5 Steps To Scale Inclusive Business Collaboratively

This step’s objective is to focus the scaling process on the intended impact collaborators aim to create for the BoP. Otherwise, their scaling efforts may end up growing the inclusive business without bringing about substantial social change. To this end, it is crucial to define a scaling impact ambition that delineates the value you seek to create, deliver and capture for people living at the BoP. Such an ambition also helps to create a common understanding of what lies within the project’s sphere of control, influence and interest as well as create support for what is intended to achieve.

In this step, answer the following seven simple questions to demarcate what value is seeken to create for the BoP. First, the questions are answered individually. Then they are discussed with the group to reach a single, shared scaling ambition.

Figure 2. Question form

Example: ELAGA in Burundi

ELAGA’s fish farming project, which develops fish farming as a new profitable supply chain in Burundi in cooperation with local communities, defined the following scaling impact ambition with its partners:

Would you like to discuss how you could apply and use the five steps for your organisation? Get in contact with us. 

References

[1] Jacobs, F., J. Ubels, and L. Woltering, The Scaling Scan: a practical tool to determine the strenghts and weaknesses of your scaling ambition. 2018.

It is crucial that collaborators carefully consider the ecosystem and the local context that impact the scaling ambition’s realisation. This allows them to avoid resistance from the BoP community and other key stakeholders during implementation

Step 2a: The ecosystem

In this step, visualise the collaborators in the ecosystem (commonly called actors), their interactions and relationships with other collaborators, and the value created, delivered and captured through the collaboration for the BoP. The actors, such as suppliers, producers, off-takers, consumers, investors, service providers, research institutes, governments, non-governmental organisations (NGOs), donors, are involved in scaling inclusive value. Before drawing the ecosystem, answer these five questions:

1. What are the key actors in our ecosystem?
2. What are the key actors’ most important resources?
3. What are the key actors’ most important activities?
4. What influence does a key actor have on the inclusive business model?
5. What interest does a key actor have in the inclusive business model?

After identification and characterisation of the actors in the ecosystem, it is time to visualise the network. First, draw the actors that are identified previously, as well as the relationships between them. Use arrows and lines as well as circles and squares. Second, clearly identify the resources and activities that are exchanged between actors. As an example, a generalised ecosystem for an inclusive business is shown in Figure 3.

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Figure 3. Example of BMC visualisation

Step 2b: The local context

This step involves identifying the political, economic, social, technological, environmental and legal opportunities and threats in the local context. First, think of as many opportunities and threats in the local context as possible. Then, choose the most important development per category for the realisation of the scaling ambition. See Figure 4.

Figure 4. PESTEL framework to identify opportunities and threats in the local context

Example: People’s Pension Trust in Ghana

People’s Pension Trust, which aims to reduce old age poverty by offering pension products for both the formal and informal sector workers, and its partners experience the following opportunities and threats in Ghana:

Would you like to discuss how you could apply and use the five steps for your organisation? Get in contact with us. 

References

[1] Brehmer, M., K. Podoynitsyna, and F. Langerak, Sustainable business models as boundary- spanning systems of value transfers. Journal of Cleaner Production, 2018. 172: p. 4514-4531.
[2] Han, J. and S. Shah, The Ecosystem of Scaling Social Impact: A New Theoretical Framework and Two Case Studies. Journal of Social Entrepreneurship, 2019.

There is no consensus about the best way to scale social impact. Instead, a combination of multiple scaling tactics is used, which together form the scaling strategy, to increase the chances of creating long-lasting for the BoP.

Generally, three categories of scaling tactics can be distinguished. The first is to increase the number of beneficiaries of a product or service, which can be accomplished through market penetration and market development. The second is to expand the product or service with a social impact, this can be achieved through product development and market diversification. The third is to increase the income generated by increasing the revenue per stream and diversifying revenue streams. In Figure 5 you can find examples of specific tactics in each category.

This step is about discovering potential scaling tactics by brainstorming ideas for each category. First, take a couple of minutes to think of tactics individually. Then share these ideas. There is no place for judgement at this stage; any idea, no matter how crazy, is listed. After sharing the ideas, pick one to two most interesting ideas. This results in about three most interesting ideas for each category.

Figure 5. Three-aim framework

Example: Mantra in Indonesia

Mantra, which facilitates the installation, operation and maintenance of community owned material management facilities on Bali Island, identified eight most interesting scaling tactics out of more than 30 ideas:

Would you like to discuss how you could apply and use the five steps for your organisation? Get in contact with us. 

References

[1] Islam, S.M., Towards an integrative definition of scaling social impact in social enterprises. Journal of Business Venturing Insights, 2020. 13.
[2] Bocken, N.M.P., A. Fil, and J. Prabhu, Scaling up social businesses in developing markets. Journal of Cleaner Production, 2016. 139: p. 295-308.

This step’s objective is to identify what adaptations are necessary to the current ecosystem’s inclusive business model to realise the scaling tactics and create long-term value for BoP communities.

These changes may range from the adjustment of a specific element of the existing business model to a change in all elements. In other words, the value creation, delivery or capture system can be changed, or engaged in the design of an entirely new ecosystem. Acknowledging that the ecosystem and its business model are changeable rather than a given, active role can be played in helping it to evolve faster and more deliberately to implement a certain scaling tactic and help partners to adjust their roles accordingly.

In this step, identify and visualise the actors, resources and activities as well as the relationships between them that are necessary to realise the most interesting scaling tactics from Step 3. Before drawing the adjusted or new ecosystem, answer the following questions:

1. What resources are needed to implement this scaling tactic?
2. Who provides these resources?
3. What activities are needed to implement scaling tactic?
4. Who carries these activities out?

