This is the story of a successful partnership between two organizations that share a passion for toilets: an NGO with 30+ years of making markets work for the poor and the largest toilet manufacturer in North America. Eventually, they made more impact together than either organization could make alone.
Combining diverse expertise
The idea of a partnership started back in 2011 at a water and sanitation conference in Delhi. Cordell Jacks, the co-director of iDE’s Global WASH Initiative, and Jim McHale, VP, Research, Development, & Engineering for American Standard, met for coffee. It didn’t take long before Cordell and Jim realized that they had the makings of a perfect partnership.
iDE would bring local expertise of rural supply chains and last-mile distribution in Bangladesh, as well as a host of sanitation market development experience gained from projects in other countries. American Standard would bring 140 years of state-of-the-art product design, computerized fluid dynamic engineering & modeling, as well as global sourcing, manufacturing and state-of-the-art product testing.
Together they had the right combination of skills and knowledge to make a difference for the 2.5 billion people who live without improved sanitation in developing countries.
Cordell remembers the potential of the partnership: “American Standard and iDE are two organizations with complimentary skill sets. Both are dedicated to increasing and improving sanitation globally. Together, we demonstrated that there is a sustainable and profitable business model in the heart of one of the most challenging market conditions in the world. It is an amazing example of impact that can be had with innovative public private partnerships.”
Accepting the challenge
American Standard saw a whole new market in the 2.5 billion people who are typically overlooked by big business. Too many corporations assume the poor have no purchasing power. But the most forward-thinking brands, like American Standard, are starting to take notice of the enormous potential in the bottom of the pyramid (BoP) customers. With a grant from the Bill & Melinda Gates Foundation, American Standard accepted the challenge to create a new latrine product for poor people in Bangladesh.
A local understanding from iDE
As far back as 1982, Paul Polak, iDE’s founder, walked and talked with small farmers in their one-acre fields. He spoke with them about their challenges and their dreams. iDE is still inspired by Paul’s approach of asking questions first. Today, iDE practices human-centered design (HCD), a methodology that identifies solutions to various challenges by placing users at the center of the design process.
In 2012, iDE led American Standard through the human-centered design process in Bangladesh. iDE was working under a grant from the Swiss Agency for Development and Cooperation (SDC) and the Water and Sanitation Program of the World Bank (WSP) to implement the “SanMark Pilot project in Bangladesh.”
Tamara Baker, co-director of iDE’s Global WASH Initiative, recalled, “We opened new doors and ways of thinking for each other.” Together they spoke with small producers, salespeople, customers, and merchants. They field-tested prototypes, gathered customer feedback and ideated on product design. They also understood the potential market dynamics that could be strengthened to form a sustainable business model.
Product expertise from American Standard
American Standard joined iDE in Bangladesh for a deep dive to ensure their solutions would be feasible, desirable and affordable. The designer from American Standard, Daigo Ishiyama, provided the big “a-ha.” He noticed something only a fluid-dynamic engineer would notice. Previous latrine products use too much water. Meanwhile, Bangladeshi are accustomed to carrying a very small amount of water into the latrine. When you have less water, you need a smaller trap. The confined space creates a whirlpool effect and provides the needed flush power.
Then, American Standard created an ingenious counterweight trapdoor solution that effectively sealed off the feces from the open air. And, of equal importance, the trap hid the feces from view of the user. Customer feedback revealed that people didn’t know it was possible to not have to see feces when inside a latrine. They were thrilled! The resulting product was named the SaTo pan (pronounced SAH-toh, derived from “Safe Toilet”).
The American Standard team also provided plastics knowledge, the ability to rapidly prototype in plastic, as well as the financial resources and influence to support iDE’s longer-term engagement with domestic plastics manufacturer RFL Plastics Ltd. “Thanks to our partnership, we suddenly saw plastic as a very interesting material for scalable, sustainable products for improved sanitation,” said Conor Riggs, Technical Director – Programs at iDE Bangladesh. “It was the spark that led to other innovations in our program, particularly the development of a fully upgradeable, mass-producible latrine system that includes the SaTo Pan that will go to market in the fall of 2014.”
The case for the BoP
BoP business models can and do work. iDE staff see it daily. iDE operates programs in 11 countries across Africa, Asia, and Central America, that are laying the groundwork for corporations to enter this new frontier. iDE asks private enterprises to think beyond charity. A sustainable business model benefits both the private corporation and the people they serve. Armed with the right insights, private corporations can make an impact and make a profit. These are some of the foundational principles of iDE, which emanate from its founder, Paul Polak.
