Ted London just sent me the latest conference announcement for the UMich/Cornell BoP conference in September. You can see more below, as well as a link to the latest Conference Announcement (PDF).

Please pass the announcement on to people who may be interested in attending. Space is limited.

Patrick

Links:

• Conference Announcement (PDF)
• Conference website

Things have been pretty quiet around the BRINQ Workshop, only a few posts in the last six months, so what have we been up to? Well, besides trying to get things started in Brazil again, I’ve been doing a lot of work for other folks, most particularly Enterprise for a Sustainable World (ESW), a new organization started up by Cornell University professor and Sustainability guru Stuart Hart, whose book “Capitalism at the Crossroads” we covered here before. Stuart Hart was an old professor of mine at UNC’s Kenan-Flagler Business School (before he headed north to Ithaca) and along with CK Prahalad is one the founders of business strategy in the Base of the Pyramid. Stu’s approach to the BoP is one of deep listening and participation; he advocates that by looking beyond poor communities as just places to “sell more stuff” companies will gain access to greater benefits: disruptive innovation, strong market relationships, better reputations, and yes, market growth. Stu is also one of the people who invited me to particpate in the Base of the Pyramid Protocol pilot in Kenya… and of course to hire me to work at ESW and to join the new Protocol team in India. I’ve also been working with Stu & co. designing the web sites for ESW and the BoP Protocol, in addition to a Drupal-based project management site to support Protocol teams in the field. You can also browse a web-version of the BoP Protocol, previously only available as a PDF. Check them out!

BoP-Protocol.org	e4sw.org

[For the technically inclined, BRINQ.com has also switched hosting providers (twice) and the Workshop has been upgraded to Wordpress 2.0!]

“Ever had one of those conversations,” Stu Hart asked the crowd, “where you think you and another person are talking about the same thing, only to discover you’ve been discussing something completely different?  In my work, I run into that all the time.”

Stuart Hart is a professor at Cornell’s Johnson School of Management, recent author of the acclaimed “Capitalism at the Crossroads”, and one of the world’s foremost experts on the strategies and business opportunities for sustainable enterprises and serving the world’s poor.  Hart was co-presenting with colleague Mark Milstein (of the World Resources Institute) at Cornell’s 3rd annual Sustainable Enterprise Symposium.  

Hart and Milstein explained that there are so many different “sustainability tribes”, each using their own vocabulary of buzzwords, that even basic communication proves difficult and unwieldy; strategic planning and collaboration are even harder.  How can we collaborate in creating a better future if we can’t even communicate? 

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"Stuart Hart was there at the beginning. Years ago when the term ’sustainability’ had not yet reached business schools, Stuart Hart stood as a beacon in the umbrage. It is clear commerce is the engine of change, design the first signal of intention, and global capitalism is at the crossroads. Stuart Hart is there again; this time lighting up the intersection."
- William McDonough, Co-author of Cradle to Cradle

Three years ago, a group of MBA prospects visited the University of North Carolina’s Kenan-Flagler Business School. We were wined & dined and offered full rides and stipends, incentives to reject offers at higher ranked business schools and earn our MBAs at Kenan-Flagler instead. The admission staff knew they had to be convincing, so they brought out the big guns. We were introduced to Stu Hart.

Naturally, we decided Carolina was a fine place to be.

At BRINQ, both Sheri Willoughby and I attribute working with Stu Hart as defining moments in our careers. Sheri, a chemist and environmental specialist from Florida, and I, a computer scientist and technologist from California, had returned to school to answer the question "How can we make companies more environmentally friendly?" However to our great fortune, Stu Hart took us in hand and convinced us to go "beyond greening", that the real opportunity for sustainability was not in better ways to comply (reducing liability and cost) but in creating new strategic business opportunities (increasing revenues and markets): "What radical new business opportunities are available for a sustainable company?"

Hart writes in his acclaimed new book, Capitalism at the Crossroads:

By moving beyond greening, companies hope not only to address mounting social and environmental concerns, but also to build the foundation for innovation and growth in the coming decades. In so doing they would outperform their competitors in today’s businesses, but even more importantly, outrun them to tomorrow’s technologies and markets. In short, sustainable global enterprises would create competitively superior strategies that simultaneously move us more rapidly toward a sustainable world.

