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“Small is beautiful but big is needed” – Why inclusive businesses should put more effort in scaling

On Tuesday, 27 September, the Inclusive Business Action Network (IBAN) together with the World Business Council for Sustainable Development (WBCSD) and the William Davidson Institute Michigan (WDI) hosted the second part of a webinar series on scaling inclusive businesses.

Did you miss the webinar series? Click here for information on the course content and corresponding learning materials.

For information on inlcusive business models, publications or support organisations click here.

The first webinar in July already provided insights on the importance of partnerships for reaching scale and how these are built. The second part of the webinar focused on strategies and skills that enable inclusive business leaders to develop scalable and sustainable inclusive business models.

Here are three recommendations and insights that Ted London, Vice President and Senior Research Fellow at the WDI shared during the webinars and that can be useful for your own enterprise or your work with inclusive businesses:

1. Small is beautiful, but big is needed
One of the most common problems of new inclusive enterprises is that they never reach scale. Instead, many projects suffer from “pilotitis” and never fulfill their potential. But scale is important for two reasons. First of all, it’s a business strategy to make your model commercially viable. Secondly, scaling is an imperative with regard to the magnitude of challenges people living at the base-of-the pyramid face. This means: Substantial impact for the 4.5 billion people living at the BoP can only be generated if inclusive businesses succeed to reach scale.

2. Design – Pilot – Scale
Understanding the necessity of reaching scale is half of the job. A good preparation that aims at reaching scale does the rest. Therefore, entrepreneurs will have to go through the design and pilot stage. Concerning the design stage, it is all about thorough planning. Considering potential risks and necessities might save business leaders from having to take ad hoc countermeasures during later stages. A pilot meanwhile has the purpose to test the viability of an inclusive business model. It should help to further assess risks or to find the right metrics. But don’t forget that the pilot should not become an end in itself.

3. Partnerships are the key to success
The key ingredient that will help inclusive businesses to run through the design, pilot and scale stages is the right set of partners. Enterprise leaders should think about them right from the start and throughout the whole process of setting up an inclusive business. Partnerships will help them to save energy and resources and to achieve a bigger impact. The Partnership Ecosystem Framework is a practical tool that Ted London developed for practitioners in order to support them to make strategic decisions who to partner with. You will find the tool in the study “Partnering for Scale”.

Going to practice level
Are you looking for examples of sustainable inclusive business models?

  • Novartis Access is a programme that aims at increasing the availability and affordability of 15 medicines against non-communicable diseases.
  • 14 Trees is a joint venture company that aims to accelerate the commercialisation of the environmental-friendly housing construction material Durabric.

In case you have questions, please feel free to reach out to Ted London on twitter. For a deeper understanding of how to build sustainable inclusive business and how to do better business with the BoP, we recommend you to have a look at his The Base of the Pyramid Promise.

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