Ep 9 – Conversation with Justin DeKoszmovszky (Founder, Archipel&Co)
In this episode, we talk to Justin DeKoszmovszky, Founder and Managing Partner of Archipel&Co’s UK office. Justin has been working at the interface of strategy, innovation, and sustainability for over 20 years. We start by talking about Justin’s sustainability journey and what sustainability means to him. We then explore Justin’s role at CISL (Cambridge Institute for Sustainability Leadership), League of Intrapreneurs, and Archipel&Co. Justin then explains the sustainability trends in businesses and how the role of purpose in large listed companies is taking prominence. We then ask Justin about the challenges faced by large, listed companies trying to balance sustainability and impact with financial returns and the issue of Sustainability vs CSR in these big companies. Justin talks about the blurring of boundaries between profit and social purpose and how the frameworks and evaluation and measurement of impact take place in these big organizations. The conversation then goes towards balancing inequality, environment, and technology and Justin’s thoughts on what the future holds for sustainable businesses.
Justin DeKoszmovszky has been working at the interface of strategy, innovation, and sustainability for over 20 years, fuelled by the challenge of answering the next generation’s inevitable question: “what did you do to make it better?”
As the Founder and Managing Partner of Archipel&Co’s UK office, Justin is committed to the transition to an inclusive economy. Justin previously led corporate sustainability strategy at SC Johnson, PUMA and OVO Energy. He is a co-founder and non-executive director of INBONIS, a financial technology firm and Europe’s first SME-focused credit rating agency. Justin is also a Senior Associate of the University of Cambridge Institute for Sustainability Leadership. Justin holds a BSc and an MBA from Cornell University.
Key moments timestamps
[00:25]- Justin’s sustainability journey
[03:19]- On what sustainability means to him
[04:47]- Justin’s role at Cambridge’s CISL, League of Intrapreneurs, and Archipel&Co
[07:15]- Sustainability trends in businesses
[09:37]- Role of purpose in large listed companies
[12:50]- Challenges faced by large, listed companies
[15:02]- Sustainability vs CSR
[17:45]- Blurring of boundaries between profit and social purpose
[21:14]- Evaluation and measurement of impact and related metrics
[24:23]- Example of evaluation and measurement
[26:42]- On balancing inequality, environment, and technology
[30:19]- Justin on what the future holds
“We’re actually rarely now working with a pure sustainability team or a CSR team, whereas that used to be quite common. And now we’re more often than not working with a brand team or a product team, or even commercial teams who are in charge of selling impactful products, impactful services.” – Justin DeKoszmovszky
“The key is to start with what is already being measured to measure what is going to really make a difference from a decisional perspective, not necessarily what’s going to be nice. And we’re less focused on measures that are purely for the public reports. We’re really more focused on measures and evaluation frameworks that are going to help make better decisions.” – Justin DeKoszmovszky
[00:00:25] Jaideep Prabhu: Justin, thank you for taking time to talk to us. You’ve been working at the heart of sustainable business for a while now. Could you tell us a bit about yourself and your personal journey?
[00:00:34] Justin DeKoszmovszky: Happy to. Yeah. Thank you for having me. Lovely to be here. I guess the sustainability part of my journey started pretty young. I was, I grew up in the U S and I was what we would call a tree hugger growing up. So even as far as high school or secondary school I was very interested in the environment, spent a lot of time outdoors and volunteered building trails out west in summers and those kinds of things.
And then in university studied resource and environmental economics. But got more and more interested in the business elements that kind of market functionings behind what were already clearly some serious problems on the environmental side from resource degradation, et cetera.
And this is before climate change became really mainstream topic, but already focused on that. And then coming out of university had a yellow wood moment, so decided to, it was choosing between the Peace Corps, which is a two year volunteer situ program that the US State department runs and consulting.
