Tag Archives: Partners in Health

The how-to-guide to “the fortune at the bottom of the pyramid”

A review of Reverse Innovation: Create Far From Home, Win Everywhere, by Vijay Govindarajan and Chris Trimble

@@@ (3 out of 5)

Back in 2004, a respected marketing professor at the University of Michigan named C. K. Prahalad raised eyebrows in the business community with a widely-read book titled The Fortune at the Bottom of the Pyramid. In 25 words or less, he postulated that multinational corporations could grow their markets and their bottom line by reaching out to the billions of poor people who crowd emerging nations across the globe. Much of Prahalad’s book consisted of “case studies” — written by his graduate students — that purported to support his thesis. Unfortunately, practically none of them did.

Here, eight years later, is the book that Prahalad — now, unfortunately, deceased — should have written. Govindarajan, a professor at Dartmouth’s Tuck School of Business, and Trimble, a younger Tuck faculty member, have formulated a concept they call “reverse innovation” that is the key to doing business in those emerging markets that excited Prahalad’s lust. Their book, too, is dominated by case studies, but in this case the examples do a good job of illustrating how multinational companies have successfully developed products that gained a foothold in developing countries — though by no means necessarily at “the bottom of the pyramid.”

“Reverse innovation” — an ethnocentric term — begins with the conventional wisdom that business innovation takes place in rich countries but asserts that transnational corporations wishing to become established in developing markets must cast off traditional thinking and develop products and services within those markets and base them on the needs and wants of people living there. Govindarajan and Trimble advocate reverse innovation as the alternative to exporting rich-country products and services with minor adjustments, a strategy that many companies have found unsuccessful. (The authors call this strategy “glocalization.”)

The case studies in Reverse Innovation span a wide range of needs, desires, and prices. The authors write about an extremely inexpensive electrocardiograph machine developed and marketed in India by GE Healthcare, lightweight enough for use by individual physicians on rounds in villages. They relate the story of the development from scratch of a lentil-based new snack food by PepsiCo in India, and of a new automotive “infotainment” system crafted through an international effort by Harman and eventually purchased by Toyota. Other examples include Procter & Gamble, Logitech, and the nonprofit Partners in Health.

Most of the case studies are great stories, even if they are better illustrations of how multinational corporations can make more money than they are of how poor people in emerging nations can gain access to needed goods and services at affordable prices. However, the bulk of Reverse Innovation is given over to discussion about change management in large corporations: it’s clear that the real challenge these companies face in growing their markets is to get around the massive barriers thrown up by organizations that are too large, too successful, and too set in their ways. The authors write, “Reverse innovation begins not with inventing, but with forgetting . . . You must let go of the dominant logic that has served you well in rich countries . . . Reverse innovation is what we call clean-slate innovation.”

Govindarajan and Trimble make it clear that the only way for a transnational company to bring about reverse innovation is to (1) start with a champion at the top, usually the CEO; (2) appoint a brilliant and politically savvy person to head up an “LGT,” by which the authors do not mean to suggest gender preference but simply to abbreviate “Local Growth Team;” (3) recruit to the team a group of mavericks willing to ignore the conventional rules; and (4) work on site in one of the major emerging markets, far, far from headquarters.

Reverse Innovation is well-organized, well-written, and delivers on its promise. Why, then, have I awarded this book only three @@@ out of 5? Out of pique, perhaps, more than anything else. For one thing, the do’s and don’ts of management in large organizations are  . . . well, for me, the only apt word is boring. And I can’t get past my aggravation that this is yet one more instance of brilliant minds being lashed to the task of making the rich richer.

2 Comments

Filed under Nonfiction, Poverty

Strength in What Remains, by Tracy Kidder

A review of Strength in What Remains: A Journey of Remembrance and Forgiveness, by Tracy Kidder

@@@@@ (5 out of 5)

“Strength in What Remains is the story of Deogratias,” as the author writes (more succinctly than I could) in a post on Amazon.com, “a young man from the central African nation of Burundi. In 1993, through no fault of his own, he was forced onto a terrifying journey, a journey that split his life in two. First he made a six-months-long escape, on foot, from ethnic violence in Burundi and from genocide in Rwanda. Then, in a strange twist of fate, he was, as it were, transported to New York City, where it sometimes seemed that his travails had only just begun.”

Deo, as he is called, was a medical student in Burundi when the genocidal campaign was launched. He fled on foot for hundreds of miles through the bloodcurdling upheaval of both Burundi and Rwanda and eventually arrived in New York, penniless, friendless, and hungry. Kidder relates Deo’s story both before and after his escape from the violence in East Africa, through an Ivy League education at university and medical school to his current work building a medical clinic in his homeland, a disciple of the famed Dr. Paul Farmer (the subject of Kidder’s next book).

Tracy Kidder is one of America’s most accomplished nonfiction writers. He has won most of the major awards that writers can receive. I was first attracted to his work two decades ago through The Soul of a New Machine, his now-classic look at the fast-changing computer industry, which was an extraordinary experience for me. Kidder seems to write where his instincts take him, covering such diverse topics as his home town and building a house to the exotic stories of Deo and Paul Farmer. Everything of Kidder’s that I’ve read has been rewarding. I recommend Strength in What Remains for the sheer humanity of its subject — and its author.

ISBN-10: 0812977610

ISBN-13: 978-0812977615

Leave a comment

Filed under Nonfiction, Poverty