Innovation Alchemy

We are completing a year in June - and very excited about the last 12 months and the roller coaster ride it has been. I guess a year is too short for any kind of 'analysis' in an entrepreneurial journey - but am so glad we started. A big thank you to everyone who encouraged, contributed, nudged us in the right directions...

Glad to say that we prototyped several different business models in collaborating and consulting in the Innovation space, especially with social enterprises. It's a fast growing, evolving space and there is tons of learning to do. Prototypes continue and this year a few clear and replicable models will emerge...

My personal blog is now integrated into the Blog at the Innovation Alchemy Website. Visit the website for updates on our recent projects and new learning as we explore, apply and research Innovation Impact.

Or interact with me on Twitter (@parvathimenon) for updates as they happen.

Looking forward to an interactive, engaging, challenging year ahead...

Tweeting from Robben Island...the new text of freedom

The opportunity to understand a little more about the famous prisoner 466/64 makes Robben Island a popular destination today.

As 50 of us tourists sat inside a prison in Section G, many were on their phones...tweeting what they heard, sharing what they saw and sending images to the rest of the world of their moving personal experiences.

Till 1991 - just 19 years ago, this was a maximum security prison known for its absolute and complete isolation of political prisoners of the Apartheid regime.

No information was allowed to leak out. Very little came in.

Nelson Mandela (466/ 64 - the 466th prisoner at Robben Island in the year 1964), spend around 16 years here, at the center of what would be South Africa's long and hard struggle for democracy and freedom from apartheid.

Today - we sat there communicating with the whole world. Each person in that room was writing, publishing, broadcasting through their mobile devices. In just 19 years so much has changed. This is the new text.

In a tour conducted by one of the ex-political prisoners, I had the opportunity to go inside the prison cells, walk the corridors and hear the stories of complete and total isolation. Of the atrocities only humans can bestow on fellow humans. And of how human dignity can still find ways to forgive.



Bereft of the tools for education, prisoners miraculaously found ways to convert the prison into a university - and the amazing process of Each One Teach One came into being. Popularly known as the 'Robben Island University' by the prisoners, they used every element of their spirit to over come the indignity of colour, separation, politics - and convert the subaltern text of imprisonment into learning.

Its amazing. Technology has changed the politics of freedom forever.

In 2004 I had the opportunity to visit the Alcatraz, off the San Fransisco Bay. When the wind blew across the bay, you could hear voices carry over from the city into this maximum security prison that had housed many Civil War prisoners. Information, learning, knowledge and news - were all a premium. A privilege that was considered unnecessary .

In 1997, I was an assistant director on one of the first film crews to be allowed to shoot in Kashmir. We shot on a few islands in the Dal Lake - islands that used to be the headquarters of the Hizbul Mujahideen. The site of many atrocities, these beautiful islands had seen so much struggle. We shot a docu-feature for the Home Ministry, stories that would build confidence and bring hope to the people of Kashmir.

The degree of despair in Srinagar in those years had amazed me. And as a film crew, we were a threat to many who saw news and information as a major de-stabiliser. Confirmed artists refused to act, under threat. And finally some CRPF personnel and 4 young surrendered terrorists became our key actors. The film ran on 'Doordarshan' - which for many years was the window to the world for India. Today of course, its irrelevant. There are over 250 channels on TV. Most of them with Breaking News every second.

Twitter, Facebook, SMSes, Mobiles have fundamentally changed our world. Made us free in such a different way. And it evolves every day.

Over 3 billion people have mobile phones across the world. 1000 new mobile customers are added every minute over the globe. Mobile internet is empowering Africa...

Inspiring organizations like Ushahidi have created platforms that allows people and communities to collate distributed data via SMS, email or web and visualize it on a map or timeline. A simple way of aggregating information from the public for use in crisis response. The people of Haiti have benefited tremendously from Ushahidi's innovation.

Georeferencing, geotagging, visual mapping, community mapping.... all innovative applications of mobile technology that connect the world today in such incredible ways.

And yet there is the oppression in Afghanistan.

It gives us more reason to continue innovating. Finding more ideas that will link technology and freedom...

An Innovation Fair!

Writing from the World Bank Innovation Fair, in Cape Town, South Africa. We are on Day 2 and just finished a Panel discussion on 'Scaling Innovations'. A favorite topic of course!

A quick background on this event: The World Bank Development Marketplace has been taking ideas to action for the last 10 years. The Development Marketplace is holding the first of a new generation event - the Innovation Fair on Moving Beyond Conflict and Fragility. The event is tied to the 2011 World Development Report and draws on a pool of innovative solutions collated through an online competition that invited applications, got users to vote and shotlist social impact ideas.

This Innovation Radar registered 2000 users, produced 223 project applications from 40 countries. 50,000 users viewed and engaged with the ideas online - and a final 30 social impact ideas were shortlisted and invited to Cape Town for the Fair. These ideas can be reviewed by clicking here.

You will note that these ideas have come from regions such as Sierra Leone, DR of Congo, Kenya, Burundi, SA, other African countries - and also from Columbia, Srilanka, a few from India. In some of these countries, the existence of conflict and the fragility of the communities is a very real scenario. And most of the ideas directly focused on how technology and innovation can be applied to empower, equip, build economic opportunity in such a context.

Egbe Osifo-Dawodu from the World Bank Institute wrote a great piece on why the subject of moving beyond conflict and fragility is relevant - and why this forms the basis of the innovation fair.

The ideas were collated and presented around 2 broad themes:

1. Improving Service Delivery and Governance through the use of Communication Tools
2. Innovative Research and Practical Approaches to Conflict and Violence Prevention

The application of Communication Technology forms a thread across many of the ideas - and while several of the ideas are in initial prototypes, a few have also created a fair amount of impact in more advanced pilot stages.

A few core themes have run through the discussions over the last two days:

• The role of the government in conflict areas to support innovation
• How do you scale beyond the initial pilots
• How do you sustain some of the ideas and get community really involved in owning and taking them forward..
• Role of institutions like the World Bank in supporting the social innovators...etc

Some of the discussions and quick excerpts of all the different presentations are accessible at the following link http://innovationfair.ning.com/

My comments on the Panel discussion on Scaling Social Innovations were really around the core thought that it is possible to 'Design for Scale' - rather than 'hope that the idea will eventually scale'... Given the nature of early stage innovations being discussed, shared 3 key thoughts around scaling...