And for a variety of reasons chose consulting. So I went down the path, much more traveled but learned business and learned seven years of consulting. And this was typical strategy consulting learned really what that all how businesses tick, how decisions are made, how to influence decisions in businesses.
And that then serve me when I did come back to those those kinds of tree-hugging in the sustainability routes which happened really via kind of personal pressure. My, friends and family asking me you don’t seem particularly happy with this job. And then, yeah, I had what I like to call an Ikigai moment and really looked at what was important to me and what would be fulfilling while still paying the bills and whatnot.
And that’s when I started looking at sustainable business really more closely, this is right around sort of 2000, 2001. And started really looking at business and poverty and eventually moved to Costa Rica and lived and worked down there for a bit, and then came back for an MBA at Cornell, where I worked with Stuart Hart and Eric Simanis and variety of others and really got stuck in, on base of the pyramid.
What was then their main focus and started working with SC Johnson. So that after my MBA, I actually worked for the Africa business and then the entire emerging markets platform at S CJ. And really putting my money where my mouth was to some degree in terms of having studied the theory, having done some consulting work for SC Johnson, basically John Longdale, my then boss who owned the P and L for that region, slid the proposal back across the table and said, okay let’s see, let’s try this, let’s do this. Which is as a former consultant is not something you get very often. And it’s definitely a sort of, heart in your throat kind of moment, but it was fantastic. From then on spent seven years at SCJ and built portfolio of social enterprise, social innovation programs from work in our supply chain to a cause-related marketing around malaria and dengue and Zika, all the way through to really business model innovation and looking at service models and circular models and those kinds of things.
So that’s been the journey and now with Archipel&Co and really focused on that similar kind of work, but working for clients who are trying to drive social innovation and inclusive business in their organizations.
[00:03:19] Venkata Gandikota: Wow. So it’s something that for you it’s been right from the childhood itself. So maybe you haven’t heard the word sustainability back then. Like when did you hear about the word sustainability at first? And what does it mean to you personally?
[00:03:32] Justin DeKoszmovszky: Yeah. For me personally, it’s it doesn’t when you ask us about what it means, the Brundtland’s definition springs to mind, right? So not having a negative impact on future generations, given our activities, to paraphrase. So that’s certainly from a definitional perspective I guess what it means to me, but you’re right back then, there was much more of a kind of, it was very much focused on environmental sustainability. And even as I continue to do the work, I, and I still find myself sometimes defining myself as well. I’m more focused on social sustainability, but the reality is that the sustainability of businesses, sustainability from an environmental perspective, sustainability from a social perspective, In today’s context, given the significance of human impact on the planet and on its natural systems and given the significant impact that business has on human systems, society in general all three of those are completely intermingled and intertwined, and it’s very rare that you can work on one element and not at least have to have your eyes on those other elements.
And that’s very much core to what I enjoy. It’s a massive challenge. It’s much more difficult to run a sustainable business than, a business maybe in the seventies when it was really just deliver what the accountants asked for, and you’ll be fine. It’s absolutely more complex, but it’s also significantly more interesting and that’s that’s the part that I enjoy very often.
[00:04:47] Jaideep Prabhu: Justin, you have a few roles at the moment. Working across the Cambridge Institute for sustainability leadership, the League of Intrapreneurs and Archipel&Co. What’s the link between these and where are you spending most of your time?
[00:05:00] Justin DeKoszmovszky: That’s a good question. The portfolio approach. Yes. So it’s spending most of my time with Archipel&Co. So I’m the managing director of our UK office. I started it about four years ago. I do live in Cambridge, so I’m speaking to you from Cambridge. And so the work with CISL is also very significant and really very fun.
And actually and that’s probably the broadest activity that I have. So that’s largely executive education work. I’m a tutor on one of their courses. There’s single business certificates and work across a couple other programs that they have. And so they’re, that’s broad, it’s across sectors.
