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MaFI Synthesis Lead Firms in Pro-Poor Market Development A pragmatic approach to impact at scale or a risky road to exclusion?

Introduction Lead firms are an essential component of any market system. They are key influential actors, which have the potential to influence other businesses, and provide products or services that can address the constraints and challenges that face small businesses or micro-enterprises. Those with a willingness to commit finance, personnel or time in benefitting the value chain are the most likely to bring about useful and sustainable change, and so many lead firms are large companies, however they can also be small firms, or even cooperatives – the key factor is their ability to influence and drive change. Lead firms are therefore strategic partners that can help inclusive market development organizations to bring about sustainable change for marginalised people. MaFI Featured Discussion Synthesis This document builds on the Lead Firms discussion paper produced by Richard Illiffe and Lucho Osorio in May 2010i, which was circulated to MaFI members to spark a debate on some key issues with lead firms. The document summarises the results of this debate, which was held over a period of three days on the Market Facilitation Initiative (MaFI) online forum from 27th-29th July 2010. The discussion was divided into the following thematic areas: Day One Focussed on the definition of lead firms, creating vision for change, methods of identifying lead firms, getting buy-in, striking deals and co-designing business strategies. Day Two Looked into effective methods for implementation, building trust, solving conflicts and monitoring progress. Day Three Focussed on the topics of crowding-in, phasing-out and detecting trends towards sustainability, including the barriers involved in publicising a project’s success.

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Contents

Introduction 1

MaFI Featured Discussion synthesis 1

Defining ‘Lead Firms’ 3

Incentivising lead firms 4

Cutting out intermediaries 4

Self-Selection 6

Building Relationships at the Bottom of the Pyramid 6

Creating Win-Win Situations 8

Incentives and building reputation 8

Other key considerations 9

MoUs - What to look out for in the small print 10

Risks 10

Knowing things are going well – and how to communicate this to shareholders 11

Confidentiality vs. publicising success 11

Avoiding taking all the credit 11

Measuring the strength of relationships 12

Acknowledgements 13

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Within these discussions, further questions were also raised, such as the one proposed by Kamran Niazi on whether the community itself could be empowered to act as a Lead Firm, and discussions on the motivations and reputation of lead firms. For simplicity, the report has therefore been categorised into the following sections:

Defining ‘lead firms’ Incentivising lead firms Cutting out intermediaries Self-selection Building relationships at the bottom of the pyramid Creating win-win situations

- Incentives and building reputation - Other key considerations

MoUs – what to look out for in the small print Risks Knowing things are going well – and how to communicate this to

shareholders Confidentiality vs. publicising success Avoiding taking all the credit Measuring the strength of relationships

Navigation Bar Key points from the discussion are summarised in the side bar. They are split into the categories of:

Convergence Where contributors reach an agreement on a topic Divergence When contributors’ viewpoints differ on a topic

Pending Questions Where a conclusion on a topic has not yet been reached, or the topic was not discussed Resource Further resources and information on the topic

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Defining ‘Lead Firms’ Most people agree on the basic definition of lead firms – that they are key drivers of structural changes in market systems to overcome bottlenecks and constraints to the market, and that this definition is independent of their size. However opinions diverge on the finer details. For example, whilst Ekanath Khatiwada believes that minimum ethical standards should apply, this is countered by Lucho Osorio’s observation that this may be difficult to enforce in practise. The discussion was started with Lucho Osorio-Cortes’ proposed definition of lead firmsii, based upon the FIELD Facilitation Working Group’s Working Paper “Defining Lead Firms and Principles of Facilitation”:

“Lead Firms are formal or informal enterprises of any size or individual entrepreneurs who buy from or sell to firms of similar or smaller size or to individual entrepreneurs, and who are innovators who can influence their providers or clients to upgrade their capabilities, business strategies or structures guided by visions of increased productivity, efficiency and sustainability”

This definition was expanded on further by Ekanath Khatiwada, who suggested including the size of the markets that the lead firms cover – both in terms of their physical size and their geographical scope (local-national-international). This distinction was highlighted because the set of facilitation skills needed at different business levels is different. Some firms are working within meso-level business environments whereas others may be dealing with more complex systems (ie. meso- macro – international environment). Similarly, the incentives and services required may differ at different levels.