• The notion of Innovation: Its not about the initial breakthrough idea - but about a series of ideas, which when layered together create significant impact. This usually involves innovations around the product, service model, revenue model, operation models etc, all combined together. Examples such as the evolution of pre-paid services on mobile phones that created a layer of a service and revenue model over the base mobile technology to make mobility accessible to millions of people. Without this extra layer of innovation - mobile phones would be limited to very few people. So the notion of innovation asks: What is that set of ideas that makes your core proposition strong and relevant?
  

• The role of the innovator: If the above is true then scale is built into the notion of Innovating, especially since the innovator needs to build a cohesive set of ideas that make a proposition work. This means that its important to start finding ways to succeed in creating the impact, incorporating many more simple solutions as the idea slowly takes shape... and find ways to have many people adopt your idea, thus creating a natural pull for your idea. The innovator has a role to play in building the core idea from the simple workability of the idea, through acceptability and adoption - and finally to a model that demonstrates the scalability of the model and its impact. Which stage is the implementation of your idea in right now?
  

• The role of the Ecosystem: And here come organizations like the World Bank, Ashoka Foundation etc - who have the capacity to facilitate collaborations, provide initial funding, exposure, learning for the innovator and his/ her team, help evaluate and provide a global platform for sharing, cross learning and fostering partnerships - that can give the social innovator speed. The most core resource is of course the funds. But its critical for Social Innovators to treat the funds as Working Capital - and not funding. Thus designing the models for sustainability very early on in the life cycle.
  

We talked through examples in India such as ITC eChoupal, SMSOne, Akshaya Patra that have approached scale in a structured manner.

A great example of a sustainable social impact model in a conflict environment presented itself right here at the Innovation fair!! The Social Media team anchoring the event - RLabs or Reconstructed Living Labs - is a beautiful idea that identifies disadvantaged youth, builds capability in them to use and apply technology and social media - and then finds a market for these skills and create economic opportunities. Was great to see them in action at the fair - you can see more on the work of the RLabs by clicking here.

Micro Entrepreneurs say go beyond News, Facilitate Market Access...

Bagmari, Ultodanga, Bhaghajatin are slum areas in North & South Kolkata - populated with several thousand enterprising, independent micro-entrepreneurs.

Vegetable vendors who buy Rs.1500 worth of vegetables every day from wholesalers and sell it at a net profit of Rs. 150-200 per day.

Egg vendors who procure 1000 chicken eggs per day at approximately Rs. 2500 and sell for a net profit of Rs. 160 per day.

A family of potters who procures the clay for Rs. 6000 per truck - that lasts them 15 days, making 1000 small Diya's (earthen lamps) per day. The family earns a net profit of around Rs. 200 per day for the sale of these Diya's. Everyone in the family works on this.

Small stitching units that produce hosiery vests, children's clothes for the local markets - producing up to 50 dozen sets with a 2-3 member stitching team. Net profit per day for the business owner approx Rs. 350 per day

These are micro- entrepreneurs. Each running simple, very relevant local businesses - providing for their families through the business and in some cases also providing jobs to a few more.

In studying this ecosystem, we found some interesting initiatives that are keen to formalize this section of entrepreneurs - and create more economic and capability impact.

For example an enterprising News Service has been initiated in this area of Kolkata for the last 2 years to build a flow of news that can enable these micro entrepreneurs to share knowledge and build capacity - and therefore increase incomes. Supported by an international News Agency, that is keen to further the impact of News in disadvantaged communities - this project publishes a local newsletter distributed to the micro entrepreneurs.

Printed twice a month, Amar Khabar is populated with stories of success, little tips on new business ideas, info on loans - all collated by 'young citizen journalists' from within the same micro-entrepreneur communities.

In its 24th edition when I met the team in March 2010 - this newsletter now reaches 102000 entrepreneurs within north and south Kolkata, free. With a validated database of 5000 readers, the team is now putting all efforts behind building a strong repository of reader data - such that more specific inputs and info can be provided - and the black box of 'who are the micro-entrepreneurs' can be opened.

Its a valiant effort at somehow formalizing the information, learning and knowledge flow for entrepreneurship - within a highly fragmented, disorganized and dynamic community.

Impact?

Meet Gopa Bhattacharya, a middle aged serial entrepreneur who runs a small eatery, makes Bindi's for local women, and makes and sells an odd assortment of simple products.

She read an article in Amar Khabar that provided tips on how to make and sell solar lamps. She went to Barabazaar, got all the key parts needed, made her first solar lamp 2 months ago. She now makes and sell 5 such lamps each week. For a profit of Rs. 200 per lamp. In the last 8 weeks she has augmented her income by Rs. 6000 by building a completely new product line! This reiterates the power of knowledge. Make it accessible. And the enterprising person will find a way to use it and flourish.

But for Gopa to grow beyond this, she says she needs the obvious - market access. As a woman she cannot travel beyond her community - but she knows that at her price point she can produce a lot more by hiring a couple more people - but where can she sell it?

More income would mean more 'poonji' that can be generated (working capital), which would mean lesser loans from money lenders and MFIs. But how does she get access to markets?

So at Version 1.0 - This News project has succeeded in demonstrating the immediate potential of this idea. But for large scale impact the 'Gopa effect' has to be wide spread and critical mass of real financial impact created in the micro entrepreneurs business. Either top line - or savings in costs or new product lines...and several of these.. Repeatedly you hear the request for a MARKET for the products. "Find us a market, connect us to the markets....we will find a way to produce more..."

The fact is that the producer will need to find his/ her own market. But what or who can facilitate that? What's the capability needed for that?

Should version 2.0 of such a Newsletter go beyond 'Knowledge & Capability' and become more of a bridge between the sellers and the buyers maybe? The reader base needs to include both sellers and buyers, producers, aggregators and consumers. Clearly the newsletter would need to shift its paradigm - from providing access to News to becoming a platform and interface for business impact - powered by relevant knowledge and strong database of active readers.

