Power of Social Business.Indd

The Power of Social Business Lessons from Corporate Engagements with Grameen The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for- profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 78 offices in 43 countries. For more information, please visit bcg.com.

Yunus Social Business (YSB) creates and empowers social businesses around the world to sustainably solve social problems. Cofounded by Professor Muhammad Yunus, YSB initiates and manages incubator funds for social businesses in developing countries. YSB aims to promote livelihoods and development with a focus on vulnerable and underserved communities by scaling up market-oriented and self-sustaining businesses that are designed to address pressing social or environmental problems. Its team of consulting, entrepreneurial, venture capital, and development experts is based in Germany, with subsidiaries in Haiti, Albania, Colombia, Brazil, Tunisia, and Uganda. For more information, please visit yunussb.com. The Power of Social Business

Lessons from Corporate Engagements with Grameen

Ulrich Villis Muhammad Yunus

Rainer Strack Saskia Bruysten

November 2013 | The Boston Consulting Group Contents

3 Introduction

5 The Value of Social Business Social Benefits Business Benefits

11 Developing a Successful Social Business Choosing the Right Focus Area Designing a Successful Business Model Continuously Learning and Adapting Building Efficient and Sustainable Operations Managing for Impact

22 Looking Forward

24 Appendix: Social Business Profiles

30 Note to the Reader

2 | The Power of Social Business Introduction

he distinction between the business and social sectors is Tbecoming increasingly fluid. Corporations are seeking to more actively address the challenges faced by society, and they are leverag- ing their business expertise to do so. Social organizations are looking to companies in the private sector for the best practices, skills, and know-how needed to deliver greater value to populations in need and to increase operational efficiency.

New approaches such as impact investing, hybrid value chains, and shared value are emerging at the intersection of the social and business sectors, aiming to blend the best of both worlds.1 In 2011 alone, 60 impact investing funds were created, raising the combined total capital available for social investments to an estimated $40 bil- lion.2 About 2.8 percent of U.S. workers are already involved in hybrid social enterprises.3 And the European Union estimates that 25 percent of all new enterprises in Europe can be considered social enterprises.4

Within this context, the concept of “social businesses”—companies with a primary objective of solving a social problem by applying business principles—has attracted particular attention. This report takes a closer look at social businesses from the perspective of a corporate organization. It highlights the value of the concept and how companies can develop a social business, with a special focus on the lessons and best practices needed to succeed.

While the report focuses on best practices for social businesses, many of the same lessons can be applied more broadly to other ventures at the intersection of the social and business sectors.

The report has been written in collaboration with Professor Muhammad Yunus, Nobel Peace Prize Laureate 2006, founder of the Grameen Bank, and early developer and implementer of the social business concept. It is based on an analysis of the lessons learned from ten social businesses that operate in Bangladesh today, each tackling a different social problem affecting people at the bottom of the economic pyramid. (See Exhibit 1.)

Many of the social businesses described are joint ventures between a Grameen organization and a multinational partner such as Danone, Intel, Veolia, and BASF. While several of the businesses are still in the learning stage, others—such as Grameen Shakti and Grameen GC Eye Care Hospital—have already achieved social impact, significant scale, and financial self-sufficiency.

The Boston Consulting Group • Yunus Social Business | 3 Exhibit 1 | The Analyzed Grameen Social Businesses Address a Variety of Problem Areas

Grameen Grameen BASF Grameen Intel Grameen Danone Foods Veolia Water Grameen Social Business Yukiguni Maitake

Child malnutrition Arsenic- Risk of malaria in Inefficient use Poverty and the Problem contaminated water parts of the country of fertilizers underemployment addressed Poverty reduction in rural areas Lack of adequate maternal health care Affordable yogurt Clean water through Affordable and Easy-to-use IT Employment for the Solution fortified with micro- village tap points long-lasting mosquito solutions (since poor through mung offered nutrients (since 2007) (since 2008) nets (since 2009) 2009) bean cultivation (since 2010) Income generation in local communities

Grameen GC Grameen Caledonian Grameen Grameen Grameen Eye Care Hospital College of Nursing Shakti Distribution Fabrics & Fashions

Limited access to Shortage of nurses Lack of electricity Lack of access to Poverty and Problem specialty eye and lack of access basic products in underemployment addressed treatment for to medical care Unhealthy living rural areas the poor among poor and environment rural communities

Affordable eye-care Nursing education for Clean energy (since Social and consumer Employment for the 1 Solution examinations and underprivileged girls 1996) with: products distributed poor through local offered surgeries for the rural (since 2010) • solar home systems door to door in rural production of such poor (since 2007) • cooking stoves areas (since 2011) items as mosquito • biogas plants nets (since 2012)

Source: BCG. 1Originally founded as a nonprofit organization, Grameen Shakti was transformed into a social business in 2010.

The contents of this report are based on on-site workshops with managing directors and key staff, site visits and customer interviews, interviews with corporate partners, a web survey of the managing directors, and a detailed data analysis.

Notes 1. Impact investments aim to create positive social impact beyond financial returns. For more information, see EVPA, “European Venture Philanthropy Industry 2010/2011,” May 2012. Hybrid value chains leverage business and social-sector capabilities to provide cost-effective delivery of goods and services to poor populations. For more information, see the explanation of hybrid value chains at the Ashoka website, https://www.ashoka.org/hvc. The shared value concept suggests that businesses can create social value and thereby advance their competitiveness at the same time. For more information, see Michael E. Porter and Mark R. Kramer, “Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility,” Harvard Business Review, December 2006. 2. Cathy Clark, et al. “The Impact Investor—A Market Emerges: The Six Dynamics of Impact Investing,” October 2012. 3. Siri Terjesen, et al. “Global Entrepreneurship Monitor: Report on Social Entrepreneurship,” 2011. 4. European Commission, “The Social Business Initiative of the European Commission,” 2012.

4 | The Power of Social Business The Value of Social Business

magine a world in which electricity reaches it objectives and by the degree to which they Ieven the most remote rural families in develop- seek to generate their own revenues. ing countries—those living far from today’s existing grid system—and provides them a means of working and studying late into the Applying business principles evenings. Imagine further that this electricity is green energy—solar home systems or biogas to social problems can plants, for example. And imagine it were sold to the customers—most of whom live on less than increase effectiveness and $2 a day—for a price that makes the business financial sustainability. financially sustainable and keeps it from depending on ongoing aid payments. On this spectrum, social businesses fall some- Impossible, you might say. And then you might where between traditional NGOs and for- travel to Bangladesh and come across Grameen profit companies. (See Exhibit 2.) Like NGOs, Shakti, a social business that is thriving on just their primary objective is to create social im- such a business model. pact. At the same time, they operate like busi- nesses and aim to generate sufficient reve- Many of the world’s most pressing social nues to at least cover their operating costs. problems are so ingrained and widespread Other emerging models, which lean further that they cannot be addressed solely by gov- to the business side, try to weigh profit and ernments and traditional social-sector organi- social objectives equally; for instance, by aim- zations. Solving these problems requires a va- ing to generate at least a minimum profit riety of approaches from the private and while also pursuing a social impact goal. public sectors alike. To this end, a wide range More toward the nonprofit side, business-in- of new models is emerging along a spectrum spired NGOs aim to generate at least some that spans from nonprofits supported entirely additional revenue by pricing their services, by donations at one end to purely profit-ori- yet without the ambition to reach financial ented businesses at the other. By combining sustainability. business principles with social objectives, these emerging models bridge the social and Although all these emerging models vary in private sectors. Their various approaches can the degree to which they combine profit tar- be distinguished both by the relative empha- gets with social targets, they all are built sis they place on social objectives versus prof- around the same basic belief: applying busi-

The Boston Consulting Group • Yunus Social Business | 5 Exhibit 2 | Social Businesses Are at the Intersection of Nonprofit and Business Sectors

Balanced Business- Social NGO social/profit Business inspired NGO Business business1

Primary Social Social Social Social impact Commercial objective impact impact impact and commercial success success Products/ services priced for sale

2 N/A Price < Costs Price ≥ Costs Price > Costs Price > Costs

Business Maximizes Maximizes Maximizes Maximizes Ensures social model social impact social impact social impact social impact standards Funded through Partially funded Financially Maximizes Maximizes donations through donations self-sustainable profitability profitability

Social entrepreneurs Source: BCG analysis. 1These include legal entities such as B-corporations (benefit corporations) in the U.S., Patagonia is one example. 2At least over the long term.

ness principles to social problems can signifi- Today, social businesses exist in developing cantly increase efficiency, effectiveness, and and developed countries alike. Although financial sustainability. That’s why many of many are still in the early phases of develop- the lessons from social businesses presented ment, some—like Grameen Shakti, which has in this report can also be applied to other revenues of about €72 million and more than emerging business models. 12,000 employees—demonstrate the poten- tial scale of these ventures. Most important, Exact definitions of “social business” vary. In however, are the social and business bene- this report, we use the definition established fits that these organizations deliver. (See Ex- by Professor Yunus: a financially sustainable hibit 3.) organization created solely to solve a social problem. Whereas original investments may be recouped, all potential profits are reinvest- Social Benefits ed to further increase the organization’s so- With their focus on social impact and self- cial impact.1 sustainability, social businesses can theoreti- cally provide solutions to almost any social Because social businesses don’t have as a problem. As demonstrated by the range of so- goal increasing shareholder value or paying cial businesses analyzed in this study, such dividends, they are free to focus on the needi- problems include fighting hunger and malnu- est, most underserved segments of the trition, increasing the agricultural productiv- world’s populations—segments that tradi- ity of rural populations, offering poor rural tionally fall outside the focus of profit-driven households access to an environmentally businesses. And because they price their friendly electricity supply, providing employ- products and services in a way that generates ment opportunities in areas where jobs are enough revenue to be self-sustaining in the limited, and improving the health and life ex- long-term, these organizations do not depend pectancy of local populations. on donations or other forms of external fi- nancial support to deliver their mission. Ulti- One example is Grameen GC Eye Care Hospi- mately, social businesses maximize value de- tal, which was founded in 2007 to tackle the livered to society as opposed to the financial prevalence of blindness and eye conditions value delivered to shareholders. such as farsightedness among the poorest