Ekanath Khatiwada also suggested the possibility of defining lead firms in terms of their “cleanliness”, proposing a minimum ethical standard that they must adhere to in order to fit within the definition. Whilst this may help to address her concerns regarding monopoly, conflict and exploitation, it was pointed out that enforcing this could be very difficult. Linda Jones noted the similarity between the preliminary definition given of lead firms and that of ‘Value Chain Drivers’, which highlighted a need to clarify the differences between these distinct terms. Also, as Alison Griffith explained, the "innovators" term in the definition could be a loaded term that implies risk taking. This could be viewed as a positive or negative thing, depending on the circumstances. The first ever MaFI Local Learning Group (LLG) in Bangladesh proposed the following regarding the definition of Lead Firms: There should not be a specific definition of lead firms for each country.

The definition should be broad enough to serve the demand of all countries.

Different development organizations define lead firms in different ways. It is however generally acknowledged that only firms which have potential

A lead firm does not have to be a large organisation. Even an empowered farmer’s cooperative can act as a lead firm. The market size and scope are key to the definition, as different types require different skills. Only firms which have potential and enough incentives to bring about change in the market system in a sustainable way should be approached as leads firms.

1. Should minimum ethical standards be applied to lead firms, and if so, how could these be measured?

2. What is the difference between lead firms and value chain drivers?

You can find the synthesis of the MaFI Local Learning Group's discussion and definition of lead firms at: http://www.slideshare.net/marketfacil/summary-paper-llg-bd-on-lead-firms

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and enough incentives to bring about change in the market system in a sustainable way should be approached as leads firms.

They also pointed out that lead firms do not always have to be big companies: "A local service provider or input seller can act as a lead firm if they provide services needed to improve the situation of the producer and if the users are willing to pay for the services”.

Incentivising lead firms A key role of facilitators is to create an environment and visions for change that will attract lead firms to work with marginalised actors. Hannah Schiff responded to the question of how facilitators can create this environment for lead firms by highlighting two important considerations:

1. Make sure there is a solid business case for the transaction. Facilitators always need to carefully identify the incentives for both parties to engage in a transaction that we would like to see repeated after our exit. We can use a variety of mechanisms to buy down risk, but we have to make sure that our financial contributions alone are not the incentive and that our vision is practical in the long-run.

2. Build on existing relationships. The lead firms may not want to work directly

with the poor or marginalized -- and indeed, they may not have to. It can be a good idea to look for existing intermediaries who are close to our target populations, as they can bear some of the risk involved and better understand the needs and limitations of the target group.

Linda Jones agreed with these points and pointed out that the incentive can often take the form of increased access to raw materials or the potential for opening new markets. In this situation a lead firm can be open to working with smaller producers, with or without an intermediary.

Cutting out intermediaries “Why can’t the community itself be empowered to act as a lead firm?” Kamran Niazi proposed the question: “why, as facilitators, do we want the lead firm to work with the marginalised communities? Why can’t the community itself be empowered to act as a lead firm? We (as facilitators) should be able to cut out the middlemen and deal with the people directly.” However, he also pointed to the paradox of whether facilitators should support the middlemen. Whilst a lot of the middlemen serve a very useful function, there are many instances of them “squeezing” the producers, for example they make money, while the producer is left with nothing. But even though they are taking advantage of the producers’ lack of market knowledge, he points out that “we

How facilitators can induce lead firms to work with target groups:

- Make sure there is a solid business case for the transaction.

- Build on existing relationships.

Whether to cut out the middle man or not depends largely on context, ie. what function the middle men are carrying out, and whether this can be replicated without them.