There are around 1.5 - 2 million such micro entrepreneurs in Kolkata. Even at a price of 0.50 paise per successful connection between seller and buyer, A Newsletter could find ways to be sustainable. At a low cost of Rs. 1 per edition that helps build the capability and provides learning to its readers...it could be more sustainable. Combine that with SMS coverage to a dedicated subscription base - and access for whole sellers...more sources for generating funds to stay alive.

The innovation challenges to building version 2.0 of such a News Service?

• How to institutionalize the 'Gopa process' of enterprise and risk taking across a larger community?
• Making content creation a far more collaborative effort - can mobile phones be leveraged to collect, write and collate news and content?
  
• How to build a knowledge chain that meaningfully links producers, consumers, buyers, sellers - in a manner that direct economic impact is possible to measure?
  
• Can this be a 'lifecycle' engagement for micro entrepreneurs - or should it be limited to providing connects and news
  
• How can available technology be integrated across the network - mobiles phones, field devices already used by large FMCGs in these markets, local phone booths.

Meeting the micro-entrepreneurs and seeing the impact of the News flowing through - led me again to the thought: There are great ideas out there, good prototypes being implemented. The initial ideas are often supported through philanthropic funds.

But to make them sustainable - what's needed is to build the next level of solutions if real impact has to be brought to economy and life in India...that's where innovation is needed. To go beyond the prototype.

If you know of some well scaled models that focus on increasing the economic success of micro-entrepreneurs and use technology and business models for this - do pls write in. Would be great to study and learn from them. Will help cut the curve immensely!

Another interesting news service I learnt of - HIBR.me in Lebanon.

Education...on a full stomach and nutritious meal!

Had an opportunity to explore and briefly immerse in the work of Akshaya Patra - a programme that provides food to over 1 million children in India. Now feeding 11,98,206 children everyday!

Millions of children in India don't get enough food for them to have any motivation or energy to really attend school or 'engage with learning'. Different studies put the number of children missing school because of lack of adequate food ranging from 7 million to 40 million across India.

Akshaya Patra focuses on this group of children. Through a range of public private partnerships, several schools now benefit from a very organized, nutritious mid-day meal.

What differentiates the Akshaya Patra effort from several other 'feeding children' initiatives is really how they have dealt with the size of the problem. By designing and engineering highly replicable, standardized processes. Spread across 8 states in India, accessible through centralized and decentralized kitchens, this non-profit organization is looking to reach 5 million children by 2020.

This mission is powered by some very large scale planning. A quick look at some numbers and the size of the operations, just in one kitchen!




The Kitchen on the Kanakpura road, Bangalore:

• Designed on the simple principles of gravity - this kitchen is a highly effective, eco-friendly operation that uses renewable fuel (husk based fuel) and recycles a large part of its waste
• Feeds around 100,000 children everyday. Plus Old people, expecting mothers and the local jail
  
• The kitchen cooks approx 6000 kgs of rice and 12,000-20,000 litres of sambhar/ dal (lentils) everyday
• Procures 5000 kgs of vegetables and 8000 litres of yogurt everyday
• Stores approximately 270 tonnes of rice for a month provided by the FCI for the mid day meal...apart from that procures rice for the BBMP scheme to feed old people in the communities
• Around 250 members work within this kitchen in 2-3 shifts starting at 3 am and going on till 6.30-7.00 pm
• People from local communities are employed in the kitchens - generating employment and building training and skills in cooking, hygiene, production, distribution..
  
• Over 3000 employed across all kitchens in India
  

Getting a hot nutritious meal to over a million children everyday is no mean feat! A brilliant example of achieving 'Scale' in social impact - comparable to any factory model for food production and distribution, Akshaya Patra has taken the job of cooking and distributing food to disadvantaged communities to another level of seriousness. Its engagement with the government at a regional level and ability to manage a diverse set of stakeholders in ensuring that healthy food reaches children and the needy is another aspect of its incredibly quiet but effective style of working.

Next level of innovation sensitive areas - community engagement, several million more children, scale out and scale up - get more education and nutrition based organizations to adopt the principles that are working here, building significantly enhanced nutrition in simple meals...so much more..

Leadership and community justice. What's the connection?!

8 am. The taxi goes past the address I have been given and we have to drive around a few blocks before we get to the office complex I need to be at. It gives me a chance to see the beautiful Copley square in downtown Boston and admire all the wonderful architecture around, in the early morning sunlight..

Its a large room..and people are starting to gather. People who haven't met each other for a couple months are catching up over Coffee, orange juice, bagels and muffins.

I am joining a 1-day session, part of the LeadBoston programme, where people from different walks of life - professionals, leaders, career people, social entrepreneurs, interested individuals ...all come together to discuss and learn about issues of Community Justice. Designed and implemented by the Boston Center for Community Justice (BCCJ), this is a year long programme designed to build socially responsible leaders within the community.

Participants meet for a few hours each week and for a few day long sessions and retreats each year. Several interactions, small projects, site visits and engagements make this a very experiential programme.

As people start collecting in the room, Kenn Elmore is sticking blue tape onto the floor - dividing up the space into 4 blocks and a few external areas. He calls a handful of volunteers together for a briefing on the simulation he is about to lead. I join the others (am volunteering too!) and we gather around Kenn to hear closely what he has to say.

There are around a 100 people in the room by this time ....and Kenn has given us instructions and the simulation is about to begin. The volunteers are divided into Police personnel, Housing Permit personnel - and we also get a Sheriff!

Today, the teenagers who are a part of the InIt programme at BCCJ also join in. The participants (a mix of adults and teenagers) get to choose from 4 ice-cream flavors - chocolate, mint chocolate, strawberry and vanilla. Everyone gets a badge to wear - depending on the group/ ice cream flavor you have chosen to be a part of. Then each group is given a space on the floor...boundaries marked with blue tape, and some start-up resources in a bag for each group.

The simulation called 'Community Build' has simple rules.