6 | The Power of Social Business populations in Bangladesh. The hospital pro- ther, and two other eye-care hospitals are un- vides low-cost eye care—including eye exams der construction. and cataract surgery—at three locations, and it extends its reach into the poorest, most ru- Similarly, the other social businesses ral areas through its traveling “eye camps.” By highlighted in this report create tangible charging patients for its services based on social impact—the degree and extent of their ability to pay, the hospital is affordable. which depends on the business stage they are operating in. Grameen Danone Foods, for example, reaches more than 300,000 The solutions are designed customers with fortified yogurt, and preliminary scientific studies point to the to provide long-lasting, impact that the yogurt has on children’s self-perpetuating benefits. growth rates and ability to concentrate. BASF Grameen’s insecticide-treated mosquito nets (which are sourced from Grameen Although 20 percent of its 545,000 patients Fabrics & Fashions, another social business) receive services at a very reduced price, the protect more than 75,000 families from hospital still manages to break even due to its insect-borne diseases. Grameen Shakti’s solar efficient operations and the income from home systems provide more than 1.2 million higher-margin patients. To date, an estimated families with access to clean electricity, and 2,500 blind patients have regained their eye- Shakti’s improved cooking stoves create a sight as a result of the hospital’s services. In cleaner living environment for roughly addition, the business has created 237 local 700,000 households. Grameen Yukiguni jobs. Now that the model has proven its via- Maitake has created 8,000 jobs in the bility, efforts are under way to scale it up fur- cultivation of mung beans, providing new

Exhibit 3 | A Social Business Approach Offers a Range of Social and Business Benefits

Social Benefits Business Benefits

Provides innovative solutions to social problems Creates greater lasting social impact than • Yet requires a clear value proposition tailored to traditional donation-based corporate social customers’ needs responsibility (CSR) programs • The approach applies business principles and draws Creates results that last well beyond the initial on core capabilities investment • Reaching financial sustainability is a challenge that Provides new opportunities for learning and requires a thoughtful business model innovation • Understanding new markets and customer segments Empowers beneficiaries by transforming them can lead to new commercial opportunities from aid recipients into consumers with choices • Pricing must be adapted to ability to pay Improves employee motivation and retention • There is greater enthusiasm and pride among Improves accountability by using sales figures as a involved staff, potential recruits, and all of the built-in mechanism to evaluate user acceptance company’s stakeholders • These must be combined with measures showing the extent to which the most disadvantaged are reached Offers the potential for a positive impact on the brand Leverages the business mindset to increase • Gains can be achieved if the business is carefully efficiency managed and tangible results are achieved • Systems for tracking social impact must be integrated with management systems

Source: BCG analysis.

The Boston Consulting Group • Yunus Social Business | 7 employment opportunities for farmers in of competitive advantage for the core busi- rural Bangladesh. Furthermore, it recruited ness. For instance, Grameen Danone Foods new employees as field supervisors and built set a goal of improving the health of children a sorting factory. (For profiles of these social in Bangladesh by selling nutritious, afford- businesses, see the Appendix). able yogurt to local families. To maximize ef- ficiency and create local employment oppor- These solutions are designed to provide long- tunities, Grameen Danone Foods built the lasting, self-perpetuating benefits. Unlike tra- smallest plant that was technically possible— ditional charitable organizations, which its capacity is below 4 percent of the typical spend donated funds every year, a successful capacity at a Danone factory in Europe. This social business has self-sustainable opera- production approach sharply reduces capital tions because it is set up to recoup every dol- expenses and provides an innovative blue- lar it invests. Social businesses also empower print for small-scale production that Danone populations in need, transforming them from can leverage in other emerging markets. (For beneficiaries of charitable aid to independent more details, see the sidebar “An Interview consumers who have a choice and a stake in with Jochen Ebert on Grameen Danone their own futures. In addition, by tracking Foods.”) sales figures and working with a business mindset, social businesses can achieve great- When companies enter a new region, social er accountability and efficiency—further in- businesses can also provide valuable insights creasing the social return of every dollar in- into the legal, regulatory, and political envi- vested. ronments. BASF Grameen’s primary social objective is to protect populations against insect-borne diseases, but the business also The most important business provides an opportunity to learn more about the Bangladeshi market and consumers— benefit of social businesses is lessons that may eventually help BASF ex- the potential for learning and plore new business opportunities. innovation. Social businesses can also provide less tangi- ble but equally important employee benefits. Giving employees an opportunity to become involved in a social business can give them a Business Benefits sense of purpose and new personal- and pro- Unlike traditional, donation-based corporate fessional-development opportunities. By pro- social responsibility (CSR) activities, social viding experiences that enrich the lives of businesses allow companies to directly use their employees, companies can strengthen their skills, expertise, and business network to employee engagement, job satisfaction, and address a particular social problem. In this retention. These types of experiences are es- way, social business activities can be aligned pecially valued by today’s “Millennial” gener- with the core commercial business. If designed ation (those born between 1980 and 2000). and managed effectively, this alignment not For members of this generation, experiencing only generates lasting social impact but also a sense of purpose is an integral part of their can lead to tangible business benefits. lives and plays an integral role in their career choices. (For more about the survey, see The According to the corporations we surveyed, Millennial Consumer: Debunking Stereotypes, the most important business benefit that so- BCG Focus, April 2012.) cial businesses can provide is the potential for learning and innovation. All along the val- Finally, achieving true social impact can also ue chain, companies often find that the new enhance a company’s reputation and brand products, operating models, marketing strate- by helping to build a network and goodwill gies, and distribution approaches aimed at with important stakeholders. Public cam- reaching those most in need have a broader paigns to encourage corporate recognition of commercial application and can be a source social issues demonstrate the growing power

8 | The Power of Social Business An Interview with Jochen Ebert on Grameen Danone Foods

Jochen Ebert is the managing director of Our social business is a lever that people Danone India. Previously, he managed the still don’t fully understand because the launch of Grameen Danone Foods in Bangla- traditional communication and learning desh, a social business that sells fortified yogurt flows are from West to East. People in the at affordable prices. The yogurt is specifically West aren’t very open to hearing, “Here’s formulated to address child malnutrition how we do it in Bangladesh.” But it’s an among the poor in rural parts of the country. extremely powerful tool, especially if more BCG spoke with him about the business and more people in the company have benefits that a social business can deliver. these kinds of experiences. We underexploit it massively, but we’ve learned a lot from it. What impact did Grameen Danone Foods in Bangladesh have on Danone’s You mentioned that Danone will be core business? launching some products in France that Grameen Danone Foods allowed us to were inspired by the Bangladesh experiment with new approaches and experience. Can you tell us more? processes. A big corporation becomes more We made some innovations in the product and more top-down in the way it is man- formulation. Milk is very expensive in aged. Our social business in Bangladesh Bangladesh, but other ingredients can was really created bottom-up. Instead of provide the needed nutrition profile at a being part of a big hierarchy, we were a lower cost. These ideas can be applied in small group of people making decisions. developed countries as well. This had a significant impact on how we ran the business. Another idea with the potential to travel elsewhere is how we go to market—and For example, it was absolutely unthinkable the need to explore different distribution for Danone to have a factory that generated channels. In developed countries, such as fewer than 20,000 tons of yogurt per year. Germany and France, we sell 80 percent of Yet our factory in Bangladesh has only a our products through supermarkets. But in 2,000-ton capacity and far lower capital India, for example, we sell via carts. I don’t expenses. Here, we are capable of manag- know if this approach is completely ing small, and we try to keep costs as low as applicable in other areas, but the very act we can. Since this is a small startup and we of breaking down mental barriers can be cannot afford high overhead, we’ve had to hugely inspirational for big companies. put very junior people into senior manage- ment positions. We have had time to experi- In Europe, where there are many steps ment, because the absolute losses that we between the manufacturer and the con- create are not so significant. This is revolu- sumer, there may be opportunities to sell tionary thinking for a company like Danone. products directly—and not necessarily via carts going through Paris. We have a big Also, there have been fantastic new Danone building in Spain where we sell learnings in terms of going to market, products directly to consumers. It wasn’t understanding and reaching consumers, directly inspired by Bangladesh, but this and creating products that our customers type of thinking can lead to innovation. want. The direct-delivery systems we created in Bangladesh are smaller and Have you gained any other insights more effective than what we have in many from your Bangladesh experience? other countries. And we’ll be launching One key learning is in the area of business some products in France that were strongly planning. Companies are spending an inspired by our products in Bangladesh. increasing amount of time planning and

The Boston Consulting Group • Yunus Social Business | 9 An Interview with Jochen Ebert on Grameen Danone Foods (continued)

then translating those plans into Power- one business plan to the next, knowing Point charts. In Bangladesh and India, we that they’ll never happen but pretending learned that it doesn’t really help to plan they will. more and more and more—your plan is going to be wrong. To generalize, if a company wants to take the risk of building businesses in emerging This experience radically changed how I countries, then it also has to take the risk look at the process. I no longer see it as of nonplanning, taking action, and then first the planning, then the action. Now it’s planning. If it doesn’t work, you cut your first the action, then the planning. It’s losses and exit. And if it works, you adjust it really the ability to act something out, to step by step. This is a permanent, interac- experiment with something that may be a tive process of correction. It is very, very little vague or entrepreneurial. Since we unlikely that you’ll get it right the first time. can’t manage uncertainty, it’s better to I have never seen that, because these manage small, modular experiments and countries are fundamentally different than see their impact on the business—instead where you’re used to operating. of taking the traditional approach of adding

that external stakeholders can have on busi- Notes ness success. Building long-term relationships 1. For more about the definition of social business and the seven principles outlined by Professor Yunus, see across all of society—including public deci- the Yunus Centre website. sion makers, opinion leaders, and influenc- ers—through an integrated stakeholder-man- agement approach is critical for building support for a company’s interests and opera- tions.

