What can aid agencies learn from McDonalds?

This is a guest post by Kate Wareing (right), Strategy Development Director for Oxfam and a partner at the ICSFKate Wareing Too many of the people reading this blog will have experienced the familiar trajectory of a development project: prove the need, find the funding, define your outputs, deliver against your targets and either find more funding to carry on, or regretfully exit. There is a fundamental mismatch between what I take to be the objective of development projects (sustainable, transformational change at scale) and a funding environment and model of project design based on a time bound, linear, output driven delivery model. So what lessons are there from elsewhere to help us move beyond this hamster wheel? Bill Clinton observed that “there is no shortage of good ideas …the real problem is how to scale them”. There also far more people in the world interested in improving the lives of their communities than there are budding social entrepreneurs. Social franchising – taking a successful idea working in one place, distilling its essence and helping someone else in another place to create their own version of it – is one way of trying to break this cycle. So how could the growth model used by McDonalds, the Body Shop, Subway, my daughter’s drama school Stagecoach and thousands more businesses be applied to social projects, and how can we identify where it is an appropriate model of achieving change at scale? childline_logoWell the good news is that lots of people are already doing it. From The TrussellTrust’s Food Bank network, which has grown exponentially to now support over 128,000 people in 200 locations across the UK who need emergency food support, to the remarkable success story of Childline India’s emergency number for street children, which is now operational in 210 across India cities through a network of 415 partner organisations, projects are proving that the principles of franchising can work in the social sphere. And it’s not just a story about building more small projects. With the strength of a national network of projects comes the potential to gather data to influence policy and build a profile for the issues that you care about, holding out the potential for even greater change. This model has much in common with the approaches of some projects of which Oxfam is justifiably proud. Programmes such as Oxfam America’s Savings for Change and the We Can campaign to end domestic violence show the scale at which positive social change can be built through taking an idea, developing it to be scalable and then enabling others to replicate its approach, with impacts that could never have been achieved through one organization working alone. The words used to describe this approach differ – is it movement building, community empowerment or Social Franchising? What Social Franchising adds to this rich arena is a framework that can help people understand how to design projects to maximize their chances of “going viral” and being adopted and adapted by multiple partners, and tools to think through how to maximize the opportunities and minimize the risks of letting others run with your project. So is this just repackaging our existing work or adding something new? I think the latter, but Social Franchising poses some real challenges to the development sector. The first is that this model works best when the project is straightforward and can be codified: you need to be able to write a “how to” guide that doesn’t depend on the reader having a degree in development studies and the ability to decipher a secret development language. This makes it a profoundly democratic and empowering model of change. It also challenges us to design projects for simplicity and scalability from the outset, using principles such as frugal project design rather than the sectoral norm of trying to solve everything simultaneously. It also challenges a few holy cows: a “project in a box” approach feels like the polar opposite to bottom-up community development and Big-Maccan provoke an allergic reaction. But when tools are used to codify and standardize the appropriate parts of a project (there aren’t that many community activists I’ve met who get their kicks from designing evidence gathering systems) then it frees up time for building the relationships and networks that really enable change within a particular context. The next fear is how locked down the box feels – how can a standardized, prescribed model change and evolve? Here is a true strength of the franchising approach. By creating a network of multiple, linked franchisees working in the same area, learning can be shared, and the model finessed and improved. That food bank network I mentioned earlier is now on version 17 of its operating model. Precisely what goes “in the box” (or less visually appealing, but more accurate in the operating model) is up for grabs in any project situation.  Careful thought and testing is therefore needed at the design phase, or when packaging up a project for franchising. What is key to this project that makes it deliver? What can we standardize to achieve economies of effort? What element of control or standardization is going to enable us to learn common lessons and lobby together, and protect the brand or reputation of the original project? And then critically, it’s back to people – have we attracted people to work with us who can take this approach and make it fly in their own specific context, with their own partners, using their own skills? The ambition of the development sector is huge, and its mission is critical. Attracting the skills, knowledge, passions and resources of as many people as possible to delivering positive change, and building the networks to enable them to learn from each other has the potential to enable good ideas to be spread, and greater change to be achieved. ICSF logoFor those of you out there who fancy franchising, and making your next million while you are at it, there are oodles of places to go to buy your business in a box. For those for whom the motivation is social progress rather than business success, the same networks don’t really exist yet, although we’re busy trying to build them. For now the International Centre for Social Franchising and NESTA are great sources of guidance and inspiration, including a handy checklist of questions you’ll need to answer to work out whether your project is ready to replicate. How about considering social franchising as your next exit plan?]]>

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7 Responses to “What can aid agencies learn from McDonalds?”
  1. Jeffrey Ashe

