Business Call to Action to launch new Inclusive Business Management Practices Tool to guide multinational companies to scale their inclusive business initiatives
The Inclusive Business Management Practices Tool, supported by DfID and developed as part of the Inclusive Business Boost, marks a new stage in the development of Business Call to Action. The Tool provides inclusive business (IB), particularly within multinational corporations (MNCs), with an assessment tool that sets a new bar, with aspirations to motivate and drive change, improve business performance across all areas of IB and offer a focus on internal management practices to drive and scale IB initiatives.
This work draws on a decade of experience engaging with companies implementing IB across sizes, sectors and regions. It includes insights from the latest State of IB Survey and interviews with executives from over 20 corporations across 10 sectors and all 5 regions, allowing BCtA to create a tool designed for internal change.
The tool and the accompanying report look at the constraints within MNCs that are preventing the uptake and internalisation of inclusive business models. It considers the internal barriers to scale and the specific management practices that MNCs adopt or develop for their inclusive business. It presents what it means to develop and tailor management practices to inclusive business, why it is important for the success of the inclusive business and how companies can improve and become leaders.
The report and the tool will be launched on September 27 during the BCtA Annual Forum in New York.
To achieve inclusive business growth and scale, companies not only need to have the right products, services and business model, but also the appropriate management practices. Base of the pyramid (BoP) markets require the adaptation of traditional management practices or the development of new ones. MNCs engaging in the BoP market are often faced with unfamiliar contexts, new kinds of customers and suppliers, thin and volatile operating margins, and long timeframes to scale and produce financial returns.
This work identified a number of organisational barriers as MNCs seek to adopt and scale inclusive businesses. These include a lack of capital, an aversion to risks, a lack of inclusive business awareness, inadequate leadership, and unfavourable attitudes among staff and management with respect to changes in working habits.
"The report shows how innovative management practices tailored to the BoP market can provide competitive advantage, ensure a better understanding and responsiveness to stakeholders, and balance short-term stability with long-term viability."
The report also identifies principles that are quite different from business-as-usual. These include:
In-depth stakeholder engagement;
Value-based talent management practices that build skilled loyal staff;
Staff wellbeing management;
Coherent performance incentives for management tied to inclusive business success;
Target-setting consistent with long-term value creation objectives; and
A sharp understanding of environmental, social and governance risks and opportunities within the inclusive business.
These practices allow companies to gain critical insights to improve their models and better communicate impact and business value thus gaining greater internal support for the sustainability and replication of inclusive business initiatives.
Actions for MNCs
Companies who are looking to engage in inclusive business activity or scale their inclusive business are encouraged to use the Benchmarking Tool to understand where they are at in their inclusive business management practices compared to peers and select areas where they wish to develop an improvement plan.
For more information, contact Nazila.Vali@undp.org.