• Each group needs to build the 'best community they can' with the available resources
• If they cross the boundaries, Police have the right to check them or put them in jail
• Once they have decided what they would like to build, police would escort them to the housing permits department - to get a permit to build
• Things have a price - money is included in the resource bag
• All groups are encouraged to build creative 3-d models..and not just do some simple stuff..

Groups are given 45 minutes to build their communities.

As the exercise progresses, Police pay more attention to some parts of the room than others. Some groups seem to go to jail more often, some communities build sprawling townships an seem to have no trouble getting housing permits. Whereas some communities seem to just not be able to get any permits - they are always sent back for more information, even though they end up paying money to the authorities...

Some communities figure that there seems to be extra restraints on them - and a group breaks out into a protest march (see people with little green flags!)...with some members of the community picking up direct conflicts with the authorities.

This is as real as it can get. But suffice to say that by the end of 20 minutes or so chaos reigns, there are hot tempers flaring, and there is anger in two communities who are feeling 'marginalized' - while most of the members of the other communities are unmindful of what is happening 5 feet away from them....

When the simulation is called to a close and the people are removed from the spaces an interesting vision emerges. Some communities have built small, temporary buildings, no connections, limited facilities..(see the far side of the image) and are very very angry. The 'favoured' communities (less stressed, chocolate flavor in the front of this image) have created large, sprawling communities with bio tech parks, sushi restaurants, airports, common spaces and several (needless!?) elements.


This leads to a very active debate.

• What caused the difference in how each community was created?
• What is the sense of Community justice? Justice for whom, from what?
  
• Who defines it?
• How did you feel in the 'restrained community'?
  
• In the chocolate community, how did you NOT notice the chaos 4 feet away from you? Or did it not matter?
• What is the role of leadership in such a scenario - what's needed to build bridges between such differences?
• What is the meaning of collaboration? Who's responsibility is it to initiate and build collaborations?
• How do we go beyond the immediate visible differences (of being less or more favored, of color or money or location) and actually build interconnected, interdependent communties...
  
• Which community tends to have far more entrepreneurial instincts, why?
• Feeling marginalized actually makes the community much closer and stronger - why?
• How does all this relate to me in my professional life as a leader?

The discussion lasts all the way till lunch, given how real the issues were and how easily they surfaced through this simulation - its easy to discuss them. Kenn facilitates the dialogue with the ease of an expert. Given his background in dealing with community issues as the Dean of Students at Boston University, he has done this simulation several times. Each time it becomes a real example of life.

Am deeply impacted by the outcome of this simple yet powerful exercise. We were talking about small neighborhoods in Boston who feel disadvantaged compared to some others. But at a larger level, in the discussion it emerges, the 'developed' world is actually sitting in the chocolate sphere - and the developing economies, with limited visible resources, way more population and complex issues of growth and poverty and health to deal with are pressured to find solutions fast, and catch up on global challenges...

In our discussions we draw learning from this exercise into how as a global community we are dealing with issues of environment, climate change, oppression, poverty alleviation...and maybe even terrorism - in the same manner. Some of us are sitting inside chocolate spaces and some of us are sitting inside other ice cream flavors, vanilla and strawberry - and for reasons that could well be arbitrary are dealing with many more issues of marginalization than others are. Why should it be so?

This is how it is. That's why we need to understand what makes the subject of 'Community Justice' relevant for each of us in our leadership roles.

It's inspiring - as well as deeply impacting for most people who attend. While BCCJ is a non-profit and has wide philanthropic support, this programme helps it also generate revenue for its many initiatives, which is really incredible. This programme has found a way to bridge the gap between social responsibility and community participation in a sustainable manner. Way to go!

Todd Fry, the exceptionally committed and passionate Program Director for LeadBoston has grown the programme over the last 4 years into a very active initiative with several companies in the Boston area sponsoring leaders from their organizations to come and do this course. In his immensely engaging style he brings together people and experiences that can create impact and build leadership skills.

I happened to meet Todd at the Development Dialogue 2010 hosted by the Deshpande Foundation in Hubli. What a lucky meeting - gave me a chance to see a community build!

A similar programme has now been adapted in Hubli - called Hubli Champions a part of the DF sandbox initiatives.....its a great way to build a deep sense of social responsibility in our emerging leaders.

Two speed world ....notes from DC...

Just concluded 2 days at the FPD Forum.

These 2 days were part of a week long event at the World Bank Group in Washington DC, that brought together World Bank Group members and a whole host of development economists, professionals working in the development space and members from governing bodies in different emerging economies - to discuss issues that are relevant today in this space - for the Bank and its group members.

A very interesting experience indeed and an opportunity to connect with, meet and hear some really engaging discussions. A few quick highlights:

Session on Base of Pyramid Opportunities


Joined Ted London from the University of Michigan to speak on the subject of how private sector companies could scale business at the base of the pyramid. Ted presented a framework, a sort of road map that social-business ventures could follow, culled from a study of various examples across the developing world. And highlighted the difference between trying to access a fortune AT the base of the pyramid - and instead creating a Fortune WITH the base of the pyramid.

I followed that up with a practitioners view and elaborated in depth on how ITC eChoupal has been able to scale - to achieve business objectives, demonstrate growth AND reach 40,000 villages, 4 million farmers through a variety of business opportunities. Focused on a few points to elaborate on the ITC story:

1. How 'Scale' can be put into the DNA of a venture very early on
2. Empowering communities with a 'Real Choice' on an ongoing basis
   
3. Staying away from Trade-offs in the course of business - but seeking and implementing 'win-more' - 'win-more' propositions
4. Creating 'mutual value' with the community - 'tightly coupled enmeshing of interests'

I had the advantage of a lot of photographs taken during the course of my research and work on ground - and so used a lot of visual examples to bring alive the different thoughts! This session got a tremendous response - especially the live examples and led to many conversations during the rest of the two days. Including discussions with the IFC who have exactly the same charter - they are investing funds into emerging economies and are now seeking ways to improve the impact of investing in such markets - connecting social impact with business growth.

Impact Investing - what is this?

