Toward A Base Of The Pyramid Protocol


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Toward A Base Of The Pyramid Protocol

  1. 1. Toward a Base of the Pyramid Protocol Stuart L. Hart Cornell University Scott Johnson SC Johnson
  2. 2. Breaking the Code: “License to Imagine” How can the MNC become the driver of an inclusive capitalism? <ul><li>For serving the base of the (income) pyramid </li></ul><ul><li>For fostering cultural diversity and social equity </li></ul><ul><li>For reducing the footprint of industrialized countries </li></ul><ul><li>For restoring ecological systems </li></ul>
  3. 3. Project Purpose <ul><li>To create a validated “protocol” for engaging the BOP in a manner that provides them with lasting value by deeply understanding their needs, perspectives, and capabilities. </li></ul><ul><li>To provide insight into the processes by which firms can identify and develop sustainable new products and business models in partnership with BOP customers. </li></ul>
  4. 4. BOP Protocol Project Staff <ul><li>Core Staff </li></ul><ul><ul><li>Erik Simanis , University of North Carolina </li></ul></ul><ul><ul><li>Gordon Enk , Partners in Strategic Change </li></ul></ul><ul><ul><li>Stuart Hart , Cornell University </li></ul></ul><ul><ul><li>Mike Gordon , University of Michigan </li></ul></ul><ul><ul><li>Mark Milstein , World Resources Institute </li></ul></ul><ul><ul><li>Ted London , University of North Carolina </li></ul></ul><ul><ul><li>Duncan Duke , Cornell University </li></ul></ul><ul><ul><li>Steve Branca , The Johnson Foundation </li></ul></ul><ul><ul><li>Allyson Lippert , Boston Consulting Group </li></ul></ul>
  5. 5. A Collaborative Venture Sponsored By Cornell University University of North Carolina University of Michigan The World Resources Institute The Johnson Foundation With Generous Support From SC Johnson DuPont Hewlett Packard Tetra Pak
  6. 6. Primary Activities Workshop I Designing The Protocol October 2004 Draft Protocol Workshop II Field Testing The Protocol October 2005 Action Research With Sponsors Additional Field Tests with Candidate Companies Action-Learning Executive Education 2006 and Beyond Research On Understanding The BOP 2003-2004
  7. 7. Workshop Participants 19-22 October 2004, Wingspread Conference Center <ul><li>Monika Aring , RTI International </li></ul><ul><li>Mohammed Bah Abba , MOBAH Rural Horizons </li></ul><ul><li>James Beebe , Gonzaga Univ., Leadership </li></ul><ul><li>Roland Bunch , World Neighbors </li></ul><ul><li>Nila Chatterjee , UNC, Anthropology </li></ul><ul><li>David Ellerman , The World Bank </li></ul><ul><li>Anne Marie Evans , Global Mosaic </li></ul><ul><li>William Flis , African Economic Development Initiative </li></ul><ul><li>Dee Gamble , UNC, Social Work </li></ul><ul><li>Kathy Gibson , Australian National University, Human Geography </li></ul><ul><li>Gita Gopal , Hewlett Packard </li></ul><ul><li>Julie Graham , U-Mass-Amherst, Geography </li></ul><ul><li>Stephen Gudeman , University of MN, Anthropology </li></ul><ul><li>Nicolas Gutierrez , Tech Monterrey, Mgmt. </li></ul><ul><li>Saradha Iyer , Third World Network </li></ul><ul><li>Scott Johnson , SC Johnson </li></ul><ul><li>Anjali Kelkar , Institute of Design, Chicago </li></ul><ul><li>Lloyd LePage , DuPont--Pioneer </li></ul><ul><li>John Lott , DuPont </li></ul><ul><li>Dipika Matthias , PATH </li></ul><ul><li>Linda Mayoux , Women in Sustainable Development </li></ul><ul><li>Denise Miley , Tetra Pak </li></ul><ul><li>Kenneth Robinson , Cornell, Applied Econ. </li></ul><ul><li>Prashant Sarin , HP Labs-India </li></ul><ul><li>Peter Schaefer , Institute for Liberty and Democracy </li></ul><ul><li>M. Shahjahan , Grameen Bank </li></ul><ul><li>Ajay Sharma , Davidson Institute </li></ul><ul><li>Sanjay Sharma , Wilfred Laurier University, Strategy </li></ul><ul><li>Kwaku Temeng , DuPont </li></ul><ul><li>Richard Wells , The Lexington Group </li></ul><ul><li>Bill Wiggenhorn , Consultant to RTI </li></ul><ul><li>Faye Yoshihara , Consultant to SC Johnson </li></ul><ul><li>Anjali Alva , Wingspread Fellow </li></ul>