10 | The Power of Social Business Developing a Successful Social Business

“Social business is always about finding the associated with them. (For an overview of the right balance, the best solution between the con- steps, see Exhibit 4.) tradicting requirements of social and business all the time.” C hoosing the Right Focus Area – Emmanuel Marchant, director of Any successful business identifies and meets danone.communities Fund a specific customer need. A social business is no different, except that it focuses its efforts ooks and articles on how to start and on addressing an unmet social need or un- Bmanage a successful company are widely solved social problem. available—and likely found in the private libraries of most of the world’s top managers. Choosing which need to focus on requires Best practices for developing a successful considering three factors simultaneously: social business, however, are not as well known. While social businesses can apply •• The core strengths, capabilities, and many of the same business principles to business agenda of the company that achieve financial sustainability, guidance on wants to engage in a social business how to achieve and maximize social impact is less straightforward. •• The problems and needs that are the most pressing and underserved in a targeted Drawing on the experiences of the Grameen geography companies and the insights of their managing directors in the field, we’ve identified a set of •• The landscape of stakeholders, legal key success factors required for social issues, and the activities of other players. business success. These factors are clustered across the five critical steps for developing a Be clear about your core capabilities social business: choosing the right focus area, and potential business interests. designing a successful business model, When identifying a social problem to address, continuously learning and adapting, building companies should start from a baseline of efficient and sustainable operations, and their core capabilities, goals, and learning managing for impact. agenda.

In the following sections, we look at these By targeting a specific need that their core ca- steps more closely, along with the key lessons pabilities can address, social businesses gain

The Boston Consulting Group • Yunus Social Business | 11 Exhibit 4 | A Snapshot of the Key Lessons for Succeeding in Social Business

Steps Lessons

Be clear about your core capabilities and potential business interests. Choosing the right Don’t just treat symptoms—fully understand the problems and their root causes. focus area Understand the landscape of stakeholders, legal issues, and activities of other players.

The poor are demanding too: A clearly differentiated offering tailored to local needs is important. Designing a Minimize the clash between affordability and sustainability: Consider differentiated pricing. successful business Rethink how to reach customers: Employ innovative distribution methods. model Go beyond traditional marketing: Customer education is oen needed too.

Continuously It takes time to get it right: Adapt and iterate to make the business model work. learning and Don't wait too long to test the concept in the market. adapting

Partnerships can be helpful—but only if structured effectively. Building efficient and The right people are integral to success: An explicit people strategy is needed from day one. sustainable operations Extreme cost pressures are an ongoing challenge—but can also be an impetus for innovation.

Measure and manage social impact as rigorously as financial results. Managing for impact To reach more beneficiaries and boost impact, scale up what works.

Source: BCG analysis.

a clear sense of purpose and can generate Don’t just treat symptoms—fully real impact. Danone, for instance, drew on understand the problems and their its own expertise in nutrition when it chose root causes. to address the problem of poor nutrition When identifying a focus area, social busi- among children from the lowest-income nesses need to develop a sound understand- families in Bangladesh. Similarly, Veolia ing of the root cause or causes of the prob- Water built upon its capabilities in providing lems they’re considering addressing. While safe water solutions by addressing the issue this might take significant time and effort, of arsenic-contaminated drinking water in getting at the root cause is critical, since hav- Bangladesh. ing a sustainable impact hinges on addressing a problem’s source—not just its symptoms. Understanding the goals and learning agenda of the organization also helps orient the com- Addressing the root causes was important for pany to particular problems while maximiz- Grameen Veolia Water, a joint venture with ing the potential business benefits. Intel, for Veolia Water, a leading provider of water example, lists as its central mission: to “create treatment services. Given its core capabilities, and extend computing technology to connect Veolia Water identified the issue of providing and enrich the lives of every person on safe drinking water to the people in rural earth.” While Intel’s commercial business Bangladesh as a potential focus area. In already achieves this goal very successfully Bangladesh, from 37 million to 77 million for many populations around the globe, people—a significant portion of the coun- Grameen Intel Social Business in Bangladesh try’s 147 million inhabitants—are at risk of provides an excellent opportunity for the arsenic contamination.1 In some areas, up to company to learn more about how to reach 80 percent of tube wells were contaminated. even the rural poor and improve their lives To truly understand the complex web of with technological solutions. underlying issues, the company invested a

12 | The Power of Social Business significant amount of money and effort, even activities and plans of the many players that commissioning an in-depth study of the are active in a given social area is key to de- cultural and religious aspects of the problem. ciding whether a new engagement can truly deliver impact. As it turned out, there were several root causes. Despite growing awareness among vil- For instance, BASF originally planned to ad- lagers of the presence of arsenic-contaminat- dress the problem of malnutrition in Bangla- ed water, they continued to drink it. A 2010 desh with a multinutrient product. But its de- UNICEF report noted that 80 percent of the tailed review of the complex landscape local people knew arsenic could be a prob- directed it to another option. lem in tube-well water, and even though con- taminated wells had been painted red to in- Although malnutrition is a very severe prob- crease awareness, many villagers still used lem in the country, as 43 percent of children the wells either because there were no other under age 5 (that is, more than 8 million alternatives or because of convenience and children) suffer from chronic malnutrition, cost considerations. the landscape of organizations working to address malnutrition is very complex and Also, many people mistakenly believed that fragmented.3 Six government ministries arsenic-contaminated water would have a deal with the issue, with support from at dark color or fishy smell, when in fact it can’t least five UN agencies and more than 30 larg- be identified by sight or taste. Finally, be- er NGOs and various coordination bodies. In cause arsenic-related health problems appear addition, there is a broad set of regulatory only in the future, the villagers didn’t connect processes connected to the sales or distribu- such problems to the water they had drunk in tion of micronutrient supplements in the the past.2 country.

After investigating this complicated network The social sector is often very of stakeholders in detail, BASF Grameen rec- ognized that there were already plans for a complex and fragmented. similar product and that regulatory hurdles would be too high to allow for a quick market entry. Ultimately, BASF decided to focus on a By understanding these underlying causes, different problem area, addressing insect- Veolia Water realized that an effective solu- borne diseases through insecticide-treated tion would require addressing not only the bed nets—a field that aligned well with the availability of safe drinking water but also companies’ core competencies. the local perception and use of water. While Veolia Water has undisputedly strong exper- tise in designing the right technical solution, Designing a Successful Business the company realized that solving behavioral Model issues would require additional skills and a An effective business model—with a clear focus on educating the local people. (See the value proposition—is as important to a social section “Go beyond traditional marketing: business as it is to a commercial business. Customer education is often needed too.”) The challenges that the social business model must tackle, however, are exceptionally diffi- Understand the landscape of stake- cult, particularly in the context of a develop- holders, legal issues, and activities of ing country. other players. Understanding the landscape of players is im- “Social businesses—as any other businesses— portant in any business activity. But it is even need a clearly differentiated product with a more important when aiming to address a so- unique selling proposition.” cial problem, as the social sector is often very complex and fragmented. Fully understand- – Kazi Huque, CEO of Grameen Intel ing the regulatory environment as well as the Social Business

The Boston Consulting Group • Yunus Social Business | 13 BCG’s survey of managing directors at social the needs, culture, and local tastes of the tar- businesses in Bangladesh revealed that chief geted population. Standard solutions from de- among these challenges is gaining a deep un- veloped markets rarely work. Market research derstanding of the specific needs of the target in the field and consultation with local gov- population in order to design a clearly differ- ernments, NGOs, or partner organizations entiated solution that meets those needs. can help generate the insights needed from Three other challenges were consistently the local market to ensure a good fit between mentioned: achieving a price point that the the solution and the specific local needs, as targeted population can actually afford, phys- well as legal compliance, and a truly differen- ically reaching those most in need, and gener- tiated offering. ating sufficient demand for the new offering. An effective business model must explicitly For instance, BASF tailored the insecticide-in- address these four challenges. fused mosquito nets it sold in other markets to meet the needs of the Bangladeshi custom- The poor are demanding too: A clear- er. Instead of sizing the nets to cover a single ly differentiated offering tailored to bed, the company adapted the nets to cover local needs is important. an entire sleeping family. Grameen Danone Operating a social business that sells prod- Foods innovated its yogurt formula by adding ucts to the poorest populations does not essential micronutrients needed to address mean cutting corners on quality. Many finan- local deficiencies. But to make the product cial demands compete for the limited budget appealing to local tastes, the company recog- held by the targeted population, which earns nized that it needed to also thicken and average daily incomes of only $1 or $2 per sweeten its yogurt. day. Poor customers, therefore, put exception- al emphasis on getting value for their money. Minimize the clash between afford- This makes it critical to truly understand ability and sustainability: Consider their needs and to address those needs with a differentiated pricing. tailored and clearly differentiated offering. One of the biggest challenges for social busi- nesses is to sell products at affordable prices to the world’s neediest—often the poorest of P oor customers put excep- the poor—while generating enough revenue to be financially self-sustaining. This can be a tional emphasis on getting major hurdle for social businesses to over- come. Veolia Water, for example, had to con- value for their money. vince people to pay for clean, uncontaminat- ed water when river water, although less safe, was free. To overcome this hurdle, social busi- Solutions to social problems don’t always re- nesses must achieve an affordable price quire developing entirely new goods or ser- point, while demonstrating the value of their vices. Existing products in other markets or offering. business ideas from social entrepreneurs around the world may provide potential start- Social businesses have three pricing options. ing points. Danone and BASF, for example, One is to charge the lowest possible price to leveraged existing products as starting points reach the people most in need. That’s an ap- for their solutions in Bangladesh. When no proach taken, for example, by Grameen Shak- appropriate product exists in the current ti. Using low-cost, manual production process- business portfolio, it is well worth the effort es to build its solar panels, the company is to systematically assess the local and global able to achieve prices even lower than those landscape for existing solutions to similar of competing Chinese imports. However, problems and the lessons that can be drawn there are limits to the extent social business- from their application. es can compete on price and still maintain adequate working conditions and minimum To achieve real impact, however, a social quality standards. Multinationals that let business must tailor its product or service to their standards slip run the risk of tarnishing