It’s middle to senior level people in really, I see that as can we get more people to have this spark and to have a few of the tools and to be start asking themselves the important questions around sustainable business. And so that’s the way I see the CISL work.
The League of Intrapreneurs is almost family. So the league started with Maggie De Pree and a few others who were doing early research at sustainability formerly John Elkington’s think and do tank on how does change happen inside large corporations? And so they found a few of us at the time I was working with SC Johnson, found a few of us who were driving change inside organizations and studied us.
So we were the lab rats, and essentially when the experiment was over, they’d written their report. We, the lab rats said hold on a second. You’ve brought us together. You’ve shown us that there is this trial. You can’t just now be done with us, and put us back into the wild. So that’s what the league really sprang out of this research project that Maggie was leading and now Flo (Florencia) and Jolana and others in the whole team are really driving this global movement of intrapreneurs supporting each other to drive better and more positive and more significant change inside their organizations.
And that’s private sector, public sector, social sector. And we’re now driving the I’m In campaign to get a million intrapreneurs all banded together and supporting each other. So I’m really proud of the work with the league and and really excited to see where the I’m In campaign takes us.
And then with Archipel&Co probably the deepest and the most focused part of this this portfolio, if you like, cause that’s where I’m working directly with intrapreneurs and with other people inside organizations, largely private sector, but also some significant foundations like the Gates Foundation on the how, on, how do we drive specific change? And those are the elements where we really can go deep and do research, do in field testing and really look to, to create hopefully what will be models and examples that help drive us towards an inclusive economy, a more sustainable economy.
[00:07:15] Venkata Gandikota: Yeah. So coming to that point, so you previously spoke about the social aspect of sustainability and then coming to this the social innovation side and the inclusive business side of the work that you do with Archipel&Co, what trends are you seeing in this sustainable businesses?
[00:07:30] Justin DeKoszmovszky: That’s a, yeah, it’s a good question. I think one of the things that’s, I’m an optimist, so I’m skewed towards the positive trends. I’m biased towards those, for sure. I think one of the things that’s fantastic is absolutely that We’re seeing much more integration of these issues, sustainability across functions in the client organizations that we work with.
We’re actually rarely now working with a pure sustainability team or a CSR team, whereas that used to be quite common. And now we’re more often than not working with a brand team or a product team, or even commercial teams who are in charge of selling impactful products, impactful services.
And they want to do them in ways that are integrated and are fit for purpose to the situations that they’re in. And largely these are, are marginalized communities, marginalized segments of markets, sometimes low income in terms of both the market that they’re in, but sometimes simply, it can be in France or the UK, a marginalized community who don’t have the access or don’t have the ability to engage with the business that they’re doing in a typical way and therefore there’s a creativity required to do that. So this sort of integration into functions, certainly the whole conversation around purpose and brand purpose, it’s something that we’ve seen growing massively. And one of the positive things for us is that it’s going beyond a conversation that is purely a brand positioning exercise and brand teams and kind of corporate purpose teams are asking themselves like, wait a minute, we really need something that’s got more than just a kind of marketing campaign behind it. If this is truly the purpose of our organization, We’re going to have to raise the bar. And I we’re seeing purpose be much more operationalized and people getting in teams and getting much more strategic about how they engage on purpose.
And so that’s where we’re coming in and helping them understand the territory, understand the landscape in the system around the issue that they have chosen as their purpose, and therefore define both in terms of impact and strategic and commercial terms, how they’re going to engage with that and do so in a way that really brings that purpose together with the kind of commercial and operational components of their business.
Those two things, I think that integration across functions and the purpose conversation, really getting operationalized and more strategic are really encouraging.
[00:09:37] Jaideep Prabhu: I wanted to pick up on that purpose point that I think that’s really interesting, particularly in large companies, those that might be listed and face shareholder pressures. How’s this being operationalized? I don’t know. Maybe you could speak to your experience at SC Johnson or some other large companies that you’ve worked with.
How does this actually play out in that context?
