Through our research we’ve identified three broad steps that companies can take to help improve their chances of success with an IBI.
Step 1: Identify stakeholder-driven processes relevant to your IBI
Which stakeholder-driven processes are most critical to the execution of your inclusive business initiative? A review of research papers, journal articles and case studies, revealed six processes relevant to more effective execution of IBIs.
- Co-creating solutions with local low-income communities
- Collaborating with NGOs and small entrepreneurs
- Partnering with governments
- Fostering a balanced regulatory environment
- Reconfiguring organizational structures
- Gaining top leadership buy-in
Step 2: Identify processes vital to scale; assess their sensitivity to local market conditions
Having identified the six stakeholder-driven processes relevant to IBI-execution, the question arises: are all six processes always and equally necessary? We’ve found that while all six are generally important, a dominant number of them yield robust scale only when deployed in combinations.
We conducted a comparative analysis of 18 IBIs across 17 large companies and one industry collaborative, with the aim of understanding how IBIs in different environments reach scale. We strived to build a sample characterized by authentic and diverse experiences with IBIs.
Applying qualitative comparative analysis techniques to the data collected through rigorous interviews with decision-makers and IBI-managers working on the ground, we found that top leadership buy-in for an IBI is an imperative—without it, the IBI will not scale successfully. Our analysis suggested that none of the other five processes independently helps inclusive ventures achieve robust scale. For example:
- Co-creation of solutions with communities did not help achieve robust scale unless it was simultaneously accompanied by government support (in the form of collaboration and a balanced regulatory environment).
- Collaboration with NGOs or small entrepreneurs did not result in robust scale if it was not adequately complemented by reforms in organizational structure to suit a venture’s business-model needs.
Moreover, we discovered that combinations of certain processes were more or less effective depending on location. In Brazil and India, sponsors and managers of the inclusive initiatives in our study achieved scale by combining two processes: collaboration with NGOs and small entrepreneurs, and organizational structure reform. By contrast, in China, balanced regulation and active governmental support helped the ventures we studied rapidly achieve economies of scale.
Step 3: Design actions to leverage stakeholders’ strengths to achieve localization and scale
We found successful companies taking concrete actions to leverage strengths of their key stakeholders linked to processes critical to achieving localization and scale:
- Driving scale through top leadership support
- Encourage top leadership to have a personal stake in building IBI scalability
- Prevent too much focus on near term bottom line
- Get top leadership to bring in the right talent
- Use government support effectively
- Collaborate with governments committed to implementing IBI-friendly decisions
- Reform Organizational architecture
- Establish in-house platforms to help partnerships run smoothly
- Partner with authentic NGOs
For further insights read:
Inclusive Business Initiatives: Scaling innovation for an emerging middle class in Accenture’s Outlook
Making Inclusive Growth a Reality: Lessons from India (The European Business Review)
Hidden Pitfalls of Inclusive Innovation (Stanford Social Innovation Review) [PDF, 3 MB]
DOWNLOAD THE EXECUTIVE SUMMARY [PDF, 209 KB]