A session that sought to understand the definition of the term 'Impact Investing' - and whether this was really any different than what the Bank and IFC had already been doing. Moderated by Georgina Baker, Director of Financial Market Operations, IFC, this debate brought together some key players in the Impact Investing space. Antony Bugg-Levine, MD Rockerfeller Foundation; Nazeem Martin, MD, Business Partners; Wayne Silby, Calvert Funds and Peter Tropper, Private Equity Department, IFC.

Much debate on whether it was right to be seeking financial return when investing in social ventures - or if that put the wrong pressures onto a project that was designed for social good - and not financial growth. Whether it was appropriate to seek 4% or 9% or 0% earning from such investments - and which was more appropriate. Antony made the point that if Philanthropic funds and subsidies for social venture funds were two tools that could provide financial support to social ventures - Impact investing needed to be considered as a third tool - that could be leveraged in meeting social impact requirements. And he suggested that these were complimentary tools - to be used together and in balance.

The jury is still out on this debate though. Is Impact investing just a clever 'friendly' term for venture funds trying to get into the very attractive 'social impact market'....

Ascent of Money - Niall Ferguson

A brilliant talk by British historian Niall Ferguson, based on his new book The Ascent of Money, A financial History of the World. He was elaborating on whether the developing world had something to learn from the History of money or where they doomed to repeat it?

Was an absolute treat to hear Niall speak - and connect the dots from history that could show why the world is where it is financially today. With the Western Economy running on a speed of 1-3% growth and the emerging economies on a 7-10% growth rate - this two speed world has a lot of learning hidden within its disrespect for regulation and excess of money in pockets.

Purchasing homes has somehow been made the measure of success for middle income families - pulling people into the capitalist loop of investing in a single, very large, unhedged asset - that they cannot afford and probably do not need - but would trap them into being capitalists forever!! Its the capitalists trying to prevent others from becoming socialists :-)

Fundamentally he argued that an excessive leverage of the financial system, too much money, and inexcusable errors in monetary theory caused the crisis. And that crisis was unavoidable and would happen. But the signs needed to be read.

It was an interesting two days in DC. And the weather held up - with a little sunshine showing up once in a while. Got a chance to go to the Smithsonian Natural History Museum and see the Hope Diamond - now much reduced in its carat-age - but still a brilliant product of India!

On my way now to Boston - more from there in a few days.

Presenting at the World Bank FPD Forum 2010

The World Bank Financial and Private Sector Development Forum 2010, this year focuses discussions on 'Getting Back to Business'.

Ted London and Parvathi Menon present a framework and talk on ‘How can the Private Sector Take Base of the Pyramid Opportunities to Scale’.

Given the data, statistics and opportunity available, it makes intuitive sense for business organizations to engage in building enterprises that have the capacity to leverage and maximize the potential of the immense markets at the base of the pyramid.

Social enterprises have attempted to create inclusive, wholistic models that are mutually ‘value-creating’ – both for business entities wanting to leverage these growing markets, and stakeholders within the BoP ecosystem – who would also gain positively from these initiatives.

Several pilots and a few scaled models down this road, the key questions are now around the critical challenge of designing social enterprises for scale.

With live examples culled from work done with organizations in India, this presentation aims to provide insights from within corporate entities that have managed to ‘scale’ their social enterprises beyond the initial pilots and really create impact on business.

World Bank FPD Forum 2010, Washington DC, March 2^nd & 3^rd 2010

March 2^nd: Session 2: How Can The Private Sector Take Base-of-the-pyramid Opportunities to Scale

Speakers:

Ted London, University of Michigan

Parvathi Menon, Innovation Alchemy

Getting paid to produce electricity for the government!

Am at the Development Dialogue 2010, an annual gathering at the impressive Deshpande Center for Social Entrepreneurship in Hubli, North Karnataka. This is designed as an intersection of social initiatives being funded by the foundation and several international social entrepreneurs, consultants, business leaders all coming together for a few days each January to work through the key issues concerning the sustainable scale and growth of socially relevant initiatives.

Amongst all the discussions, the one that stands out is the Micro-Hydro community based electricity production in Indonesia. Tri Mumpuni, an Ashoka Fellow and well known activist in the subject of sustainable electrification of rural communities shared the model she and her team have evolved in Indonesia.

The challenge? Over 105 million people in Indonesia still live without electricity. The government has tried large hydro plants - but it violates human rights and often irreversibly damages the ecology. Several small initiatives have tried local micro-hydro plants - but these are not sustainable. As soon as subsidized state run power comes in, these small community initiatives fizzle out. The problem still remains - because state run electricity, supplied off a central grid has its own challenges of sustainability, especially in remote, rural areas.

The People Centered Economic and Business Institute, partnering with local communities has created a series of micro-hydro solutions. And they found a way to succeed! The trick is:

- Build the capability and skills within the community to run and manage the micro-hydro plant, including the technical details of running the plant. If the community is unwilling to learn and take ownership - Mumpuni and her team just don't take it on.

- And - more importantly - build an agreement with the central state grid to buy the excess power generated from these small installations!

And by implementing a connection between the off-grid local system and the central grid, the provision of rural micro-hydropower (MHP) plants has now become an economic investment activity!!.

Through cooperative dialogue the community decides how to leverage the income it is generating - Voila! And now the income from these micro-hydro plants is enabling better health, more education and sustainability of the communities. And it chooses to continue using the local off-grid system long term, instead of completely shifting to the central grid.

The by product of this approach is also the protection of the environment - its become critical to ensure trees are protected, water is saved and harvested, catchment areas are kept healthy - because it is all now an economic investment and is helping the community build and grow.

What started initially as a government approval only for IBEKA facilitated MHPs, Tri Mumpuni and her allies got the government to agree in 2002 to buy all small scale power generated from such off-grid systems in Indonesia. It probably required tons of lobbying over several years - but the impact today is a highly sustainable model that connects local, off-grid electricity production to economic opportunity in an ecologically responsible manner.

The United Nations Economic Commission for Asia and the Pacific (UNESCAP) adopted this as a Public Private Partnership model in the Asia Pacific region. The People Centered Economic and Business Institute is now taking its extensive learning from Indonesia and in partnership with organizations across other countries is advocating the need for good governance to build sustainable models through the Electricity Governance Initiative.

