3p Contributor: Jim Witkin
Recent Articles
C.K. Prahalad Q&A: Lessons from the Bottom of the Pyramid
It’s been five years since the publication of “The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits,” the seminal work by C.K. Prahalad, a professor of corporate strategy at the Ross School of Business of the University of Michigan.
The book combined a pragmatic framework with inspirational case studies to show companies how they could develop innovative business models and find new profits by serving the world’s five billion poorest people at the bottom of the economic pyramid (or BOP).
To commemorate the event, Wharton Publishing has issued a revised and updated anniversary edition that includes a new introduction by the author, as well as many new case studies.
I recently spoke with Professor Prahalad to discuss what these companies have learned as they’ve built profitable businesses in emerging markets while reducing poverty in the process. Excerpts from this discussion follow:
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Triple Pundit: What are the big lessons learned over the past five years since the book was first published?
C.K. Prahalad: First, the thesis of the book that the private sector is an integral part of the poverty alleviation process is well accepted by multilaterals, aid agencies, many NGOs and large private sector firms as well. Second there is now a growing belief that the bottom of the pyramid provides an opportunity for business to “do good and do well.” Third, we recognize that the BOP is more than micro-consumers. It also represents micro producers and micro investors who can be connected to national and global markets. And the BOP can also be the source of major innovations that affect us all. These ideas were in the original book but have been confirmed and amplified.
Day Two BSR Conference Highlight: Oceanographer Sylvia Earle
Sure, the BSR conference brought together CSR thought leaders to discuss the latest sustainability strategies. But the Day Two highlight for me was listening to the oceanographer Sylvia Earle, author of several books including her latest, The World is Blue.
Ms. Earle was soft spoken, but delivered a powerful lecture on the current state of our natural systems, particularly our oceans, providing an important context for why socially responsible business practices are important in the first place.
The ocean is home to half the earth’s species and provides half our atmospheric oxygen produced by phytoplankton photosynthesis. But we are so concerned with carbon, she warned, that we often neglect our oceans.
October 15th. Blog Action Day. Join the Climate Change Discussion!
This Thursday, October 15th, marks the third annual Blog Action Day. The yearly event unites bloggers from around the world to discuss a single issue of global importance. In anticipation of the upcoming international climate negotiations in Copenhagen, this year’s discussion will focus on the very global topic of climate change.
Over 5000 blogs are expected to generate over 20,000 unique blog posts on the day, according to estimates by Robin Beck, Organizing Director at Change.org, this year’s sponsor of Blog Action Day. We recently spoke to Robin Beck about the event and the unique contribution bloggers can bring to this effort.
Triple Pundit: Obviously this is a very pressing issue, but what unique value do bloggers offer?
Robin Beck: Bloggers bring a conversation that they are running day in and day out. They have built up a community of people who are interested in conversing with each other, so the purpose of the day is to put the climate change conversation in front of that audience. And the real value is seeing the conversation start to take hold in places where it hasn’t before.
The 5 Stages for Achieving Innovation Through Sustainability
“There’s no alternative to sustainable development” begins the recent Harvard Business Review article, “Why Sustainability Is Now the Key Driver of Innovation.” Sustainability and green initiatives are no longer optional contend the article’s authors — Ram Nidumolu, C.K. Prahalad and M.R. Rangaswami. Not only is the business case getting stronger, but embracing a sustainability agenda can stimulate innovation, pushing companies to rethink their operations, products and business models.
The authors studied the sustainability initiatives of 30 large companies and discovered what they describe as a “mother lode of organizational and technological innovations that yield both bottom-line and top-line returns.” From their research, they’ve developed five distinct stages of change that transforms a company from sustainability laggard to leader. Each stage has its challenges, required competencies and abundant opportunities as the authors illustrate through case study examples.
SoCap09 Day 1: Attendance Tops 1,000
Judging by the attendance this year at the Social Capital Markets 09 conference in San Francisco, there is no doubt the buzz around social enterprise and social investing is gaining momentum. The conference began yesterday with attendance well exceeding last year’s turnout of 650. Over 1,000 participants from 32 countries have registered this year, representing a mix non-profits and for-profits, investors and entrepreneurs, all with a variety of interests, backgrounds and social missions. The conference runs through Thursday and includes over 150 speakers, 40 panel sessions, and a full “unconference” day on Thursday, where participants set the agenda.
SoCap convener Kevin Jones began the conference by welcoming all in attendance and introducing the keynote speaker, Sonal Shah, Director of the White House Office of Social Innovation. “First it’s notable that we now have an Office of Social Innovation,” commented Ms. Shah, assuring the audience that the government now recognizes the importance of the social sector in addressing our most pressing social problems. She went on to describe her Office’s goal of creating a context in which socially innovative entrepreneurs can succeed.
E-waste Offsets: A Good Idea but How Effective?
In response to the ever-expanding challenge of electronic waste (e-waste), most developed countries have enacted legislation that mandates the responsible disposal and safe handling of discarded electronics within their own borders. (Thankfully, the US is catching up with the rest of the developed world, state by state.) But what happens to your old TV, computer or cell phone after you drop it off at your local “green” recycler?