  8. 8. Criteria for Success <ul><li>Generate a structure and supporting logic for the BOP protocol through the Design Workshop </li></ul><ul><li>Participants gain perspective and widen their bandwidth as a result of participating </li></ul><ul><li>Everyone agrees to have his/her name included as part of the protocol design team </li></ul><ul><li>Build a community of collaborators moving forward </li></ul>
  9. 9. The Vision: The Base of the Pyramid Protocol To create inclusive, mutually beneficial business processes through which the private sector and local communities build economic, social and environmental value. A Process for Mutual Value Creation
  10. 10. Draft Protocol Structure <ul><li>“ Opening Up” </li></ul><ul><li>Launch non-business </li></ul><ul><li>specific immersion guided by </li></ul><ul><li>two-way dialogue and humility </li></ul><ul><li>Generate competitive </li></ul><ul><li>“ imagination” </li></ul>“ Building the Ecosystem” Generate a network of relationships among MNC and local actors that supports co-creation and win-win strategies “ Enterprise Creation” Pilot test, evaluate and scale-out business experiments that generate TBL value for all constituencies
  11. 11. Processes for Mutual Value Creation Opening Up Building an Ecosystem Enterprise Creation The 4 P s: P eople, P artners, P erformance, P lace Mutual Value Chains Sub- Process 1 Sub- Process 5 Sub- Process 2 Sub- Process 3 Sub- Process 4 VISION
  12. 12. “ Opening Up” – The Mutual Value Chain Rethinking Needs & Value Idea Generation & Assessment Knowledge Retention Immersion & Engagement Team Formation & Preparation MNC Value Creation Local Value Creation Competitive imagination and local capacity building through engaging marginalized stakeholders VISION: <ul><li>Create shared vision </li></ul><ul><li>Identify people with </li></ul><ul><ul><li>passion </li></ul></ul><ul><li>Train in participatory </li></ul><ul><ul><li>methods </li></ul></ul><ul><li>Partner with “bridging’ </li></ul><ul><ul><li>expert </li></ul></ul><ul><li>Identify & engage </li></ul><ul><ul><li>community </li></ul></ul><ul><ul><li>partners </li></ul></ul><ul><li>Live the “local” life </li></ul><ul><li>Observe using unob- </li></ul><ul><ul><li>trusive means </li></ul></ul><ul><li>Engage multiple </li></ul><ul><ul><li>levels </li></ul></ul><ul><li>Build multiple access </li></ul><ul><ul><li>channels </li></ul></ul><ul><li>Share and engage in </li></ul><ul><ul><li>dialogue </li></ul></ul><ul><li>Learn through parti- </li></ul><ul><ul><li>cipatory means </li></ul></ul><ul><li>Write life stories </li></ul><ul><li>Analyze current </li></ul><ul><ul><li>assumptions </li></ul></ul><ul><li>Co-identify assets </li></ul><ul><li>Co-present findings </li></ul><ul><li>Co-formulate </li></ul><ul><ul><li>metrics </li></ul></ul><ul><li>Share learnings across </li></ul><ul><ul><li>firm </li></ul></ul><ul><li>Document processes & </li></ul><ul><ul><li>ideas </li></ul></ul><ul><li>Create local “idea </li></ul><ul><ul><li>bank” </li></ul></ul><ul><li>Link firm resources </li></ul><ul><ul><li>to needs </li></ul></ul><ul><li>Re-imagine the </li></ul><ul><ul><li>business </li></ul></ul><ul><li>Co-generate ideas </li></ul><ul><li>Co-evaluate ideas </li></ul>
  13. 13. “ Opening Up” – The Four P’s People & Preparation <ul><li>Cross-functional team </li></ul><ul><ul><li>People with a passion </li></ul></ul><ul><li>Training in participatory </li></ul><ul><ul><li>learning methods </li></ul></ul>Partners <ul><li>“ Bridging “ expert </li></ul><ul><li>Core partners </li></ul><ul><ul><li>Cross-section of community (e.g. local community groups) </li></ul></ul>Places & Structures <ul><li>“ Knowledge linkage” to firm </li></ul><ul><li>“ Base camp” in local community </li></ul>Performance <ul><li>Option generation </li></ul><ul><li>Imagination & “border thinking” </li></ul><ul><li>Embeddedness </li></ul>