    Kate thank you for your posting on Franchising. You mention Saving for Change. Established in 2005 SfC has grown to close to 600,000 members, most all of them women small holders who live in some 8,000 villages. You raise several important points:
    • The model needs to be straightforward and codified. Saving for Change provides a simple solution to high priority need for villagers, a safe, convenient place to save, easy access to income smoothing loans over the year, and a lump sum of capital at the end of the cycle to help women put food on the table during the hungry season before the next harvest. SfC is easy to understand because it is built on long established traditions of savings circles and holding each other accountable. Since each group is entirely run by the members as you say it is “profoundly democratic and empowering.
    • The box is not “locked down” as you say. Each group can evolve their group as they see fit. While all groups adhere to the same basic principles in the first cycle groups tend to change over time, changing their rules, taking on a village leadership role, linking with other development actors and initiating group projects.
    The franchising of the Savings Group model while superficially similar to giant franchise operations such as McDonald’s and Subway is less formal and ultimately entirely community based and controlled. Once the genie is out of the bottle program evolves organically as group leaders choose without reference necessarily to a specific methodology or brand.
    How did a methodology that started in a few villages in Niger evolve into a Savings Group movement that at last count has grown to six or seven million group members in some seventy countries?
    The INGOs have had a critical role. The major players are Care, Oxfam America/Freedom from Hunger/Stromme Foundation and Catholic Relief Services, but seeing the relevancy and simplicity of the model other INGOs have joined such as Pact (whose Women’s Empowerment Program in Nepal representing a separate invention of the methodology), Plan International, Aga Khan Foundation and recently many others.
    NGOs that implemented the program through the INGOs are increasingly mobilizing their own funding and running their own programs while new NGOs are downloading the methodology or taking training courses and starting their own ventures.
    Showing the resilience of the methodology most groups continue functioning on their own without outside support. Even more importantly group leaders and trained village level volunteers continue to form new groups and support existing ones.
    This is what I call the amoeba model of microfinance since each group has within it all the genetic material it needs to run itself and to replicate. The ideas spread virally within villages and as the word spreads through markets and through villagers traveling to other villages.
    If support for Savings Groups were to disappear tomorrow the movement has reached a critical mass and not only will the groups survive and evolve the ideas imbedded in the methodology will continue to spread. This, to me, is the test of a successful development intervention.

  2. Hello Kate
    Very interesting post. I agree with your conception of the fundamental mismatch between the objective of development project and the search for scalable replicable models that will bring on this required change. Also I think you are asking a set of relevant questions, which might result in a better match:
    -For one you mention the need for a language to describe models, so that you can compare (for instance McDonalds with a social franchising idea)
    -Secondly there is the issue of replicability of models. Will a tactics that led to a viral campaign in on setting lead to the same in a new setting?
    -Lastly you mention the need of a design approach, a method of progressive learning, rather than providing immediate solutions. What would this approach look like?
    It is my observation that you’re asking classical questions relating to business model innovation. How can your project organization create, capture, and distribute the impact value you want to achieve.
    I am working on a design methodology to design business in development projects in such a way that they are geared to searching effectively for business models. This is done with simple tools like the business model canvas which is very easy to adopt once the logic is displayed and very empowering. I used it for instance in a project on smallholder tea certification in Kenia (http://bartdoorneweert.posterous.com/quick-scan-of-business-models-for-certificati)
    The essence of what I’m trying to do is to take methodology for developing startup companies, and applying that to the context of value chain development. This puts the focus on SEARCHING for a scalable, replicable model, and designing project impact metrics that support search, rather than starting a process EXECUTION as if the project already has a validated model. This is where much goes wrong in development projects, and why it is so difficult to understand what works and doesn’t work for whom, and under which conditions.
    If you’re interested in my learnings, and application of my design methodology, then I can refer you to my blog where I share my insights. It contains a post which is specifically relevant to your blog post here called “private sector development and the pivot”: http://valuechaingeneration.wordpress.com/2012/06/04/private-sector-development-projects-and-the-pivot/
    If you’re interested I hope that you will be available to discuss what such an approach might mean for your work. And who knows, we might be able to trial a design workshop in in the context of a project definition you might be working on. In any case, I’m looking forward to your thoughts!

  3. I am a great believer in theories and thoughts of Prof. Christensen. As a graduate student in Industrial Eng. at one of the top schools in Asia (in South Korea), I am following his ideas in order for coming up with fresh and unprecedented notions to rub a business. I have read his paper with the same title, and I do remember when I gave a copy of that paper to the prof. of Innovation course in the school, he is so interested in his works as well, the prof. was impressed with the seminal paper. I am impatiently waiting until I can prepare the book from market. Needless to say, I am quite sure that I will get extremely useful advices for my future career as well as my life by him through this amazing book.

  4. If one thing has been proven in the last 40 years of development worldwide; it is the fact that ‘cookie cutter’ approaches to community development projects do not work. Call it ‘upscaling’, ‘social franchising’, or ‘ramping up’, it’s all the same thing. What works well in one setting (with all its cultural, spatial, linguistic, and other unique attributes) cannot simply be cut out and stappled to another location be it the village next door or the village on the other side of the world. Applying business and economic models to social enterprises is the latest in a long line of ‘development solutions’ to alleviate poverty, and while I agree with the idea of shared information globally, and not reinventing the wheel, McDonalds and Subway are businesses that are franchised in order to make money. There is a demand for their products (no matter how vile they may taste)and without this economic driver, franchising cannot work. Applying across the board solutions and trying to standardize approaches to complex issues of poverty, inequality, and other social issues is foolish and dangerous. Businessmen, MBA’s, and CEO’s please stick to doing what you do best; growing businesses and making money for your investors.