Operational Challenges. And a Few Solutions

Hi David,

Being an engineer by profession, I must say that technology can do wonders for social-entrepreneurs. Every business process can be innovated using technology and I don't just mean high-tech costly technologies for communication, transportation or information-management. I beleive that a social-entreprenuer must select from a range of technologies available -products and services, that suit the specific project in a way as to make the entire project-infrastructure scalable and flexible enough to keep it sustainable. We, social-entrepreneurs, need to be and luckily are very innovative. The beauty lies in transforming every busniess process into a replicable framwework that can be uniquely defined for any specific project. Technology, similarly, can be quite abstract and we must define its use and utilize it as per the task and current-time. More than anything, I strongly believe that its the relationship between the social-entrepreneur and the BOP that can define and eventually solve any business constraint. If the relationship is of trust and cooperation, simple technologies and infrastructure can do wonders.

The processes that we need to follow to do business with the BOP are different especially since they also include the social-value perspective. We need to have a holistic view of the project and must be able to look at the economic and social results of the project together.

Every case is unique. I am looking forward to getting more replies to this important topic.

Rrgards Ankur

Ankur-

When I started my career doing international development in Africa, the term appropriate technology was thrown around a lot. The important part of that statement is "appropriate". I think that SEs need to be more sophisticated when they look at business process and technology... there are two important facets to the relevance of technology.. the direct impact, the distribution and the SE itself.

In the direct impact, you might use a very simple mechanical system to shell peanuts... wizz bang microelectronics aren't going to help. In the distribution , a big modern factory that builds shellers at a low unit cost might be great or you might want to keep to local materials so that local folks can build businesses around the machines. And finally, in the SE itself, you might use all types of wizz bang technologies to make you more efficient at getting shellers into the hands of people.

The point here is that at each step you select technology that is appropriate to the business process you are implementing. The technology is just a tool with little bearing on social impact... it simply magnifies (or reduces) the social impact of the business process.

What challenges have people faced when selecting from the range of technologies available?

I use business process reengineering principles extensively in my third world development work. See the first three papers at my website at http://home.comcast.net/~prigter/site/. I find that a lack of supplies in rural areas is my biggest challenge. For example on the following project, I must obtain veterinary supplies, poultry netting, tropical fruit tree seeds, moringa seeds, micro irrigation equipment, etc. Also I must insure that this equipment will be available to the poor Colombians after I leave.

The Mas Dinero Project for Improving the Lives of Poor People in Cordoba Colombia

The purpose of the Mas Dinero project is to use the latest findings in science, technology, and social programs to improve the lives of poor people in the Department of Cordoba along the north coast of Colombia. In particular, the object will be to dramatically increase the finances, health, and athletic ability of poor working men and women in Cordoba between the ages of 18 and 70. Four proven methods will be used to increase the income and health of the poorest people. They are: 1) Growing Moringa for use by humans as well as for animal fodder (see http://www.treesforlife.org/ http://www.moringanews.org/ (especially articles on the use of Moringa for increasing the growth of cattle and pigs which is an important industry in Cordoba) http://www.echotech.org/mambo/index.php?option=com_content&task=view&id=89&Itemid=122 http://www.echotech.org/mambo/index.php?option=com_content&task=view&id=63&Itemid=140) (Note: Some ECHO and Trees for Life technical notes are available in Spanish and will be distributed to participants in the Mas Dinero project)

2) Growing tropical fruit trees (see http://home.comcast.net/~prigter/Bangladesh.doc http://www.echotech.org/mambo/index.php?option=com_content&task=view&id=63&Itemid=140)

3) Growing other high value food commodities such as Hawaiian Sweet Corn with the help of micro irrigation (if available in Colombia) (see http://www.ide-india.org/ide/pt/index.shtml and http://www.ide-india.org/ide/ipmas.shtml http://www.echotech.org/mambo/index.php?option=com_content&task=view&id=160&Itemid=164 http://www.echotech.org/mambo/index.php?option=com_content&task=view&id=63&Itemid=140)

4) Starting Backyard Poultry farms (see http://home.comcast.net/~prigter/Poverty.doc http://www.fao.org/english/newsroom/news/2002/5480-en.html, http://www.fao.org/AG/againfo/themes/en/infpd/documents/papers/2004/7afghan1503.pdf, and http://www.globalfoodchainpartnerships.org/cairo/papers/TomFattoriAfghanistan.pdf http://www.echotech.org/mambo/index.php?option=com_docman&task=doc_view&gid=35

The cost of supplies for each project is expected to be less than $100. Poor participants in the program should be able to substantially increase their income within 1 year and may want to use their profits to expand their businesses.

