What we think

What came first, the impact or the profit?

18th December 2013 Posted by: Rachael

We have been exploring social value recently. Why? Because business needs to get better at analysing and communicating the value it adds to sustainable development. In conversation with international NGOs and multinational companies we are exploring the killer measures, the values they track to help make real decisions on their operations. There is a very constructive overlap between business and development measures. Just look at Bond’s Impact Builder and Anglo American’s Socio-Economic Assessment Toolbox (SEAT) to see the direction social impact measurement is moving.

Paul Polak is the author of’ “The Business Solution to Poverty.” He insists that we give far too little attention to achieving attractive bottom line profit and too much on detailed measures of impact. We asked him to identify the social value measures that help transform business, and this is what he said on Business Fights Poverty…

Here’s my approach to impact measures:

1. What is the basic mission built into the DNA of the company, and to what extent is social impact inherent in the basic mission statement?

For example, if bringing electricity to customers without access to it at a price they find attractive and doing it at scale is built into your mission statement, and you are successful in accomplishing your mission, then the impact is built in. There is plenty of convincing information about the contribution REA made to development in the US south, for example, and it should be pretty easy to outline some related key measures of impact

But then the key challenge is making attractive profits, which requires applying all the principles of running an excellent business, and this is far tougher to do than measuring social impact.

2. From interviewing thousands of poor people, I am convinced that helping them increase their net annual income is the single most important social impact measure. From the perspective of poor people themselves, all the other impact variables, like improved quality of life, improved education, empowerment, education, and health, flow from improved net income. So I put a major focus on measuring improved net income, compared with people who are not company customers.” PAUL POLAK

It is a powerful point. For those businesses with a mission to serve the base of the pyramid, profit and income are the two powerful measures. Of course, business profit and impact can get a bit chicken and egg, but let’s not talk about that now.

The three ‘N’s

6th October 2013 Posted by: Rachael

At a meeting with an international NGO last week I was asked for three trends for the ‘business of development’. Based on research we have been conducting over the past year, here are the three ‘N’s that rose to the top:

1. Measurement of NET impact. Business increasingly needs to monitor the impact it has, not just in terms of numbers of jobs and investment dollars. But what is the quality of impact, and the consequence of its actions that support the business development model? And can you measure that in an accessible way? Sounds like the challenge NGOs and governments have. So there’s an opportunity here for the development community to develop the measures that can be applied to the ‘business of development’, and monitor sustainable development.

2. The NEXUS of social and environmental challenges. Leading global business are working on a nexus of social and environmental issues that cut across stakeholder groups. Problems are far bigger than any single actor. Social and environmental NGOs are sensitive to each others’ issues and positions, but how can they respond to this nexus of issues most effectively?

3. NEW partnerships. Business partnerships, NGO and business collaborations, public private partnerships… The scale of the challenge requires the ‘management of impact’ rather than the ‘management of projects’. More transformative partnerships are needed and this will no doubt lead to a consolidation of ‘projects’ and a challenging process of negotiating multiple agency, scalable programmes. The effort required in forming and storming through such partnerships will be immense, but NECESSARY!

Our research, whether desk research, case-studies, stakeholder research or online listening is constantly stimulating issues and ideas. A top ten set of trends will need to emerge next.

Are you ready to partner?

30th October 2012 Posted by: Rachael

The role of business in development is maturing. Partnership is moving out of a position in philanthropy, firmly in to new business development, which in NGO language, means new models for development. This week, discussions about building a new global partnership with business, convened by Business Action for Africa, really delved in to the stuff of partnership. How refreshing. Here are some of the key insights from the discussions and their great report:

  1. Business now needs to measure its net impact. Shareholder returns in country, tax, sustainable terms with farmers and infrastructure are all part of this calculation, along with jobs. Business will need government and NGO input on this.
  2. Business delivers jobs, but not all jobs are the same and jobs alone do not necessarily reduce poverty! Look at the proportion of skilled, sustainable and more senior jobs created locally too.
  3. Social impact work needs steady direction from the post-2015 framework to enable investment, as it is inherently long-term return and risky. Financial institutions working with government can identify bankable investments to leverage risk capital.
  4. Business will seek to consolidate projects after exponential growth. NGOs went through a similar period of consolidation after their last phase of growth. Data will be increasingly important (see point 2!).
  5. Manufacturing is moving in to Africa and business will need to support effective policy making as well as governance and standards locally.

