A model to support capability building and scaling of existing ventures

This is my attempt to solve a recent ET Prodigy Case Study, which is briefly mentioned below.

Problem Statement
Arvind Apte is employed at an Infrastructure consulting firm in a senior position. He has been involved in multiple projects with International financial and labour organizations; focused towards creating more inclusive and sustainable growth in India. Apte has identified the potential for a viable business model catering to this space, and understands the need to contribute directly towards these initiatives. Apte has hence decided to resign from his present job and start an organization that will create social impact. Today at his farewell dinner, his colleagues kept probing him about his new enterprise. As he was driving back, Apte felt that he had not given enough thought to his new organization’s business model, in particular, thinking through ways and means to ensure self sustainability of the enterprise while realizing the mission and social goals.
The question was still lingering in his mind as he parked the car in his garage. What should be the focus of his organization? Should it be ‘ To develop underprivileged job seekers into job creators’ or ‘ To support capability building and scaling of existing ventures managed by underprivileged individuals/ communities’ The chosen statement would set the course for Apte’s planning and implementation in his home state of Maharashtra over the next 3 years.


Solution

Vision of Arvind Apte's new organization should be “To support capability building and scaling of existing ventures managed by underprivileged individuals/communities”. The business model of ‘Sustain World’ should be divided into 3 separately functioning but highly integrated units:

1. Sales/Marketing: Focusing on identifying underprivileged individuals/communities in Maharashtra
2. Operations:Focusing on grooming individuals/communities with required skills & strategies
3. Advisory and Organizational Capability building:Monitoring execution of business plans by individuals/communities and offer support if required.

These 3 units should work in a factory-like model where identified entrepreneurs from Sales unit should be nurtured by Operations unit after which the advisory unit will monitor them and be available for support, if required.

The salient features of this model are:

• 3 separate but integrated business units will ensure faster results, better quality & high productivity
• Feedback mechanism and organizational capability building initiatives including continuous learning built into the model for sustainable growth
• Existing ventures will position their product/services into their market in quick time and be prepared to face the competition

One risk identified for this model is the unwillingness to existing ventures to take advisory services the mitigation for which would be to educate them that their innovative ideas and business models need to be harnessed and connected into globally competitive environment so their models are sustainable and profitable.

Second model was preferred over the first model because

• It will directly focus on supporting existing ventures and hence their existing business plans will be expedited faster to market thus impacting more end customers in quick time.
• There is an immediate opportunity in second model to know the problems faced by existing ventures in their market so that they can be addressed

Challenges


1. What would it take for the model to become self-sustaining and emerge as a viable proposition?

‘Sustain World’ should ensure that it works in following areas to become self-sustaining and emerges as a viable proposition:


1)    ‘Sustain World’ should make it’s employees aware of it’s vision and believe that it has the capabilities to achieve that

2)    It should identify it’s strengths and areas of improvement and proportionately invest it’s resources

3)    It should define it’s course of action clearly and focus on the area of entrepreneurship advisory services in initial years(For eg:In initial few years, it might specialize itself in training entrepreneurs who are in the field of micro-finance)

4)    It should clearly identify the geographical areas within Maharashtra which have condusive environment for enterpreneurship and start operations by concentrating these areas

5)    Organization capabilities in each of 3 units should be built (like specialized expertise in micro-finance, processes to monitor progress of a batch which underwent micro-finance training)

6)    Any compromise on quality of services should not be entertained

7)    Speed of execution is important since training imparted should be implemented by entrepreneurs and they should be able to appreciate the importance of it

8)    ‘Sustain World’ should be innovative, pro-active and should not hesitate to take calculated risks

9)    ‘Sustain World’ should learn from experiences and hence should be better prepared to face similar challenges in future

10)    ‘Sustain World’ should acknowledge that there is no lack of ideas in individuals & communities but the problem lies in converting these ideas into marketable products and services. Considering this, there should be enough demand for it’s services by individuals & communities who are entrepreneurs

11)    Since ‘Sustain World‘ will be supporting existing ventures managed by underprivileged individuals & communities, the ventures would have already done some study in identifying customers of their services/products. Hence, it might work to Sustain World’s advantage if it’s initial focus of services is directly the one existing ventures are in need of.

