Growing Up Quicker with Marico

July 2013 – Civil Society

It’s been 13 years since Akshaya Patra served its first meals to 1,500 students at five government schools across Bangalore. Since then, the organisation has become the world’s largest midday meal programme, providing nutritious lunches for 1.5 million students across nine states last year.

Though Akshaya Patra has not yet attained its ambitious founding vision that “no child in India shall be deprived of education because of hunger”, the organisation has demonstrated remarkable capacity for growth, increasing its reach 1,000 times in only 10 years. By 2020, Akshaya Patra hopes to reach fully 5 million children, and aspires to complete obsolescence by 2030 when, they hope, lack of food will no longer be an obstacle to education. Yet a simple question remains: how will they get there?

A new pilot expansion programme set to roll out in 2014 will disassemble the current centralised kitchens in favor of a ‘hub-and-spoke’ model. Where centralised kitchens require consistent all-night hours for employees, the new model will organise packaging and distribution from larger ‘hub’ kitchens, while ‘spoke’ facilities set up nearer to the communities they serve will allow employees to work more traditional morning hours and ensure that the meals delivered will be fresher.

Once the midday meal has been prepared, spoke kitchens will become available for rental to other organisations, thus serving as sources of revenue for Akshaya Patra. The hub-and-spoke model, says General Manager Vinay Kumar, should decrease costs and make it possible for Akshaya Patra to provide breakfast as well as midday meals. Each new hub-and-spoke module will also create around 250 jobs.

Since last year, the leadership team at Akshaya Patra has participated in the incubation programme sponsored by the Marico Innovation Foundation, which aims to accelerate growth for promising social enterprises. Founded a decade ago, the foundation has from the outset taken a unique approach to Corporate Social Responsibility (CSR), focusing on research and knowledge dissemination to foster a stronger and more transparent culture of innovation among social enterprises.

“Most organisations are looking at CSR in terms of hardware,” says Harsh Mariwala, the Chairman and Managing Director of Marico Ltd. “Ours is more catalytic – that is, we help others get results. We hope the impact is much bigger.”

Teaming with the Bangalore-based consultancy, Innovation Alchemy, the foundation uses a system of market-led research and hands-on guidance to speed the scale-up process. In the course of the three-year partnership, the team has helped to accelerate five projects: two from the programme’s inaugural year and three more beginning in 2012.

In May, representatives from the leadership teams of those three projects – Yuva Parivartan, an employability and training programme for uneducated Indian youth; Microspin, a company that hopes to return value to cotton farmers through a small, manageable yarn spinning technology; and Akshaya Patra – gathered along with representatives from leading financial and business institutions at Marico Ltd’s corporate offices in Mumbai to present their progress and plans.

“The next-stage requirements are twofold,” says Parvathi Menon, founder and CEO of Innovation Alchemy. “One, they need organisational capacity building. Second is funding.” The small conference room at Marico Ltd’s corporate offices at the fringes of the Bandra Kurla Complex is filled with representatives from the three enterprises, from the foundation and Innovation Alchemy and from leading business and financial institutions. “Today’s session was designed around getting these teams to see through that lens.”

CLIMBING UP: One of the most innovative elements of the incubation programme is the diversity of projects it can accommodate. In their first year of collaboration, the foundation and Innovation Alchemy selected two projects for acceleration. The first, Waste Wise, came in as a non-profit dealing with waste management in Bangalore’s Electronics City. After a year in the acceleration programme, the organisation had secured a private contract with the Electronics City Association to handle infrastructure and solid waste management.

The second project taken on in that first year was with Yuva Parivartan – an organisation that would continue working in the programme in 2012. The initial project helped Yuva Parivartan develop a model for expanding its employability training programme deeper into rural India with mobile camps. Roughly 80 per cent of Indians below 25, who constitute nearly half of the national population, lack formal schooling. With neither education nor skills, these young people have little chance of advancing socio-economically.

“We started as a ‘mom and pop’ NGO with 100 students in 1998,” recalls Kishor Kher, founder of Yuva Parivartan. “Last year we had 100,000, but I’m not very proud of that – we should have done a million.” With the help of the acceleration programme, the Yuva Parivartan camps increased in size from 301 in 2011-12 to 1,310 in 2012-13. The number of students soared, increasing by almost 70,000 in the camps’ first year of operations. With that kind of growth and the continued help of the foundation, Kher believes Yuva Parivartan can reach the one million mark within three years.

Now in its second year of the acceleration programme, Yuva Parivartan is looking to expand its model by developing partnerships with local NGOs, instituting a curriculum development team to carry those partnerships forward and creating a strong network of potential employers in the informal sector. With these systems in place, Yuva Parivartan hopes to expand its reach still further, not only providing much needed skill training for uneducated youth and connecting them with potential employers, but also fundamentally changing attitudes toward employment in underserved regions and communities.

Founded in 2009 under the aegis of the non-profit Fractal Foundation, Microspin – the youngest organisation in the acceleration programme – has developed a technology that will allow otherwise impoverished cotton farmers to oversee their own yarn spinning operations. The second largest industry in India after agriculture, textile production is – as Microspin founder and CEO Kannan Lakshminarayan points out – a highly diffuse and fractured industry. By devolving the spinning process back to the farmers themselves, Microspin aims to increase farmer revenues and alleviate poverty in an underserved population.