14 | The Power of Social Business their brands and reputations. For these rea- Strategic, differentiated pricing such as this sons, competing on price against local compa- can make products more affordable to the nies that have fewer constraints is an ongoing target population while ensuring that overall struggle for social businesses. operations at least break even and are thus sustainable. Given the very limited purchas- When low-price leadership isn’t an option, so- ing power of those most in need, it is often cial businesses can command higher prices the only way to effectively reach the poorest only if their offerings are clearly differentiat- of the poor. ed. The poor—even more so than traditional consumers who are better off financially— thoroughly compare product value and price Differentiated pricing is when making buying decisions. The second option, a moderate premium price, is possible often the only way to reach if the additional value is very clear. For in- stance, BASF Grameen’s premium mosquito the poorest of the poor. nets, which are infused with particularly ef- fective repellent, sell for 30 percent more than standard nets—but are still sought after A major challenge, however, is to properly even by customers in rural areas. identify different customer segments and en- sure that the benefits of lower costs accrue Even when products are too expensive for only to the very poor. Some social businesses low-income consumers, a “moderate premi- have found innovative ways to address this um” strategy can work if it is combined with challenge. Grameen GC Eye Care Hospital, for financing options. For example, Grameen example, has an outreach system that involves Caledonian College of Nursing charges young visiting potential patients in their villages, un- women €3,700 for their nursing training; to derstanding their income levels, and verifying help make the tuition affordable, it can be re- this information in separate meetings with paid after graduation with a 5 percent service the village elders. charge through the Grameen Bank. Grameen Shakti also offers a variety of financing op- Rethink how to reach customers: Em- tions for purchases of its solar home system, ploy innovative distribution methods. with monthly installments equal to or lower The poorest people often lack access to basic than the monthly price of the kerosene alter- products and services because they live in ru- native. ral areas unreachable through established distribution networks. Poor, muddy roads and The third option is to price products differ- flooding can further complicate logistics, ently for different customer segments, charg- making transportation costly and time con- ing prices based on a customer’s ability to suming. To succeed, social businesses often pay. For instance, Danone Grameen Foods must rethink how they physically reach their charges less for its yogurt in rural areas than target customers, supplementing traditional in the few modern trade stores in Dhaka, the commercial channels with innovative meth- capital of Bangladesh, where consumers can ods of distribution. afford higher prices. Grameen Veolia Water sells its safe drinking water to rural custom- For instance, Grameen Distribution originally ers via village tap points while more affluent relied on traditional channels such as the customers in Dhaka are served with 20 liter local distribution channels and local retail jars sold at a higher price per liter. Grameen stores. But leaders at the company quickly re- GC Eye Care Hospital charges more affluent alized that the more rural areas—at the end patients full price for surgery and other treat- of the “last mile” of distribution—lacked ac- ments, which allows the company to treat the cess to essential products. By recruiting and poorest customers at a far lower price. In training women within local communities— each of these businesses, higher-income con- the so-called Grameen ladies who sell prod- sumers subsidize the lower-income segments ucts door to door—Grameen was able to of the population. reach its target customers and provide valu-

The Boston Consulting Group • Yunus Social Business | 15 able employment opportunities to women in Even once demand is generated, customers rural Bangladesh. Today, Grameen Distribu- often need to be educated on the proper us- tion employs roughly 9,000 women, men, and age of the offering. Several of the Grameen youth to sell products in Bangladeshi villages; social businesses, such as Grameen Danone they reach 9 million of the most remote Foods and Grameen Veolia Water, offer prod- households. ucts that require regular usage to be effective. Other offerings, such as the solar home sys- tems of Grameen Shakti, require proper us- New marketing methods age to maximize the effectiveness and work- ing life of the product. To successfully change include door-to-door out- behavior, social businesses must go beyond traditional marketing and try new methods reach and advocacy by early and channels such as educating consumers adopters. through door-to-door outreach and through advocacy by early adopters.

Go beyond traditional marketing: Grameen Danone Foods, for example, edu- Customer education is often need- cates customers through small-scale events ed too. featuring a female student lecturing on the For many reasons, getting target populations product’s nutritional benefits. Grameen Veo- to buy and properly use a new social product lia Water uses local leaders to help overcome is difficult. Products offered by social busi- long-held beliefs and behaviors that are ob- nesses may address needs that consumers stacles to behavior change. These efforts of- aren’t aware that they have. A lack of educa- ten require time, patience, and persistence. tion may keep people from understanding the value that the social business is offering. Finally, deeply entrenched behaviors and cul- Continuously Learning and tural or religious norms are often hard to Adapting change and require specific education to en- One thing we consistently hear from people sure proper usage of the product. who have been involved with social business- es is that getting the business model right is To create demand for its offering, a social an iterative learning process that involves business must develop marketing that effec- time and effort, trial and error. tively reaches and communicates a clear val- ue proposition to the population in need. It takes time to get it right: Adapt This is an area where the capabilities of the and iterate to make the business mod- business and social sectors need to merge. el work. While the business sector can provide the Be prepared for this step to take much longer needed marketing expertise, this must be than one might initially expect based on ex- adapted to the social sector’s knowledge of periences with traditional business ventures. the drivers behind customer behaviors in the Throughout the development process, the targeted populations. business model must be continuously moni- tored and adapted to ensure that it is eco- Many of the Grameen social businesses draw nomically feasible and delivers real social im- on the knowledge of local people to guide pact. This learn-and-adapt cycle can be their marketing efforts. For example, the approached in one of two ways: Grameen ladies are integral to the sale and marketing of many social businesses because •• Rapid Market Entry. This “learn by doing” they have firsthand knowledge of their neigh- approach involves entering a market bors’ needs. By explaining product benefits in quickly with a small-scale prototype and a way that’s understandable to the target gathering direct feedback—an approach population and identifying opportunities for often used by entrepreneurs and startups new products, the Grameen ladies offer a crit- that want to gain a first-mover advantage ical avenue for creating demand. and try out new ideas in the marketplace

16 | The Power of Social Business quickly. Grameen Distribution went this cial business under a different name can be route, adapting its model based on feed- another option to protect their brand while back from the Grameen ladies and their getting real market experience quickly. customers on products, pricing, and the door-to-door sales method. After achiev- ing success on a small scale, the business Building Efficient and Sustain- was able to break even and rapidly ex- able Operations pand its operations in less than two years. Social businesses aim to translate initial in- vestments into self-perpetuating impact well •• Thorough Advance Planning. By doing more into the future, but such long-run benefits thorough planning and testing in advance, can only be achieved if efficient, sustainable a business can minimize its risk of failure operations are put in place. To remain viable and protect its investment and corporate over the long term and increase the social im- brand. After up-front planning, pilot pact they deliver, social businesses must programs may be used to prove an structure operations and partnerships effec- offering’s potential for social impact and tively, hire and retain the right talent, and de- financial sustainability before scaling it up sign operations to be as lean and efficient as for entry in the broader market. This possible. Although these objectives are the approach is more typical of corporations same as in any business, social businesses that set up a social business. Grameen face particular challenges in addressing them Intel Social Business thoroughly devel- effectively. oped its products and business model before starting pilot tests. Currently, shumātā—a software that monitors Partnering with a local organ- high-risk pregnancies—is being tested with about 1,300 women in three villages, ization can provide valuable and eAgro—an agriculture productivity tool—is helping about 900 farmers access to customer insights. increase their crop yields.

Don’t wait too long to test the Partnerships can be helpful—but concept in the market. only if structured effectively. While both rapid market entry and thorough Many corporations find that partnering with a advance planning can work, the best path for- local company or social sector organization ward for most multinationals may be a hy- can provide valuable access to knowledge of brid of the two approaches. Some up-front markets and customer needs; support for lo- planning, market research, and refinement of cal production, distribution, and administra- the business model can minimize the risk of tion; and an understanding of the specific failure. But waiting too long poses its own challenges in the social sector. Grameen’s risk because unless a concept is tested in the joint venture partners often cite the clear market, there’s no way to know if it will actu- benefits gained from Grameen’s deep knowl- ally succeed. Unexpected challenges invari- edge of Bangladeshi market dynamics, both ably arise, and things often turn out very dif- in rural areas as well as in the country as a ferently than what was expected. whole.

“We learned that it doesn’t really help you to “Social business creates a common platform for plan more and more and more—your plan is the public sector, the private sector, and NGOs to going to be wrong.” work together on the resolution of social prob- lems…This demilitarized zone allows collabora- – Jochen Ebert, managing director of tion modes, creativity, and a cocreation of solu- Danone India tions which no other modality allows.”