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do not have any other choice to improve matters (as the middlemen can offer a portfolio of unmatched services)” and the other option of trying to do something else “might not succeed also”. The Local Learning Group in Bangladesh addressed this issue in their definition of lead firms, saying that “a local service provider or input seller can act as a lead firm if they provide services needed to improve the situation of the producer and if the users are willing to pay for the services. On a local level, lead farmers can become service providers and take the role of the lead firm, introducing new technologies or services.” Hannah Schiff thought that the question “depends a lot on the context, and more specifically, on whether the ‘middlemen’ in question are fulfilling a useful function or not. In many cases, intermediaries diffuse risk, transmit information, aggregate product, and perform other such roles. Our job is therefore not necessarily to cut out or support anyone per se, but rather to facilitate the best solution or model to addressing a given constraint, and then ask ourselves what functions are needed and who can fulfil them (now and in the future)” For Sharad Rai, the question of “cutting out” or “bringing in” intermediaries is not the issue. He gave the following example of markets in Nepal to support this: “In Nepal, where we work with small producers and in (usually) thin markets, there are not many choices for our target group members in the absence of various qualitative bottlenecks (skills, knowledge, attitudes) as well as physical (access to micro finance, health, transportation) bottlenecks. In this context what we try to do is to build individual as well as institutional capacities of our target groups in order to ensure that they can assess the markets by themselves, build relationships and linkages as required and decide with which intermediaries or value chain actors to work with - in short enable them to make their own choices. On the other hand, as we are trying to do in our current work in the dairy sector in Nepal, we try to rope in lead firms and/or service providers (such as small to large-size dairy plants/industries, micro finance and insurance providers, private sector feed manufacturers, etc.) to fill in the 'gaps' for making dairy markets work for the poor. We have just started to 'think' collaboratively with these critical market actors to pilot a few innovative interventions – for example micro financing models with banks, market assurance schemes with small and medium sized buyers/plants, and research on low-cost feed with private sector feed manufacturers and others. While we are sure that the results of these pilot models will be significantly important in learning and applying lessons in terms of systemic development, we will still need to do more in terms of bringing about a 'sustainable' model.”

When bypassing or cutting out market actors:

- How to do it in ways that do not erode the market system's resilience?

- Who should do it?

How can marginalised market actors like farmer groups or local service providers become lead firms?

To what extent should marginalized producers and other actors participate in the design of the lead firm’s business strategy or do the lead firm and the facilitator know best?

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Self-Selection Is self-selection the only practical method of identifying these innovative and visionary market actors? Or have you used other methods successfully? The only mention of self-selection came from Alison Griffith, who noted that “it is becoming common to advertise open calls (e.g. in the media, on the web) to invite companies to be part of an initiative. Sometimes these can be quite formal processes, such as the Africa Enterprise Challenge Fund (where NGOs cannot apply; the main applicant has to be a private firm). The idea is to get companies to invest their own resources and to take a lead. In Bangladesh I think the Katalyst program initially had difficulty getting interest from lead firms in the vegetable seeds sector and much discussion and negotiation was required before they could move ahead. In other cases there is more competition to be involved and it is important to ensure that selection processes are transparent.”

Building Relationships at the Bottom of the Pyramid Alison Griffith notes some interesting research on the Bottom of the Pyramid approach that could be relevant to the understanding the motivation of lead firms. “Hart presented at the [2009] SEEP Conference a reviewiii of the last 10 years showed that in many cases BOP initiatives did not work because companies did not invest in relationship building. Some big companies had their fingers burnt” As a result the next phase of BOP is paying much more attention to these aspects. “For us facilitating lead firms this means we need to consider how we will help big and small players develop relationships; how we will build capacities of different players to become more ‘market literate’ (particularly getting a more systemic understanding of the market); and how we will deal with power and governance issues).”

Expanding on this, Peter Edward added that “one issue for big companies can be not that they don't invest in relationship building between the company and the local community but that they can overlook the need to develop understanding within the company of how the BOP activities contribute to overall company strategy and are valued within the company. For these large lead firms, building and maintaining internal relationships and networks can be vital to ensure the lead firm’s project staff do not feel too disconnected from the firm’s core business activities - I suspect that aspect often gets overlooked when projects are started.”

Sharad Rai gives an example of how building relationships at the bottom of the pyramid was important. “One of the challenges for the current dairy project in Nepal will not only be testing innovative smallholder farmer-private sector/service provider linkages models, but also to see how we can build and maintain healthy relationships between critical market actors –between small holder farmers and relevant market actors in particular. I think this is one area

What are the risks and problems with self-selection? Have any other approaches worked?