“This is not a spinning machine sitting in Madurai,” Lakshminarayan says. “It brings the tools to cotton farmers and brings them up the value chain.” It also, Lakshminarayan goes on to point out, decreases both carbon footprint and costs. “We believe we can be the lowest-cost yarn producer on the market,” he says.

Lakshminarayan’s presentation perfectly illustrates the tools, techniques and stages of the Alchemize methodology. Beginning with the social problem that first generated the concept for his company, Lakshminarayan proceeded to the quantifiable results of field research and eventually to plans for scaling based on those results, scaling that would simultaneously increase the Microspin product’s impact and profitability. The presentation, in short, traced the company’s progression from an experimental non-profit start-up to a private limited company.

“We are not an early-stage model for projects with an idea or a concept. One of our beliefs is that innovation requires the ability to work in these spaces long-term,” Menon says. “Good innovation is about execution. So these are all models that have been on the ground for a while – two or three years – and are now ready to scale.”

Alchemize facilitates that scaling process through a series of specific steps, developed for flexibility and adaptability to the unique needs and challenges of different programmes. The process undertaken by the Marico Innovation Foundation and Innovation Alchemy as a team begins with a series of “Innovation Workshops for Social Enterprises”. Following these workshops, leadership at the foundation and Innovation Alchemy analyse the participating organisations and invite the most advanced or promising to apply for the acceleration programme. “We’re really picky about choosing organisations that are ready to go here, or that are innovating at a level where they could,” Menon explains.

The last round of workshops has resulted in 37 applications for the incubation programme, among which livelihood, clean tech and healthcare projects are the most prevalent. From this set of 37 applications, the foundation plans to induct eight into its third acceleration group, more than doubling the team’s portfolio.

Once projects have been taken on, the acceleration process begins with what Menon calls an “innovation diagnostic” to help identify the challenges preventing a major scale-up for the existing project. Second, core teams will identify insights via market-led research to develop a plan for overcoming those challenges. With these insights in place, the teams will develop and implement a prototype, and finally, having proven that prototype viable for scale, will quantify and document their work, and seek collaborators.

Alchemize also encourages groups to shift their mindsets while researching mechanisms for growth. Akshaya Patra, for instance, conducted its research across a variety of institutions, from the Auroville farms to McDonald’s. By drawing on a variety of farming, processing and cooking models – including those from corporate, profit-minded companies – Akshaya Patra has generated a scheme that can increase quality and efficiency, lower costs and generate capital.

Microspin developed its new 1,600-spindle prototype after extensive market research on productivity and net costs for spinning machines of various sizes. The newest product, Lakshminarayan says, could produce net profits as high as 18 per cent. The next stage in the process is finding organisations to help fund farmers for purchasing the machinery itself, which Menon describes as “investing in the market to create market pull”. With that pull, Lakshminarayan says his team hopes to go from a one per cent market share this year to an ambitious 40 per cent in the next decade.

“We may have had a model, we may have had an idea and we probably would have been able to implement it on our own,” Kher says of Yuva Parivartan. “But the acceleration programme has given us a more robust model than we would have been able to develop otherwise.”

SYNERGY AND SCALE: “These organisations will not grow automatically,” Mariwala said following the three group presentations, which form an essential part of the Alchemize methodology’s collaborative last stage. “That’s what hand-holding is for.”

With Alchemize, the foundation’s acceleration programme has not only produced new programmes at the cutting edge of development in India, but also quantifiable results for a set of practices that will, with luck, serve as a growth model for a diversity of other social enterprises and start-ups.

“I really want to create a robust, replicable methodology. My hope is, if we are able to demonstrate with 15 projects or 20 projects, then other projects will use it,” Menon says. “You see, we really need to solve these problems in India in the next decade. We don’t have another decade. Entrepreneurs learn from us. If the methodology works and demonstrates results, then people will use it.”

By generating results and documentation, by facilitating a more in-depth understanding of the possibilities inherent in socially conscious business and by putting those organisations in contact with one another, acceleration ultimately serves to  create an ecosystem that is supportive of social enterprises, not just in terms of funding, but also in terms of sharing ideas and experience.

Here at the Marico offices, Kher has already begun asking questions about the employment needs for Akshaya Patra’s new kitchens, while representatives from banks and companies have begun offering suggestions to Lakshminarayan on potential funding sources for Microspin’s next stage. Organisations that began as relatively small efforts to ameliorate some of the many social ills that continue to plague modern India are now in a position to explore those efforts as large-scale remedies. By sitting in this room together, the leadership teams from these three organisations not only have an opportunity to forge useful bonds for future growth, but also to learn valuable and diverse lessons from each others’ past experience.

“Real scale will happen when these programmes can talk to one another,” Menon says. Here under bright fluorescent lights and the supportive watch of the Marico Innovation Foundation, that conversation has already begun.

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One comment

  1. This wasn’t as fun to read as the other piece but it was facinating and inspiring. How do people who think on this kind of scale become inspired? Where do they find the strength to keep pushing forward?

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