Rather than seeking incremental improvements to what already exists, moving beyond greening often means pursuing innovations that may make obsolete what currently constitutes the company’s core business—it is an inherently disruptive act.

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The past couple of weeks have been intense travel weeks, with meetings at the Base of the Pyramid Learning Lab, hosted by Cornell University, and the 2005 Advisory Board meeting for the Center for Sustainable Enterprise at the University of North Carolina. Included below are some meeting highlights.

Base of the Pyramid Learning Lab
This latest session of the BOP Lab, held in Ithaca February 17-18, had three main agenda items, KX Industries innovative new "World Filter", the SC Johnson partnership with ApproTec in Kenya, and the field test for the Base of the Pyramid Protocol. The BOP meeting and its participants were fantastic, and we all finally got to thumb through celebrated business guru (and BOP founder) Stuart Hart’s new book "Capitalism at the Crossroads":

""This book takes the contrarian’s view that business–more than either government or civil society–is uniquely equipped, at this point in history, to lead us toward a sustainable world in the years ahead," writes Hart. "Properly focused, the profit motive can accelerate (not inhibit) the transformation toward global sustainability, with nonprofits, governments, and multilateral agencies all playing crucial roles as collaborators."

Center for Sustainable Enterprise Advisory Board Meeting
The 2005 Center for Sustainable Enterprise board meeting kicked off with a keynote address by Marc Gunther, senior writer at Fortune magazine and author of "Faith and Fortune: The Quiet Revolution to Reform American Business". We were interviewed by Marc several years ago when he visited UNC to do an article on Professor Stuart Hart and sustainable enterprise. Marc credited those meetings as one of many inspirations for "Faith and Fortune". We’re glad to have made an impact.

Another notable session was a panel discussion around "Making the Business Case for Sustainability", led by CSE Director Al Segars, with participants John Lott (DuPont), Pogo Davis (ConocoPhillips), and Tony Singarayar (Johnson & Johnson). Most memorable was Singarayar’s use of tsunami pictures to illustrate how difficult it is to recognize a change in context, even when your life is threatened. "We need a better business model lens", Singarayar commented.

Further sessions included a presentation by MBA students Dan Holt and Rebecca Swartz on the shortcomings of current sustainability indices (Calvert, Dow Jones Sustainability Index, etc.). "It’s almost impossible to do company by company comparisons," explained Swartz. The duo proposed an alternative system, which will shortly be available on the CSE White Paper page. Finally, Al Segars announced the launch of CSE Consulting. The brain child of CSE Executive Director (and BRINQ advisor) Katie Kross, the program offers fee-based consulting to organizations in need of sustainability business services.

How can the multinational company become the driver of an inclusive capitalism?

That’s the critical question the Base of the Pyramid Protocol seeks to answer. Developed by Stuart Hart and the Base of the Pyramid Learning Lab, the BOP Protocol Project is a collaborative effort to develop guidelines and business models for successful Base of the Pyramid ventures, enabling them to meet the needs of the world’s 4 billion poorest people while discovering huge new growth and innovation opportunities.

The Vision: to create inclusive, mutually beneficial business processes through which the private sector and local communities build economic, social and environmental value.

The protocol is a best-practices methodology to discover new business opportunities, create sustainable growth, and incubate disruptive innovations; the theory goes that by following the protocol’s three iterative and repeating steps (see image right), a company will discover the answers to capturing and delivering value in BOP markets.

The first draft of the protocol was developed by a diverse group of academics and practitioners and will have its first field test this summer in Kenya, through a joint project between the BOP Lab, SC Johnson, and Approtec. The target community? Kenya’s pyrethrum farmers, who struggle with a global decline for their crop of natural pesticide. A series of follow up tests and organizations are also in the works and the BOP Protocol will be released with an open source development model (The protocol will eventually be available at www.bop-protocol.org).

BRINQ will be involved in field-testing the protocol, either in the initial Kenya field trial or potential follow-ups in Latin America. We are currently taking part in the protocol draft review.

