Toward a Base of the Pyramid Protocol

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Toward a Base of the Pyramid Protocol
Stuart L. Hart Cornell University Scott
Johnson SC Johnson
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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

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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.

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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

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A Collaborative Venture
Sponsored By Cornell University University of
North Carolina University of Michigan The World
Resources Institute The Johnson Foundation With
Generous Support From SC Johnson DuPont Hewlett
Packard Tetra Pak
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Primary Activities
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Workshop Participants19-22 October 2004,
Wingspread Conference Center

• 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

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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

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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
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Draft Protocol Structure
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Processes for Mutual Value Creation
Opening Up
Building an Ecosystem
The 4 Ps People, Partners, Performance, Place
Enterprise Creation
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Opening Up The Mutual Value Chain
Rethinking Needs Value
Idea Generation Assessment
Knowledge Retention
Immersion Engagement
Team Formation Preparation
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Opening Up The Four Ps
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The Mutual Value Chains
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BOP Business PrinciplesOperating 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

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BOP Business PrinciplesCode 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 appropriateand
  sustainabletechnologies
• 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

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Next Step Testing the Protocol

• First Site Kenya
• S.C. Johnson
• Pyrethrum sourcing
• 200,000 small-shareholder farmers
• Several decades in country

Opportunity for Applying the Protocol

• Partnership with ApproTec
• Micro-irrigation pumps
• Pilot project
• BOP Access

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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 and
  faculty from the Design Workshop
• Work closely with ApproTec staff on the ground
  and SC Johnson staff in Kenya
• Videotape experience and interviews
• Continue effort into the fall in the form of a
  practicum project
• Debrief experience and revise protocol in the
  Second Workshop to be held in October 2005

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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 (next
  meeting February 17-18 at Cornell University)