The Business Solution to Poverty: Design for Scale

I like how Paul Polak and Mal Warwick start The Business Solution to Poverty: Designing Products and Services for Three Billion New Customers focused on their target customer, the global poor who live on less than $2 per day. This is a massive customer segment: 2.7 billion people.

To serve this market of customers effectively, and thus make a difference in global poverty, organizations need to work at a very large scale. Dozens of countries. Tens of millions of customers. Billions of dollars.

Scale is a great challenge in public sector endeavors. Polak and Warwick contend that only through private sector approaches, mainly in finance, can solutions to poverty reach the necessary scale to address 2.7 billion people worldwide.

I’m not convinced that the private sector has exclusive knowledge and success in scale. But Polak and Malwick do outline the pervasive influence of scope in planning and executing any endeavor, public or private.

Here are some of their key points

  • Target a problem that affects a large amount of people. This might seem obvious, but if you want to have large-scale impact, you need to tackle large-scale problems. Often, these problems intersect the public services that governments and communities often provide, or fail to provide: clean water, shelter, food, public health, education, energy, communications.
  • Design a solution that can be easily replicated or mass produced. For a solution to reach a large audience and therefore have a large impact, it must be designed so that it can be efficiently created or provided. Customized or labor-intensive approach will not work.
  • Scalable testing and funding. To reach scale, a solution must go through successive rounds of testing, which likely also means successive levels of funding before reaching a scale that’s effective, profitable, and self-sustaining.
  • Design a distribution system that can be expanded easily. Having an effective and affordable solution is pointless if you can’t deliver it to those who want and need it. Polak and Warwick outline strategies for creating distribution systems that can cover the last mile, or even the last 500 feet, which can be the most costly and crucial part of distribution. They also show how distribution systems can be designed for modular expansion, one region, one state, one nation at a time.
  • Design for cultural independence. To reach the scale of 2.7 billion people worldwide, a solution must be able to span borders and cultures. This holds true as well for all the necessary pieces that support a solution such as branding, promotion, communications, and personnel recruiting and training.
  • Design in profit for all the partners and pieces of the supply and distribution chain. To operate in many regions and many countries, an organization will need to work with many suppliers and distributors. All of those people and organizations will need an incentive to participate in creating and providing the solution. Polak and Warwick argue that profit is that motivation. While I believe that governments and NGOs can devise schemes whereby suppliers and distributors profit in providing a public service, I agree that profit is a powerful and often missing component in the equitable provision of public services throughout the larger community.

(The Business Solution to Poverty: Designing Products and Services for Three Billion New Customers and other books mentioned in this blog are available in the bookstore.)

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