Now the resources are identified, as well as the activities and actors that are needed to implement a certain scaling tactic, it is time to visualise the ecosystem’s inclusive business model (see Figure 6 for an example). If there are adjustments necessary to the existing ecosystem, integrate the new actors as well as new resources and activity exchanges in the ecosystem visualisation from step 2.

Figure 6. Adaptation of BMC

Example: Flying Food Consortium in Uganda and Kenya

The Flying Food Consortium is establishing a new sustainable supply chain for cricket rearing for human consumption in Uganda and Kenya. Below, the ecosystem is shown that the partners created to realize a combination of multiple scaling tactics, e.g. start with building strategic partnerships with food processors who can function as champion and investor, create sufficient demand by supply from Europe, and establish paid helpdesk function for advice.

Would you like to discuss how you could apply and use the five steps for your organisation? Get in contact with us. 

References

[1] Gradl, C. and B. Jenkins, Tackling barriers to scale: From inclusive business models to inclusive business ecosystems. CSR Initiative, Harvard Kennedy School, Cambridge MA, 2011.
[2] Ciulli, F. and A. Kolk, Incumbents and business model innovation for the sharing economy: Implications for sustainability. Journal of Cleaner Production, 2019. 214: p. 995-1010.

Once collaborators have identified several potential scaling tactics and associated business model adaptations, an important question arises: what scaling tactics should be implemented? A combination of different scaling tactics supports inclusive businesses to scale the inclusive value creation, delivery and capture system. Yet they also have limited financial resources to scale. Therefore, priorities must be set what scaling tactics to execute and what changes in the ecosystem’s business model to implement. Although a prioritization not fully answers the question what scaling tactics should be implemented, it informs the management decision about which ones to execute.

In this step, use a simple attractiveness feasibility matrix to evaluate the scaling tactics. First, score each of the most interesting scaling tactics from step 3 based on their attractiveness and feasibly on a scale from high to low. It is most useful to score the tactics individually. The individual scores are then added up to come to a total score.

Figure 7. Impact feasibility matrix

Example: RESCO in Indonesia

RESCO, which provides reliable, safe and affordable clean renewable energy solutions to remote villages, business owners, residents and public facilities on Sumba Island, and its partners evaluated their most interesting tactics as follows:

1. Promote services and change perceptions via educational efforts through partnerships
2. Provide alternative ways of payment, e.g. financial institutes and other commodities
3. Increase the promotion of impact using social media, merchandise and influencers
4. Offer new product combinations
5. Offering tourists, a stay-in experience in a traditional village
6. Work as a supplier or vendor to benefit from the village’s funds
7. Attract High Network Individuals and churches as sponsors

Would you like to discuss how you could apply and use the five steps for your organisation? Get in contact with us. 

References

[1] Rohrbeck, R., L. Konnertz, and S. Knab, Collaborative business modelling for systemic and sustainability innovations. International Journal of Technology Management 22, 2013. 63(1- 2): p. 4-23.
[2] Geissdoerfer, M., N.M.P. Bocken, and E.J. Hultink, Design thinking to enhance the sustainable business modelling process – A workshop based on a value mapping process. Journal of Cleaner Production, 2016. 135: p. 1218-1232.

Defining a joint scaling ambition in step 1 is important to: (1) create a common understanding of what lies within the collaborators’ sphere of interest, influence and control; (2) build enthusiasm, intentionality and support for the impact that is intended to be achieved; and (3) align collaborators’ purpose, vision and mission[1].

In order to avoid that each organization is working independently to achieve the scaling ambition, the collaborators will have to visualize the ecosystem to highlight the interdependencies of the actors in the ecosystem. This is done in step 2. It enables the collaborators to recognize, communicate and discuss how the value creation, delivery and capture affects other actors. More specifically, when the collaborators are working in an ecosystem to achieve the scaling ambition together, it enlarges their degree of freedom by providing the opportunity to scale outside the boundaries of the inclusive business[2]. Additional opportunities as well as potential threats for scaling outside the collaborators’ direct sphere must also be identified in step 2, by discovering the local context[3].

The opportunities and threats that are identified in step 2 serve as a base for collaborators to brainstorm together about scaling tactics in step 3. In this step, it is crucial to include diverse collaborators in order to generate a broad range of scaling opportunities, rather than focusing on the perspective of one single actor[4].

The scaling tactics developed in step 3 may range from highly feasible to highly infeasible. Therefore, they must be assessed and prioritized by developing a minimal viable footprint (MVP) based on the current ecosystem from step 2. This enables collaborators to determine for each tactic how current interdependencies can be leveraged, and whether new ones must be created to successfully execute the strategy. The key point of step 4 is to identify if and how the collaborators must change their value creation, delivery and capture systems to make the scaling strategy work[5].

In the final step, collaborators jointly evaluate the attractiveness and feasibility of each tactic, based on the scaling ambition (step 1) and the adapted ecosystem (step 4), by means of the impact feasibility matrix. This matrix supports collaborators to select a scaling strategy by developing a well-balanced portfolio of high impact with both low and high feasibility tactics[6].

It is important that a large group of collaborators is involved in this process, to better understand the effects of the decisions on the wider ecosystem. More specifically, these insights allow collaborators to ‘’make decisions that benefit the ecosystem of stakeholder relationships, rather than trying to maximize a particular variable with a transaction and then causing value-destroying consequences in other areas” (Freeman et al., 2020, p. 78). In other words, the more collaborators are involved in the final evaluation step, the better the understanding of the effects on the ecosystem and the greater the support for the decisions that are being made. This provides a strong base for further agreements, contracts and adaptations to individual business models that allow for a staged expansion of the scaling strategy[7].