Profit-nonprofit partnerships
Rama Bijapurkar
The Economic Times, Oct. 24, 2005
I have often said that change in India is of the morphing, creeping kind, not of the mega-trend,
discontinuity kind. One such creeping change is the increasing private sector partnerships with
development sector organisations, to create win-win solutions to help alleviate the problems of the poor, in
an affordable yet profitable way. However, the coming together of people from two worlds which are wired
so differently has been fraught with problems, and that’s what this article is about — what are the
challenges involved in creating the much-needed common framework of understanding that enables the
creation of robust partnerships?
But before that, an invocation to the guru! There is a saying in my mother tongue that unless you pour
water through a conch shell, it does not become holy water. And unless you have a leading management
guru talking about it, it does not carry legitimacy in the business world. It’s thank you C K Prahalad, for
giving profit motive driven businesses the compelling logic of the ‘why’ and ‘how’ of engaging with
people at the Bottom of the Pyramid (BOP).
His book Fortune at the Bottom of the Pyramid has made it mandatory for companies around the world that
consider themselves progressive, to at least examine the idea, and devote some time and resources to real
life market experimentation to test this idea. One of the key ideas of the book is that the last, but most
important ‘get to, and get the consumer’ mile can only happen if private sector works in partnership with
the development sector organisations.
The latter have access, influence, trust and knowledge, about people at the bottom of the pyramid, as well
as the cost-right grass-roots organisation infrastructure; and hence are the best market development and
channel partners for any company wanting to find the fortune at the bottom of the pyramid. That’s where
the theory ends. In practice, wherever I have been a part of such initiatives, even sustaining a constructive
dialogue has been tough. What we have is parallel monologues, with different mental models and different
processes of “getting the job done”.
I think both sides need to first train each other in how they think, plan and speak, before having aspirations
of working together and believing that this is one more “learn as you go” situation. Here’s an example of
some significant differences. The development sector processes are all about forums, networking, sharing
knowledge; about creating intellectual and experiential resource pools which act as enablers and catalysts
and hence generate action. The private sector is all about organisation structures, work plans, working
backwards from the results (rather than going forward with the evangelism).
I once went to an all star cast meeting to discuss how to get small producers together to give them market
access with reasonable supplier power. The private sector answer was to create a marketing organisation
that acted as a bridge between the two worlds and did vendor development in line with market demands.
The development sector answer was to create a networked movement, which included a whole slew of
experience sharing conferences, training sessions for supplier organisations on business processes, and
marketing. The private sector was looking at shorter time horizons than the development sector. Clearly
one lot comprised “human doings”, while the other comprised “human beings”.
Another area where arguments happen is the notion of what it takes to replicate successful initiatives, and
hence build scale in the whole endeavour, whatever it might be. I once saw a huge fight between a
consulting firm and their development organisation counterparts; very interestingly both sides were alumni
from the same business school. One said that ramping up the low-cost education model that had proven
successful was to hire 400 managers and get them to replicate the model in 400 locations, armed with best
practice manuals.
The development sector folk said that replication should happen wherever there was a supportive local
government, a development sector person and local community expressed desire for the initiative — no
matter what the pace of ramp up be. Both sides made sense, but there never was a resolution, because one
thought the other was an interloper into hallowed turf, and the other thought that this was a bunch of
impractical, hide bound old women.
But the real good news is that there is more similarity today than there ever was. There is emergence of a
whole bunch of new-age development sector organisations, set up and run by people who have had
classical engineering, MBA type educational backgrounds that you would find in the private sector, and
that makes for easier communication, negotiation, and for easier finding of solution spaces. Second, much
of the progressive, younger development sector thinking is about creating financial sustainability in
services that they offer to their beneficiaries.
I was once invited to a big NGO conference where they wanted to hear about low-cost business models that
businesses were beginning to create, and learn from them. As an aside, I must say that I had to delete large
parts of my presentation, which exhorted everyone to do product and process innovation — the sort of stuff
we would say at a business forum.
Because money and people shortage coupled with passion to get the job well done is the sort of necessity
that is the mother of all innovation, and the development sector has it in plenty. Add to it the number of
tech savvy folks now in the sector, and you have much that the business side can learn. The jhola has been
replaced with the lap top, and the hand out with the concept of financial self-sufficiency, and earning
surpluses to reinvest in the initiative. So the environment for partnerships has indeed come of age.
(The author is an independent market strategy consultant)