Still, early market entry may seem too risky – Emmanuel Faber, co-COO and to some corporations. For these, starting a so- vice chairman, Danone Group4

The Boston Consulting Group • Yunus Social Business | 17 Corporations that decide to partner with a lo- ble for people around the world through cal social-sector organization often enter new business endeavors. territory. Ways of working in the social sector often differ from those in the business world. Similarly, responsibility for the social business- While these new interactions can be chal- es of BASF and Veolia Water lies within the lenging for both sides, they often turn out to respective business units and is closely coordi- be very fruitful. Grameen’s focus on simple nated with the regional and local commercial solutions, for example, required that Intel business structures. The top-level decision work at a lower level of complexity than a makers of all partners typically are represent- technology business typically would. Gra- ed on the board of the social business to en- meen’s approach encouraged Intel to think of sure that their interests are considered when new ways to make it easier for Bangladesh’s making strategic decisions. Equally strong rural population to understand and use prod- links should be established among executives ucts such as mrittikā, software for analyzing to encourage crossover benefits in both direc- soil nutrition and recommending fertilizer. tions. Activities such as regular management calls and staff-rotation programs can help en- courage ongoing cooperation and engagement. Social businesses need The right people are integral to suc- employees and managers cess: An explicit people strategy is needed from day one. who possess both social and As with all businesses, a high-performance business skills. workforce is critical, but social businesses face particular challenges in recruiting and retention. Social businesses need employees Partnerships can also be a source of con- and managers who possess both social and flicts—especially when the visions or expec- business skills, and finding the right mix of tations for the business are not aligned. Deci- capabilities isn’t easy—especially in areas sions about whether to set up a partnership where educated, experienced employees are with a local organization and, if so, which in short supply. This issue of scarce resources partner to choose must be considered careful- requires social businesses to start building ly. To increase the odds of a successful part- local capabilities immediately to prepare nership, agreements should be detailed up for long-term, sustainable operations. Gra- front to clarify key elements of the relation- meen Danone Foods, for instance, brought ship. Critical to success are aligning expecta- in a team from Danone India to provide tions, creating a common vision at the outset, critical management skills on a temporary setting boundaries around operational areas basis while local skills were developed in that the company prefers to avoid, and clear- parallel. ly defining roles and responsibilities. Corpo- rate partners engaging in a social business Although it might sound surprising, social must also remain alert to any potential con- businesses in developing countries can face flicts of interest with their commercial opera- high rates of staff attrition. Despite their wor- tions. thy and ambitious goals, social businesses of- ten compete with large, for-profit corpora- To encourage a long-term, sustainable partner- tions that can offer better compensation ship and to maximize mutual benefits, strong packages. As a result, some employees see links between the parties must be integrated their work as a temporary commitment, and into all levels of the new social business. This they move on to higher-paying jobs once integration should go well beyond the corpo- they’ve gained a certain degree of training or rate CSR function and encourage engagement experience. While this can be a challenge for within the business units and top leadership. the social business, it is also a source of addi- At Intel, for example, the joint venture is man- tional social impact. The social business acts aged out of the company’s World Ahead Pro- as a stepping stone, providing training to— gram, which aims to make technology accessi- and helping develop critical skills among—

18 | The Power of Social Business employees who can then move on and spread ing, and local labor to keep costs low and pro- their talent in other settings. vide added employment benefits to the local population. Other improvements designed to Still, high attrition is often a reality that must minimize costs include increasing the plant’s be anticipated and managed because it can capacity utilization and improving product threaten the social impact and financial sta- and packaging design.5 Danone can leverage bility of a social business. For instance, many of these innovations in other markets Grameen Shakti’s field staff has an annual at- to make its yogurt affordable to lower-income trition rate of approximately 25 percent. Im- customers. portant measures for managing high turnover include planning for attrition through recruit- ing, training new hires efficiently, and using Managing for Impact incentives and clear career paths to encour- The moment of truth for a social business is age longer tenure. finding out whether success has been achieved—and can be sustained and in- creased. Success means two things: delivering Success means delivering real social impact and doing so self-sustain- ably, without the financial support of a corpo- real social impact and doing rate partner or outside donations. Both of these outcomes can and should be measured so self-sustainably. and managed. While most companies are used to managing financial returns, manag- ing social impact is often a new undertaking. Extreme cost pressures are an on- going challenge—but can also be an Measure and manage social impact as impetus for innovation. rigorously as financial results. The cost pressures that social businesses face Although social-impact outcomes may seem are exceptionally severe, given the low in- intangible or difficult to evaluate, clear met- comes of their targeted populations and the rics can help quantify the impact of a social need to be financially self-sufficient in the business on the target population. At a mini- face of low profit margins. Moreover, multina- mum, social impact should be measured tionals that set up social businesses must along two dimensions: the impact on each deal with wholly new customer segments, beneficiary and the number of targeted ben- many of which are not accessible through tra- eficiaries reached. ditional marketing and distribution channels. Success requires low-cost operations and in- To quantify the impact per beneficiary, key novative solutions, with a goal of doing more performance indicators must be tailored both with less. to the social problem addressed by the busi- ness and to the social benefits expected. For By applying the typical efficiency levers of example, a social business that provides traditional companies along with a mindset green energy, such as Grameen Shakti, should of risk taking and innovation, social business- measure the environmental and economical es can optimize resources and maximize im- impact of its products. An initial analysis pact. Operations at Grameen Danone Foods comparing Grameen Shakti’s solar home sys- are a prime example. tems to the kerosene alternative, for instance, suggests that the average household with a The yogurt business in Bangladesh required home system reduces its carbon dioxide lev- far less output than the typical Danone plant els by roughly 0.25 tons per year and gener- and low-cost operations to achieve affordable ates net annual savings of €58. prices for the rural poor. By designing a new factory from the bottom up, Grameen While the impact per beneficiary is impor- Danone Foods developed a small-scale facto- tant to understand, it is also critical to mea- ry that produces just 2,000 tons of yogurt and sure the scale of impact. Here, social busi- uses state-of-the-art technology, local sourc- nesses must distinguish between the total

The Boston Consulting Group • Yunus Social Business | 19 number of individuals or households reached To reach more beneficiaries and (full scale of the business) and the total num- boost impact, scale up what works. ber of the targeted disadvantaged beneficia- Ultimately, increasing social impact requires ries reached (degree of social impact). scaling up the social business to maximize the number of beneficiaries reached. A rough assessment of the impact of Grameen Shakti’s solar home systems, for ex- “Big companies can reach people in many ample, reveals a total reach of about 1.2 mil- countries, deliver products to remote areas, learn lion households, about 314,000 of which are in one place, and take knowledge to all other estimated to be in the targeted poor segment. countries.” (See Exhibit 5.) It is important to closely monitor this metric, as Grameen Shakti’s – John E. Davies, general manager, ability to provide affordable green energy Intel World Ahead Program and cost savings to the most disadvantaged populations is a key element setting it apart There are three routes to increase scale: from traditional commercial energy busi- nesses. •• Local scale-up aims to reach a broader customer base in a given country. For These metrics, along with financial metrics, instance, Grameen Shakti plans to expand must be integrated into the management sys- from more than 1 million solar home tem of a social business. In this way, social systems sold in 2012 to a cumulative businesses can learn to manage for social im- installation base of more than 2 million pact just as they do for financial returns: units by 2015. through end-to-end management processes that plan, measure, report, and improve per- •• Portfolio extension enhances the portfolio formance. of a social business by adding new

Exhibit 5 | Social Impact Metrics Should Be Tracked

Example: Grameen Shakti—Solar Home Systems

Social impact per beneficiary

Environmental Economic annual impact per household annual impact per household

Kerosene CO savings1 3 savings2 System cost ~0.25 tons of CO ~€72 ~€14 – Net savings Social impact ~€58 ~315,000 tons of CO saved annually through solar home systems × ~€18.2 million in energy cost savings annually among the most Number of targeted beneficiaries disadvantaged households

# of households % of “absolutely # of “absolutely reached underprivileged” underprivileged” ×=households4 households reached 1,257,848 ~25% ~314,000

Source: Grameen Shakti; BCG analysis. 1Based on Grameen Shakti estimate. 2Based on Grameen Shakti estimates: 108 liters of kerosene saved annually x €0.67 per liter. 3Based on Grameen Shakti estimates for a 50 watt-peak solar home system: €290 investment/20 years usage. 4Based on Grameen Shakti estimates using high-level assumptions. Absolutely underprivileged households are defined here as the “bottom of the economic pyramid”—those with incomes below US$2.50 per day (adjusted for purchasing power parity).

20 | The Power of Social Business products or services. For instance, going iteration and adaptation, the company Grameen Distribution has expanded its has proved its ability to achieve social benefits portfolio with new social products, such as and create a financially sustainable business.6 BASF Grameen mosquito nets. Over time, Grameen Shakti has added new •• International expansion involves transfer- customers and expanded its product line to ring a social business to another region or include biogas and improved cooking country. While none of the businesses stoves—installing more than 700,000 stoves highlighted in this report have yet taken to date—in addition to solar home systems. this step, it is certainly an option for those Today, it is a thriving business with nearly that have reached significant national €72 million in revenues and 12,000 workers. scale.