Paul recently expressed his approval of the collaboration that led to the SaTo pan: “Since poor sanitation is a key source of illness in developing countries, I am delighted to hear that iDE has collaborated with American Standard, the biggest toilet manufacturer in North America, to produce and start to distribute a radically affordable product to prevent the spread of diarrheal disease. I am particularly impressed with the price of $1.50, which could make it accessible to millions of people. It is simple, affordable devices like this that make the biggest impact.”
There is still a lot of convincing to do out there. American Standard is a pioneer. Their next horizon? Zambia—where they know it’s not a question of “if” the markets will be profitable, it’s only a question of “who” and “when.”
On Friday April 13, iDE was selected as the winner of the Wharton School’s inaugural Barry and Marie Lipman Family Prize for our innovative, market based water, sanitation & hygiene projects. We’re extremely honored to be the first recipient of this prestigious award!
Here’s a short video produced for the award ceremony:
Philadelphia, PA, April 13, 2012 – The Wharton School of the University of Pennsylvania announced today the winner of its inaugural Barry & Marie Lipman Family Prize – iDE, a social enterprise that has pioneered innovative, market-based approaches to safe water and sanitation access. Chosen from hundreds of organizations worldwide devoted to social impact and building sustainable solutions for social and economic challenges, iDE received $100,000 and bragging rights at a gala marking the event’s culmination last night at the Wharton School. iDE and the two other finalist organizations, KOMAZA, a pioneering forestry social enterprise, and MedShare, a distributor of surplus medical supplies, will all profit from unprecedented, synergistic opportunities with Penn and Wharton.
“The $100,000 is one thing but the partnership with Penn and Wharton is just absolutely outstanding,” said Cordell Jacks, the Water, Sanitation, and Hygiene (WaSH) Program Co-Director at iDE. “We really believe that we’re going to change the world with toilets and we think that a partnership here is going to bring together great people, creative ideas and really solve a global public health challenge, something that is very finite and can be achieved in our lifetime. So it’s just really exciting to do this together with the University.”
About the 2012 Lipman Family Prize Winner:
iDE is an international nonprofit organization helping poor rural households in the developing world to access the tools and knowledge they need to increase their income. iDE’s productive water solutions create and increase both food production and incomes, and with innovative drinking water and sanitation technologies, iDE gives rural households the basis for healthier and more dignified livelihoods.
iDE’s involvement with improved sanitation began in Cambodia, which has 16 percent sanitation coverage. Cambodia has the second to worst rural sanitation coverage outside of Africa, at only eight percent. Furthermore, Cambodia loses approximately seven percent of its GDP, USD $448 million per year, due to poor sanitation. iDE Cambodia’s Sanitation Marketing Program (SanMark) recently reached the milestone of 10,000 latrines sold and, in 2011, the organization was awarded a major grant from the Bill & Melinda Gates Foundation, the Stone Family Foundation and the World Bank Water and Sanitation Program (WSP) to scale the SanMark approach nationally in Cambodia, targeting an additional 160,000 households. Building further on these successes in Cambodia, iDE has recently secured funding for WaSH activities in Bangladesh and Nepal with a $400,000 UNICEF-funded scoping and piloting project utilizing the model and support of iDE Cambodia to promote both water filters and low cost, sanitary latrines.
About the Lipman Family Prize:
Currently in its inaugural year, the annual Lipman Family Prize has been made possible by a $6.5 million gift from Wharton alumnus Barry R. Lipman and his wife, Marie.
“For more than ten years, I have had a strong desire to impact the non-profit/social responsibility sector,” said Barry R. Lipman, co-founder of California law firm Goldfarb Lipman. “Through a partnership with the University of Pennsylvania and the Wharton School, my dream has been realized with the awarding of the first Lipman Family Prize. Penn and I eagerly look forward to annually honoring an organization whose mission is to improve the lives of those less fortunate.”
Administered by the University of Pennsylvania through the Wharton School, the Lipman Family Prize is governed by an interdisciplinary Steering Committee comprised of faculty, and staff from across the University of Pennsylvania, drawing upon the expertise of such entities as the Center for High Impact Philanthropy, Wharton’s Center for Leadership and Change Management, the Netter Center for Community Partnerships, and the School of Social Policy and Practice.
The selection of Prize finalists involved a Student Selection Committee that reviewed initial submissions and conducted the due diligence process under staff guidance, and a Prize Committee that selected the finalists and chose the winner.