To increase the athletic ability of the residents a Sports Club will be organized using low cost sports equipment imported into Colombia (badminton, croquet, horseshoes, Frisbees, and softball equipment.) As the income of the residents increases it is expected that a Pitch and Putt golf course will be prepared following the plans supplied by Golf Digest magazine. In addition, a miniature golf course may also be prepared. These golf projects will not be started initially due to the difficulty and cost of importing equipment into rural Colombia.

Initially the concepts described in this paper will be tested in Los Cordobas, Cordoba, Colombia (an isolated village in on the Atlantic coast of Colombia where the author was a Peace Corps volunteer specializing in rural community development). As seeds are produced and concepts are proven, the Mas Dinero program will be expanded to other parts of Cordoba using middle-age women from Los Cordobas as salesman for both the technology and the tropical tree seeds required to take advantage of the technology. These women will be familiar with: 1. The production and use of Moringa, tropical fruit trees, and other high value food commodities, 2. Modern methods for backyard poultry production, 3. The use of micro irrigation (when it becomes available in Colombia) 4. The use of low cost sports equipment

In addition, they will be chosen for their ability to be compassionate with the problems of other women and men living in other parts of Cordoba (since they have experienced similar problems). They will use modern sales techniques to sell the program such as the following slogans: 1. Why not purchase small miracles for the price of a Kola Roman soda (Moringa seeds) (Note: The moringa tree is also known “The Miracle Tree) 2. Why not grow the best possible food for your family and your animals for the price of a Kola Roman (Moringa seeds) 3. Why not start a modern high technology farm for the price of two Kola Romans (Moringa seeds, tropical fruit tree seeds, other selected high value food commodity seeds)

These saleswomen will provide literature in Spanish describing the use of Moringa for family health and animal fodder to potential customers. They will be able to discuss improved technology for tropical farms. It is hoped that these saleswomen will receive help from the Government of Cordoba, leaders of the Catholic Church, and NGOs in the area such as World Vision in Monteria as the program progresses.

prigter-

Sounds like the challenge here is sourcing. I think that local sourcing gets to be a huge challenge for social entrepreneurs working in developing countries... can't just pick up the yellow pages and sometimes you have to teach people to be your suppliers in the first place.

How did you go about local sourcing?

Most folks I talk to say the only way is to be on the ground and talk to EVERYONE... eventually you can find what you need. Anyone have other suggestions for effective local sourcing?

In general I plan to work with all the important political and technical personnel in the area including the Governor of Cordoba and her staff, Mayors of Monteria and Los Cordobas, Bishop of Monteria, various school teachers and medical personnel, NGOs, etc to obtain the subsistance farming information that is available. The discipline of business process reengineering helps me identify all the supplies, business processes, and resources that are needed. However, I still need to solve the problems of getting the supplies where they are needed, quality control, packaging, transportation, appropriate training materials for subsistance farmers, etc.

I don't believe that all the critical supplies are available in rural areas of Cordoba much of the time and this is what causes microbusineses to fail or be ineffective in the area. There is a huge supply chain problem providing all the supplies that people need to make a living particularly when you are trying something new. Providing small amounts of money (micro financing) does not help if you need a particular type of fertilizer, herbicide, pesticide, or micro irrigation equipment which is not available locally and would cost a lot of money to import into the area.

I don't believe Cordoba is unique in this situation. In many rural areas throughout the world BOP businessmen and subsistance farmers are forced to do what they can with the supplies that are available; poverty continues as a result.

The Gates Foundation PASS program is trying to solve this problem in Africa.

@Prigtar:I beleive you have an edge. Support from the "key" players of the area does remove some "overheads".

I think finally what matters is what you choose. Sometimes, "talking to EVERYONE" in the local market can bring forth some wonderful ideas and these will be ones that would be easily and readily accepted by the local community (co-creation). Sometimes, however, the BOP prospective customers and suppliers have no idea about what we intend to do and the challenge lies in creating this market from scratch.

Its this uncertainity that,sometimes, I find a bit frustrating and other times interesting.

I've seen a few projects where micro-lenders are opening up their on the ground infrastructure to market BOP goods... if I have a solar light, how do I get it to my target market... going through an existing network is a good strategy.

I have yet to see anyone identify supply chain needs in a geography and then support micro-businesses in meeting the gaps in the supply chain. Has anyone else seen this? I suspect the complexity might be too high to have any reasonable chance of success with this type of approach.