From a scale standpoint, Grameen Shakti has been the most advanced of the Grameen so- cial businesses to date. The company was Notes founded in 1996 to improve the supply of elec- 1. Margaret R. Karagas, “Arsenic-Related Mortality in Bangladesh,” The Lancet, July 24, 2010; 376(9737): tricity in Bangladesh and to promote a healthi- 213–214. er living environment in the country. When 2. Thérèse Blanchet, “Grameen Veolia Water: Grameen Shakti was formed, 70 percent of Assessment of a Social Business Project with an households in Bangladesh lacked electricity, Anthropologist Perspective,” 2011. 3. The World Bank, “Nutrition at a Glance: and indoor air pollution was high because Bangladesh.” many families used kerosene stoves, which 4. Yunus Social Business, “Investing for Social Benefit: pose a fire risk as well. The company began by Yunus Social Business Incubator Funds,” 2013. selling solar home systems to address the need 5. Lee, Katharine and V. Kasturi Rangan. “Grameen Danone Foods Ltd., a Social Business,” Harvard for electricity. Business School, 2010. 6. Nancy Wimmer, Green Energy for a Billon Poor. Besides offering a range of affordable pay- Munich: MCRE Verlag, 2012. ment plans, Grameen Shaki’s “micro-utility” option allows the owners of the systems to sell power to their poorer neighbors, who might not otherwise be able to afford it. Through on-

The Boston Consulting Group • Yunus Social Business | 21 L ooking Forward

lthough social businesses and Second, a wealth of new ideas and prototypes Asimilar hybrid models that combine of social business models are available. Many social impact and business principles are still social entrepreneurs are developing and prov- an emerging concept, they clearly have ing new ideas that are ready to be financed tremendous potential. In the future, it is and scaled up either independently or in conceivable that social businesses will partnership with nonprofits or corporations. become an increasingly strong sector in the A recent Global Entrepreneurship Monitor global economy as their benefits and best study estimates that roughly 2.8 percent of practices become better known. We expect the working population in the U.S. is involved that social businesses will complement in hybrid social enterprises.2 The European organizations in the public, private, and dona- Union estimates that 25 percent of new ven- tion-based social sectors. tures in Europe can be considered social en- terprises. Social businesses command even Several trends underpin the high potential higher percentages—as high as 33 percent— for growth among social businesses and of new ventures in France, Finland, and similar hybrid models. First, there is a Belgium.3 growing interest among nonprofit organi- zations to increase the sustainability and Feeding into this growth of new business efficiency of their operations—largely models is the increasing academic attention because donors and society are increasingly that the topic is attracting. Journals on social demanding it. Many nonprofits already have business and social entrepreneurship are begun exploring new ways of migrating spreading, and many of the leading business toward more sustainable business models schools—such as Harvard, Stanford, HEC Par- and generating revenues through their is, and INSEAD—have established chairs or operations. According to a recent survey, programs dedicated to the topic. 40 percent of nonprofits in the U.S. and Canada with budgets of $250,000 or less— The regulatory environment and capital mar- and 60 percent of those with budgets above kets are also becoming more amenable to the $5 million—used a hybrid, socially oriented development of social businesses. Govern- business model for a portion of their ments are beginning to create legal structures operations. Moreover, 87 percent of the designed to support companies with a social organizations with a hybrid model expect to mission. For instance, the European Commis- launch another one within the next three sion’s Social Business Initiative aims to pro- years.1 vide a favorable environment for social busi-

22 | The Power of Social Business nesses by improving access to funding and fits, which themselves become increasingly reducing regulatory and administrative re- important as a source of competitive advan- quirements. Several development agencies, tage. Learning and innovation in new mar- such as the U.S. Agency for International De- kets, particularly in developing economies, velopment (USAID) and African Develop- are key requirements for future growth. A ment Bank (AfDB), have also committed to clear sense of purpose and meaning is in- promoting and developing social businesses.4 creasingly important for the current genera- tion of young employees. Finally, in an ever Finally, more funding and support mecha- more interconnected world, recognizing the nisms—probably the most important drivers importance of contributing to and engaging of growth—are emerging to encourage the in- with all stakeholders of society will be essen- cubation and growth of social businesses and tial for lasting business success. other similar ventures. For instance, impact investment funds—defined as “investments The most natural and effective way for com- intended to create positive impact beyond fi- panies to approach social causes is with a nancial returns”—have become a significant business mindset. Large corporations are par- funding source for social entrepreneurs and ticularly well equipped for such endeavors; social businesses around the world. Organiza- they possess the unique capabilities and re- tions have also been created to develop the sources required both to undertake small “ex- social investment market. For instance, U.K.’s periments” and also to scale up existing ap- Big Society Capital has budgeted £600 million proaches. Such engagements benefit their to invest in social intermediaries, which can own business interests and the world as a in turn provide support to social sector or- whole. ganizations. Innovative social-investment vehicles and structures are also beginning to emerge, such as stock markets specifically fo- cused on social business. Notes As we have illustrated throughout the report, 1. Community Wealth Ventures, “Social Enterprise A Portrait of the Field,” 2010. these developments present an important op- 2. Siri Terjesen, et al. “Global Entrepreneurship Monitor: portunity for the corporate sector. Companies Report on Social Entrepreneurship,” 2011. increasingly seek to move away from tradi- 3. European Commission, “The Social Business tional CSR, aiming to better leverage and in- Initiative of the European Commission,” 2012. tegrate their socially motivated activities with 4. USAID, “USAID and Yunus Social Business Announce Collaboration to Promote Social Business,” July 23, the core business. Social businesses not only 2013. AfDB, “The AFDB and Nobel Laureate provide a more effective way to create social Muhammad Yunus Launch Social Business in Africa,” impact but also offer corporations the oppor- March. 15, 2013. tunity to harness a variety of business bene-

The Boston Consulting Group • Yunus Social Business | 23 Appendix S ocial Business Profiles

his report is based on an analysis of BASF. While several of the businesses are still Tthe lessons learned from ten social in the learning stage, others—such as businesses that operate in Bangladesh today, Grameen Shakti and Grameen GC Eye Care each tackling a different social problem Hospital—have already achieved social affecting people at the bottom of the eco- impact, significant scale, and financial self- nomic pyramid. In this appendix, we spotlight sufficiency. each of those businesses, sharing their focus and their accomplishments to date.

Many of them are joint ventures between a Grameen organization and a multinational partner such as Danone, Intel, Veolia, and

24 | The Power of Social Business Grameen Danone Foods Fights Malnutrition with Fortified Yogurt Impetus Business model Operations Status and outlook Impact Social problem Product Two equal partners Founded in February Financial status • 56% of the world’s • Yogurt fortified with • 50/50 joint venture 2007 2011 preschool-aged children micro-nutrients • Grameen provides Current status • Revenues: are undernourished • Delivers 30% of a child’s local and social • Sales increased €1 million • The severe (long-term) daily needs in vitamin A, know-how from 5,000 to 87,000 Social impact effects of malnutrition iron, zinc, and iodine • Danone provides cups sold per day • More than 300,000 cause economic Price product and • Adaptation of customers underdevelopment • Differentiated among technical know-how business strategy • Johns Hopkins • Poverty regions because of • danone.communities • New nonchilled University's Danone’s objectives logistics costs Fund (social business product launched first-dra results • Fight malnutrition among • €0.08 for rural areas fund) Outlook showed positive impact on physical children • €0.10 for urban areas • Grameen Credit • Business expected Agricole (foundation) and cognitive – fulfill the mission: “Bring Place to break even in development health through food” Separate legal entity 2015 • Production in Bogra1 • ~1,500 jobs created • Reduce poverty by • Guarantees • Business aspires to • Two distribution channels: (and opportunities including local independence scale up for income communities in all stages – Innovative door-to-door generation) of the business model approach in rural Bogra • Learn to work with (“Shokti ladies”) stakeholders (e.g., NGOs) – Small retailers in some • Learn about the bottom of regions the economic pyramid (BoP) Promotion • Create a meaningful • Consumers are educated on workplace for employees benefits and proper usage

Fighting malnutrition Selling fortified Grameen Danone Adaptation of strategy More than 300,000 and reducing poverty yogurt to children joint venture for scale-up customers reached Sources: Grameen Danone Foods; FAO. Note: The “bottom of the economic pyramid” are those “absolutely underprivileged” with incomes below US$2.50 per day (adjusted for purchasing power parity). 1Yogurt is produced in a microplant 230 kilometers north of Dhaka.

Grameen Veolia Water Combats Arsenicosis Poisoning By Providing Clean Drinking Water

Impetus Business model Operations Status and outlook Impact Social problem Product Two partners Founded in March 2008 Financial status 2012 • 37 million to 77 million • Delivering drinking • 75/25 joint venture Current status (2013) • Operating people are at risk of water through tap • Veolia Water (75%) • Infrastructure serving expenditures: €70,000 arsenic poisoning point network and provides technical 7,000 people and 250 • Revenues: €40,000 subsidizing the cost • In Goalmari, 83% of know-how direct clients in Dhaka Social impact 2013 the tube wells are with jar sales in Dhaka (offices) • Grameen Health Care • Customers: contaminated Price Services (25%) • 300,000 liters sold per • Arsenic has severe-to- • €0.025 for 10 liters of provides local and month – 40,000 targeted in 1 Goalmari and Padua fatal consequences on water in the village social know-how • Plant utilization: 5% health – current customers: • €0.80 per jar in Dhaka Separate legal entity Outlook Veolia’s objectives 7,000 Place • Guarantees • Develop new means of • Develop know-how to 2 independence • Public service: all • Goalmari and Padua distribution (via jars) social segments have serve the bottom of for village distribution More than €600,000 in and new target market the economic pyramid access to water • Dhaka city offices for funding (Dhaka) for (BoP) and test new cross-subsidization • Health: reduced service approaches jars • €600,000 to date for arsenic poisoning plant, pipeline • Develop rural sales (such as economic, Promotion • Employment: 21 sociologic, and network, jars, and jar • Business projected to • Adapted customer factory employees, 45 water anthropologic) approach: education break even in 2015 keepers, and 10 jar • Contribute to the local on public health in the distributors public health situation rural areas and to the Millennium • Customer stewardship Development Goals in Dhaka

Fight arsenic poisoning Provide drinking water Grameen Veolia Pilot business Clean water consumed and enhance access to at low cost for poor Water joint venture plan adapted by ~7,000 people water for all rural areas Sources: Grameen Veolia Water; Yunus Centre. Note: The “bottom of the economic pyramid” are those “absolutely underprivileged” with incomes below US$2.50 per day (adjusted for purchasing power parity). 1Price is about 100 times less expensive than the price of bottled water. 2These villages are 100 kilometers east of Dhaka.