  14. 14. The Mutual Value Chains A diverse, multi-level network of partnerships that pool resources and knowledge and incubate ideas and enterprises to build local capacity and generate firm value. Vision Building an Ecosystem Enterprise co-creation that generates local wealth, builds local capacity, and develops new capabilities and markets for the firm. Vision Enterprise Creation
  15. 15. BOP Business Principles: Operating Guidelines <ul><li>Suspend Disbelief - willingness to admit ignorance </li></ul><ul><li>Put the Last First - seek out the voices seldom heard </li></ul><ul><li>Show Respect and Humility - all parties have something important to contribute </li></ul><ul><li>Accept & Respect Divergent Views - there is no one best way </li></ul><ul><li>Recognize the Positive - people that survive on $1 per day must be doing something right </li></ul><ul><li>Co-Develop Solutions - mutual learning between MNCs, partners, and BOP members </li></ul><ul><li>Create Mutual Value - all parties must benefit in terms important to them </li></ul><ul><li>Start Small - begin with small pilot tests and scale out in modular fashion </li></ul><ul><li>Be Patient - it takes time to build the ecosystem and win the trust before the business takes off </li></ul>
  16. 16. BOP Business Principles: Code of Conduct <ul><li>Design businesses that increase earning power, remove constraints, and build potential in the BOP </li></ul><ul><li>Ensure that wealth generated by the business is shared equitably with the local community </li></ul><ul><li>Utilize only the most appropriate—and sustainable—technologies </li></ul><ul><li>Promote the “development” of affected communities as broadly as possible in ways that are defined by the local people themselves </li></ul><ul><li>Track the “triple bottom line” impacts associated with the entire BOP business system </li></ul><ul><li>Monitor and address any unintended negative impacts associated with the business model </li></ul><ul><li>Share best practices with local partners to the extent possible </li></ul><ul><li>Report transparently and involve key stakeholders in on-going dialogue </li></ul><ul><li>Commit to increase community value regardless of the business outcome </li></ul>
  17. 17. Next Step: Testing the Protocol <ul><li>First Site: Kenya </li></ul><ul><li>S.C. Johnson </li></ul><ul><ul><li>Pyrethrum sourcing </li></ul></ul><ul><ul><li>200,000 small-shareholder farmers </li></ul></ul><ul><ul><li>Several decades in country </li></ul></ul>Opportunity for Applying the Protocol <ul><li>Partnership with ApproTec </li></ul><ul><ul><li>Micro-irrigation pumps </li></ul></ul><ul><ul><li>Pilot project </li></ul></ul><ul><ul><li>BOP Access </li></ul></ul>
  18. 18. The Approach <ul><li>Select a diverse team of three business students as summer interns in Kenya to apply the protocol with small shareholder pyrethrum farmers </li></ul><ul><li>Support the students with selected experts and faculty from the Design Workshop </li></ul><ul><li>Work closely with ApproTec staff on the ground and SC Johnson staff in Kenya </li></ul><ul><li>Videotape experience and interviews </li></ul><ul><li>Continue effort into the fall in the form of a practicum project </li></ul><ul><li>Debrief experience and revise protocol in the Second Workshop to be held in October 2005 </li></ul>
  19. 19. Call to Action <ul><li>Provide feedback; this is an “open source” process </li></ul><ul><li>Join the Protocol project as an “Investing Partner” for the future </li></ul><ul><li>Become a potential site to “field test” the Protocol </li></ul><ul><li>Get involved in an action-learning Executive Development program based upon the Protocol </li></ul><ul><li>Join the Base of the Pyramid Learning Lab (next meeting February 17-18 at Cornell University) </li></ul>