Alistair Fernie of DfID; Anne McCormick of Diageo Africa; Inci Yalman of Standard Chartered; and Duncan Learmouth of GSK were thoughtful and open. Their reflections on the challenges for business and government helped highlight the opportunities we have with the post 2015 agenda. Okay, so this is not the practical framework for partnership. But what it indicates is the direction this work is going, and highlights that readiness to partner is now business critical. Let’s tackle the practical partnership essentials in another blog.

For details on specific partnership case-studies, read this great report from Business Action for Africa, Harvard Kennedy School and The Partnering Initiative titled, ‘A New Global Partnership With Business.’

A partnership approach

30th October 2012 Posted by: Rachael

Partnership starts with building trust. Here’s the journey we take organisations on from immersion to action in 5 easy hard-working and committed steps…


The approach starts with trust.

You say ‘tomato’, and I say ‘potato’ – does this mean we should call the whole thing off?

10th May 2012 Posted by: Rachael

NGO and Corporate partnerships: is language one of the main barriers in making useful connections?

It would be naive of me to suggest that NGO and Corporate partnerships (MNC) are the new, perfectly harmonious, utopian partnerships that will drive the ‘for purpose’ agenda forward. However, it is equally naive to think that all partnerships are homogenous in their approach, and even, as Ethicore often finds, that all NGOs are driving the good agenda, and big business are the ‘bad fat cats’ of the world. We have hit a time of flux; with an economic system never seeming to recover ‘as projected’, funding for doing good is limited, even negligible. The increasing challenge of traditional approaches are not all doom and gloom, though, as what has occurred is a greater focus on innovative approaches to funding, and a space for new voices and new approaches to be championed.

One of these approaches, now appearing more, is that of NGO and MNC partnerships. Ethicore have worked with numerous organisations spanning the spectrum between these two terms, and have found that the divide between the two types of organisations is less clear than we may assume. What I think is easy to forget, is that both ends of the spectrum are made of individuals, individuals who now, more than ever, are conscious in their consumption, and critical of traditional business practices. NGO and MNC corporations bring with them the possibility of new access to funding, audiences, new ideas of how change can be made and scaled, and even knowledge and expertise in how problems can be faced.

Reflecting on several partnerships that successfully investigate the potential and mutual, albeit differing, benefits of NGO MNC partnerships, it struck me that one of the first hurdles that needs to be tackled is that of language. Although we assume that we are all talking the same language, it appears that, actually, we are not: the language of the NGO world sits in disparity to that of the corporate world, and what is prioritised, is shown in the way we speak. NGOs, for example, often speak in terms of ‘gender’, which appears to clash with discussions of ‘profit’, whereas talk of ROI sits uneasily with those who want to talk SROI.

All that being said, are we really talking about different things? Should this stop us from trying to have partnership dialogues at all? As I have found time and time again, actually, the answer is ‘no’.

When we strip away the jargon of the organisations, to the issue at the core of these linguistic embellishments, what we find is often similar. For example, the most common overlapping interest is that of developing economies. MNCs, on the most part, understand the new approaches that need to be found to make sustainable business agendas within these regions, but what they lack in areas such as the cottage industries, the role of gender, and how to create the S of ROI*, is the knowledge of how to do this. What NGOs lack is the same sort of potential for scale, networks, and capital. Together, carefully approached partnerships can be created to bring the SROI that all want. Partnerships, as noted, are not a one-size-fits-all solution, and are dependent on the organisations engaging in the discussions. You have to find the genuine mutual interest first, and build a partnership from there, as well as carefully checking on the power relations that develop, and being prepared to work hard to achieve the wants of all involved based on the inputs each organisation is prepared and able to give.

It is not a marriage of convenience, but one of work. As we all know, with hard work we can achieve great things. I, then, suggest that we have to look beyond seemingly clashing languages and priorities and start with the core issue we want to effect and change. I sometimes think it worth remembering, that if organisations, especially the people within them, had no overlap, then there would be no discussions. Even if sometimes we need ‘interpreters’ in the initial stages to help us understand what each other is really talking about.

Now if only we could create the NGO-MNC dictionary…

* Arguably S should now, certainly in this case, stand for Sustainable as well as Social