The Boston Consulting Group • Yunus Social Business | 25 BASF Grameen Provides Protection Against Malaria

Impetus Business model Operations Status and outlook Impact Social problem Product Social business joint Founded in March 2009 Financial status 2012 • 11 million people in • Long-lasting (2 to 5 venture Current status • Operating Bangladesh are at risk years) insecticide- • BASF (99.5%) provides • Capacity: 3,000 nets per expenditures: €198,000 of malaria treated nets product and technical machine per day with full • Revenues: €171,000 know-how • 84,000 cases in 2009 • Customized nets capacity; for one shi, Social impact • Dengue has also been suitable for the • Grameen Healthcare production is 1,000 Bangladesh market Trust (0.5%) provides 1 • Health: protection a critical problem • 75,000 nets sold to date against insect-borne since 2008 Price local and social know-how • Adaptation to local diseases for more than BASF’s objectives • ~€7.3 with foreign market (e.g., net size) 75,000 families Separate legal entity • Develop affordable production Outlook • Guarantees protection against • ~€6.0 with new local • Objective: insect-borne diseases production independence – sell 200,000 mosquito • Foster implementation Place and promotion Initial investment of €200,000 nets through 2015 of ethical and social • All of Bangladesh, aspects into core • Provided by BASF – 3 machines in the including the malaria future business regions • Additional supply of • Learn about the 100,000 mosquito nets – Nets for 3 million people bottom of the • Products from economic pyramid Grameen Fabrics & – 50 employees at (BoP) Fashions Grameen Fabrics & Fashions

Fighting insect- Insecticide- Grameen BASF Business model adapted Protection for more borne diseases treated nets joint venture and scaled up than 75,000 families

Sources: BASF Grameen; World Malaria Report 2012, Word Health Organization; Yunus Social Business; World Malaria Report 2009, World Health Organization. Note: The “bottom of the economic pyramid” are those “absolutely underprivileged” with incomes below US$2.50 per day (adjusted for purchasing power parity). 1To date, mosquito nets have been imported from Thailand.

Grameen Intel Social Business Improves Agriculture and Health

Impetus Business model Operations Status and outlook Impact

Social problems Product Grameen Intel Social Founded in May 2009 Financial status 2013 • Lack of agricultural • Soware for computer Business Current status • Operating expenditures: efficiency and and mobile devices • Intel provides • 3 soware products for ~€225,000 unsystematic use of • Soil test and advice for product and sale • Revenues measured as fertilizer the type and amount technical know-how Outlook cost recovery: 10 to 15% 1 • 12,000 mothers die of fertilizer needed • Grameen • Projected to break of expenses annually in • Screen for high-risk provides local even in 2018 Social impact Bangladesh from factors in pregnancy implementation pregnancy-related knowledge • 2013 goal • Agriculture Price (planned) complications Separate legal entity – technology adoption – 924 farmers using soil • Limited access to • Grameen Intel – more than 100 analysis Soware: ~€7.5 • Guarantees medical care independence third-party service – lower input costs Intel’s motivation • End-customer service: hubs serving a and higher output Initial investment community of more €1.25 per soil test • Health • Mission of Intel’s (eAgro) • Intel Capital and than 20,000 farmers World Ahead Program – 1,354 pregnant women Place and promotion Grameen Trust are – more than 1,200 – “connecting people shareholders mothers using the screened to a world of • Local entrepreneur pregnancy-care – early risk detection, opportunity” uses soware on product mortality reduction mobile devices to offer • Learn about the services in the – launch of five new • Employment: 110 jobs bottom of the communities products and a job multiplier that economic pyramid • Future scale-up in ensures additional and (BoP) for potential India, Bangladesh, and better job opportunities entry into the market Macedonia for farmers and women

Improve health Soware assesses Grameen Intel Pilot with More than 2,000 customers and agriculture health and soil status Social Business first products will be served in first set of deployments Sources: Grameen Intel Social Business; Yunus Centre for Social Business and Health; Royal Norwegian Ministry of Foreign Affairs. Note: The “bottom of the economic pyramid” are those “absolutely underprivileged” with incomes below US$2.50 per day (adjusted for purchasing power parity). 1To date, the majority of income is nonoperating income from shares sold to Grameen Trust and Intel.

26 | The Power of Social Business Grameen Yukiguni Maitake Will Create More Than 10,000 Jobs in Rural Areas

Impetus Business model Operations Status and outlook Impact

Social problem Product Social business joint Founded in October Financial status 2012 • Underemployment, • Cultivation and venture 2010 • Operating poverty, and processing of large and • Grameen Krishi 2012 status expenditures: €435,000 malnutrition in small mung beans Foundation provides • Cultivation in 13 • Revenues: €237,000 Bangladesh local know-how Price districts across more Social impact • Women face particular • Yukiguni Maitake than 2,000 hectares • 7 BDT (Bangladeshi • Employment: 8,000 hardship taka) per kilogram provides product and • Yield: 1,500 metric tons technical know-how jobs created in 2012 • Lack of knowledge in • The price farmers • Exported 231 metric the agricultural sector Separate legal entity – more than 10,000 receive can be higher tons to Japan jobs will be created • Poor agricultural than the local market • Guarantees • Cultivation is also in by 2014 efficiency pays independence the coastal area • On average, farmer's Yukiguni Maitake's Place and promotion Total investment to despite the salinity income increased 20% objectives • 60% of sales go to date problem over last year's levels • Sustainable, safe, and Japan (large beans) • Yukiguni Maitake: • Improved quality • Improved quality due reliable supply of • 40% of sales go to €2 million Outlook to Japanese technical mung beans for Bangladesh (small • Grameen Krishi know-how Japanese market • Expected to export beans) Foundation: €20,000 more than 1,000 metric • Agricultural efficiency • Stable price level tons to Japan increased from 800 • Will employ 10,000 kilograms per hectare farmers in 2015 to 1,200 kilograms per hectare • Will increase yield to 3,000 metric tons in 2015

Increase agricultural Mung beans for local Grameen Yukiguni Successful commercial More than 10,000 efficiency and Japanese market Maitake joint venture cultivation jobs will be created

Source: Grameen Yukiguni Maitake.

Grameen GC Eye Care Hospital Provides Low-Cost Eye Care Impetus Business model Operations Status and outlook Impact Social problem Product Social business Founded in 2007 Financial status 2012 • 750,000 blind people • Three hospitals • Operated by Grameen Current status • Operating • 250,000 people with offering general eye Health Care Services • ~545,000 patients expenditures: ametropia (low vision) examination and • Seva Foundation bears treated through ~€557,000 problems special surgery the cost; medical September 2013 • Revenues: ~€542,000 • 3 million people with Price training at Aravind India • ~320 surgeries a • The expenditures are other eye problems • ~€40 to €320 for • Lavelle Fund and the month largely related to the 1 • 600 people blinded as surgery Calvert Foundation: • ~237 employees recently established equipment third hospital a result of cataracts • ~20% cheaper than • First hospital broke • There are only 1,400 competitors • Grants/donations: Green even in 2010; second Social impact ophthalmologists in • Free or subsidized as Children Foundation; hospital expected to • ~545,000 people Bangladesh necessary International Women’s break even in 20152 treated to date Health Coalition; • Poverty prevents Place and promotion Shareholders of Outlook • Including 20,000 people from seeking • Bogra, Barisal, and Grameen Health Care • Objectives through cataract surgeries surgery and appropri- Thakurgaon Services, Grameen 2020 • Avoided average ate eye care Telecom Trust, Grameen cumulative loss for • Eye camps for the Kalyan, Grameen Shakti – have at least six bottom of the hospitals with an Bangladesh's GDP economic pyramid ~€850,000 in funding ophthalmologist over the lifetime of (BoP) available treated patients: • Green Children Founda- €4.5 billion tion: ~€650,000 – perform ~60,000 cataract surgeries • Employment: • Calvert Foundation: ~237 jobs created ~€200,000 – treat more than • International Women’s 565,000 patients Health Coalition: ~€4,000

Lack of eye care Low-cost or subsidized Standalone social Break-even point Avoidable GDP loss: for underprivileged eye care business reached, continuous ~€4.5 billion Source: Grameen GC Eye Care Hospital. scale-up Note: The “bottom of the economic pyramid” are those “absolutely underprivileged” with incomes below US$2.50 per day (adjusted for purchasing power parity). 1Price depends on the type of lens used (€1 = 100 Bangladeshi taka (BDT)). 2Depreciation is included in the 2015 estimate.

The Boston Consulting Group • Yunus Social Business | 27 Grameen Caledonian College of Nursing Trains Young Bangladeshi Women

Impetus Business model Operations Status and outlook Impact

Social problem Product Three partners Founded in January Financial status 2011 • Lack of nurses: only 1 • Nursing/midwifery • School of Health and 2010 • Operating nurse for every 6,300 school to contribute to Life Sciences, Current status expenditures: people nursing health care Department of • ~180 applicants in ~€180,000 • Ratio of nurses to workforce Nursing and Commu- 2012 for 50 seats • Revenues: ~€90,000 doctors is 1:2 instead • Diploma program for nity Health at Glasgow Caledonian University • ~138 students Social impact of the typical 3:1 young women from currently enrolled rural areas • Nike Foundation • Empowerment of • Poor maternal and child Outlook disadvantaged youth health is a persistent Price • Grameen Healthcare problem in Bangladesh Trust • ~550 students are • Improved ratio of • ~€3,700 in total (~€100 expected in 2015 (the nurses to doctors • Lack of access to per month) Legal setup break-even point) • Positive effect on medical care among • Low-interest loans • Approval from the poor and rural popula- • Expanding to 70 maternal and child provided by Grameen Bangladesh Nursing students per year health tions Bank Council for a degreed • New programs to start Partners’ objectives Place and promotion program in Nursing and Midwifery (B.Sc., etc.) • Empower girls • College in Dhaka • Prepare nurses to meet ~€310,000 in initial • Students must be funding international standards daughters of Grameen of health care Bank borrowers • Provided by Nike • Develop leaders and Foundation (and change agents for the student fees) future

Reduce nurse Health care Partnership of Continuous Empower women shortage training for girls three partners scale-up as a health from launch care workforce Source: Grameen Caledonian College of Nursing.

