The Base of the Pyramid Protocol Project From Concept to Action

1. The Base of the Pyramid Protocol ProjectFrom Concept to Action

2. Concept Origins

3. Breaking the Code: “License to Imagine” How can the MNC become the driver of an inclusive capitalism? • For serving the base of the (income) pyramid • For fostering cultural diversity and social equity • For reducing the footprint of industrialized countries • For restoring ecological systems

4. Project Purpose To create a validated “protocol” for engaging the BOP in a manner that provides them with lasting value by deeply understanding their needs, perspectives, and capabilities. To provide insight into the processes by which firms can identify and develop sustainable new products and business models in partnership with BOP customers.

5. BOP Protocol Project Staff • Core Staff • Erik Simanis, University of North Carolina • Gordon Enk, Partners in Strategic Change • Stuart Hart, Cornell University • Mike Gordon, University of Michigan • Mark Milstein, World Resources Institute • Ted London, University of North Carolina • Duncan Duke, Cornell University • Steve Branca, The Johnson Foundation • Allyson Lippert, Boston Consulting Group

6. A Collaborative Venture Sponsored By Cornell University University of Michigan University of North Carolina The World Resources Institute The Johnson Foundation With Generous Support From SC Johnson DuPont Hewlett Packard Tetra Pak

7. 2006 and Beyond 2003-2004 Action Research With Sponsors October 2005 October 2004 Research On Understanding The BOP Workshop I Designing The Protocol Workshop II Field Testing The Protocol Additional Field Tests with Candidate Companies Action-Learning Executive Education Draft Protocol Primary Activities

8. Monika Aring, RTI International Mohammed Bah Abba, MOBAH Rural Horizons James Beebe, Gonzaga Univ., Leadership Roland Bunch, World Neighbors Nila Chatterjee, UNC, Anthropology David Ellerman, The World Bank Anne Marie Evans, Global Mosaic William Flis, African Economic Development Initiative Dee Gamble, UNC, Social Work Kathy Gibson, Australian National University, Human Geography Gita Gopal, Hewlett Packard Julie Graham, U-Mass-Amherst, Geography Stephen Gudeman, University of MN, Anthropology Nicolas Gutierrez, Tech Monterrey, Mgmt. Saradha Iyer, Third World Network Scott Johnson, SC Johnson Anjali Kelkar, Institute of Design, Chicago Lloyd LePage, DuPont--Pioneer John Lott, DuPont Dipika Matthias, PATH Linda Mayoux, Women in Sustainable Development Denise Miley, Tetra Pak Kenneth Robinson, Cornell, Applied Econ. Prashant Sarin, HP Labs-India Peter Schaefer, Institute for Liberty and Democracy M. Shahjahan, Grameen Bank Ajay Sharma, Davidson Institute Sanjay Sharma, Wilfred Laurier University, Strategy Kwaku Temeng, DuPont Richard Wells, The Lexington Group Bill Wiggenhorn, Consultant to RTI Faye Yoshihara, Consultant to SC Johnson Anjali Alva, Wingspread Fellow Workshop Participants19-22 October 2004, Wingspread Conference Center

9. Criteria for Success • Generate a structure and supporting logic for the BOP protocol through the Design Workshop • Participants gain perspective and widen their bandwidth as a result of participating • Everyone agrees to have his/her name included as part of the protocol design team • Build a community of collaborators moving forward

10. The Vision: The Base of the Pyramid Protocol To create inclusive, mutually beneficial business processes through which the private sector and local communities build economic, social and environmental value. A Process for Mutual Value Creation

11. “Building the Ecosystem” Generate a network of relationships among MNC and local actors that supports co-creation and win-win strategies • “Opening Up” • Launch non-business • specific immersion guided by • two-way dialogue and humility • Generate competitive • “imagination” “Enterprise Creation” Pilot test, evaluate and scale-out business experiments that generate TBL value for all constituencies Draft Protocol Structure:Three “Bubbles”

12. Mutual Value Chains VISION Sub- Process 1 Sub- Process 2 Sub- Process 3 Sub- Process 4 Sub- Process 5 Processes for Mutual Value Creation Opening Up Building an Ecosystem The 4 Ps: People, Partners, Performance, Place Enterprise Creation