Additional Links and Resources:

• BOP Protocol Presentation (PPT)- Stuart Hart (Cornell) & Scott Johnson (SC Johnson) at WRI’s Eradicating Poverty through Profit conference in December, 2004
• Capitalism at the Crossroads - Stuart Hart’s new book on "The Unlimited Business Opportunities in Solving the World’s Most Difficult Problems"
• Base of the Pyramid Resource Center - the BOP Resource Center has more information from the draft of the BOP Protocol

Photos from the field trial site in Kenya:

Past "How to Change the World" articles:
The Fortune at the Bottom of the Pyramid — The Model T Trap — Going Beyond Networking

The disruptive-innovation theory explains why new firms armed with relatively simple, straightforward technological solutions can beat powerful incumbents, often creating entirely new markets and business models. The disruptive innovation theory was popularized in Harvard professor Clayton Christensen’s "The Innovator’s Dilemma". This article points to some examples of disruptive innovations, their characteristics, how to test for disruptive innovations, and further sources for review.

Some examples of disruptive innovations:

• Peer to Peer networking, disrupting traditional distribution mechanisms
• MPEG Audio and Video Compression (MP3 et al.), disrupting physical media
• PCs, disrupting other media devices (TV, stereo, etc.)
• Smaller sized hard drives (as discussed in the Innovator’s Dilemma)
• Steel Mini-Mills (as discussed in the Innovator’s Dilemma)
• Amazon.com (disrupting traditional Brick & Mortar retail)
• Dell Direct (disrupting the whole PC Industry)
• Cell Phones (disrupting PCs and digital cameras)
• Ebay (disrupting traditional retail systems)

Potential Disruptive Innovations

• Renewable and Distributed Energy (Solar, Biomass, etc.)
• Adaptive Eye-Care’s user-adjustable corrective glasses
• WiFi and organically grown networks

Characteristics of a Disruptive Innovation>

• Its performance attributes meet the unfulfilled needs of an emerging market’s customers. These same attributes are not initially valued by the mainstream market, which instead value different performance attributes and initially see the innovation as substandard.
• Emerging market adoption enables the innovation to increase its performance and to begin overlapping with the performance expectations of the mainstream market.
• Awareness of the innovation increases as the innovation develops, influencing change in the mainstream market’s perception of what it values.
• The change in the mainstream market’s perception of what it values enables the innovation to disrupt and replace the existing offerings in the mainstream market.

Can you see why those us of working in the Base of the Pyramid are so excited about this theory? The Base of the Pyramid could be an ideal place to meet unmet needs and to incubate disruptive innovations, creating new markets and one day perhaps even disrupting mainstream markets higher up the pyramid. This idea of incubation in the BOP was put forward in Christensen and Hart’s article “The Great Leap: Driving Innovation from the Base of the Pyramid”. Quoting Professor Hart:

“It is much easier to take an innovation up-pyramid than it is to try to do it the other way around.”

We believe that same reasoning is why Hewlett-Packard set up the HP labs in India.

Is the Idea Disruptive? Christensen’s Litmus Test
Summarized by Emergic.org

Executives must answer three sets of questions to determine whether an idea has disruptive potential. The first set explores whether the idea can become a new-market disruption. For this to happen, at least one and generally both of two questions must be answered affirmatively:

• Is there a large population of people who historically have not had the money, equipment, or skill to do this thing for themselves, and as a result have gone without it altogether or have needed to pay someone with more expertise to do it for them?
• To use the product or service, do customers need to go to an inconvenient, centralized location?

The second set of questions explores the potential for a low-end disruption. This is possible if these two questions can be answered affirmatively:

• Are there customers at the low-end of the market who would be happy to purchase a product with less (but good enough) performance if they could get it at a lower price?
• Can we create a business model that enables to earn attractive profits at the discount prices required to win the business of the overserved customers at the low end?
• Once an innovation passes the new-market or low-end disruption test, there is still a third critical question to answer affirmatively:
• Is the innovation disruptive to all of the significant incumbent firms in the industry? If it appears to be sustaining to one or more significant players in the industry, then the odds will be stacked in that firm’s favor, and the entrant is unlikely to win.

Sources and Links:

The Innovator’s Dilemma, by Clayton Christensen
The Innovator’s Solution, by Clayon Chistensen and Michael Raynor
The Great Leap Forward: Driving Innovation From the Base of the Pyramid , by Clayton Christensen and Stuart Hart
HBS Working Knowledge Article - A Diagnostic for Disruptive Innovation
Optimize Magazine - Forging Innovation from Disruption
CIO Magazine - Disruption is Good - an interview with Clay Christensen Emergic.org Article - TECH TALK: My Mental Model: Creating Disruptive Innovations
Adaptive Eyecare - low cost, user adjustable eye glasses.