Grameen Shakti Provides Clean Energy to Rural Households

Impetus Business model Operations Status and outlook Impact

Social problem Product Standalone business Founded in 1996 as Financial status 2012 • Low living standards • Solar home systems in cooperation with: not-for-profit business • Operating and unhealthy • Improved cooking • World Bank Social business since expenditures: environment in rural stoves • Infrastructure December 2010 €71.4 million areas • Small biogas plants Development Current status • Revenues: • Lack of electricity: Company Limited €72.77 million Price • Reached break-even 70% of households (IDCOL) Social impact were not connected • Solar home systems point in 2000 Initial investment of • 8 million beneficiaries to electricity (for 50 watt-peak): ~€90,000 • CAGR: 55% ~€290 (customers and their • Indoor air pollution: • USAID and others • Market share for solar families and kerosene stoves pose • two-burner cooking home systems: 50% neighbors) high fire risk and cause stove: ~€9 Key challenge • More than 1.7 million • Energy access, eye irritation due to • Biogas plant (3.2 • Manage high rates of products sold smoke attrition improved health square meters): ~€400 Outlook environment, reduced Place and promotion • Scale-up planned deforestation • Sales and service via • ~800,000 tons of rural offices carbon dioxide saved • Technical training per year through for users and biogas, cooking stoves, maintenance service and solar home provided by Grameen systems Technology Center • More than 12,000 jobs created

Clean energy for Health- and environment- Standalone Break-even point More than rural household friendly solutions business achieved in 2000, 8 million scale-up planned beneficiaries

Source: Grameen Shakti.

28 | The Power of Social Business Grameen Distribution Sells Essential Products in Remote Areas

Impetus Business model Operations Status and outlook Impact

Social problem Product Standalone business Social business since Financial status 2012 • Remote Bangladeshis • Variety of products: with partners March 2011 • Operational lack access to a variety telecommunication, • BASF Current status expenditures: of daily consumer energy, and health • Canadian Solar • 118 employees ~€0.4 million products of high Price Technologies around the country • Cost of goods sold: quality • Affordable for poor • Grameen Fabrics & • More than 9,000 ~€3.27 million • Prices oen exceed • Price is ~10% below Fashions salespeople • Revenues: customers’ purchasing ~€3.7 million power competitors’ prices • Johnson & Johnson • Hit break-even point in 2011 Social impact • Few job opportunities Place and promotion • Square Consumer in Bangladesh, • Distribution and Products • 568,000 products • Reaches ~9 million especially for women marketing via shops • Lal Teer Seed sold in 2012 households in remote areas and the decentralized • ID Group Outlook sales force of Grameen • Supplies social and 1 • Tetley ACI Tea • Extend the social Marketing Network impact of the product normal daily €1.4 million in funding portfolio consumer goods in 2012 • Creates 9,000 jobs • Grameen Telecom • Provides income and Trust: 95% empowerment for • Grameen Kalyan: 5% women

Lack of products in Social products for the Standalone Started piloting and ~9 million households in remote areas rural population business achieved break-even remote areas reached point in 2011 Source: Grameen Distribution. 1This decentralized sales force employs salespeople in the Grameen Marketing Network (GMN); they sell products door to door in rural areas.

Grameen Fabrics & Fashions Creates Employment Opportunities

Impetus Business model Operations Status and outlook Impact

Social problem Product Stand-alone business Production began in Financial status 2012 • ~40% of Bangladeshis • Produce goods to • Chemicals from BASF February 2012 • Operating are underemployed address specific social • Mesh fabric from local Current status expenditures: • Production capacity is problems (such as bed supplier • Capacity: 2,500 nets ~€604,000 lacking for social nets to combat per machine per day • Revenues: €364,600 malaria and dengue) Total planned products investment: • Market share is below Social impact • Produce products for • Little foreign currency €45 million 1% • Health: protection in Bangladesh export to earn foreign currency • Grameen Telecom Outlook against insect-borne Trust: ~€7 million diseases for more than • Create employment • Increase capacity to 3 • Operations, Grameen machines producing 75,000 families Price Bank, and other 7,500 nets per day • Employment: ~450 • ~€5 for small net companies: ~€38 • Composite Knitwear jobs created • ~€6 for large net million from Unit is in development • Offers social services Place and promotion Initial investment of: – planned production for employees, such as €4.34 million a day care center and • Production at Social of 60,000 ready- • Grameen Telecom made garments per education for Business Industrial employees’ children Park1 Trust: ~€3.9 million day • Grameen Bank: – 8,000 employees • Earning of foreign ~€0.44 million planned by 2017 currency

Fighting Jobs in textile- Standalone social Production will Social products and underemployment based industry business be scaled up the provision of jobs

Source: Grameen Fabrics & Fashions. 1Sarabo, Kashimpur, Gazipur, Dhaka.

The Boston Consulting Group • Yunus Social Business | 29 no te to the reader

About the Authors For Further Contact ic development, the environment, Ulrich Villis is an associate director For further information about this arts and culture, and corporate so- in the Munich office of The Boston report or to learn more about BCG’s cial responsibility. We partner with Consulting Group and leader of the social impact work, please send an multilateral organizations, nongov- firm’s Social Impact practice in Eu- e-mail to [email protected] ernmental organizations, founda- rope. Rainer Strack is a senior part- or contact the authors. tions, governments, and—for our ner and managing director in the corporate social responsibility firm’s Düsseldorf office. He leads Ulrich Villis work—with businesses. the firm’s People & Organization Associate Director practice in Europe and the Social BCG Munich Acknowledgments Impact practice in Germany. +49 89 23 17 46 81 Many thanks to all interview and [email protected] discussion partners who significant- The report is coauthored by Profes- ly contributed to the creation of this sor Muhammad Yunus, Nobel Rainer Strack report: K.M. Ashaduzzaman Peace Prize Laureate 2006, founder Senior Partner and Managing Director (Grameen Health Care Services), of the Grameen Bank, and early de- BCG Düsseldorf Ehsanul Bari (Grameen Krishi veloper and implementer of the so- +49 2 11 30 11 32 36 Foundation), Corinne Bazina cial business concept; and Saskia [email protected] (Grameen Danone Foods), Ahsan Bruysten, cofounder and CEO of Yu- Ullah Bhuiyan (Grameen Shakti), nus Social Business. Yunus Social For more information about the Thérèse Blanchet (social anthropol- Business is the international imple- Grameen Network and its various ogist working for Grameen Veolia mentation arm focused on setting Social Businesses, please contact: Water), Ajoy Chakraborty (Grameen up and managing social business Veolia Water), Melinda Daif incubator funds around the world Saskia Bruysten (Danone), John E. Davies (Intel and collaborating with corporations CEO and Cofounder World Ahead Program), Fiamma to create social businesses. Yunus Social Business Degl’Innocenti (Yunus Social Busi- +49 69 90 55 90 33 ness Centre), Saori Dubourg (BASF), We would also like to acknowledge [email protected] Tomoyasu Ebana (Grameen Yukigu- Marissa Benson, Viviane Engels, www.yunussocialbusiness.com ni Maitake), Sophie Eisenmann (Yu- Frank Meyer, Günter Rottenfußer, nus Social Business), Emmanuel and Fabian Uhrich for their support BCG and Social Impact Faber (Danone), Aam Mahbubul in conducting the study on the BCG is deeply committed to making Haque Udoy (Grameen Health Care ground in Bangladesh and for pre- a difference in the world. We be- Services), Zahirul Haque (Grameen paring this report. lieve that the same insights and ap- Distribution), Nazmul Haque proaches we use to solve business (Grameen Distribution), Ashraful Finally, we would like to thank Kath- problems are applicable to social Hassan (Grameen Fabrics & Fash- erine Andrews, Martha Craumer, problems. ions), Isabelle Hellio (Veolia), Sa- Mary DeVience, Kim Friedman, jedul “Pavel” Hoq (Grameen Intel Brenda Thickett, and the BCG edit- Working at the community, region- Social Business), Laëtitia Houdart ing and production team for contri- al, and global levels, we focus our (Grameen Veolia Water), Dr. butions to the writing, editing, de- social-impact work on seven areas: Nazmul Huda (Grameen Caledo- sign, and production of this report. poverty and hunger, public health, nian College of Nursing), Kazi education, community and econom- Huque (Grameen Intel Social Busi-

30 | The Power of Social Business ness), Shariful Islam (Yunus Cen- Shakti), Alexis Rawlinson (Yunus tre), Tanbirul Islam (Yunus Centre), Social Business), Benoit Ringot Luc Jonveaux (Grameen Danone (Grameen Veolia Water), Patrick Foods), Abser Kamal (Grameen Rousseau (Veolia Water), Saria Shakti), Amir Khasru (Yunus Cen- Sadique (BASF), Aelia Schreder tre), Eric Lesueur (Veolia Water), (Yunus Centre), Christian Schubert Asad Mahlende (Grameen Caledo- (BASF), Mustafa Shafkat (BASF), nian College of Nursing), Emmanu- Aisha Siddika (Grameen Veolia el Marchant (danone.ccommunities Water), Imamus Sultan (Grameen Fund), Lamiya Morshed (Yunus Caledonian College of Nursing), Centre), Shehla Nasreen (Grameen Labib Tarafdar (Yunus Centre), and Shakti), Professor Barbara Parfitt Satake Yukoh (Grameen Yukiguni (Grameen Caledonian College of Maitake). Nursing), Fazley Rabbi (Grameen

The Boston Consulting Group • Yunus Social Business | 31 © The Boston Consulting Group, Inc. 2013. All rights reserved.

For information or permission to reprint, please contact BCG at: E-mail: [email protected] Fax: +1 617 850 3901, attention BCG/Permissions Mail: BCG/Permissions The Boston Consulting Group, Inc. One Beacon Street Boston, MA 02108 USA

To find the latest BCG content and register to receive e-alerts on this topic or others, please visit bcgperspectives.com.

Follow bcg.perspectives on Facebook and Twitter.

11/13