A new report suggests that companies will be more centrally involved in development programmes, says Howard Sharman


If you believe Accenture Development Partners (ADP), we are all living in an increasingly converging world, and corporations will be playing a large and growing role in solving complex development problems.


This proposal is outlined in a report produced in May – Convergence Economy: Rethinking International Development in a Converging World. It takes us way beyond (if you will excuse me for this, CSR readers) the dabbling with doing good that passes for much of current CSR activity.


Because, let’s face it, the budget available to the head of CSR is almost always dwarfed by the budget available to the head of marketing – especially in consumer goods companies.


And nothing wrong with that as the role of the corporation and its management must be to generate value for shareholders. Building the success and profitability of the company’s brands has traditionally been the best way to do this.


Building value


But ADP’s thinking is really very radical. Shareholders, they argue, could be best served if the companies that they own engage fully with solving development problems.


ADP says: “Businesses have woken up to the fact that what they once deemed social is now strategic to their organisations. Not only do they understand that there is money to be made in doing good, but they see long-term value in presenting themselves as exemplary corporate citizens in terms of social responsibility.”


I must say that it is clear what development has to gain from engaging thoroughly with business. ADP points out that Procter & Gamble has almost four billion customers on a planet of seven billion people and is planning to add another billion to that total over the next decade.


That gives P&G massive reach, massive power and influence to drive change, and it offers a giant potential audience through which to influence development outcomes.


Financial muscle


It is less clear to me what business has to gain from engaging with development. That said, as a development professional who has moved over from the commercial world I would love to think that the drive and innovation – not to mention the sheer financial firepower – of these organisations could be harnessed to solving some of the most intractable development problems.


And we do need new ideas and new approaches. On the development side of the fence we have to face the fact that decades of dedicated development work in Africa has not lifted that continent out of poverty – indeed an academic paper published last year argued that many countries in sub-Saharan Africa were poorer in 2000 than they were in 1970

(see here http://blog.advanceaid.org/news/sub-saharan-africa-has-been-getting-poorer-for-30-years-%E2%80%93-official/).


ADP argues that what we are seeing is a convergence of issues, solutions and interests. And it is the last of these that is both the most important and the most controversial.


“Convergence of interests refers to the growing number of scenarios in which what’s good for NGOs turns out to be good for business and vice-versa – the opposite of the conventional wisdom that says that the objectives of businesses and NGOs are often at odds,” ADP says.


New innovation source


The report cites General Electric and Vodafone, which, it says, have discovered that addressing emerging market challenges leads to innovation that can be applied elsewhere.


And it also mentions some of the joint ventures between Grameen Bank in Bangladesh and companies such as Danone, BASF, Veolia and Adidas on which we have already commented in the Advance Aid blog (http://blog.advanceaid.org/news/we-all-have-the-capacity-to-change-the-world/).


One outcome of the partnership with Danone has been the establishment of a €100m social innovation fund designed to encourage social business initiatives.


And many of the convergent business models that will emerge from this linkage of the corporation with the NGO are likely to be social enterprises, which may well be profit making, but are unlikely to be profit maximising. Market orientation – and the important element of responsiveness to the market so often missing from development projects – will be blended with delivering a broader social impact.


NGOs, too, will be required to change, ADP argues, as this convergent model gathers strength and speed. In particular, they will be probably begin to consider some of the disaggregation and outsourcing of non-core skills that have become commonplace in the commercial world.


“After all,” ADP says, “advocacy work calls for very different skills and resources than on-the-ground relief work.”


Rebuilt value chain


Convergence, if real, will demand that all participants – and this includes governments and donors as well as commercial and non-profit players – challenge conventional wisdom about their own particular value chain, deconstruct it and then rebuild it in the modern image.


The final piece in the ADP jigsaw is a suggestion that, as corporations become more open to, and involved in, development work, which they see as a key strategic part of their corporate development, NGOs will become more measured by (and compared on) the impact that they deliver.


Indeed, this impact measure could well become a proxy for the corporation’s shareholder value. This could lead to real transparency, efficiency and accountability to donors for NGOs.


So, how likely is all of this to happen? Have the chief executives of Fortune 500 companies really decided that lifting Africa out of poverty is a strategic priority? Somehow I doubt it. But is the tide moving in that direction? Maybe. Do let Ethical Corporation know if that is the case in your business.


But the point when we will know that this is a real wave of change rather than a ripple of interest will be when the CSR budget becomes 10% rather than 1% of the marketing budget. As so often, it is the money that will be doing the talking.


Howard Sharman is a senior consultant with Advance Aid (http://www.advanceaid.org)


The Accenture Development Partners report can be downloaded here: http://www.accenture.com/us-en/Pages/insight-international-development-converging-world.aspx 



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