Large businesses often must leap into an IBI without government sponsorship or regulatory support. According to our findings, inclusive business initiatives that lack such support can sweeten their odds of success by tapping local nonbusiness partners, such as NGOs and small entrepreneurs. Inclusive innovations that have effectively partnered with such stakeholders have done so through the following means:
Reform organizational architecture. Providing IBI managers with the flexibility and freedom to make decisions about a project’s organizational structure is critical to ensuring effective collaboration with local non-business stakeholders. The organizational structure created for ITC’s e-Choupal project (which, among other benefits, enables Indian farmers to buy seeds and other agricultural materials as well as sell their produce through the Internet) offers an apt example. (See Figure 4.)
While drawing heavily from its original business model, ITC realized that it had to modify the model to support the e-Choupal initiative. The firm did so by adding two new layers of responsibilities to employees’ and managers’ roles. The first new layer was designed to address the lack of detailed and real-time information about low-income customers’ tastes and preferences. ITC employees were tasked with investigating farmers’ aspirations, and senior managers were charged with making business-model innovations.
These new responsibilities streamlined the innovation-to-execution process by enabling project team members to draw more useful insights from on-the-ground market realities. As e-Choupal’s business expanded into low-income markets across India, the firm added the second new layer of responsibilities, aimed at exploiting operational efficiencies from the initiative’s growing scale. New supply chain duties for middle management enhanced efficiencies in the IBI’s backoffice operations. Meanwhile, higherlevel management focused on capturing synergies between the e-Choupal business and ITC’s traditional business.
Esoko, a company that provides tools for agri-projects and agribusinesses to deliver data to farmers via SMS in 15 countries including Nigeria, is another good example of how reform of organizational structure can help inclusive innovations succeed. Initially Esoko relied heavily on government agencies to market and collect data for its price information service. For instance, initial projects using TradeNet (Esoko’s predecessor) in West Africa collected and shared data sourced from ministries, departments and government offices, and tried to market the service through the network ministry basic marketing.
Establish in-house platforms to help partnerships run smoothly. Natura’s IBI in the Amazon is an example of how to collaborate effectively with local NGOs. The company recognized early on that such collaboration would be critical to earning local communities’ trust and gaining access to their knowledge. Members of such communities were often wary of outside businesses because of the deforestation they had caused. Accordingly, the firm focused on building relationships with local NGOs in support of environmental preservation.
The company then set up an “ecorelations management” department. The department is solely responsible for managing relationships with communities based on field visits by company officials. The department also conducts regular dialogues with NGO partners to ensure that there is constant alignment across aspirations of all the key stakeholders, including communities. As one senior executive noted, “the company does not send a buyer to interact with the community, but someone who understands the social logic.” This approach has helped the company gain local communities’ trust and develop.
For example, prestigious and national-level NGOs may do good work and may have a country-wide reach that can help an IBI develop scalable operational capabilities. But partnering with such NGOs is not always a good strategy. Why? They may not have the capability to bring about behavioral change within local communities regarding a particular venture’s product or service offerings. Many NGOs claim to have information about local institutions and practices, but whether they can transform this information into actionable insight is another question entirely.