Clarifying the BoP Protocol

Erik Simanis — Fri, 04 Apr 2008 19:49:08 -0500

Thanks for this post, Derek and the reference to our work on a corporate innovation process for the BoP (aka, the BoP Protocol.) I did want to make a small correction/addition to your description of that process. Importantly, the BoP Protcol is NOT about how to do "deep listening," nor simply how to understand the BoP customer's "true needs." We contend that that approach, which reflects a very traditional corporation innovation process, is (counter-intuitively) the reason why so many of the intial corporate BoP ventures have produced lack-luster results, both for companies and communities. It also leads to weak competitive positions for the company and exposed to low-cost knockoffs. The problem, therefore, isn't a lack of "good customer data" or new methods (like co-creation or quick ethnography) to get that data; the problem is the very belief that new businesses (particularly in the BoP) are built on "customer data!" When you do business development with that as the organizing framework, it inevitably leads to a transactional relationship with BoP communities and fosters the view that the company's primary interest is simply to "sell stuff to the poor." The BoP Protocol, instead, is about how companies can engage in "deep dialogue" with BoP communities and through that process, to creatively marry each others resources, capabilities, and imaginations in forging a new business. The process, which establishes a close, personal relationship (not with the intent of getting deeper insights into someones needs), fosters a deep interpendence and sense of mutual commitment between a company and a community - that "solidarity," if you will, shifts the basis of value on which the business is built and establishes a durable base of competitive advantage. To be clear, we do not run intensive "focus groups" as part of the BoP Protocol process - again, we see the transactional, "focus group" mentality as part of the problem! We do hold intensive workhops and community engagements, but the purpose of those is to build the capacity for the community and the company to work effectively as long-term business partners and to harness the creative potential that the partnership holds (the workshops fall under the "collective entrepreneurship development" part of the Protocol process). That's why "action learning" plays such an important part in the BoP Protocol process. We use the term "co-venturing" to help differentiate the BoP Protocol process (and its strategic intent) from the concept of co-creation (which has become a bit of a buzz-word of late and is very similar to the concepts of end-user innovation and public-private partnerships - all good and valuable, just not particularly effective, we believe, in delivering the kind of company and community value on which the BoP concept was premised). The front-end of the 2nd Edition of the BoP Protocol (which can be downloaded at www.johnson.cornell.edu/sge/) lays out some of this logic. We have another paper that is in the publishing process (Beyond Selling to the Poor: Building Business Intimacy through Embedded Innovation) that explores in depth this larger question (of "re-embedding" innovation strategy). Again, thanks so much for the mention - I hope this helps situate the BoP Protocol and clears up any misconceptions of it being an approach to marketing research at the BoP (or the same thing as co-creation).

BoP = 1; SME = Global

Derek Newberry — Thu, 03 Apr 2008 12:23:04 -0500

"N=1, R=G" is purportedly the equation that summarizes C.K. Prahalad's new contribution to business management literature. I haven't had a chance to read the book yet, but there are good synopses online already, such as this one - all of which report that the new book by C.K. and co-author M.S. Krishnan, The New Age of Innovation, urges companies to become at once more global and more personalized.

The authors essentially argue that the world businesses will have to adapt to is one in which they increasingly co-create value with customers, connecting products and services with their needs on an individual basis (N=1). At the same time, they will have to dramatically strengthen and streamline their global supplier networks to meet these personalized demands (Resources=Global).

The examples I've seen floating around so far seem to relate mostly to MNCs, but I can't help but imagine how many of these ideas C.K. may have extrapolated from his BoP work and of course what these trends mean for smaller BoP businesses. C.K. writes in a recent post on his book that:

"The sources of value are rapidly shifting from products to personalized experiences; from dependence on a firm to a network of suppliers; and from firms deciding unilaterally what consumers can have and should expect to cocreating value with the active involvement of consumers"

This deep listening approach expressed in the notion of cocreating value is the same sort of advice BoP champions have been giving to companies for years.

(This post continues past the break; click "Read More" to continue)

NextBillion.net - Development Through Enterprise - BoP = 1; SME = Global - Comments

Clarifying the BoP Protocol

BoP = 1; SME = Global