“This is the beginning of a long partnership with iDE, KOMAZA and MedShare as new members of the Wharton and Penn community,” said Thomas S. Robertson, the dean of the Wharton School. “The possibilities of these cross-sector collaborations are powerful and we look forward to our ongoing role in fostering sustainable new solutions for the advancement of society as a whole.”
There’s a lot of excitement and momentum from volunteers showing up to help spread the word in our local community. We’re going out and hitting the streets with postcards, stickers, tee shirts to share facts like these:
Did you know that it takes 635 gallons of water to produce one hamburger? Or that 397 gallons of water are needed to produce 35 oz of cane sugar? The truth is, without water there is no food. Water scarcity already affects every continent and more than 40 percent of the people on our planet. This year’s International World Water Day focuses on the critical relationship between water access and food security.
iDE, along with Card Gnome, Green Spaces, and our event sponsors, brings Water4Food 2012 to the Denver area to raise awareness for this issue and money to prevent famine for families in West Africa.
What can individuals do?
follow a healthier, sustainable diet;
consume less water-intensive products;
reduce the scandalous food wastage: 30% of the food produced worldwide is never eaten and the water used to produce it is definitively lost!
produce more food, of better quality, with less water.
There’s still time to volunteer! If you can spend a couple of hours taking stickers and information sheets to Denver area businesses, sign up at volunteer.water4food.com. All volunteers are invited to join us at the Water4Food 2012 party tonight at 5:30pm at Green Spaces.
Purchase a Water4Food 2012 greeting card plan at Card Gnome, and 50% of the proceeds will provide families in the Sahel region of West Africa with the tools and knowledge needed to create and sustain a sustainable income from small plot farming, enabling them to increase food security and lift themselves out of poverty.
Your plan allows you to send 25 cards throughout one year. You choose the perfect card from Card Gnome’s selection of thousands of cards for all occasions; write your personal message and Card Gnome mails it for you. You can even schedule cards for delivery a year in advance.
With the purchase of a card plan, you gain a ticket with a guest to the party at Green Spaces tonight. Just show up and we’ll have your name on a list along with others.
If you would like to donate directly to iDE, please click here.
There are many ways to get involved in this issue, no matter where you are!
Visit the U.N.’s World Water Day site (www.unwater.org/worldwaterday/) to find World Water Day events all over the world, downloadable informational materials and more.
Twitter: Join the conversation using #Water4Food and #WorldWaterDay and give a shout to @CardGnome and @ideorg or any of the other great sponsors listed below.
I’m incredibly inspired by all of these volunteers who are taking time out of their busy days to help us tackle this issue. Thank you to our sponsors, partners staff, volunteers, and news media who are working hard to spread the word on this very important day.
What is the future of the corporation? How can capitalism be a force for positive transformation?
iDE Founder Paul Polak’s recent talk at TEDx Mile High may challenge your assumptions about the answers to these questions. His talk details the tremendous shared value that lies within product and system designs for the bottom 90% of the income pyramid.
10,000 of them, actually. Congratulations to IDE Cambodia, for facilitating sales of 10,000 IDE EZ Latrines in just over a year.
IDE Cambodia staff celebrate the 10,000 Easy Latrine milestone
Here’s the full story from IDE Cambodia:
Phnom Penh, Cambodia – January 14, 2011 – In only a little over a year, IDE’s Sanitation Marketing Project in Cambodia has reached a landmark of 10,000 latrines sold. This marks more latrines sold in the project areas in the past year than in the last four years combined, a tremendous step forward in public health for a country where only 18 percent of the rural population has access to a toilet.
What is even more remarkable about the Sanitation Marketing Project’s success is that all the latrines were sold without any price subsidy. Instead, the Sanitation Marketing Project has applied market principles and world-class product design to the challenge of rural sanitation in Cambodia.
A common local latrine, which could run up to $150, was well beyond the means of the average rural Cambodian, whose average annual income is a mere $135. With help from IDEO designer Jeff Chapin, IDE redesigned the latrine to make it more user-friendly—easy to buy, easy to build, and easy to use. The resulting “Easy Latrine” costs only about $35 and can be assembled by the families themselves in a day.
“The project began by treating people as customers rather than beneficiaries of charity,” said Michael Roberts, Country Director for IDE Cambodia, “and we have seen that many rural Cambodians are able and willing to pay for something that delivers real value.”
