is more acute with small companies. So, “Big but Small and Small but big” simply means that big businesses need systems that enable quick decision-making on issues of strategic importance. Small companies with a beneficial short turn-around on decisions, need to think big by taking calculated risks to scale-up in order to achieve growth and impact
- Spheres of Influence: Finally inclusive business models work well when entire ecosystems have been built around them. Hence a company that would be able to implement an inclusive business model should be able to identify and influence the various stakeholders that are relevant to the inclusive business project within its ecosystem and leverage their strengths in implementing the model. I guess this is very critical as it is can be a herculean task to scale up an inclusive business model in isolation.
These are the 3 hypotheses I have come up with and they are definitely not exhaustive at all. I didn’t intend to make it this long. My objective is just to stimulate ideas and contributions towards answering the exam question - “What kind of company has the perfect DNA to implement and scale up Inclusive Business models?”. Perhaps, with the collective of learned professionals from the various BIF Countries, we should be able to develop a more comprehensive and accurate body of hypotheses that should lead us to promulgate the first law of Inclusive business. *Smiles*