Tag: strategy

How leveraging collaborative expertise help scale social impact

This article was republished in Nextbillion in July 2016

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.

Partnership

  • 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.




Making markets Work: A Step towards Responsible e-waste Recycling

Indian-workers-recycle-009

What do we do when we see a heap of waste lying around on the roads or see water from the drains directly entering some of our holy rivers. Most of us turn a Neilson’s eye towards it citing helplessness. Now this is the problem most of us face- We all want to save our environment but we do not know how to go about it. But here’s an organisation which is not merely making a business, but also making us support the community and protect the environment through their business. Bingo!!

This organisation, however took on something which most of us do not even consider as a waste(maybe they don’t look ugly or smell bad) and they are e-waste. Discarded phones, old computers, laptops are things which do not directly go into our dustbin but most of these find their way into the unorganised market, where the metal is extracted using environmentally hazardous ways and everything else is dumped in water bodies and landfills,ultimately harming the environment. Statistics say that on an average, an American replaces his phone every 2 years(though i struggled to find similar study in India, but i think the number will be same for a salaried person in India).By 2020, electronic waste in India is set to reach 1.72 million metric tonnes.

So what makes this organisation different?  Albert Einstein once said – We cannot solve the problem with the same level of thinking that caused it. With the same mindset did Nitin and Rohan Gupta started Attero Recycling eight years ago to provide end to end electronic waste recycling through their patented technology. Little they knew then that this uncharted territory will be pumping today a monthly revenue of  nearly 12 crore by selling extracted metals to industrial and private consumers at commodity market prices .

So what worked for them?

  •        A Home-Grown Formula for metal extraction
  •         Single Player(It is the only company to undertake precious metal refining in the country)
  •         The growing consumer electronics market (estimated to be around $35 bn at 17% annual growth)
  •         Stringent e-waste disposal rules in India; amended in May 2012 (it is now mandatory for consumers to hand over electronic waste to designated collectors for proper disposal, while producers are required to take back e-waste for recycling)

The Blue Ocean Strategy

STREAMLINING THE SUPPLY CHAIN : HUB-AND-SPOKE MODEL

Attero is currently working with hundreds of manufacturers such as Samsung, Wipro, Voltas, outsourcing companies like Genpac and Infosys and several OEMs for recycling  their e-waste, which forms approximately two thirds of e-waste received by Attero. As Attero realized that most of the IT Giants are located in Bangalore, the company decided to set up a recycling hub in Bangalore to cater to the IT-heavy South India including Chennai, Mumbai and Pune. At this 3000 TPA(tonnes per annum) facility, e-waste is collected(the “spoke”), segregated and dismantled and later set to Roorkee plant(the “hub”) for recycling of precious metals. This saves their freight cost and help in cutting down on carbon footprint.

Much of the remaining third comes from India’s “informal sector,” who collect and pick through trash. Attero buys printed circuit boards from these collectors at a higher price than the collectors would have earned if they stripped metals from the boards using toxic chemicals themselves.

The e-waste, mainly mobiles, tablets and laptops are collected from consumers through their online marketplace AtteroBay; where the customer can sell their mobiles using the inbuilt designed software determines product prices on the basis of set metrics such as age, wear and tear, and market demand. The electronics is then picked from the consumer’s address and paid accordingly.This model of collection is established across 25 states of India and in 2012 alone, Atterobay collected 250,000 mobile phones.

INTEGRATING ENVIRONMENTAL PRINCIPLES

Promote Reuse before Recycling

The electronic items that haven’t reached their end-of-life phase are refurbished at Attero’s refurbishing facility, where they are reworked on and restored to ‘as-good-as-new’ condition. These goods are then sold to consumers at heavy discounts with assured warranty, which helps promote their reuse.

Outcome: Affordable phones for everyone

Sustainability in perpetual motion

While those electronics which cannot be refurbished, precious metals are extracted. According to Attero, the cost of extraction of gold from e-waste is at least 40% less than the lowest-cost gold mine in the world and the technology is less carbon intensive. These metals are further sold to metal dealers and since this process does not degrade the quality of the metals extracted, the precious metals in the electronic products can be recycled again and again.

Outcome

  •  Saving on foreign exchange by cutting down gold and silver imports( One tonne of cell phone contains around 100 kg of metals like gold and copper)
  •         Earning Carbon Credits*(When IT organizations recycle their e-waste with Attero, they help to reduce energy consumption and lower GHG emissions and thus earn carbon credits)
  •         Less pressure on mines for virgin metals

ASSIMILATING THE E-WASTE RAGPICKERS INTO THE ORGANISED SECTOR

According to a recent study by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), over 35,000-45,000 child labourers between the age group of 10-14 years are estimated to be working in collection, segregation, and distribution of e-waste without adequate protection, in Delhi alone. The company has collaborated with IFC, a member of the World Bank Group to launch Clean e-India Initiative . Through this, it is roping in ragpickers for proper disposal of electronic waste, by training them on eco-friendly recycling techniques and making them part of its supply chain through their consumer take back program.The program has provided employment opportunities to the informal recyclers and helped them earn a better living.

RAISING PUBLIC AWARENESS

Through their Clean e-India initiative, which has been successful in Hyderabad, Ahmedabad and Delhi, Attero ran awareness campaigns through print and electronic media,to enable consumers to give away their old and used electronic items.

Business Lessons

WORKING ON THE PRINCIPLE OF ‘DO WELL BY DOING GOOD’: STRIKING THE EMOTIONAL CHORD

This motto(typically tried by most companies) was not forced to adoption but rather seamlessly integrated in their organisation’s DNA. The whole idea of sustainable recycling began when the founders found that that is there no market for safe disposal of e-waste in India. Besides this, their initiatives like supplying refurbished electronic items to schools and non-government organisations (NGOs), saving ragpickers from the health hazards , has led the organisation receive investment from the likes of World bank and catapulted it to pinnacles of success.

INCENTIVISING FOR SELLING DISCARDED ELECTRONICS

Customers tend to dispose e-waste irresponsibly even though it causes adverse health and environmental impact.Atterobay allows convenience of selling smartphone at best rates with a pick up facility; so customer stays away from travelling to the second hand marketplace to avail the best price of their old phone.

 

As I draw the curtain close on my post, the environmental engineer in me would like to play a devil’s advocate. Here’s my take on them.Though they have pioneered the art of creating wealth from waste and have done stellar job in managing the growing e-waste problem in India, there is still a need to create a strong buzz among the customers about the e-waste disposal. My experience as an Environmental Consultant speaks that most of the time consumers do not know the implications of irresponsible disposing and even if they know, most of the them do not send their waste to the rightful owner( authorised recyclers).The goal of completely removing the middlemen who continue to use environmentally harsh methods to extract valuable metals in their backyard workshops can only be achieved when the message of ownership of your waste reaches masses, enabling them to dispose waste responsibly.

Disclosure: My post is based purely on my readings on Attero Recycling, while i have no experience working with the organisation or had any direct interaction with the Attero team. I would request the readers to share their experience if any & contribute to this conversation.

 

*Carbon Credit is a generic term that refers to any tradable certificate or permit representing the right to emit one tonne of Carbon Dioxide or an equivalent amount of any other Greenhouse Gas (GHG). An organization can manage its Carbon Credits by reducing its overall carbon and GHG emissions into the environment. So if an entity has reduced carbon dioxide emissions by 1 ton it receives 1 carbon credit.