A New Approach for Multinational Corporations and Social Enterprises to Tackle Poverty in Africa

You might think the following is a familiar scenario: partnerships between multi-billion dollar corporations and social enterprises to serve the poor. The usual arrangement looks something like this: companies give money, perhaps a little bit of management advice and technology; social enterprises (SEs) carry forward with implementation; and social gains are made. But something new and different is happening in East and West Africa, where multinational corporations (MNCs) and SEs are mutually benefiting by helping each other to achieve core business goals. These MNCs and SEs shaped their partnerships by participating in a series of three annual Collaboration Summits. With a shared interest in economic development, these disparate partners are working in agriculture, energy, health care, and water and sanitation to build healthier and more prosperous communities. This is a story about the value of effective process, the role of the catalyst, and innovating for the win-win.

The catalyst is Acumen, a global nonprofit, unique in its bold new ways of tackling poverty. Founded by Jacqueline Novogratz in 2001, with the goal of bridging the gap between traditional aid and markets, Acumen invests in game-changing social enterprises that create products and services for the poor throughout Africa, South Asia, and Latin America. Together with The Dow Chemical Company and Unilever, Acumen launched a series of annual Collaboration Summits in East and West Africa between MNCs and SEs. Through an iterative process, the aspiring partners sought to accelerate the growth and impact of SEs in moving people out of poverty. The MNCs would reap benefits as well by advancing their core businesses through deepening their understanding of vital new markets; helping to build supply chains and social, economic, and environmental ecosystems that would be essential for their own expansion and sustainability; and involving their employees in meaningful engagements that foster recruitment and retention.

From the outset, the challenge was to get past the superficial conversations between the MNCs and the SEs. "How do you get past the rhetoric," said Yasmina Zaidman, Acumen's Director of Strategic Partnerships. For these partnerships to work, the win-win had to be compelling for all--scaling the SEs and advancing the MNCs, while improving standards of living and expanding opportunities for the poor to lead lives of dignity.

By the end of this year's third Collaboration Summit, held in Nairobi in May 2015, Acumen and its partners were seeing results. SEs like Sanergy, d.light, and Sproxil, attest to concrete results in expanding their companies. The MNCs see value as well. But this success took time and effort.

Much changed between the first summit and the third as all parties learned along the way. Zaidman described the shift. "We got rid of the power dynamic and moved on to working on shared goals, figuring out what each party brings to the table and what we want to achieve together." By the third summit, the MNCs were describing their challenges and how the SEs could help them. And the MNCs were sending additional people as well--people who had direct responsibility for public policy and advocacy in the region for example. "Together, the heads of key business units within the MNCs and the SEs shared complementary expertise and knowledge, looking for ways to be useful to the other," indicated Zaidman. The value of the summits has grown over the three years as follows:

  1. As the facilitator, Acumen listened carefully to the goals of both the SEs and the MNCs and adjusted the process and discussion accordingly.
  2. Partners learned how to listen, without assumptions, to understand each other's business models and goals.
  3. Partners began sending more of the right people who had expertise and direct responsibility for the core business.
  4. MNCs began to understand the unique strengths and challenges of SEs based on site visits to local companies operating in sanitation, agriculture, energy, and healthcare.
  5. Participants became more trusting of each other and hence more candid in discussing their goals and ways they could provide mutual value.

Sanergy, an SE that has experienced rapid growth since the beginning of the first summit, takes a systems-based approach to sanitation provision. By partnering with residents of Nairobi's informal settlements, Sanergy provides access to hygienic sanitation facilities, knows as Fresh Life Toilets. Sanergy collects the waste on a regular basis, removing it from the community, and converts it into valuable by-products, such as organic fertilizer, which is then sold to Kenyan farmers.

David Auerbach, Sanergy's Co-Founder, describes the myriad ways in which Dow has helped the company to scale up rapidly. "As a young company, we've needed training for our middle managers in solving problems and leading teams. Dow sent people from Europe for days at a time to provide critical training." Dow also facilitates valuable introductions to distributors of agricultural inputs; these are customers for Sanergy. Additionally, Dow's financial investment in Acumen's initiative has made it possible for Sanergy to hire staff, and to gain technical expertise to strengthen marketing and branding as they move into the Kenyan market. Auerbach also mentioned the mutual benefit of the exchanges between Dow's and Sanergy's public policy teams.