[00:09:58] Justin DeKoszmovszky: Yeah, happy to. So one example, and this is not SC Johnson, it’s a client we’re still working with them. And I won’t use their name, but there are another very large consumer goods company with a very significant hygiene and soap and cleaning brand and who we’ve been working with for the last couple of years. So since the beginning of the pandemic and they, with hygiene becoming such a central issue, they needed to revisit their purpose and ensure that it was both appropriate for a pandemic situation, but also importantly, important for what we hope will become a post pandemic or at least the longterm, living with COVID situation.
And so we were involved in that work and what we brought were the development and public understanding into the conversation with their marketing agencies and social media agencies, et cetera, who were a part of this project. And so that was bringing in the data if you’d like.
One of the important things to understand is that we’re working for the global brand team, but everything that they do is going to be executed by country teams or regional teams, and then country teams. And so one of the ways that we operationalize this for them was saying, okay. Let’s understand. We did a dual segmentation, one around the height where we call it the hygiene gap. So what is the situation in terms of hygiene in each of these countries that are, we had about 25 in the analysis that were most important countries for them, but then also looking at what is the brand stature?
And so this was a mix of business metrics and the hygiene gap was a mix of public health metrics. And so we looked at both the business situation and the public health situation to really identify and then segment into three groups. These are the countries where you don’t have that significant a business, but there is a significant hygiene gap.
And then we were able to find, budget levels and actual programmatic advice and toolkits for that level. On the other end of the spectrum markets, where they had really significant business and there was also a very significant hygiene gap, we were able to define higher budget levels because they perceived more brand responsibility, but also obviously more budget from a marketing perspective to do more with, but also, a higher degree of focus on partnering, a higher degree of focus on impact and measurement, right? So they would have enough programmatic heft and the budgets to do more measurement.
One example in terms of segmenting markets, both on business and on purpose terms to allow for more focused strategic advice from a global entity to a country level entity. And we also did a lot of work with them and subsequently on measurement and evaluation, and really structuring a framework for them to measure the impact of their activities. And these are largely, in school programs, programs targeting mothers and new mothers, especially. And how could they measure that? Both in terms of brand terms, also in terms of the health impacts that they were having. And so that was a whole series of work that we partnered with the London school of hygiene, tropical medicine on to bring in theory of change and a whole kind of impact pathway thinking to the way that the brand was going to measure the impact of these purpose programs.
[00:12:50] Jaideep Prabhu: So when a company that’s really large global complex has these multiple operations and they then commit to being purpose-driven, does that actually set them up to fail because then they become more the focus of attention and then people identify inconsistencies, they may be doing well in one with one brand in one part of the world, but not so well with another brand another part of the world, how do companies that are really large and complex deal with that?
[00:13:17] Justin DeKoszmovszky: I don’t think there are too many significant brands that are flying under the radar now. So one of the kind of assumptions behind the question is that if the brand doesn’t engage on purpose, it can get away with that. I think that clock is ticking down. And then most of the data on this is the upside data, right? So there’s very rarely the counterfactual of, you know, it would be interesting to see a study and I can suggest this to Jaideep perhaps for some of your colleagues at the Judge, let’s look at brands that aren’t doing purpose and understand if they’re underperforming, because there’s a lot of data, especially out of Unilever and others showing how purpose led brands are outperforming others, but are the other still doing okay? And that would be an interesting interesting analysis. So I’ll throw that throw one question back at you, but I think essentially the way that these companies are looking at this is that they’ve bought into that positive upside potential for purpose-driven brands and then essentially they’re really trickling this down. So they’re starting with their most significant brands from a footprint perspective, but also from a, from an opportunity perspective in terms of impact, but it is trickling down. Certainly Unilever has trickled purpose down and made it a requirement for every single brand to be identifying and working on these.