The latrine redesign is integrated with a social marketing campaign to stimulate demand. By marketing the latrine as a status product instead of lecturing people about the health woes of defecating in the fields, the Sanitation Marketing Project triggered people’s universal desire for “keeping up with the Joneses.”
Previously an unsexy product, the rapid growth in demand is now being met by local entrepreneurs in the latrine supply chain who have been trained by IDE in efficient production methods, business skills, and proactive methods for generating sales. There are now 22 Easy Latrine producers, who have inspired ambitious competitors to also join in the booming latrine market.
Not only has the Sanitation Marketing Project made tremendous strides in improving rural sanitation in Cambodia, it has done so by leveraging the market and improving the livelihoods of local entrepreneurs. The program has been recognized internationally for its success, winning the International Design Excellence Award and recently being inducted to the World Toilet Organization’s Hall of Fame.
In Cambodia, where scarce water resources and poor water quality are a pervasive constraint to rural development, we have been using water as a strategic entry point in our programs addressing poverty.
If you are attending World Water Week, please stop by the Nestlé booth to say hello.
Agriculture in Cambodia is at a very basic level with some of the lowest yields in the region. Consequently even very simple improvements in the quality of inputs or cultivation practices can have a big impact on productivity. Since the mid-1990s, we have been working to help Cambodian farmers increase their incomes. We began by introducing small-plot irrigation devices like foot powered treadle pumps and low-cost drip irrigation systems.
Incomes improved but even when their water constraint was solved, farmers would quickly run into another wall, which would limit profit. We spent a lot of time listening to them and found that to get the maximum benefit from better water control they needed to be able to access a more integrated package of agricultural inputs and advice.
Originally, we used our staff to deliver these services but then we realised that if a few inputs and a little advice could create significant value for small farmers then there must be a viable business in there somewhere. In 2005, we began to train and support a network of small rural entrepreneurs to become Farm Business Advisors (FBAs), selling a range of products and services to help small-scale farmers improve their farming techniques and income.
The surveys we have conducted with FBA clients demonstrate that on average, their income has increased by about USD 150 per year. This is a significant change in areas where cash income in an average household is only about USD 30 per month. The average monthly income for an FBA is currently about USD 60. This has been increasing month by month but is still too low given the amount of work they do. For now, most FBAs are content with this because of the high value that they place on the training that they receive. In the long-term, we estimate that FBAs will be able to make more than USD 200 per month as their client base, range of products, and experience grows.
IDE differs from the traditional NGO model in that we take a market-based approach to all of our projects. We treat people as customers, not beneficiaries. This simple change in perspective has profound implications on how we work. If I have to convince someone to purchase something, then my success is absolutely dependent on listening to them, understanding them, and responding to their highest priority needs.
This also means that we don’t provide direct subsidies to our customers. If we have done a good job of listening to their needs (including that for affordability) then even very poor people will be able to purchase items that improve their well being.
The Nestlé CSV Prize will help us to expand the current project, adding an additional 36 FBAs toward our ultimate goal of more than 500. We will also be leveraging the Prize to attract additional funding from several donor agencies that are planning substantial investment in the agriculture sector in over the next several years.
Once the project reaches the scale of 500+ FBAs, we expect that the franchise enterprise will be able to operate independently without additional donor funding. As we move from a successful pilot into a scale up phase we expect a number of challenges.
For instance, the FBAs have seen a rapid growth in clients over the past dry season. To ensure that most of these become repeat customers, the FBAs must find the right balance between client numbers and the amount of follow-up service that can be provided to ensure that the clients are successful.
Creating Shared Value is the very heart of this project. FBAs work with their farmer clients to increase agricultural production and improve incomes. If the farmers are successful, the FBAs are successful. If the FBAs are successful, the franchise enterprise is successful. The system flourishes only if there is real value being created at the farm level.
In the ‘good news’ department: more companies are incorporating social good into their business model. The Triple Bottom Line (TBL) sector is comprised of purpose-driven companies whose business practices positively affect People and the Planet as well as the company’s Profitability. TBL companies provide greater impact than traditional businesses—through social, environmental, and economic means. However, at present only 1 in 11 TBL companies receive enough funding. That’s a real disconnect with consumers, 79 percent of whom want to support more purpose-driven companies. However, the TBL model does seem to be catching on; 68 percent of the top 250 global Fortune 500 companies have embraced TBL public reporting, alternately termed corporate social responsibility or sustainability reporting.