Dream-a-Dream

Friday afternoon 4.30 pm. Children from Ananya Shikshana Kendra and Makkala Jagriti are getting together at the SPT Sports Academy, Bangalore to play a friendly football match. Dream-a-Dream, a Bangalore based Civil Society Organization, facilitates the match for the children as a part of their sports program to build Life Skills in underprivileged children.

The kids from Makkala Jagriti are a little late - the Dream-a-Dream bus has picked them up from their school and tackled heavy Bangalore city traffic to bring them over to the Sports Academy. But when they arrive there is a flurry of reunion - kids meeting each other, colour jerseys and football studs being worn, boys and girls ready for the match - everyone excited to be outdoors, playing. The youngest child is around 6 years old all the way to senior kids from grades 8, 9 and above. The children are separated by height and age - and smaller teams are created. Each group then goes into a separate part of the field to warm up under the guidance of the team of coaches.

Ajit Gupta - the head Coach of the SPT Football programme tells me he is really excited to be doing these sessions. His team also runs 'regular' sessions each weekend where eager parents from in and around Bangalore bring their children in for Football Coaching. But Coach Ajit says working with the kids from Dream-a-Dream is energizing. The children are eager, very ready to be coached and wanting to learn and use every minute of the time they have on the field.

The senior children are formed into two teams and the rules are laid down for the match - boys and girls form part of each team. The coach tells me that the number of girls has been steadily increasing. The game gets under way - and gets into a heated mode real soon. By half time one side is clearly ahead - the other team is dejected. The coach huddles the team - and teaches them to deal with the frustration of loosing and convert it into strategy for the next half.

This is truly a life skills session. None of this can be taught in the regular academic classes. And without the support from Dream-a-Dream, the children from Ananya and Makkala Jagriti would not really have a chance to learn these critical skills of life survival - through such a fun and engaged excercise.



These life skills have the capacity of being a great leveler between regular and 'underprivileged' children. Vishal Talreja, the young CEO of the organization passionately believes in that possibility. At the end its about how well you can deal with issues, problems, situations in life - and the programmes run by his team focus on helping build that capacity through co-curricular activities.

Covering a key area of skill building their work focuses on the critical portion of the gap between an underprivileged child and his/ her ability to work with equal opportunities.




Working across several partners in Bangalore who work with underprivileged children, D-a-D is now looking to scale up their work and are struggling to determine if the scale that they want to achieve should be in terms of deeper impact or more numbers covered - or both? Given that this is a critical need area. That triggered the discussion and work with Innovation Alchemy.





They have built an amazing network of volunteers who come together to support the various activities and programmes. A small core team manages the operations and works through partner organizations and volunteers to reach over 2000 children in Bangalore. That's not a small number considering each child is in atleast one activity each week of the academic year.

As the Dream-a-Dream core Team came together last month for a 'scale-architecture' session, clearly the idea they have experimented with and fine tuned incredibly over the last 7-8 years is powerful, the operations are effective - and now its time to potentially reach 500,000 children in the next 5 years! Through a whole new service model leveraging Learning Skills Experts. The thought of being able to do that has energized the team! With a powerful fund raising base, D-a-D hopes to increase its reach and impact significantly - and also go beyond Bangalore and Mysore soon...

You can support their work by running in the Mumbai Marathon coming January. Infact you will find Dream-a-Dream at some of the biggest marathons across India, being supported by a bevy of volunteers who enjoy raising funds and giving time to this project...

Innovation Alchemy...scaling-up social enterprises

Growth is a tricky issue when is comes to the subject of creating Social Impact. In my transition from a largely corporate environment into the development sector - the definition of 'growth' and 'scale-up' stood out as a key point of difference that needed consideration...which led to the setting up of Innovation Alchemy, a firm focused on enabling growth agendas in the social impact space.

Of course, creating change and social impact is complex. People are dealing with the real challenges of poor economy, endangered ecology, lack of opportunity and lack of skills to use those opportunities and make real change possible.

In such complex scenarios, when you talk about 'growing an idea' or 'scaling an initiative' what do you focus on? How do you combine the passion needed to work hard and long in these areas - with the sharp business principles that need to be adopted for real scale.

A PRIA - John Hopkins University study in 2001 indicated that there were around 1.2 million NGOs in India - that number could well be 3 million now. Those are huge numbers by any standard - and in a largely fragmented sector, without an institutional framework to grow within.

What it essentially means is that there are hundreds of ideas out there and lots of passion, being implemented in small scale to try and impact local communities, local issues. Several of these organizations have demonstrated impact at a micro level, are great ideas - and now really need to scale-up and grow for real change to be visible. NGO's have started to transition into Social Enterprise organizations, and the issue of scaling up is becoming a loud conversation.

As a start point for the discussions is to define the intent for scaling up... what is the focus?

1. Increasing the number of 'people'/ 'communities' impacted by the initiatives? For example SKS Microfinance in India now reaches around 3 million individual customers - poor women - who have benefited from micro-enterprise loans..

2. Or Deepening the impact on the people and communities - so increasing the nature and complexity of projects and the 'comprehensiveness' of the impact. BRAC in Bangladesh has evolved since 1972 to be a huge platform of support initiatives that has the capacity to customize and provide solutions to the poor, in a very localized manner. A poor woman in the village can rely on BRAC to provide her with essential health care, education for herself and her family, business support, legal assisstance and a voice in local issues.

3. Or doing a combination of both in an attempt to stay small - but have larger impact - collaborating with a lot of partners in a sort of R&D based, franchise model for growth where others take up the idea and build it in their regions...while the core team works on a small 'lab' or core zone of impact to create newer solutions..

At Innovation Alchemy we look at these challenges up close and work with the evolving Social Enterprise Teams in their quest for growth. We apply a very collaborative, hands-on approach in our work - thus getting involved over 12-18 months in working with each team to help them design and develop scale for their organizations.

School!

Govt. School, Kurivundi, Nanjangud Taluk, Mysore District.

On a trip into the Cotton farming belt around Mysore, came by this charming school. The students were having a science exhibition.

