Co-inventing to innovate: the Danone Ecosystem Fund’s approach

Summary

The Danone Ecosystem Fund bases its innovation process on co-invention. It allows the projects to come up with innovative solutions and develop innovative approaches, in line with local specificities and needs.

19Déc.
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The raison d’être and mission of the Danone Ecosystem Fund is to strengthen the Group’s ecosystem, i.e. its “economic and social environment,” in the words of Danone’s CEO Franck Riboud. Francisco Camacho, Executive Vice President of Danone Waters, says that the Danone Ecosystem Fund represents a “very pragmatic way to implement Danone’s twofold project”. Through all 47 projects it supports all over the world, the Fund thus strives to help the people Danone works with every day develop and reinforce their activity, as well as achieve a better lifestyle.

 

To achieve this, one thing is indispensable: dialogue. The Danone Ecosystem Fund has thus developed a specific approach to drive innovation: constant co-invention with the stakeholders. As Muriel Pénicaud, Executive Vice President Human Resources and Chair of the Danone Ecosytem Fund, told the Fund’s latest newsletter on the subject: “Innovation is never generated in a homogeneous, closed universe: new business and society models come about through the friction of ideas, experiences and partners’ ideas.”

This vision allows Ecosystem to come up with ideas that transform practices and can later be shared across the Group.

 

The two pillars of innovation

 

The Fund’s way to innovate is based on two approaches.

 

The first, most evident approach is that it supports innovative projects. These either create new services for consumers (thanks to direct-to-consumer distribution methods, like the Kiteiras project in Brazil), address public health issues with new service offers (like the Activida project in Spain, offering an “advanced care model” for the elderly), develop new sourcing channels (such as the Milk Collection Communities in Egypt, empowering small milk producers) or use new technologies (the CAPE project in Costa Rica, for instance, will be testing a new banana processing unit that is compatible with small farms). These projects all tackle local, specific issues.

They adapt to their environment, coming up with solutions to business challenges that are also socially virtuous.

 

The second pillar for innovation involves the actual methods used by the Fund’s projects. A key approach is that of mutual benefits. Mutual benefits mean shared risks, which is why the endowment fund allows the Fund and the stakeholders to co-finance the projects. Co-funding goes hand in hand with co-creation – which means sharing skills and experiences, a key to developing new, innovative types of governance and making everyone stronger in the process. Another very important issue for the projects is to measure their social and business impacts. To achieve that, the Fund is exploring new assessment methods, thanks to partnerships with a network of universities.

 

For instance, the Fund is currently working with The William Davidson Institute (WDI) at the University of Michigan, and more specifically with its Base of the Pyramid Research team in Mexico City on an impact assessment project on Semilla. As described on WDI’s website: “Semilla recruits individuals from the communities they operate in, mostly women who are affected by poverty, have difficulty finding formal employment, and often face domestic violence. (…) The salespeople are empowered by their jobs, which give them social benefits such as health insurance and housing aid. Other potential benefits will be explored by the WDI team, such as changes in self-esteem. (…)

By accurately measuring poverty-related impacts, social ventures can maximise mutual value creation and develop more sustainable and scalable business models.

 

Heather Esper, Programme Manager for Impact Assessment, defines the approach more precisely: “Our impact assessment approach is innovative in that before deciding what to measure, we have in-depth dialogues with the venture’s stakeholders and other experts through qualitative interviews, to gain a holistic understanding of what impacts are occurring and which seem to matter the most – those that have the greatest effect on the salespeople and the greatest likelihood of occurring. In this sense we co-create the specific impacts we will quantify at later stages of the research. Innovation doesn’t end there – before developing a survey to capture these impacts, we conduct thorough literature reviews to ensure that the measures we use and our study design will answer critical questions for the venture, as well as advance leadership through thought, and contribute to further innovation”.

 

Spreading the positive impacts

 

It is also crucial that innovation spreads and does not remain a well-kept secret. « Ecosystem » strongly supports an open-source knowledge model, so that best practices can be shared and replicated.

 

Innovation, which is brought about through co-invention, thus makes it possible to create business and social value.

As Francisco Camacho says, it also has a positive impact on the people: “Every person, every Danoner who has the opportunity to get involved in this type of project comes out of the experience with an improved set of skills, a broader perspective on the way business can be conducted, and a broader perspective on how we can have a much more positive impact on the territories where we operate.”

 

To learn more about co-invention and innovation at the Danone Ecosystem Fund, please read their latest newsletter.