Pi-Squared Part 4: Building Resources and Capabilities
by Anita McGahan
Wednesday, November 6, 2024
Learn more about Pi-Squared: Private Innovation in the Public Interest at https://pisquared.burnescenter.org.
Welcome to the fourth post in the five-part series on insights that are emerging from my conversations with thought leaders about supporting companies and other private-sector innovators that want to contribute in a sustainable way to the public interest.
This week, I focus on what the conversations with thought leaders emphasize about building resources and capabilities. (The prior posts in this series were on creating a compelling aspiration, engaging stakeholders, and excelling in value creation). Building resources and capabilities is an essential step for bringing a great idea into reality. Nothing can occur until you have the means to make it happen. The conversations that I had with friends on this topic put a broad variety of issues on the table. From an agile learning platform in Nigeria to one of the world’s most impactful business schools, the issue of resource acquisition is pervasive.
The conversations that I’m featuring on this topic are with Tunji Adegbesan, Raja Roy, and Jasjit Singh. I also reflect below on ideas that came up in prior conversations, particularly with Samina Karim, Roger Martin, and Thomaz Teodorovicz:
1- Large companies have a special role in supporting innovation at scale to relieve severe resource shortages of essential services. Tunji Adegbesan, a star student at IESE Business School in Barcelona, returned to his native Nigeria to start Gidi Mobile, a learning-game company that enrolled 300,000 teenagers onto its platform at its peak right before the pandemic. A passionate advocate of learning, Tunji described the gigantic scale of the challenge of providing basic education to the country’s 110 million young people. With millions of students left unserved, just about any effort makes a difference, he said. Gidi Mobile made a commitment before the pandemic to do just that at scale by distributing its games through 4,000 schools. And then everything changed in a heartbeat. Public schools in Nigeria shut down completely for nearly two years, taking Gidi Mobile with them. Tens of millions of the country’s 110 million children had no public education at all. Now, nearly five years later, Gidi Mobile is reviving with the help of two of Nigeria’s largest companies, which see the platform as an essential service for the country’s vibrant, youthful communities. In our conversation, Tunji explained how executives in these companies are willing to do what it takes to elevate education because it’s the right thing to do – because the need is so great. You want to succeed as a telco or a bank in Nigeria? You need to make sure that your customers and employees have the basic skills to use your products safely and capably. I was left after our conversation with a new appreciation for the ways in which companies can engage in Nigeria and other countries with educational challenges at this scale.
2- Non-government organizations can serve as proof-of-concept, entrepreneurial ventures. The different roles of small and large organizations in responding to resource shortages came up in prior conversations. Samina Karim described how a non-governmental organization in central America experimented through after-school programs before implementing innovations at scale in the school system. Roger Martin got fired up about the important role of social enterprises in experimenting with ideas before they get scaled profitably by companies. Thomaz Teodorovicz described how – surprisingly — a large Brazilian company found profit in providing general education at scale to low-income contract workers. The idea that NGOs and social enterprises can test ideas that can be pursued profitably by large companies came up repeatedly.
3- Deep sustained commitment in companies generally requires goal alignment between organizational goals and personal goals. Jasjit Singh and I talked about how the firm is a tool for accomplishing important goals. The structure of a company is built around profitability. Unless there’s some path to profitability, we can’t expect a company to act as an effective tool for organizing effort. This was a central message of Roger Martin’s remarks as well. We can’t expect managers to jeopardize their careers and pursue social-impact goals that are not realistically linked to their employer’s objectives. It may be that a corporation – especially a large, publicly traded, widely held corporation – is not an effective vehicle for accomplishing a big, diffuse goal. What may be an opportunity is to reduce that goal into component parts, one or more of which is profitably actionable. But the key here is that the corporate form is a resource – a tool – that can be deployed when it’s useful. But when it can’t be aligned, then it won’t work.
4- Organizations can develop skills at orchestrating other organizations. Raja Roy describes the complexities and pressures on NASA as it sought to cultivate capabilities at an entirely new level to support the Space Shuttle program. These involved the orchestration of major competitors in the aerospace industry in the building of different parts of the Shuttle System so that they could be re-used. NASA had to consider issues such as modularization for re-usability; long-term competition over service contracts; and firm-level competencies. The companies had a lot of capabilities – and a lot at stake in their portfolio of defense-department relationships and reputation. NASA’s role as orchestrator created extensive challenges around anticipating corporate incentives over the short vs. long term while simultaneously considering how its expertise could be leveraged to make the Space Shuttle perform cost-effectively and at scale. The broad implication? Capability development requires understanding a wide range of conflicting concerns.
5- Resources and capabilities must be deepened and reconstituted over time. Many of our conversations about resources and capabilities are focused on acquiring them. This is of course understandable: Many essential capabilities must be invented as NASA orchestrated the design of the Space Shuttle, and as Nigerian educators sought to meet the needs of children before and after the pandemic. At the same time, their cultivation and development are critical to the achievement of excellence in performance. The right organization structure, governance, learning, knowledge, and systems must be improved and enhanced to sustain excellence.
Next week, you will hear from me further about sustaining excellence for private innovation in the public interest. Please stay connected with us! Sign up for updates and visit our website.