How Can We Achieve Greater Scale and Impact Supporting Small Businesses?

Photo: SABMiller.  4e participant and her mentor, Peru.

To mark Global Partnership Week (www.p3.co), join us for a live, online discussion of ways to achieve greater scale and impact in our efforts to strengthen small businesses.

 

The CSR Initiative at the Harvard Kennedy School and Business Fights Poverty recently completed a report on SABMiller’s new 4e Path to Progress program in Latin America—a partnership with FUNDES and the Multilateral Investment Fund of the Inter-American Development Bank that aims to empower nearly 200,000 small retailers at the base of the pyramid by 2020.

 

The report identifies emerging lessons and key strategic questions facing 4e on the journey to scale. Many of these are common to enterprise development programs across regions and industry sectors, and we know that other organizations, in addition to ourselves, have some of the same questions—and their own valuable experience and insight to share.

 

Please join us on Tuesday, March 10, 10:30-11:30am Eastern Time / 2:30-3:30pm GMT to explore the following questions, exchange your insights, and help spark some new ideas:

 

  1. What is the business case for companies to help strengthen the small businesses in their value chains?
  2. How can technology be employed to increase scale and impact at a reduced cost per participant?
  3. Where do policy drivers most need to change to enable small businesses to succeed, and how can companies and their development partners influence these drivers?
  4. What is the scope for broader alliances of companies, donors, governments, and civil society organizations to work together to strengthen small businesses?

 

This event is part of a one-week special with SABMiller on helping small businesses thrive.  Click here to read the blogs in the series.

CLICK HERE TO VIEW THE EVENT SUMMARY.

Editor's Note:

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Thank you Estrella for the link!
 
Estrella Peinado-Vara said:

Hi Camilo and Justin. Iinvite you to visit www.reciclajeinclusivo.org it is an alliance among the MIF/IDB, Coca-Cola Latin America, PepsiCo, Avina and the Latin American Wastepickers Network (RedLacre). We are working together to make a more inclusive recycling sector in the region, including rural and island communities, also providing information on different producer extended responsibility schemes.  
 
Camilo Santa said:

How about including an inverse logistic commitment as part of the company´s value proposition? ..Most rural communities in Latin America don´t have nor the institutional strenght nor the budget to develop recycling so interiorizing negative impacts of the business should most definately be considered, don't you think?  

Jane Nelson said:

Camilo, there is an example of a tendero's community leadership project that is about recycling. This could be an opportunity to deal with those issues and potentially generate additional income - it depends on the recycling environment in the country/locality.

Camilo Santa said:

Thank you Justin, I'm thinking about the impact socially and on the environment that may generate scalating the distribution of products to rural communities that may not be able to deal with it by its own. For example indigenous or afro communities with no trash dissposition or no comparable experiences of having permanent alcohol distribution. I mean this must be taken in account as a core item and not as a marginal CSR matter. It is just as important as providing tools for financial endurability of the small businesses; it is about sustainability of the business as a whole.



Justin Bakule said:

Camilo, thanks for this question - can you elaborate on what you mean by the "post consumption responsibility strategy"?  In a program like 4e, I see the benefit case accruing to the company and to the retailers but you make a good point that there is a bigger loop created here that includes consumers.

Camilo Santa said:

If the purpose is to create shared value, it is most important to incorporate a post consumption responsibility strategy when scalating markets through rural retailers, if not then it is just business as usual, don´t you think?

Sorry, i have to go. Thaks for invite me. Regards.

There is great  concern regarding how valuable it is fos small businesses and entrepreneurs to use the sysstems and processes developed by corporations. Corporations are very different from businesses and entrepreneurs, therefore a different approach is required. To give some examples about the difference: Corporations share value can increase even if their profits fall, i.e. their value does not depend on performance, whereas in a business performance and value are dependent on each other. Corporation can be bailed out, businesses just go broke. In a corporation employees work on a need to know basis. In a business department independence is detrimental to their success.

Corporations face very small risk in their operations because of mass accumulated over time. The phrase "too large to fail" summarises this idea.  

 In today´s world for small businesses to succeed they need to learn the rules under which they operate, rules that are very different from those of corporations. Business must be understood as a science and apply this science to thrive for success. Some business systems and processes can make a difference but, let's face it, 10% sales growth on average in a project will hardly make a difference to the "tiendas".

It is possible to transform a "Tienda" into a large business. The example of "Wong" in Peru is a clear example of this. The "tiendas" business needs to evolve it they are to survive the competition from convenience stores set up by stronger companies and brands. In Bogota in the area where I live there are many "tiendas", most of them just a few meters away. Most of them are not run by their owners, and effectively these owners own two to three of "tiendas" located in different "barrios". This shows that some level of scale has been achieved but not large enough to move away from the small business structure.

In our company we believe that there is enormous potential in shared value provided that we work on expanding brain space and capability with the "tenderos". They do support a large number of people and are an integral part of our society and economies. They need to build systems and processes that are relevant to their small business situation.

In summary, we must acknowledgs that the small business needs a very different approach and that the current level of sucess falls short from what is required.



Jane Nelson said:

Let's get started with our first question. What is the business case for companies to help strengthen the small businesses in their value chains?

By strengthening small businesses link to a value chain two good things can happen, first if the linkage is mutually beneficial,  the small business has a chance of becoming a real partner to the host company. Second, the 'new business  partner' now an independent entity begins to open its value chain to other small businesses at the same time addressing societal issues. Thank you.

Regards,

David

Once the new partner becomes a separate business endeavour and opens its own value chain to other small businesses, the new partner moves from being a benefciary to a benefactor.

I'm pleased to say that we now have a summary of this great discussion.  To download it, click here.

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