It’s not easy innovating or themillions who are climbing rom thebottom rung o the income ladder inhigh-growth and emerging markets.Even when much goes right, many initiatives go wrong.Take the recent example o a largecompany that had developed a highly nutritious, low-cost ood product.The company then recruited a salesorce o local women, who developedrecipes and coordinated cookingsessions in remote communities tomarket the product. A yearlong trial proved thatprospective customers ound theproduct aordable and easy to use. And prot margins were in line withexpectations. But despite the company’sbest eorts—“co-creating” a useulproduct with local communities; usingsalespeople with local knowledge—the venture ailed.The problem: The product didn’t reachenough new customers at a pace thecompany’s leaders elt was necessary to justiy urther investment. In short, theinitiative didn’t scale.In a past issue o
, weexplored how a number o companiesare overcoming the many obstacles to“inclusive growth” and seeking newmarkets in low-income communities.More recently, Accenture conductedurther research into the subject,looking at what we call “inclusivebusiness initiatives,” or IBIs—businessesaimed at protably scaling innovationin these markets—and asking: Why dosome initiatives achieve scale, bringingboth social benets to low-incomepopulations and prots to thecompany? To nd out, we undertook an ambitious comparative study oninnovation, looking at 18 initiativesin ve countries: Brazil, China, Ghana,India and Nigeria. We discovered that successulinitiatives met three key requirementsor achieving the scale companiesneed to thrive.
1. Getting top leadership on board
Lack of real or sustained support from the board and top managementdooms many new projects.
This is true even or a major eort at alarge company. But inclusive businessinitiatives ace special hurdles.Many boards, or example, demandto see sales and even prots quickly once they have approved an IBI.Directors and senior leaders oten ailto appreciate that shaping purchasebehaviors and winning trust in low-income communities requires more timethan middle-class market initiativesneed. Further, when doubts about anIBI’s potential surace, leaders otenwithhold the needed talent or nancialresources and reuse to sanctionorganizational reorms that wouldhelp better align the venture with therequirements o external partners.Eective IBI leaders, however, apply several innovative approaches toovercome these problems.
Encourage top leadership to havea personal stake in the initiative.
When board members and senior leadersare personally committed, initiativesponsors and managers will haveenough time to develop the local con-nections necessary or achieving scale.In India, or example, HindustanUnilever Limited’s CEO ostered high-level commitment to IBIs by building adecision-making structure that appealedto the board’s entrepreneurial spirit.
Sponsors andmanagers o inclusivebusiness initiativesmust encouragesenior leaders to takea longer-term view.