Understanding the needs of less-affluent communities and devising creative solutions
Lack of Resources
Innovating New Models
We seek and exchange ideas throughout the world. This isn't traditional benchmarking because we don't simply copy something they see elsewhere. We take pieces of practice or technology that we find and recombine them in novel ways to solve our community problems.
New technologies are changing job markets & increasing the demand for new skills and why it has critical for our work to invest in people to realize their potential.
Companies in developing countries face serious challenges, including political instability, volatile exchange rates, and an underdeveloped physical infrastructure.
More critically, they must contend with three realities that particularly stymie innovation:
1. Developing countries generally lack a solid technology base of trained scientists and world-class research universities.
2. Companies in developing countries must manage to eke out a profit while serving customers with low disposable income; per capita, gross domestic product in the advanced economies is on average ten times that of developing nations.
3. Managers in these companies must often innovate on a shoestring budget since the high cost and scarcity of capital preclude massive spending on research and development. As a result, they must innovate from other areas of their business's structure, including manufacturing, logistics, marketing, and customer service.
We work to overcome these formidable obstacles to become some of the most innovative in the world.
Our distinct approach to innovation is that we strategically innovate around (rather than through) technology, and we scour the globe for good ideas. These strategies, we believe, are as important for managers in developed countries as they are for executives in the developing world.
A structure in a medical compound in the Nuba mountains damaged by a bomb dropped on their location.
We use technology to understand our customers' mindsets and needs—intimately
We have committed to understanding the needs of less-affluent customers and using this knowledge to devise creative solutions to customer problems.
We make modifications to make products versatile enough to address rural and war zones problems becoming market leaders in these areas.
A more significant finding was that do-it-yourself projects have a special significance for this demographic. Innovative housing projects, the team learned, provided more than the functional benefits of extra living space to these consumers; they also conferred the psychological satisfaction of creating a sanctuary, something of enduring value to be passed on to the next generation.
Innovation comes in two varieties: technology-push and customer-pull. Technology-push—introducing new products based on cutting-edge research—is not an option for most companies in developing countries. As a result, they must rely on the customer-pull approach: finding ways to solve customers' dilemmas whilst relying on novel science.
Many multinationals entering developing countries pay lip service to serve less-affluent customers but then supply only slightly scaled-down versions of products originally designed for wealthier markets. This approach rarely succeeds, that's why our village companies have committed themselves to understand the needs of less-affluent
Understanding Community's Mindset
To better understand the needs of those from less-affluent areas and war zones, we assemble teams of individuals who work with these communities to better understand and solve their problems.
Consumers in these areas generally buy and use less-expensive materials and technology. New insights gained help bring innovations that appeal to their aspirations and create an enduring legacy.
An inability to secure credit emerged as a primary obstacle to financing innovative projects.
Our team also discovered that to raise capital for projects, refugees would organize Harambee in which a group of families contributes a specific sum each week to a pool and one lucky family wins the entire amount at the end of the week.
What we also learned is that although these funds were intended for innovations, winnings were often diverted to such other purposes as weddings and celebrations of festivals.
Working with local leaders, we developed a program to help community organizers establish similar financing pools in which, instead of cash, the winners received innovative materials, including solar. In addition, we provided construction advice and blueprints to the winners. The program has already helped more than 10,000 families, and the company's goal is to reach 1,00,000 more within five years.
Innovative Information Technology
We innovate around—rather than through—technology
Companies in developed nations can drive innovation from their research and development labs, continually translating scientific breakthroughs into new products. In contrast, innovation by developing-country businesses looks very different.
In general, the innovations come not from product technology but from all the elements of the business model that surround the product technology, including manufacturing, logistics, distribution, and finance.
Consider the challenge of delivering services to war zones and very remote areas without roads or automobiles.
Our systems do not emerge from highly developed labs but rather internal innovative efforts allowing us to increase impact and creating long-lasting solutions.
We use technology to understand and help individuals rise form ashes of extreme poverty and war. This is where our conceptualization of new products and new lines that serve local needs becomes indispensable.
Managers in developing countries sometimes despair of closing the gap with larger and better-funded multinationals. Clearly, there is hope for companies anywhere in the world to win through innovation and creativity. Moreover, the practical innovation tools used by developing country champions can be used by managers anywhere to innovate on a shoestring.
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