Sadly, and according to the latest estimates from the EPA, much of the e-waste handled by “responsible” recyclers will eventually make its way to the third world, where anything of value is extracted in ways hazardous to humans and the planet. The reverse supply chain, as the recycling waste stream is known, is long and opaque with materials moving from handler to handler with little oversight.
The recently launched Ewaste Foundation thinks they have a better approach, by offering E-waste Certificates, which are essentially offsets to pay for responsible handling of e-waste material that ends up in developing countries. When you purchase a certificate through their website, they will move a corresponding amount of e-waste from a developing country and send it back to the EU or move it to one of their certified recyclers in country.
Sounds like a good idea, but for me it raises many of the same issues inherent in other forms of offsets, namely: verification (how to verify that the downstream recycling partner meets standards), additionality (some e-waste is recycled responsibly and doesn’t need to be “offset”), and incentives (we should be working instead on reducing the amount of electronics that enter the waste stream).
GIIRS: A Bridge at the Intersection of Meaning and Money
Last Day for 30% Discount for Triple Pundit Readers
“A bridge is about to open up in the market at the intersection of money and meaning that will make things easier and safer for people who want to make their investments consistent with their values,” according to Kevin Jones, lead convener of the upcoming Social Capital Markets (SOCAP09) conference in San Francisco.
The bridge he’s referring to is GIIRS (for Global Impact Investing Rating System), a new investor system built through the collaboration of leading foundations, social investment funds, rating agencies and consultants. The demand for solid social investment opportunities is growing rapidly among high net worth investors, family offices and institutional wealth managers. GIIRS is expected to address this pent-up demand by letting these new style investors compare and measure the kind of social and environmental impact they can expect from their investments and donations.
The GIIRS rating system will be explained in more detail on September 2 at the SOCAP09 conference. The system is ready and has been in trials for a while. In fact, some of these large institutional investments could be announced at SOCAP09.
Big Room’s Vision for Dot Eco: Let the Consumer Decide Who Is Green
Next year, ICANN, the group that coordinates the Internet’s system of unique identifiers, will expand the list of top level domain (TLD) names. Anyone can apply, but only one deserving applicant will be awarded the registry rights for the .eco domain. Triple Pundit has provided much coverage lately (here and here) on the efforts of Dot Eco LLC, an LA-based group, endorsed by eco-luminaries like Al Gore, to win the registry rights. But Dot Eco LLC is not the only game in town.
Enter Big Room, a Canadian company, with a different vision on how to make the .eco domain relevant. They have already created the largest, global database of eco labeling information available on the web, and they plan to expand this capability through their Dot Eco initiative if they are awarded the registry rights. In their approach, companies that apply for the .eco domain name will be required to provide comprehensive eco-information about their operations. Big Room will build a system to make this information available to anyone who wants it. Their emphasis is on transparency and disclosure, not deciding who is green and who isn’t.
I recently spoke with Trevor Bowden, a Big Room co-founder, about their Dot Eco initiative, who explained, “We are not going to take the position that we can judge who is green, especially as standards are constantly changing. We will let the consumer decide.”
Facebook Useful? Who Knew?
Intel and Facebook Team to Tap Unused PC Processor Power
Having just finished the “Who Has the Biggest Brain” Facebook app (and scoring just ahead of a sixth grader), I found myself wondering if all this social networking really served any useful purpose. Just then I came across an Intel Corporation press release describing Progress Thru Processors, a volunteer application Intel has built on the Facebook platform that allows people to donate their PCs’ unused processor power to non-profit research projects.
Faceboookers can contribute their excess computational resources to Rosetta@home, Climateprediction.net or Africa@home. Rosetta@home uses the additional computing power to help find cures for cancer, HIV and Alzheimer’s. Climateprediction.net focuses on increasing our understanding of global climate change by predicting the Earth’s climate and testing the accuracy of climate models. Africa@home looks for optimal strategies to combat malaria by studying simulation models of disease transmission and the potential impact of new anti-malarial drugs and vaccines.
Nice to see the Intel Corporation is continuing to find innovative ways to tap the power of microprocessors for good causes. It’s proof once again that providing a means to collect together lots of individual contributions can have a far-reaching impact. And partnering with Facebook allows them to reach a huge swath of individuals, who like me, may have been looking for something useful to do there.
Ricoh Tree-Planting Program Offers CSR Cautions
By so many measures, Ricoh, the Japanese office equipment-maker, is a leader in Corporate Social Responsibility (CSR). You can spend several hours on the Ricoh website reading about their numerous CSR initiatives, their environmentally friendly products and processes, as well as the many awards they have won over the past 20 years. The company places corporate citizenship at the core of their mission and makes the effort to integrate these core values through every part of their business. Well done.
But good intentions don’t always make for good results. The UK website BusinessGreen.com is reporting on one Ricoh CSR program that has seemed to miss its mark, raising the questions: how do you decide which CSR initiatives are most appropriate for your business, how do you monitor the programs, how do you measure their effectiveness, and are good intentions enough?