By the end of 2013, Sanergy had 300 Fresh Life Toilets in Nairobi's informal settlements -- a number it doubled by the end of 2014. Currently, it has 748 Fresh Life Toilets in eight informal settlements run by 370 Fresh Life Operators, and its network of toilets is used more than 33,000 times per day. Sanergy is collecting more than nine tons of waste per day. Since opening its first toilet in November 2011, Sanergy has collected, removed, and treated more than 6,200 tons of waste. It converts the waste to organic fertilizer, which it sells to Kenyan farmers, some of whom came through contacts made at Collaboration Summits, according to Auerbach.

d.light, another rapidly growing SE, also participates in the summits. d.light provides affordable solar energy solutions for households and small businesses that are transforming the way people use and pay for energy. Its main products are a range of bright, portable solar lanterns designed for home, work, and studying. As of the first summit in 2013, d.light had sold about 3.6M units. At this point, it has sold more than 11M units in over 60 countries. "We are now a mini-MNC," said Kate Montgomery, Director of Global Partnerships. Having attended all three summits, Montgomery commented that "this last one was the most evolved." She explained that "at first, there was a mismatch in language and goals. By the third summit, corporates came with the right people ready to learn with their issues and goals at the forefront with what they were trying to achieve. For example, companies like Unilever and Coke have initiatives that are working with smallholder famers and developing last mile distribution. They call themselves INTRApreneurs and the problems they are trying to solve are more similar to ours at d.light. So there is synergy. This new group people attending the summit are open and see the opportunities to leverage relationships with social enterprises." Montgomery mentioned that emerging from d.light's work with Unilever, they are working together on ways to improve the livelihoods of retailers through access to renewable energy.

Skeptics might question the importance of these partnerships to a multi-billion dollar company like Dow. Yet Dow's case for the value of their partnership with Acumen and its SEs is compelling. Indeed, it predates the Collaboration Summits and its success inspired Acumen to explore partnerships with additional MNCs. Together, Dow and Acumen have been co-investing to scale up SEs that increase access to clean water, agriculture, renewable energy, and sanitation for low-income communities in East and West Africa. (pp. 20-23 in A Better World, Inc.: How Companies Profit by Solving Global Problems) Neil Hawkins, Corporate Vice President, Environment, Health & Safety, and Chief Sustainability Officer, The Dow Chemical Company, describes the four ways in which sustainable development gives the company a competitive advantage:

  1. Growing the business, the top line for the future. Hawkins explained: "As a B2B business, we don't have as much on the ground experience with consumers as other companies. By co-investing with Acumen, we're learning how to collaborate with SEs, NGOs, and others in the value chain so that we can make our products even more relevant to grow Dow's business for the future. We are laying the groundwork so that we're more thoughtful, more experienced, and have better judgment when we enter these markets more directly. That's an essential value proposition for the Dow-Acumen collaboration."

  • Increasing profits, the bottom line. Hawkins stated: "Our executives and managers become more innovative in creating solutions because they gain an entire new realm of experience through these partnerships. Dow employees who work with Sanergy on the production and distribution of low cost, high quality toilets to address sanitation needs--and then fertilizer development--they are forever changed. They gain a broader, deeper perspective in entirely new environments and geographies, as well as a deep sense of satisfaction for the impact they're having. They become aware of issues, callings and opportunities, which makes them better employees and future leaders."
  • Recruiting and retaining the best talent. Hawkins elaborated: "We're competing in the global marketplace for the best talent. Providing our employees with such rich opportunities for personal and professional development makes Dow an employer of choice. And once employees are here, they're more likely to stay when they get development experiences they can't get elsewhere. We're investing in our employees."
  • Collaborating to achieve more than we can alone. Through partnerships, Dow understands that they will have the biggest impact on a region in which they are invested for the long term. They are helping to develop an ecosystem that will improve people's lives and livelihoods, enrich communities, and allow Dow to prosper as well.
  • My research for A Better World, Inc. revealed that companies are most successful in profiting by finding solutions to global challenges--economic, social, and environmental--when the board of directors is engaged in setting the value proposition; the company engages with stakeholders, including communities on the ground; and the company leverages partnerships for the greatest impact. Through its engagement with Acumen, Dow exemplifies this approach. Together, Dow, Acumen, Unilever and other participating MNCs, NGOs, and SEs, are developing and continuously improving on a process to leverage each other's greatest assets to grow their enterprises and build a better world.