The Gates Foundation is providing a supply chain for African BOP farmers. See http://www.gatesfoundation.org/learning/Pages/africa-seeds-system-updates.aspx

Unilever in India has a BOP supply chain

ECHO provides seeds worlwide to NGO personnel for use by BOP personnel

Dr. Madhu Viswanathan is doing subsistance marketplace research and development. See http://www.uic.edu/depts/oee/submarkets/agenda_final.pdf

Also see Sustainability Challenges and Solutions at the Base of the Pyramid at http://www.greenleaf-publishing.com/productdetail.kmod?productid=2759

Dear David, I like your article on operational challenges to social entrepreneurs. I may add few more components though I am not sure whether they are common to all: 1) In the Indian context , i would obviously put financial constraints as a major challenge. The project funding cycle and process-cycle donot match often, If your money stops before the process cycle is completed in the target community or target work , then the work fails to sustain. Stopping of money also break the team before the mission is completed.

I have seen how the traditional donor agencies like to give support for 2/3 years and then the process suffer if the Entrepreneur is not able to get another donor. Thus lack of finance affect the mission fulfillment process and the Entrepreneur gets frustrated.

2) With regard to the external environment , political parties or Govt. often control the Social entrepreneur, if the work intends to bring social change. In India. the govt officials create problems for the NGO or Enterpreneur .

lalit India

I am always interested in how finance and capital are often the first barriers that social entrepreneurs identify. I have a fair amount of experience in the angel investment/ venture capital world and often capital masks the bigger problems organizations face.

In my last start up, we had some serious operational challenges and we were operating on shoestring. Internally the mantra was "if we only had the capital", we could be successful. As it turned out, even if we were to have the capital, we would have had to confront those internal challenges.

I wonder if what we really need in the sector is an effective way to deliver just enough money to social entrepreneurs and then, if they are successful, support them in scaling.

I believe that social entrepreneurs lack knowledge of the following subjects and as a result are ineffective in helping BOP personnel in rural areas throughout the world: 1) Subsistence agriculture 2) Bringing food to the market 3) Use of irrigation in tropical and arid areas 4) Food storage 5) Raising small animals Many social entrepreneurs have been trained in "policy studies", "fund raising", and "finance". These poorly trained social entrepreneurs rationalize their lack of knowledge by stating that they expect desperate poor people to become entrepreneurs even though they have an inadequate amount of funds in some cases (I believe that a college educated person should be better prepared to lead an entrepreneurial entrepreneural opportunity than a person with a third grade education). Relying on "technical support or local expertise" is another excuse. Better training of future social entrepreneurs would help. I told my children to avoid any college course that focused on "policies" and to take courses that they need even though their grades may suffer. It worked in their case.

We didn't get a lot of solutions out on the table, so I thought I'd do a little wrap up post to tackle the issues that seemed to resonate with people.

How do you create codified and replicable business process?

Write things down. Return to what you've written down and revise. -- For the geeks, configurable technology allows you to refine business process on the fly. At NetSuite when our application process went from a letter of intent and an application to just an application, that night I reconfigured the application process, changed the online forms and revised all of my dashboards and management searches on the fly. [be careful, this only works when down time and mistakes are acceptable]. The number of tools out there that allow you to do this is tremendous... Drupal, Salesforce, CiviCRM, and far more.

How do you create relationships / source at the bottom of the pyramid?

Face to face with intermediaries. Create partnerships. Get out on the ground and talk to everyone.

How do you finance an social enterprise? [if I had a good answer, I could be rich :) ] -- financing is like sales. Talk to 100 people. Listen to 99 nos. Keep going until you have the money you need. -- Really look at whether your problem truely is money... is you approach too expensive? does the needs for financial resources mask underlying problems?

How do you train social entrepreneurs?

I don't think we got to an answer, but my opinion is go out and be one. Fail a few times and you will become a high impact social entrepreneur.

Hi David,

Thanks for initiating the dialogue with some great questions. I'm interested specifically in what's come up around internal challenges that go masked under the guise of the need for capital/other external factors. In my experience, money, like time usually turns up a larger conversation about mindset over anything else.

Shifting mindset shifts everything else. I've seen "capital poor" operations pull off the seemingly impossible and organizations rich in reserves struggle for years - I think it starts with the mindset of the leaders. Everything we need to generate the results we're committed to is already there. What gets in the way is an inside job.

I'd love to hear more about the internal challenges you've experienced and continue to see in other social enterprises...

Leaves your operation wall to wall in process. I know there are some must have's but its social enterprise. The operational side has to be passed back to the people undertaking the social enterprise. If you look at the Sirolli (http://www.sirolli.com/) model, its something that keeps things simple, low cost and puts the emphasis on community to make things happen and drive the project.

YOu need a kick start for people with zero money and no likely way of getting it and that where I think Sirolli and the Micro lending scheme of Professor Muhammed Yunus (http://www.londonspeakerbur[…]muhammad_yunus_speaker.aspx) comes together to make social enterprise work and reduce these operational needs flagged above.