13. An Open-Source Effort Building a Community of Interest www.bop-protocol.org

14. Competitive imagination and local capacity building through engaging marginalized stakeholders VISION: • Selecting community • partners • Establishing a base camp • Co-identifying needs • Co-mapping local • assets & systems • Co-creating metrics • Co-generating ideas • Co-evaluating ideas • Generating community • profiles • Creating opportunities • for feedback Local Value Creation • Putting together MNC • team – identify people with passion • across functions • Selecting immersion site • Living the local life • Building multiple • access channels • Preserving options & • retaining • knowledge • Critical resource • assessment • Identifying capability • gaps MNC Value Creation “Opening Up” – The Mutual Value Chain Needs & Asset Identification Idea Generation & Evaluation Team Formation & Preparation Immersion & Engagement

15. Performance People & Preparation • Core Team diversity • Number & diversity of needs & • assets identified • Number of existing & “new” firm • resources identified • Number of options generated • Cross-functional Team - people with a passion • Training in participatory • learning methods • Training in ethnographic methods & ABC development • “Bridging” expert • Community Team representative of local diversity • Skilled advisors and trainers • Additional community members based on immersion • “Knowledge link” from MNC team • to corporate structure • “Base camp” in local community • Feedback link from community to • Team • Idea Bank Partners Places & Structures “Opening Up” – The Four P’s

16. A diverse, multi-level network of partnerships that pools resources and knowledge and incubates ideas and enterprises to build local capacity and generate firm value. Vision Building an Ecosystem Enterprise co-creation that generates local wealth, builds local capacity, and develops new capabilities and markets for the firm. Vision Enterprise Creation The Mutual Value Chains

17. BOP Business Principles:Operating Guidelines • Suspend Disbelief - willingness to admit ignorance • Put the Last First - seek out the voices seldom heard • Show Respect and Humility - all parties have something important to contribute • Accept & Respect Divergent Views - there is no one best way • Recognize the Positive - people that survive on $1 per day must be doing something right • Co-Develop Solutions - mutual learning between MNCs, partners, and BOP members • Create Mutual Value - all parties must benefit in terms important to them • Start Small - begin with small pilot tests and scale out in modular fashion • Be Patient - it takes time to build the ecosystem and win the trust before the business takes off

18. BOP Business Principles:Code of Conduct • Design businesses that increase earning power, remove constraints, and build potential in the BOP • Ensure that wealth generated by the business is shared equitably with the local community • Utilize only the most appropriate—and sustainable—technologies • Promote the “development” of affected communities as broadly as possible in ways that are defined by the local people themselves • Track the “triple bottom line” impacts associated with the entire BOP business system • Monitor and address any unintended negative impacts associated with the business model • Share best practices with local partners to the extent possible • Report transparently and involve key stakeholders in on-going dialogue • Commit to increase community value regardless of the business outcome

19. Protocol and Principles Comments & Suggestions?

20. Next Step: Testing the Protocol Opportunity for Applying the Protocol • First Site: Kenya • SC Johnson • Pyrethrum sourcing • 200,000 small-shareholder farmers • Several decades in country • Partnership with ApproTEC • Micro-irrigation pumps • Pilot project • BOP Access

21. The Approach • Select a diverse team of three business students as summer interns in Kenya to apply the protocol with small shareholder pyrethrum farmers • Support the students with selected experts, faculty and students from local Kenyan institutions & the Design Workshop • Work closely with ApproTec staff on the ground and S.C. Johnson staff in Kenya • Videotape experience and interviews • Continue effort into the fall in the form of a practicum project • Debrief experience in the Second Workshop to be held in October 2005

22. Pilot-Testing the Protocol Comments & Suggestions?

23. Call to Action • Provide feedback; this is an “open source” process • Join the Protocol project as an “Investing Partner” for the future • Become a potential site to “field test” the Protocol • Get involved in an action-learning Executive Development program based upon the Protocol • Join the Base of the Pyramid Learning Lab