Fortunately, the TBL sector is known for collaborative partnerships. IDE is working with The [i4c] Campaign, which capitalizes on these partnerships to raise funds and awareness for TBL companies. By supporting The [i4c] Campaign and their partners, consumers help support the success of businesses that are deeply committed to their communities. The [i4c] Campaign is partnering with Alter Eco, Better World Books, and To-Go Ware, three enterprises—like IDE—that hold unique commitments to improving the world.
IDE Cambodia was awarded the first Nestlé Prize in Creating Shared Value for its Farm Business Advisors program today at an awards ceremony in London. Since its inception in 2005, the FBA program has enabled 60 rural Cambodian entrepreneurs to start small farm advisory businesses, which in turn have helped 4,500 small-scale farm households increase their net income by 27 percent or US $150.
The prize of 500,000 Swiss Francs (about $433,050) will improve the project by recruiting and training an additional 36 advisors, generating approximately US $1.9 million in new income to positively impact 20,000 people in more than 4,000 rural households across Cambodia.
Nestlé Chairman Peter Brabeck-Letmathe, who presented the award to the IDE, said: “We congratulate IDE Cambodia on being the first to be awarded the Prize. The work they do is inspirational. The support and training from IDE ensures that all involved work together to create sustainable farming enterprises.”
Accepting the award, IDE Cambodia Country Director Michael Roberts said, “It is an honor to receive this recognition from Nestlé. The prize will help us further IDE’s mission to create income opportunities for poor rural households. We hope to leverage the Prize to reach more than 75,000 rural Cambodian households in the next few years. On a global scale this is still very small but we think there are big implications in what we are learning.”
The CSV Prize – which received more than 500 applications from 79 countries – was awarded during Nestlé’s Creating Shared Value Forum, an international gathering of leading experts in water, nutrition, rural development, and the role of business in society which took place in London on 27 May. The Prize was created to provide financial support of up to 500,000 Swiss Francs to individuals, NGOs, or small enterprises who offer innovative solutions to nutritional deficiencies, access to clean water, or progress in rural development. The prize money will be disbursed over a three-year period to assist in the scaling-up of the project.
Learn more about IDE’s Farm Business Advisor Program.
To start IDE’s blog on an inspirational note for 2010, we give you an excerpt below from an analytic essay written by IDE’s founder, Paul Polak along with Peggy Reid and Amy Schefer for the forthcoming special edition of Innovations Journal, “Tech4Society: A Celebration of Ashoka-Lemelson Fellows” to accompany a live conference in Hyderabad, India next month.
It seems self-evident that we should care about helping 2.4 billion people raise themselves out of poverty. But really, why should we? Most of us working in the field of development fall into that fortunate few: the richest 10 percent of people in the world. Is it altruism alone that motivates us to care about the fates of billions of individuals whose lives we know relatively little about? For some of us, perhaps. But for most, recent history has made it painfully evident that the fates of all nations are connected. As economic institutions and markets have become ever more globally linked, the peace and security of our nation and of all nations are inextricably interwoven. And the widening gaps between the “haves”and the “have nots” are not simply morally questionable—they also lead to greater violence and instability and further economic stagnation. As President Barack Obama cautioned the world in his Nobel Peace Prize speech in Oslo, Norway,“Security does not exist where human beings do not have access to enough food, or clean water, or the medicine they need to survive.”
As we slowly recover from the worst economic downturn in nearly a century, we would be wise not to ignore the spectacular opportunities to create jobs and profits and to spur more rapid economic growth by giving birth to dozens of Henry Ford sized new markets that serve 90 percent of the world’s customers. By investing in income-generating enterprises that provide access to basic human needs, we are investing not only in prosperity but also in education, health, and greater global security.
The strategies to get there are surprisingly simple. We need to start by recognizing the enormous market opportunity to create products and services that 90 percent of the world will pay for instead of limiting ourselves to 10 percent of the world’s customers. We need to start treating the poorest of the poor as customers, not as charity cases. We need to listen to those customers to understand their biggest, most pressing needs and build simple, affordable solutions; ones that can be easily maintained and which create profitable businesses for local entrepreneurs. And we need to do so by relying on business models that offer attractive profits to companies and commercial rates of return to investors. Most importantly, we need to galvanize and embrace the self-interest and enterprising spirit inherent in all of us—companies, investors, and poor people.
The most effective way to reach the world’s poorest people and to give them the chance to generate wealth and lift themselves out of poverty is to energize market forces, those same forces that have fueled enormous wealth creation in developed nations for generations.