Turbines, water harvesting systems, water storage & sprinkling systems for dry rain-fed areas.....wonderful little experiments that reflected keen minds, a science teacher's involvement in his students... and the fact that most experiments were looking to solve local contextual problems. More on that in a separate blog post ...but what really caught my attention was the beautiful charming faces of the happy children...

Everyone wanted to get into the picture - and getting so many excited faces together into the frame made these images come alive!

Perseverance and a 'Thick Skin': India's Next Wave of Entrepreneurs - India Knowledge@Wharton

Continuing from the last post - on the need for social entrepreneurs. While this article is not directly about social entrepreneurship - the principles apply....Perseverance and a 'Thick Skin': India's Next Wave of Entrepreneurs - India Knowledge@Wharton

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Social enterprise - the much needed catalyst..

On a continuum, social purpose - and business for profit have been separated and positioned at two extreme ends. Never to be brought together, as it would be impossible to serve a human need and make profit at the same time - even if it was possible, it would be exploitative.

Entrepreneurs of course respect no such perceptions. Bold new models, hybrid collaborations, breakthrough products and services designed for the 'bottom of the pyramid' have signified a new breed of social purpose enterprises that blend social impact with business - under the phenomenon of social entrepreneurship!

If you step back and look at development and growth of people and economy - The government initiated development in the early years of independence across agriculture and infrastructure. Large enterprises in conjunction with liberal policies of trade brought in the next wave of development and economic prosperity into India. I firmly believe that it will be Social Entrepreneurs who, with their bold vision and enterprise, will lead the next wave of socio-economic development in our country.

Some really interesting and inspiring models like Vatsalya Hospitals, Selco Solar Solutions, Vision Entrepreneurs at Vision Spring - give an indication of whats possible once entrepreneurs find the link between a real need - and the capacity to convert it into a set of viable solutions.

Are these exploitative? Are micro-lending institutions charging too much interest? Should poor people have to pay for services? These are interesting questions - depending on who is asking them.

For a poor family, with no access to potable drinking water - spending Rs. 5.00 every day to purchase water from a local entrepreneur (who is funded by an MFI and equipped with innovative low cost equipment) - is an economic activity. Clean water keeps his family healthy - more people can earn and be productive. Rs. 5.00 is payable.

Should the government be providing it? Yes. But can this family wait till the government reaches them - or is he better of finding more enterprising solutions that help him increase the productivity of his family? He cannot wait. He must not.


I know that this is probably an over simplification of the challenges. But Exploitation, I find, is becoming an inclusion-phobic term. It stays as an excuse for allowing a lot of people to continue having debates on what is good and what is not, and what should be done..and should not be allowed. Arm chair dialogue in true democratic style, leading nowhere.

Aid is on its way out - as many non-profits realize the sustained viability of having independent revenue models. More non-profits are investing time in becoming self-sustaining. Beyond Good Intentions follows 10 interesting cases across the world that are demonstrating this trend. Bill Gates calls it creative capitalism. And the jury is still out on whether this form of enterprise is healthy for the larger good.

Not withstanding, social enterprise is becoming the much needed catalyst for bold new initiatives, new breakthrough models, rapid innovations that can bridge sustained impact - and economic viability. More power to them.

What do you think? Would be interested to hear a different point of view on this. And also hear of examples where you believe social enterprise has been the change agent...

Opportunity models via Mobility inclusion

It’s pretty clear that the mobile device is no longer just a talking device for personal use, designed for urban users – but it’s instead a computing device, an economic device, an opportunity gateway.. that has the power to transform lives through inclusion.

I studied four examples specifically to cull out some learning on how 'opportunity models' have been crafted using mobility as the route:

1. Space Data Corp - Wireless Network Coverage

Jerry Knoblach wanted to bring wireless service to millions of rural Americans. His plan: Beam it down from balloons hovering at the edge of space. His company, Space Data Corp., already launches 10 balloons a day across the Southern U.S., providing specialized telecom services to truckers and oil companies. The balloons soar 20 miles into the stratosphere, each carrying a shoebox-size payload of electronics that acts like a mini cell phone "tower" covering thousands of square miles below. To make this effective, an operational and economical model has been put into place that pays farmers to release hot air balloons with transmitters every 24 hours.


2. M-Pesa (Vodafone – Safaricom)

In a country like Kenya, where there are less than 2 million bank accounts serving a population of 32 million, the lack of an efficient, affordable banking infrastructure is a contributing factor in the persistence of poverty. Prohibitively high cost of banking and the fact that a majority of Kenyans earn less than $1 a day added to the problem and left a big gap in the development potential.

Vodafone came up with a single but powerful approach to tackle poverty in the developing countries where they operated, based on the insight that access to finance facilitates entrepreneurial activity. And thus was born M-Pesa.

Essentially account holders can have virtual accounts at Safaricom and operate it using SMS – thus transacting business between individuals and individual to businesses, without really needing a 'traditional' bank account.


3. Cell Bazaar

A rudimentary e-bay like service that leverages the simple, widespread power of SMS to bring the market to the phone. By sending simple text messages to 3838, users post items for sale, look for items to buy, and obtain current market prices of products or services.

This is essentially a craigslist over mobile phones! Any Grameenphone user can dial 3838 and listen to the latest items on the market in Bengali. After dialing 3838, users choose from 8 categories: Jobs, Mobile Phones, Agriculture, Motorcycle, Car, Electronics, Computers, and To-Let. Every few hours, users will hear new information through this service.

Although 75% of Bangladesh’s population has no access to electricity and Internet penetration is only 0.03%, Cell Bazaar has more than one million users.



4. Voxiva - Alerta

A health and disease surveillance system that enables health workers to use existing modes of communication, without any Internet access. This system challenges old paradigms related to monitoring diseases in remote rural contexts by enabling:

• Real-time collection of critical information from a distributed network of people;
• Rapid analysis of data to drive decision-making and allocation of resources;
• Communication back to the field to coordinate response.

Effectively transforming the village pay phone into a communications device on par with that of a computer – and putting the power of technology and communication within easy access for remote rural users.