And just as I said, some of them are going to be doing more and some of them are doing less. But every single brand is doing that within that organization. And I know other big FMCG who have similar mandates and they’re structuring it in on both opportunity and impact perspective, they have central teams who are supporting the brands and doing this work and we’ve worked with some of those on helping the brand teams who are not used to asking themselves these kinds of questions. They’re having to ask different questions or having to look at different inputs and different data to make these kinds of decisions but I think that it really is being cascaded across the organizations in most of the big kind of complex multibrand organizations that I know of at least.
[00:15:02] Venkata Gandikota: So based on what you have told so far, so you said, look, you’re working with these businesses balancing, the purpose driven and social aspects of this and the business aspect of these companies, when you’re working with them. Do you see these businesses doing these as part of a broader sustainability?
Or is it a CSR thing? Because I want to understand how It’s sustainable to be pushed to other parts of the organization. So how integrated is it across various functions?
[00:15:29] Justin DeKoszmovszky: The examples I’ve been talking about are absolutely being driven by brand teams. So teams who own, who are responsible for both the commercial side, but increasingly the impact side. As I said earlier, I think more and more we’re seeing this the responsibility for sustainability being pushed more broadly across the organization, into various functions, even functions that you know, are, the finance function, accounting functions, operations, manufacturing, et cetera, they’re being asked and they’re working much more closely across the organization to deliver it. So, Accounting has been asked to figure out like how do we measure this stuff? How are we going to evaluate these programs in the same way that we’ve gotten very good at evaluating marketing spend, we need to be as good about managing and evaluating purpose spend.
I think that’s how these things are being disseminated. And in terms of how they’re reacting, I think for the most part, it’s certainly there, I can also look at the people I see coming through the Cambridge Institute for sustainability leadership courses and those who are coming into the league of intrapreneurs quite often, there are people who have had this sort of new responsibility land on their desk, but actually for them, it was a breath of fresh air.
It was, wait a minute, I’m actually being asked to do something as my day job that actually matters. And, we see that as a spark with a lot of the journeys of intrapreneurs who we work with there and a lot of the people coming into the Cambridge courses is that yes, it was pushed onto them from on high, within their organizations that, Hey, you now have this added responsibility. But actually they’re diving in with both feet because they’ve really see an opportunity to do something significant and meaningful. And there is as you mentioned in your question, there’s absolutely a balancing act.
That you still have to deliver the commercial numbers and that, that doesn’t go away. It’s not, the businesses aren’t shifting to be philanthropies, but you’re absolutely seeing a blurring of those lines. Between what a business should be delivering in terms of impact and metrics and what may be philanthropies and NGOs have thought of is their territory in the past.
And those parties are partnering together. That with the public sector in the social and the private sector as well. And we do some of that kind of partnership work, whether the, largely when we’re doing infield either tests or scaling up programs that we’ve worked on, that’s when partnering really does become a critical component. And it’s definitely one that for most of this space is really important for on the executional side of things to have that skill set around partnering.
[00:17:45] Jaideep Prabhu: That blurring of lines between the social and public and private and commercial is really interesting. It sounds like it could be challenging too. We see large companies that are obviously, thinking about that shareholders also getting into social impact, the questions about greenwashing and so on on purpose washing, then on the other side, NGOs, charities getting into, thinking about at least cost recovery and charging beneficiaries.
So is it problematic and how do they work together? Cultural clashes that might happen, organizational clashes that might happen.
[00:18:20] Justin DeKoszmovszky: Certainly. My introduction to this was when I was at SC Johnson and leading this portfolio of social innovation programs. And we ended up having a public private partnership with USAID in Rwanda on supply chain focused on Pyrethrum, improving farmer incomes from Pyrethrum and that work we knew exactly what we wanted to do. USAID had a program that met our needs very closely and we had a local partner who was already working with USAID in the coffee industry. And so that one actually came together very nicely and and benefited, it achieved all of our objectives across the three partners.
