We found successful companies taking concrete actions to leverage strengths of their key stakeholders towards achieving deep localization and robust scale: Leveraging top leadership buy-in to drive scale To drive scale through top leadership support, effective IBI sponsors and managers apply the following practices: Encourage top leadership to have a personal stake in building IBI scalability. Maintaining leadership’s personal buy-in for an IBI gives initiative sponsors and managers enough time to develop the local connections necessary for achieving scale. For example, HUL’s CEO fostered commitment to IBIs from the board and senior management team by building a decision-making structure that tapped into these internal stakeholders’ entrepreneurial spirit. After a 15-month market-exploration initiative, HUL selected six inclusive ventures for further investment over a three-year prototyping phase. To ensure senior leadership’s continued buy-in, the company appointed a Ventures Director to the board. The selected initiatives’ project managers reported regularly to this director and made presentations on their progress to the chairman and other board members every quarter. This phase represented a significant investment in testing the projects’ potential to achieve scale. During this phase, HUL’s board operated as venture capitalists, granting project managers resources in the form of people, money and company expertise in areas such as supply chain management. Team leaders were also given scalability milestones, and teams were allowed to move to the next level of venture funding only after achieving scalability milestones set by the board.
Creating a competitive and entrepreneurial environment among board members kept them heavily involved in the inclusive ventures, even though these initiatives still made up only a small part of HUL’s bottom line. According to one project manager, board members readily provided guidance to project teams and used their contacts to open doors in other parts of the organizations and outside HUL to ensure scale. Only two out of the six IBI ideas made it to market. One of them was Pureit, a water purifier. The other was ‘Project Shakti’, which today is seen as a landmark inclusive business innovation driving participation of women from small villages into creating markets. Thanks to sustained board buy-in, the project continues to deepen its connections with local communities even now. Prevent too much focus on near term bottom line. In most cases, leaders take a keen interest in the near-term impact of a new initiative on the company’s bottom line. Yet, sponsors and managers of the most successful inclusive business initiatives also encourage top leadership to take a longer-term view. To see how that can be done, consider the example of Natura, a large Brazilian consumer goods and cosmetics company. The cosmetics giant has made the need to preserve biodiversity in the Amazon a key tenet of its business model and organizational culture. As one company executive noted, the model was built on a single question: “How can we create a business that helps develop Amazon communities without jeopardizing the ecosystem?”
The company’s use of a particular kind of oil in its products linked to Murumuru trees illustrates what such practices can look like in action. Local communities were cutting down these Murumuru trees, as the sharp thorns along the tree-trunk were perceived by indigenous families as an obstacle in engaging with profitable berry farming. The company, however, realized the trees were much more valuable for the oil they produced through their nuts and seed. After suitably processing the same, the company used the oil in their soaps.