2. How would Sustain World identify individuals / communities to provide advisory services? 

‘Sustain World’ can identify individuals/communities to provide advisory services in any of the following ways. Wherever required, below mentioned modes might need to be customized for a particular local environment (local language, preferred mode of communication in local environment etc).

1)      Different types of Media

‘Sustain World’ can advertise their offerings through different forms of media like television, online, print, radio etc in local & national languages

2)      Conducting contests

An interest can be created in prospective clients by throwing a contests and inviting participants for the same

3)      Organizing Camps and Community Sessions

Organized Camps and community sessions can be conducted to educate interested communities from which entrepreneur individual/community can be identified

4)      Network

Networks of friends, families and well-wishers can be leverage to identify those interested

5)      Schools, Colleges & Universities

Awareness sessions can be conducted in different educational institutions. Any related events in educational institutions can be considered for sponsorship

6)      Not-for-Profit Organizations

Any information available from Not-for-Profit organizations that are working to identify entrepreneurs can be collected

7)      Publicly available information from Departments under State/Central Government

8)      Collecting information from Surveys/Articles/Cover Stories in newspapers/magazines

9)      Word-of-mouth

One another way identifying entrepreneurs is to just talk on that when we meet people. Word-of-mouth power can be enormous especially in places where literacy is less

10)  Sharing success stories and experiences

Last but the most important way is to share success stories and share experiences. This will encourage potential entrepreneurs that their ideas and models too can flourish

The Sales/Marketing unit of ‘Sustain World’ can break their unit into different divisions, each of which can focus on certain districts. The focused approach in terms of content of advertising and customizing can go in a long way to reach out more people. Enough local research and study should be done current and future trend before starting out this identifying process. The sales unit should also continuously study the response from different divisions and see how better they can attract more people.

3. How many people can Cascade World or Sustain World impact in the first three years? How can the model be made scaleable? 

Maharashtra is comprised of 35 districts and 922 talukas(Source:Wikipedia). ‘Sustain World’ should first start operating on a pilot basis in two or three talukas in one district. The response from this pilot should be evaluated, learnings should be captured, strategy changes should be made and then the operations should roll out through out Maharashtra in phases. Each phase should cover one district and/or groups of talukas and the response from rollouts in different districts should be carefully considered. It is possible that different strategies might need to be adopted in different districts/talukas. Assuming that ‘Sustain World’ has initial resources and initial capability of training 25 people per batch per month and it can train 1 batch per month in 1^st year, 2 batches per month in 2^nd year and 3 batches per month in 3^rd, it can impact following number of people.

In 1st year, 1 batch per month, so, 12 batches in the year, 12 * 25 = 300 people

In 2^nd year, 2 batches per month, so, 2*12 batches in the year, 2*12 * 25 = 600 people

In 3^rd year, 3 batch per month, so, 3*12 batches in the year, 3*12 * 25 = 900 people

So, in 3 years, ‘Sustain World’ has the potential of training 300+600+900 = 1800 individuals/communities to better handle their businesses.

This model can be made scalable by:

1)      Controlling the number of people ‘Sustain World’ can train in one batch

2)      Controlling the number of simultaneous batches that can be conducted per month

3)      Controlling the number the number of talukas/districts where the operation can be started.

The necessary organizational capabilities, skills, resources, best practices to control above factors has to be continuously built over a period a time. Having these abilities and knowing the definite number of talukas & districts in Maharashtra, different combinations can be tried to make the model scaleable according to the need of the time without compromising on the quality. The 3 different units in the model proposed also ensure scalability they function independently and scaling up the individual units is purely the capability and skill matrix of that unit. The advisory and organization building unit will ensure that good practices will be identified and reflected in different units so that Sustain World as a whole can leverage it and it’s operations can be easily made more scaleable.