In other cases and certainly this has been my experience, and also my advice often is it’s really important for each partner to know what they need and what they want out of the other partners. So what is that value exchange? And we’ve done work to actually really map that out in detail when creating partnerships or creating a platform, that’s going to have multiple players on it, if you like.
And that’s how I like to think of partnerships. So there, you really get explicit and you work with each other to understand what you’re each trying to get out of it. And I think you have to be very honest. There are NGOs for whom corporate donations are a very significant source of income and it would be very difficult for them to continue their important operations on the ground without that. And although we, the big brands that just write a huge check to some NGO, they’re being dragged through the mud a little bit as, purpose washing. And they’re not really doing much. It’s hold on. Because that’s actually a really important way that the social sector gets a significant part of its funding. So,I think there’s a space for pure just donation, but increasingly as I mentioned, we’re seeing much more integrated and operational partnerships whereby for instance, a client, we have Leak Seal, which is a latrine improvement solution. They work very much with social sector and public sector to some degree to distribute this latrine project so that they’re selling it via private, retail channels, but also this product is available when the government or NGOs are doing sanitation drives and sanitation campaigns where they’re trying to help people build latrines and improve latrines in their communities. This is a product that can do that it’s been designed for this exact situation, low price point, highly durable, not complicated to install.
And so they’ve got this kind of dual business model where they’re a privately held company. They’ve got a P and L they’re trying to deliver profit back to the company. Although they’re largely on a breakeven perspective right now. They’re a purpose driven component of leak seal, which is a big global home and construction materials company and they have this dual approach. And we worked very closely with Jason and others who, run their partnerships, but that their partnership strategy and their commercial channel strategy their go to market strategy are very intertwined.
And so I guess that’s the way I see that those kinds of partnerships going in the future but certainly the full spectrum of, pure donation all the way through to really integrated approaches is I think will be part of the portfolio going forward.
[00:21:14] Venkata Gandikota: Again, this is about the hard questions. So you’ve been talking about how businesses and how you Archipel&Co help these businesses, balance the business aspects as well as also they keep the impact side of things. How are firms dealing with these hard questions about materiality, measurement, evaluation, and additionality coming back to learning and sharing, et cetera.
[00:21:36] Justin DeKoszmovszky: Yeah. They are absolutely hard questions. The materiality piece, I think though that’s where often we ask ourselves that questions when we’re choosing clients. And when we’re, in an opportunity to, work with somebody new, we ask ourselves like is the question they’re asking us to help them answer really material to their business.
And that doesn’t mean that it’s always, yes, there are many ways to start working on these issues and show the opportunities, show the potential to actually having, you know, an impact and then you work your way towards the most material issues, which are sometimes the biggest and most difficult.
But we try to work on material issues because that’s also where we know that there’s going to be a longevity of focus, the potential to do longer term work, to think more systematically because it just matters more to the company. So I think from a materiality perspective, Some companies are choosing to do innovation and some other programs that are less material to their main business.
But they’re very much using that as a learning laboratory to then learn and try new things and bring that back to the main business. And I think that’s a viable approach and they shouldn’t be, they shouldn’t be lambasted for not approaching the really core most material.
As long as that’s a clear strategy and they can show evidence that they are moving in that direction. And certainly I think that’s, in the oil and gas industry, for instance, I’m not sure how true that is. But in, for other, I think others are focusing in on, as I mentioned, As new teams get more responsible for different kinds of impact, they’re asking themselves, okay, how are we going to measure this? Leadership of organizations are asking themselves, okay, how are we going to embed sustainability into the incentives of our teams? And in order to do that in a fair way, you need to have better measures. And I think that’s where, certainly our work in terms of developing impact pathways and working through from outputs to outcomes to impact, you know, sort of traditional, taking that sort of work that the development world has been doing on how do we measure impact in systems and on these really challenging issues that we’re dealing with, taking that and translating it and adjusting it for a commercial entity is something that we’ve done.