Experiential Marketing: Greening A High Impact Industry
ignition Reduces the Footprint of Live Events
As traditional forms of advertising decline, companies are continually looking for new ways to connect with consumers. Many are turning to live events, known also as experiential marketing, as a way to bring their brands to life. Today’s experiential events have evolved from the days of flashy PR stunts to become designed emotive experiences intended to create a lasting emotional connection between a brand and its target market. All the research suggests these designed experiences are working. Good news for the brand; bad news for the planet. These events can also be huge energy hogs and environmental disasters as far as footprint (think NASCAR).
Thankfully, many brands that are concerned about their footprint are also demanding strict green guidelines for their live events, but it’s the job of experiential marketing firms like ignition to make sure these guidelines get implemented. The Atlanta-based ignition has worked with some big sponsors and events like: Live Earth, Coke, Delta Airlines, Nokia, Earthlink, the FIFA World Cup Trophy Tour, and the Olympic Torch Relay to name a few. The company incorporates varied conservation and offsetting practices across all of their campaigns, and they’re currently developing the first environmental standards for their industry.
I connected with ignition at the Sustainable Brands 09 conference, and later followed up with Mike Hersom, President, to learn more about the company and their efforts to develop green standards for the experiential marketing sector.
PC Disruption: Virtual Desktops Provide Low Cost Computing
SOCAP09 Sponsor nComputing Taps Unused Computer Resources
Making better use of existing resources is one of the canons of Sustainability. And one of the greatest untapped resources happens to be sitting on your desk. A typical PC running standard office applications like email, word processing and web browsing uses less than 5% of it’s processing power, which means 95% of this resource is wasted.
SOCAP09 sponsor nComputing is harnessing this vast, untapped resource. The Silicon Valley-based company has developed a unique software solution based on virtualization technology that creates virtual independent desktops inside one Windows or Linux PC allowing a single PC to be shared by many users.
The nComputing solution can reduce computer deployment costs up to 75%, not to mention the huge savings in energy costs, and is attracting attention from businesses all over the world. But perhaps the most important beneficiaries of this disruptive technology are schools, non-profits and developing economies that can now obtain low cost computing solutions that were previously out of reach.
Book Review: Andrew Winston’s Green Recovery
Get Lean, Get Smart, and Emerge from the Downturn on Top
“Hunker down and play it safe” seems to be the mantra of many recession-battered companies, as they cut back on people, payrolls and purchases of non-essentials. Unfortunately, many of the green programs that may have gotten funded in good times are now finding themselves in this “non-essential” category. That’s exactly the wrong approach, argues Andrew Winston, the green business evangelist, in his new book Green Recovery, a follow-up to his 2006 Green to Gold.
In Green Recovery, Winston offers a compelling case for why the recession is the perfect time to use a green strategy to get lean, get smart and innovate your way forward. With success stories from industry leaders as examples – companies like Boeing, Disney, DuPont, Microsoft, Procter & Gamble, Toyota, and Wal-Mart – the book offers a four-point roadmap for using green initiatives to drive business performance during the downturn:
· Get lean: generate immediate bottom-line savings by reducing energy use and waste.
* Get smart: use value-chain data to cut costs, reduce risks, and focus innovation efforts.
* Get creative: pose heretical questions that force you to find solutions to tomorrow’s challenges today.
* Get engaged: give employees ownership of environmental goals and the tools to act on them.
I recently had a chance to speak with Andrew Winston about his work and his latest book.
SOCAP09: Towards Triple Impact – Sustainable Ventures in Developing Countries
The UNDP’s Growing Inclusive Markets Initiative Seeks to Build Viable Markets, Alleviate Poverty and Protect the Environment
“About 2.6 billion people in the world living on less than $2 a day are trapped outside of the global economy, looking in with minimal access to formal markets,” according to the United Nations Development Programme (UNDP). Living on the margins deprives the poor of opportunities, while discouraging many companies from offering the basic goods and services – things like consumer products, banking and telecommunications – that would empower the poor and improve their lives.
Among the world’s poor, there is no lack of human resources – minds and muscles – to build successful markets, and certainly no shortage of demand for goods and services. What’s missing in many cases are basic market mechanisms. Market components like financial services, physical infrastructure, government policy and regulation, and market information are the basic building blocks that make markets work.
Building viable markets that include the poor as consumers, producers and employees is the focus of the UNDP’s Private Sector Division, and specifically their Growing Inclusive Markets (GIM) initiative. GIM serves as a platform to engage all the actors in the process of building more inclusive business models. It gathers relevant information, highlights good examples through case study research, develops practical operational strategies and creates space for dialogue.
At the upcoming Social Capital Markets conference (SOCAP09), GIM Programme Manager, Sahba Sobhani, will lead a panel discussion to highlight successful triple bottom line entrepreneurs from developing markets. I recently had the opportunity to sit down with Sahba Sobhani at the UNDP offices in New York to discuss the GIM initiative and their involvement with SOCAP09.
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