Globally there is a growing awareness on corporate sustainability i.e. organizations conducting their business in ways that will guarantee their long term operations and this seldom can be achieved without consciously creating value for the environment and community where they operate. In Nigeria business circles, there is little talk about this topic but mounting global influence especially for multinational organizations is creating a shift. Take for instance Guinness Nigeria a Diageo Company, to which the Business Innovation Facility (BIF) is providing support to for the development of a sustainable local sourcing strategy of its raw materials such as Sorghum. One of the drivers of this project is pressure from institutional investors and government requesting the company to show its social investment credentials. Hence the idea of inclusive business was very attractive to the company, as it provided the platform for mutual value for both the company and the community.
Traditionally large organizations in Nigeria shy away from dealing with smallholders in their value chain, but directly deal with large and medium size organizations instead. Hence they tend to be isolated from other stakeholders and activities in the value chain.
How can a big corporate sustainably engage the entire value chain, especially one that is laden with a host of challenges is the big question most organizations can’t answer. Hence an approach that requires the company to deal with only few groups, providing lower transaction cost seems to provide an easy solution for the companies, howbeit in the short and medium term. This was the approach adopted by Guinness Nigeria in its supply chain but the drive to create social value via core business activity and the long term sustainability and security of supply spurred the desire for an inclusive business project.
With a supply chain burdened with low yield, poor margins, inadequate storage, unavailability of affordable finance, and a host of other challenges, the question was what approach can be adopted by the company to seamlessly mitigate the challenges in the supply chain without increased pressure on the current operations. The process of interacting with the various stakeholders within and outside the organization made the task clearer and identifying the right approach easier. An inclusive business ecosystem posed a viable option. This ecosystem involved the organization partnering with multiple stakeholders from farms to tender millers and NGOS/Donor agencies, with the organization simply playing a coordinating and support role in this process hence limiting transaction cost by leveraging on the strengths of other partners that make up the ecosystem.
The inclusive business ecosystem has huge potentials to create large scale social impact while guaranteeing increased supply for Guinness Nigeria in the long term, sufficient for future expansions. In order to achieve this, implementation is critical, especially as the concept is relatively new in the environment. Although the project relates to a core business activity, it was originated from the organization’s Corporate Relations unit. The challenge hence will be getting the buy-in of other stakeholders within the organization for the successful implementation of the inclusive business project.
Add a Comment