Book Extract: The Base of the Pyramid Promise
Interest in creating impact enterprises for BoP markets has increased dramatically in the past decade. There’s a growing portfolio of these enterprises, and a growing number of entrepreneurial leaders seeking to craft more of them. This interest transcends, and blends, industries: energy, sanitation, health care, agriculture, technology, and consumer goods, to name a few. Equally, this interest transcends institutions: Company leaders, entrepreneurs, nonprofit managers, development professionals, and government officials all see great promise in investing in impact enterprise development in BoP markets. The lessons and frameworks in this book apply across these industries and institutions. I have found strategies and models that can guide the development of these enterprises. My goal is to create standardized frameworks that enterprise leaders can customize to respond to the specific contexts and circumstances they face.
The debate around BoP focus has also changed substantially over time. The focus is no longer, Should we be doing this? Today that debate is over. Business is and will continue to serve the BoP. Furthermore, most business leaders don’t need motivational stories encouraging them to consider BoP markets. Nor do development community professionals need to be convinced of the potential poverty alleviation benefits of BoP impact enterprises. Rather, the focus has moved on to, How can we do this better?
Yet despite this steady growth in interest and investment, enterprise performance to date has been mixed. We know that success is certainly possible, as the cell phone revolution in emerging markets has shown. Yet many of these new BoP impact enterprises are not as good as we want them to be—or as good as they have been represented to the world—and few of them have yet achieved the necessary scale to which we aspire. We need more BoP impact enterprises that are sustainable at scale.
So what is to be done? How can we help the next generation of successful enterprises emerge? How can we build more sustainable, scalable enterprises with impact?
What’s urgently needed now are managerially friendly tools, frameworks, and guidelines that can help move BoP impact enterprises forward: away from wishful thinking and hyperbole to practical, hands-on advice for for-profit, nonprofit, and development sector leaders who want to build enterprises that can generate sufficient profits while also having substantial poverty alleviation impacts.
Until now, no such integrated set of tools and strategies has existed. In its absence, all too many entrepreneurs and enterprise leaders are making the same mistakes as those who have gone before them—continually reinventing the wrong version of the wheel, if you will—thereby limiting their impact, scalability, and profitability and wasting precious time, money, and talent.
Since 1989, I have lived in, worked with, and studied BoP markets and impact enterprises, including engagements with dozens of leadership teams across the globe. Through this work, I have found that three key components must be correctly implemented and integrated to build enterprises with impact. I have translated that discovery into specific and actionable recommendations and frameworks for creating, sustaining, and scaling BoP impact enterprises.
My approach has three cornerstones:
- Leveraging customizable tools, frameworks, and strategies to enhance enterprise development.
- Creating value with the BoP by truly understanding the poverty alleviation opportunity.
- Understanding how to establish an ecosystem of partners to sustain those enterprises.
I argue that for BoP impact enterprises to succeed, each of these cornerstones must be considered and effectively addressed. Indeed, these three cornerstones are mutually reinforcing—and, in fact, they are inseparable.
In The Base of the Pyramid Promise, I intersperse description and prescription, with an emphasis on the latter. In other words, what’s the problem, and how can we solve it? What’s the opportunity, and how can we pursue it? This is the road map that I have long contemplated. It is my prescription for building enterprises with impact and scale for the benefit of all.