And really there, the key is, to start with what is already being measured to measure what is going to really make a difference from a decisional perspective, not necessarily what’s going to be nice. And we’re less focused on measures that are purely for the public reports.
We’re really more focused on measures and evaluation frameworks that are going to help make better decisions. So it’s really from a learning perspective that we come at that challenge. And I think that those brands and those clients with where that’s the mentality, are certainly finding this, a challenging space, but honestly, the teams, as I mentioned before, in terms of that sort of intrepreneurial spark, we’ve worked with clients where it was hard going, but the entire team, even those who were really going to have to change significantly the way that they work and think we’re really up for.
[00:24:23] Jaideep Prabhu: I wonder, Justin, if you could give us an example of that.
[00:24:26] Justin DeKoszmovszky: Yeah. We’ve done some work with a client in the haircare space. Not a typical BoP initiative, but actually a haircare and as an industry, Is a massive, first rung on the economic ladder in a lot of places.
And we did some work with a major global brand on how could they engage, lower income hairdressers, specifically female hairdressers coming into what work was done in India had been predominantly a male dominated industry. And we identified two things. One was, they had a sales program that was largely focused on training hairdressers, creating loyalty, and then, providing the product.
One of the things we identified was that they were doing a nice job through the twenties when these female hairdressers were training and apprenticing and establishing their businesses. And some of them were still in largely informal, some of them had formalized to some degree, but every single one of them faced a go, no go decision when they got married. And they all wanted to get married and we did a fair amount of ethnographic work on this, most of them wanted to get married and they knew that the day after they got married, their new husband or their mother-in-law would have a go no-go decision on whether they would continue their business or not.
And none of them said this with a real lament. It was just matter of fact. And so we brought that insight back to the commercial team who had been used to just training on here’s, how you do hair coloring. And we brought to them the thing, look, you actually need to start understanding how you engage on the social elements around the hairdresser and how you can help these, especially emerging female hairdressers.
Essentially pitch their mother-in-law on why they should continue their business. Because otherwise all that investment you’ve made over maybe 10 years, while this woman’s been apprenticing and learning and getting loyal to your brand and your products, all that can go to zero if her mother-in-law essentially decides no no, you should be a stay at home wife.
And so that requires that team to think very differently. Suddenly the commercial metric need to shift and you need to understand a little bit better, okay, how are we engaging, female hairdressers and also engaging them on very different topics, new materials, new training and different conversations.
And so those that’s, I think, one example that struck me with a pretty radical shift from a very product and training focused approach to a much more insight driven and socially relevant approach that achieved significant improvements in loyalty and outcomes for all, for both the brand and the hairdressers we were looking at.
[00:26:42] Venkata Gandikota: That’s a great example. Do you have any other examples that you can share? Or otherwise where you see sustainability and social impact as important issues for businesses to be involved in. So you just talked about this in your previous example about this the inequality aspect of it, but maybe can you bring inequality, environment and technology? What are the links between those?
[00:27:04] Justin DeKoszmovszky: Yeah, absolutely. I think the technology can absolutely be a massive lever for improved outcomes, for access, certainly to information of course. But even access to other things. And we’ve seen that with, the kind of revolution around pay as you go and in certainly in countries where, you know, mobile payments and the need, the kind of transaction costs have just been radically reduced via technology and that’s massive and that’s continuing and it’s spreading and it’s phenomenal to see. But there are also equity elements within that where, we’ve worked with waste pickers in Kenya, for instance and waste pickers are, and these were informal urban waste pickers. Largely undereducated, did have access to phones, not necessarily the smartphones, largely feature phones and, or, second, third generation smartphones where, you know, neither the screen or the camera were working well enough to work the way that we conceive a smartphone working.
But nonetheless, they had access to technology, but actually their ability and their engagement with that technology was very limited. And we were working with a waste collection and recycling company there and really helping them improve the way that they engage with the informal sector.
