Scaling social enterprises internationally is recognised as a fruitful pathway for the sustainability of the organisation and the potential to grow in impact.
However experience shows that overstretching and expanding beyond the organisation’s capabilities can lead to fragility.
So how do social enterprises grow across borders? What are the challenges and pitfalls to avoid? And how have successful social enterprises achieved international growth?
Drawing on insights from innovators from the Reckitt Catalyst cohort, we lay out pathways to international expansion for social impact organisations.
Sizing for capacity
Innovators that have participated in the Reckitt Catalyst have grown their footprint across communities and borders, but to do so have taken a stage approach to growth. This starts first within the organisation, through identifying the needs and capacity requirements to be ready to scale. For smaller organisations, this is not only about having the right stock or infrastructure in place, but also accounting for the human demand on team-members and leadership.
Adeola Alli, founder of digital health provider OneHealth Nigeria, lists the critical questions to ask before deciding on international expansion.
“Do we have the operational readiness for that? Have we got the existing infrastructure that allows digital to really scale in the way that we need it to be, such as logistics, integrations, and then working capital and mental workload, do I have the expansion capacity to deal with, you know, firefighting in Nigeria and trying to expand at the same time?”
Zara Isa Modibbo, managing partner, Débbo Africa
To overcome these challenges innovators including Zara Isa Modibbo, managing partner of digital diagnostics and screening start-up Débbo Africa, have deployed a hub and spoke model, with the original location or main site servicing as a base, with then satellite locations in target geographies with the potential to scale once the demand is there.
“We have some centralised lab systems, but we’re able to pull in samples from other little regions. Because of technology and virtual health, we’re able to provide that service to all the 36 states [in Nigeria] already.”
This can also occur within one national jurisdiction, with languages, regulatory requirements and demand profiles varying from state to state or province to province. Setting up the process for domestic expansion can then provide a playbook for international growth in future.
Others have deployed digital first models in new markets, to reduce the cost of establishing new physical infrastructure and conduct market testing before committing fully to an additional location.
Partnerships on the path to growth
Overcoming the daunting task of growing into a new market can be achieved through identifying and collaborating with like-minded organisations in the target geography to test and trial a new product, before fully committing to the new country, as Sylvia Kengere, Regional Expansion Lead, at Sanivation highlights.
“On quick projects, we are partnering with local companies for each of the countries. The local company is going to lead on their project proposal, and then you are coming in with international expertise.”
In some cases, local partnerships can be necessitated due to local ownership requirements, but even when this does not apply it can be an effective strategy to leverage local knowledge and smooth the path to integration.
Founder and CEO of OneHealth Nigeria, Adeola Alli
But just as with a partner in life, finding the right partner in business comes with a period of getting to know one another before the full commitment, Alli said.
“We’re in the dating process before we partner, understanding the regulation, what they require. That’s a lot of travelling, being in calls, being in programs.”
This ensures the values of the two organisations align, the financials of the partnership stack up and there’s a clear understanding of what the future holds, not just the current state of affairs.
Importance of government
Crossing borders will inevitably require engaging with local governments and bureaucratic systems, some of which may be unfamiliar to an organisation. For innovators who have made the leap, this can involve timing expansion to align with election cycles, and being ready for timelines to stretch.
“One of the biggest mistakes I think we made initially is underestimating the timelines on closing a project,” said Kengere. “You think maybe in six months, seven months, you’re going to close this. One year down the line you are still at negotiation stage.
“Being realistic, especially with government contracts, that is going to take time, and any contract that has external influences to really have a buffer from six to 12 months.”
In other cases, this has also meant assessing the government procurement landscape, particularly when the service is subsidised or has a direct interface with public bodies, including utilities, as Meltus Mugomi, country director for Zambia at sanitation provider Fresh Life explains.
“We prioritise before we go into an area. We map these customers and then we list them in terms of who are the key stakeholders. Who are these people that without them we cannot implement? And then we prioritise who to engage.”
Foresight in four
Putting these into practice, what are the mantras by which social innovators grow across borders. Here’s four.
- Kengere: “Don’t scale your losses. Always be flexible to refine your market entry strategy. It’s ok to pause, to pivot anything. No one is going to judge, only yourself.”
- Modibbo: “There are lots of similarities between us builders and the way we tend to want to scale, and so with that, you know, sharing stories like this, reaching out.”
- Mugomi: “Market entry is 70 per cent political economy and 30 per cent technical design. The solution is rarely the problem. Alignment is.”
- Alli: “Going deep is a lot better than scaling too fast.”
