Once a viable business model has evolved and the incremental learning from the pilots is nominal, the Implementation Team should formalize the business. At this point, the focus turns to establishing the enterprise’s governance structure and building onto the insights and achievements of the pilot projects. All decisions should be documented and made available to the community through the local enterprise office.
The “Enterprise Formalization” process is comprised of five primary tasks: formalizing the governance structure, scaling out from local systems, establishing contingency plans, launching and leveraging new capabilities, and creating a growth trajectory.
The Implementation Team needs to address two key issues when establishing the enterprise’s ownership and control structure. First, it must ensure that an equitable portion of the venture’s profits is retained within the local community. One option would be to establish a Community-Based Organization that receives a dedicated percentage of the venture’s annual profits. Second, the governance structure should provide some degree of oversight and decision-making authority to the local community. Given that the Implementation Team itself is comprised of representatives from the local community, one option would be to create a Board of Directors that includes each of these team members. The same performance assessment and feedback mechanisms utilized during the pilot stage (e.g., the scorecard) should be continued once the business has been formalized. The principles of transparency and equity should guide this process.
To expand the scale of the pilot projects, the Implementation Team should continue to build off of local systems and capabilities as much as possible. There should be special sensitivity to the uniqueness of each site, and every effort must be made to learn from the local situation when broadening the effort to other areas. Thus, this task is about transferring the learning processes developed throughout the enterprise’s formation, while allowing the local context to guide the specific content of the business model.
The Implementation Team should put into place plans and structures for dealing with the possibility that the MNC may decide to pull-out of the venture. The Team, guided by the principle of long-term responsibility and commitment, should create an exit plan that ensures a “soft landing” for the business, as well as the community. Again, the intention is to leave the community better off than before the venture was initiated. Options may include establishing a “venture transition” fund or pledging to the community any assets that the firm contributed to the business.
The BoP enterprise should serve as a launching site for the capabilities and competencies developed by the MNC over the course of the pilot phase. Indeed, the MNC team should strive to integrate these competencies into the core of the new enterprise’s value proposition, thereby strengthening its own competitive position and expanding the MNC’s opportunities to further develop and refine them. In addition, the MNC Team should actively seek out other businesses within the MNC that may be able to deploy these new competencies in their particular markets. One of the central objectives of this process is to fundamentally redefine or disrupt the mature markets currently served by the MNC by using the newly-developed competencies to provide new functionality or existing functionality at a far-lower cost.
The MNC Team’s experience in co-creating the BoP enterprise should serve as a platform for communicating a BoP growth strategy within the corporation and for ultimately expanding the MNC’s presence to other BoP markets and communities. Central to this process is the creation of an organizational network that brings the MNC’s country and product managers into conversation with the MNC Team and other Implementation Team members. The focus should be on identifying those aspects of the BoP enterprise’s business model and the enterprise creation process that can be creatively combined with other resources and capabilities in meeting the needs of other BoP markets. The new BoP Enterprise could serve as a BoP Center of Excellence for the MNC, providing a site for training and hands-on learning.