Does self-selection help facilitators to identify the most reliable and effective lead firms?

Building relationships and understanding between companies and communities is key to the success of BOP initiatives.

For short term partnerships, is it worth the time, resources and potential harm to a facilitator’s reputation to work with large companies? Will this help smallholders to move up the value chain?

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which has been mostly neglected or overlooked. The Relationship Matrixiv as an M&E tool could be useful to monitor this relationship building process.” Chris Piennar takes the concept of relationship building one step further, pondering “what would happen if everything began from the viewpoint, values and passion of not just the farmer/producer but anyone within the community who may wish to take forward some enterprising actions of their own choosing but which could find a market locally? In working in this manner the passion and energy comes from those driving their own enterprises but working interdependently with other enterprises within the area for mutual benefit –retaining their own independence to channel their own passion yet operating interdependently for the benefit of all. The driving is in the hands of the producer (no dependency and maximum energy) and the lead role switches to one of facilitation of the initial ‘spaces’ or events for people to step forward, the coaching of the start-up process and support network development.” He sees this as not necessarily being mutually exclusive of lead firms, but rather removing the main focus from these, so that they can simply “be formed in due course where beneficial by those operating interdependently or contracted into on an agency basis”. In terms of trust and working together, he suggests a simple tool used on his www.pluggingtheleaks.org programme called Perspective Wheel – Groups, which he is happy to forward to anyone by request. He claims that “the tool has been effective at teasing out the various perspectives held by different stakeholders within an initiative, building respect for these perspectives and allowing them to be “mainstreamed into the approach being taken. In doing this, everyone is valued for their views, the others understand their motivation much better and perhaps most crucially, in this way the values, passions and energy of all members are harnessed and pointing forward to the best initiative that can be in the eyes of all of the stakeholders.” As the saying goes, “time is money” in business, and so a lead firm’s investment of time in a project must be carefully balanced by a facilitator. Linda Jones notes that “lead firms are often concerned about the investment of management and staff time,” and therefore “the upside of dealing with smallholders or small producers has to be a strong incentive. This is one area where a facilitator can make a big difference as the initial stages of any such arrangement are time consuming and the process can easily go off the rails.” Kamran Niazi picks up on this, questioning whether, when companies such as McKinsey and individuals such as MBAs at Harvard want to work with large firms for a limited amount of time, it is worth working with them at all. Investment of management and staff time concerns by the lead firm, in addition to requiring them to change their mind set from working on million pound budgets to hundred pound budgets may mean that the help that they can give to small holders is limited, and so may not be worth the extra time and resources of the facilitator, or potential damage to their reputation.

Perspective Wheel Groups – Helping stakeholders to work together, understand each other’s perspectives and build trust

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Creating win-win situations Key things to consider when drafting successful action plans and promoting sustainable relationships: minimise the involvement of the NGO, carefully select the lead firm, and understand the motivations (financial or otherwise) of the parties involved. Incentives and building reputation: Kamran Niazi kicks off the debate on what to consider in the planning of a project by pointing out the importance of having a financial incentive: “there has to be a clear reward for the lead firm and it should be considered as a business. Unless we can create win-win situations for all concerned, the intervention is not going to last.” However whilst the monetary aspect is clearly important, Peter Edward warns against only focussing on this, arguing that “the rewards need to be understood as more than just monetary. Building or insuring reputation, or developing better political influence and positioning can be strong motivators for a lead firm. To be able to truly understand the lead firms, and hence draw up an effective plan, Peter argues that “it is important to step back from our desire to see development take place and instead to reflect on what is motivating the lead firm” by putting oneself in the lead firms position. This, he suggests, can help to build up a “clearer (and perhaps ruthlessly cynical) understanding” of how they operate, in order to identify risks, and understand motivations and the ways those motivations might change in the future. He later clarifies that “if we want to understand the motivations of a lead firm –and hence their likely commitment to driving a project in the long-term […] rather than merely using the project to build a good [image and influence amongst powerful actors], we need to look beyond the contract and the project aims and funding.” In that way, “if (when?) the project starts to drift from its original aspirations and timeframe, [the facilitators can envisage] what the driving motivation are for the lead firm at that time.” The flip side of focussing on reputation, as Kamran Niazi points out, is that there is a risk of the lead firm having the wrong priorities. He recalls: “I have seen lead firms spend more money on the launch ceremony than on the program itself”. Linda Jones discusses the equally important issues of negative reputation, noting that reputational issues don’t just involve lead firms using a project to raise their profile, but can also be “a lead firm concerned that a poor project will harm the company. This might be true, for example, when large companies have had more of a plantation style in agriculture and are reaching out to smallholders. Their actions might be seen as a land grab (which indeed it could be) and a company with the best of intentions will want to be very careful around this.”

