Entries in hybrid value chain (3)


Business-NGO partnerships and a call for a more systemic approach

Darian Stibbe, executive director of The Partnering Initiative, says the NGO-business collaborative model has already progressed from the transactional (fee-for-service) to the transformational. Using the example of drug maker GSK and the NGO Save the Children to illustrate the latter model, Stibbe notes that the partners combine capabilities, resources and influence over the long-term to increase value. However, he adds a transformational approach is limited in that scaling requires greater financial inputs, which may not be sustainable from a donor's point-of-view.

In a recent article for Business Fights Poverty, Stibbe contends a more systemic approach can increase the reach of business-NGO collaborations. In this model, the partners integrate with the governmental sectors that offer relevant infrastructure and local expertise (bearing in mind the introduction of more partners inevitably leads to greater complexity of the model, sometimes creating issues surrounding the process and accountability).

To avoid getting bogged down, Stibbe recommends collaborators choose soft ties (i.e., ongoing communication, sharing current and future activities and plans, exchanging knowledge and experience), which encourage organic, integrative activity, over hard ties (i.e., formal MoUs, clearly defined partnerships with specific goals). We're interested to know what you think about how partnerships can be most effective -- please share your thoughts!

-- Catalysts


Hope, hybrid value chains, and graduating from poverty

Nicholas Kristof writes about how the realization that life can be better -- or the power of hope -- can transform a person, family and community. His recent New York Times column focuses on the findings of a large-scale randomized control trial involving 21,000 people in six countries; this trial looked at the impact of a type of aid package called a "graduation program."

Graduation programs (designed to help people graduate from poverty) give very poor families a significant boost that continues after the program ends. These programs can help the extreme poor establish sustainable self-employment activities and generate lasting improvements in their well-being. This program targets the poorest members in a village and provides a productive asset grant, training and support, life skills coaching, temporary cash consumption support, and typically access to savings accounts and health information or services.

Kristof quotes Sir Fazel Abed, who started the Bangladeshi aid group that developed the graduation program:

“Poverty is not just poverty of money or income. We also see a poverty of self-esteem, hope, opportunity and freedom. People trapped in a cycle of destitution often don’t realize their lives can be changed for the better through their own activities. Once they understand that, it’s like a light gets turned on.”

We like this kind of initiative; it's another form of the hybrid value chain partnerships that we develop with Maua and Bloom.

-- Clara Shen



Hybrid value chain and social impact in developed economies

Poverty and economic inequality are global challenges that have an impact on even the most developed economies, as we noted in a post earlier this year. I recently had the pleasure to participate on a panel with an experienced entrepreneur and value chain expert who is involved with i-propeller open innovation -- an initiative to create a platform to allow businesses to address some of the challenges of poverty in Belgium.

Just over 15% of Belgians live in poverty, which affects their material and social wellbeing as well as their health. The i-propeller Business & Poverty platform seeks to use structural and innovative power of business to develop meaningful and scalable solutions. Businesses will, at the same time, be able to gear up their organizations for the future, with innovative solutions and market approaches.

This is an example of a hybrid value chain approach: a process of collaborative entrepreneurship designed to combine the power of innovation and entrepreneurship of the business and citizen sectors. HVCs are partnerships that include social outcomes, but are rooted in a market-oriented for-profit approach. Businesses offer scale and expertise in operations & finance. Social entrepreneurs and their organizations offer lower costs, strong social networks, and a deeper understanding of customers and communities.

We have used this approach in some of our own efforts to test new business models, and look forward to learning of other cases where they have been deployed, or are in the process of being deployed.

Image source: i-propeller

-- Clara Shen