Social business is a concept famously defined by Muhammad Yunus as a business that is financially self-sustainable, but recycles all profit into addressing developmental needs. But how does one measure the success of these ventures? While the metrics may be different for each social leader, Louis Boorstin, a water, sanitation and hygiene (WASH) expert, defines success for a social enterprise in terms of three equally important goals:
- Impact: Does it demonstrably improve the health and socio-economic well being of the poor?
- Sustainability: Does it have enough resources to keep running for many years?
- Scale: Does it have the potential to reach millions of people?
The landscape of social enterprise is strewn with tales of struggle.In the pursuit of the first goal, many leaders find it difficult to chase other two goals simultaneously. No doubt that lack of funds is a major challenge for organisations to succeed, but with various financing options available, social leaders often manage to overcome these resource constraints. The leaders of these social entrepreneurial organizations, however, have countless other tasks to manage and balls to juggle. Problems like inefficient distribution, ineffective supply chains, the inability to grow customer bases, inadequate pricing models, or an absence of economies of scale creep in. Fine tuning business models, growing customer bases, converting one-time users to regular customers requires strong expertise, which the founding team may not possess. An organisation focused on developing a technology to reduce water consumption in farms, clean cook-stoves; often finds it challenging to create a market of these unmet needs. And yet, only a few solutions have achieved impressive scale and by doing so have been able to improve the lives of millions of people.
On the other hand, partnerships with sector specialists or government bodies creates an opportunity for these accelerator companies to identify and address specific challenges that would otherwise go untackled. The idea here is not merely a consulting business (where partners consult via teleconferencing or moving to client office for a week) or a corporate social responsibility side project that is restricted to investing financial resources, but rather a co-creation process – a time consuming one, indeed.
Here are some examples of how a right partnership can ignite a movement of social change at the systemic level.
- Power of Networks: Co-creating with experts
Toilet Board Coalition(TBC) is a global alliance of corporations, government agencies, multilateral institutions, sanitation experts and non-profit organisations, with a unifying goal of improving sanitation, to catalyze and accelerate scalable market-based initiatives by leveraging the best of the member’s networks, assets, capabilities, and financial resources.
Svadha, a subsidiary of eKutir is an Indian social business that provides a comprehensive sanitation solution for low-income rural consumers in India. The company trains and supports local entrepreneurs who manufacture latrine components, market them in villages and offer installation and after-sales service. While finding funding to scale up is a daunting task; Svadha also faces the challenge of increasing consumer demand and improving the revenue of entrepreneurs, which requires entrepreneurs to sell 300 toilets an year for Svadha to break-even in 2 years time. How did they approach the problem?
Under the umbrella of TBC, Svadha partnered with Unilever for testing marketing approaches to accelerate toilet adoption, while Kimberly-Clark committed to drive greater consumer engagement through more targeted communication strategies. Alliances such as TBC underscore the tremendous potential the marriage of corporate and philanthropic worlds can bring and ensure that all partner organisation are same level focused on improving the lives of people(in this case through providing better access to sanitation facilities). Leveraging the expertise of private players help the organisation receive the guidance for widespread adoption, while, private sectors on the other hand benefit by developing a greater knowledge of understanding and deepening their relationship with consumers from emerging economies.
- Outsourcing expertise for achieving Best Practices
Global Fund had channeled close to US $1billion for AIDS prevention program in Tanzania, but getting the medicines to the last mile had always been a challenge due to poor infrastructure. The ubiquitous presence of Coca-Cola bottles was an insight for development practitioners to use Coke’s expertise in solving the distribution problem. Coke has in the past helped organisation to distribute malaria bed nets and condoms to the rural village, However, unlike in the past, the challenge here was to improve reach of their more than 3000 different, yet expensive drugs, with storage specification.
With many decades of experience working in rural markets of Africa, Coke decided that instead of lending its vehicles to supply life saving pharmaceuticals, it would share knowledge of their supply-chain management capabilities. Coca-Cola, in partnership with country’s Medical Stores Department (MSD), mapped out health facilities (approximately 5,000 of them), using software to organize distribution, training workers and advising MSD on route planning, scheduling and the best types of vehicle to use to reach small, faraway villages. The project also tapped into the Coca-Cola ecosystem of suppliers and service providers to leverage their input and specialized skills.
Result: The new management information system enabled MSD to supply directly to the network health facility whenever a request is made, instead of delivering to its 500 odd warehouses with limited capacity and infrastructure to store these medicines.The program, launched in 2010, was so successful across Tanzania, Ghana and Mozambique, that Coke is planning to expand its support into additional countries.
Apart from creating value and offering a competitive advantage, the Project is aiming to achieve reduced mortality and improved well-being of its own employees, for Coke is the third-largest employer in Africa.
- Avoid the Prejudice Trap: It’s all a Game of coordination
When individuals/organisations/businesses/charities/governments pre-judge each other’s habits, inaction often is the result. Businesses are often seen as short-term minded and exploitative, governments as inefficient and bureaucratic,NGOs and charities as naïve and inefficient. But Swapnil Chaturvedi of Samagra Sanitation eliminated these prejudices when, instead of building new toilets, he decided to revamp existing municipality toilets while liaising with Pune government (they call this their SMART partnership philosophy). This wasn’t a part of Swapnil’s original plan; he was initially converting toilet waste into biogas while generating revenue from the waste or building modern toilets. Both ideas were discarded because of lack of space in urban India or financial sustainability. However, unlike many public private partnerships, where there’s no incentive for maintaining or running these toilets, here initial capital expenditure is covered by these partnerships. Meanwhile in return for operating these toilets, local women are hired from the community and earn 100% of the revenue collected.
Organisations, networks,and government should foster a culture of ongoing interactions with people from other sectors and collaborate to develop new structures and business models that can be replicated.The commitment demands time and extended effort. But for those with an appetite to buy into the risk, there is a tremendous potential for social ventures to scale and create a massive impact.