And so we knew we needed to have a technology element and we were building an incentive scheme that would work via phone, but obviously it had to have an SMS interface. And we also knew that it had to have a boots on the ground human interface as well. And that’s something that we’ve seen in this example with waste pickers was something we’ve seen in work we’ve done with agro dealers and the last mile retail sector in the agricultural sector where, engaging them, even though, they’re established, they have an ongoing business, they will absolutely have a phone, but the trust level, when you come to them with a pure technology play, You’ve got to still establish a relationship. There’s still trust there, which needs to be established. And very often, we’re having to work with clients and remind them to say, look, you absolutely have a great technology and we can build this, new app and then it’ll get downloads and all that. We’ve looked at usage. We know what kind of devices are really in the hands of marginalized communities and those devices are less functional than you think they are. And their usage is really limited to things that deliver. So they’re still making phone calls, actual phone calls. They’re absolutely using WhatsApp for messaging and for actually marketing their own, their businesses. And the other one was the calculator and those were the top three apps being used. And then in markets where you had mobile. Those were were quite often being used too. So, m uch more limited and focused usage of technology in more marginalized communities.
Understanding that better, remembering that you still need to build trust. And that often is face-to-face high touch and therefore a significant investment in order to get the buy-in and to make sure you have the usage of that technology that you expect to have. But then with those things in place and applying the network effects and all those kinds of things that you can, we’ve seen really fantastic uptake.
So, The example of the waste pickers, the incentive scheme has had a huge uptick in both the waste picker income, but also for the recycling company in terms of the quality and the volume of recyclable materials coming back to them. We’ve absolutely been able to design a scheme that is technology driven, that there’s a, a CRM backend to it. And there’s an SMS, or even a smart phone if you want a front end, but it had to also have that personal and initial kind of personal and boots on the ground approach to it as well.
[00:30:19] Jaideep Prabhu: Justin, when you step back and look at this whole landscape and you think about the future, what is your overall feeling? Are you optimistic that we can deal with some of the challenges of climate change and that business can play a role?
[00:30:33] Justin DeKoszmovszky: I’m optimistic because I don’t see an alternative. And I think, as a species, when our backs are against the wall we tend to come up with a solution. That optimism is absolutely challenged on a regular basis. And certainly, the run up to COP 26 is throwing up all kinds of examples that are challenging my inherent optimism. But I am optimistic. I’m in a really privileged place where I get to work on these solutions. I get to engage clients and make that link between the impacts that they need to have, but also looking at their products and their manufacturing and bringing in holistic thinking to these issues while still having The infield and the very commercial hard-edged conversations, where it gets very real in terms of, okay, we’re going to make this investment, we need to have some return on it. How are we going to do that? I’m optimistic. It’s not going to be easy. And I think there’s going to be a fair amount of of pain across the board, especially from climate change and shifting weather and patterns and increased extreme weather events.
But I remain optimistic and certainly as I said I’m privileged to be working on these issues and just, looking to make the important happen and what’s important is going to be a blend of the sustainability elements and those business elements, because that’s what I know how to do essentially.
So yeah, I’ll continue working on it and hopefully I won’t solve it by myself, I’m quite confident. But working together continuing to push ourselves, ask ourselves hard questions and keep raising the bar. I am optimistic.
[00:31:53] Jaideep Prabhu: That’s a wonderful place to stop Justin. While we were speaking, there was a bird tweeting in the background, presumably in agreement or in hope as well. thank so much for this conversation.
[00:32:04]Venkata Gandikota: Exactly my thoughts, Jaideep. It was wonderful having this conversation with Justin. So Justin, thank you so much.
Venkata Gandikota is a frugal innovation and impact investing evangelist and Prof Jaideep Prabhu is a Professor of Marketing at Cambridge University’s Judge Business School and co-author of an award-winning book on frugal innovation.
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