Systematic Review - Network for Business Sustainability

development on the needs of the poor as well as
building long term relationships with such partners as
local communities, local companies and NGOs, firms
can meet the dual goals of satisfying stakeholders’
expectations for growth as well as satisfying social and
environmental stakeholders (Hart and Christensen,
2002). See Appendix 6 for further illustrations of frugal
and reverse innovations.
Such disruptive business models at the base of the
pyramid offer important lessons to firms in a developed
economy:
• Build diverse and multiple relationships — from
local support through to government-level policy
dialogue
• Form new alliances – e.g. for supply chain
sustainability
• Consider local needs when developing products
and services
• Leverage the strengths, capacity and capabilities
of the local community, either by engaging them
individually, by building on existing networks or by
creating new networks
• Adapt products and processes and redesign
business processes to fit the local context: reinvent
cost structures, reduce costs, rethink
functionality from product service systems, utilize
renewable or human-made resources instead of
non-renewable resources, draw inspiration from
nature (biomimicry), rethink delivery and distribution
methods
• Adopt a stakeholder rather than shareholder view
of the firm: understand that the organization’s
success is inextricably linked to the success of its
stakeholders
For Organizational Transformers operating in
underserved markets, the required innovation strategy
is not to fine-tune systems, optimize existing processes
or ship end-of-line or discontinued products to
emerging markets, but to place the TBL at the centre of
the business model. Multinational corporations (MNCs)
can learn both from the innovative business models
emerging domestically in these countries and from their
own ventures in these markets in which the principles
of the sustainable business model, so much as they are
currently understood, can be piloted in separate (“ringfenced”)
initiatives, e.g. in departmental, product-level
or SBU-level experimentation.
In Practice
Cisco, a global networking technology
company, invested in Aavishkaar, a venture
fund founded to promote development
in rural and semi-urban India. Cisco aims
to promote technology-enabled inclusive
growth and seeks to use this investment as
a way to both learn about the market and
accordingly align technology innovation.
Adapted from UN Global Compact &
Rockefeller Foundation (2012).
Local firms can use innovative approaches when
delivering products and services to the underserved.
MNCs can learn lessons from these experiences
(Prahalad & Hart, 2002) through “learning investments”
(UN Global Compact & Rockefeller Foundation,
2012): strong anecdotal evidence supports pro-poor
innovation — both for those living in poverty and by
those living in poverty — as a stimulant for creating
new business models. Many cases of social innovation
in new or niche markets start outside the mainstream,
Innovating for Sustainability 53