These four diverse examples from very different corners of the world had insightful patterns:


1. The economics of phone usage currently assumes that the consumer of services pays for it. Instead we see here that service providers need to view the consumers as the producers. Producers of real time data, knowledge, information and insights that can be exchanged for services. The business model is not based on usage – but on contribution. Cell Bazaar applies the principle of user-generated content becoming the currency for mobile usage.

2. Access to mobile solutions is largely based on network coverage, which involves high investments and slow movements into remote areas. Space Data Corp experiments demonstrate that Network coverage can potentially break free from the assumptions of location, physical infrastructure and huge investments – to a method where it can reach everyone. With an effective economic model that pays for itself.

3. Paradoxically high-tech solutions need not mean more devices, or more complex applications for users. Alerta combines existing modes of communication inside villages and overlays it with a robust application to capture and interpret voice inputs from all kinds of devices…the backend of this solution is fairly sophisticated. But for the user it just involves talking into a phone. A simple act that now has the power to save lives, control disease and enable prosperity.

4. Urban users have followed a sequence in reaching today’s advanced technology state. From simple phones and computers to high tech converged gadgets using cloud computing. There is no reason that rural users need to follow this sequence. Business model innovations that compel users to adapt to voice or video or any other complex technology have demonstrated this already.


Its very interesting to note that Prosperity (and inclusive growth) is a combination of economics, opportunity and accessibility. Examples like M-Pesa, Cell Bazaar and Alerta have created opportunity models and powered them with mobile technology – thus driving prosperity in developing economies.

When Samsung says 'Next is What?' - its time to look away from the product paradigm and dig deeper into user lives and regional contexts. Nokia's Life Tools has some interesting initial experiments in that direction for rural users...

Innovation...for Inclusive Growth.

The economy of India, measured in US exchange terms is the twelfth largest in the world, with a GDP of around $ 1 Trillion . It recorded a GDP growth rate of 9.1% for the fiscal year 2007-2008 which makes its growth the second fastest among emerging economies in the world, after China.

However in parallel, the Planning commission of India estimates that 27.5% of the total population of India lives below the poverty line. This is measured based on per ca pita consumption expenditure of a household below Rs. 356.35 for rural areas and Rs. 538.60 for urban areas. That is below $1.25 per person.



In addition, a 2007 report by the state-run National Commission for Enterprises in the Unorganized Sector (NCEUS) found that 65% of Indians, or approximately 750 million people, lived on less than 20 rupees per day (equivalent parity with $2 per day) with most working in the "informal labor sector with no job or social security. Of this population approximately 80% live in the rural or semi urban context.



What this means in simple terms is that approximately 750 millions Indians are outside the purview of what is classically perceived as the ‘traditional market’ for most goods and services. This ‘under served’ market has the attention of the world ever since Bottom of the Pyramid was written.

This market is expected to behave and function in a different manner than traditional. And so Sales & Marketing teams often try to penetrate this market with modified urban strategies, fail in their efforts to create any impact - and then respond with the sentiment that the fortune at the bottom of the pyramid is a myth and that ‘this market is not yet ready for our products – it needs to mature’.

Increasingly I find organizations reaching this conclusion after some attempts - and subsequently stopping initiatives in really penetrating these under served markets. Instead the Chairman or CEO converts it into a CSR initiative. Inclusion then suddenly gets limited to a 'feel good' factor under Corporate Social responsibility.

CSR works on the limited paradigm of Philanthropy - rather than sustained impact.And so while there are several CSR initiatives, the sum total of all such initiatives creates very little impact.

Notwithstanding these dilutions, the sheer size (750 million people) of these under served markets commands a perspective. And while these complex ecosystems need maturing, it is clear that the sequence for impact will need to be:

Step1, create a fortune for the bottom of the pyramid - through economic and social opportunity creation and inclusion
And then step 2, capture a portion of the new value created in an equitable manner. This will form the fortune at the bottom of the pyramid.



The success of the Micro finance model is a testimony to this sequence. In a recent visit to an MFI center near Hyderabad I met a group of women who have benefited from these small loans. A stone cutter who could often not even feed her children a few years ago is today running her own micro-enterprise, providing employment to 10 others. She is perfectly happy paying the high interest charged - is driving the MFI to give her larger loans - so that she can grow faster. Her aspiration today is for gold jewelery, a pension scheme for future investment and durables. Service providers in these areas will today find this woman a 'mature' consumer who is ready to consume!!



But if we go deeper into the process, the steps clearly include first creating new value by delivering the most relevant service (organized micro finance) and then capturing resulting value (higher interest rates + new opportunities for other servivces) - in a manner that it benefits everyone involved.

This in many ways, I believe, is the basis for a truly impactful 'inclusive growth' story.

Such an approach presumes a few critical innovation sensitive areas:

1. Focus on crafting unique win-win business models - not just having an idea to 'help' a community. Crafting business models needs 'business thinking' profit/ loss/ income/ expenditure. These terms are often anathema to social organizations. That's a mindset that needs change.

2. Crafting unique 'Engagement Models' - of how entities will interact with each other in socially acceptable ways. A business model that makes a land owning farmer sell FMCG products to his village will probably not work. Because the farmer considers 'selling soaps and shampoo' below his social dignity. Therefore insights are needed about the relevant social norms, such that unique engagement models can be crafted.

3. Collaboration amongst entities in the ecosystem - its not sustainable (or feasible) for a single entity to create new value models, deliver that value and also find ways to capture it. Therefore you may need an MFI to create new value, a rural distribution network to add depth and capture some value, a telecom network to deliver and capture some value, a school/ hospital to enhance capacity to create value in the long term. So here a key question is how can such entities identify each other and co-create new models and work together to create and capture value?

4. Deploy technology to consolidate information, learning and data capture across collaborating entities. This is probably the most critical element. If everything else works, but there is no technology to consolidate learning, analyse data and make relevant decisions - there is no way to scale an inclusive growth model. Mobile networks, computers, satellite scans, GPRS etc are now reaching deep parts of India. How do we build solutions that connect all these into central frameworks where data can be consolidated?

Do such examples exist? What can we learn from them?