Reflecting upon potential motivations from the perspective of the lead firm can be very useful in cultivating successful business relationships and identifying risks.

It can be risky working with lead firms whose main motivation is reputation building, as they may not have the interests of the smallholders in mind.

Is money or reputation the more important motivation to consider for the lead firm? And what risks and benefits are associated with each?

Do motivations of the lead firm matter if they are doing their job of leading transformations in market systems?

Podcast from Mesopartners: How to manage expectations of both the lead firms and the smallholders. http://ledcast.libsyn.com/index.php?post_id=340268

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Kamran Niazi picked up on this point on creating a negative reputation, by suggesting that larger companies might have better PR departments which could “project the smallest of success in to seeming to be a paradigm breaking one.” Christian Pennotti suggests a useful resource that may help clarify many of the issues on reputation: Think Big. Go Small - by Oxfamv. He explains: “The report is written with a multi-national corporation audience in mind and does a couple of things that may be useful to [this] conversation:

It discusses about what sorts of information and opportunities prospective lead firms may find attractive –though admittedly, very sophisticated lead firms such as MNCs. A key message in the report is the potential brand and reputational value that firms can generate through socially-conscious smallholder engagement.

It provides a number of useful cases illustrating how companies have actually worked as lead firms to advance smallholder engagement in their supply chains.

It outlines a framework and principles for effective smallholder partnerships with lead firms in the food and beverage sector: - collaboration and innovation - linkages - transparent governance - sharing of costs and risks - access to services

Opinions seem to converge in the discussions around the dangers of reputation building and the importance of understanding the lead firms’ motivations, as Peter Edward summarises: “I have in mind here some projects I have seen that have been launched with much political fanfare and very good intentions by all parties but when they went wrong the priorities for the lead firm were to maintain reputation nationally and with political elites rather than to address the local issue of development failure. I recall, for example, one project (which can remain nameless) that notably failed to deliver development benefits but went on to become a celebrated and fairly widely publicised success story for the lead firm in popular business magazines in the ‘developed’ world. I am sure many others in this forum have similar experiences.” Other key considerations Even if the incentives have been carefully calculated from each aspect, there are several other key points that must be considered. Kamran Niazi points out for example that poor execution can kill a project, so the team of the lead firm has to be dynamic. Alexandra Snelgrove builds upon this warning with a list of critical mistakes that organisations should watch out for when trying to develop linkages between lead firms and producers, which include:

1. Trying to do too much too soon - i.e. introducing a range of finance and services on day one as opposed to a more gradual process of trust building between diverse actors.

Think Big. Go Small - by Oxfam – a report covering information and opportunities that are attractive to Lead Firms, to clarify reputation issues http://www.oxfam.org/en/policy/think-big-go-small

Trying to do too much too soon is a bad idea

Using a checklist of issues or standard framework may be helpful in guiding agreements with individual lead firms

How to empower farmers to negotiate effectively without getting too involved in contract negotiation?

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2. The NGO becoming too involved and actually handling contract negotiations. Implicit hand-outs have a way of “sneaking in” to the model.

3. Failing to conduct sufficient due diligence on the lead firms to make sure that they have a growing end market for their product; not to mention the capacity and willingness to invest in their supply chain.

4. Failing to introduce competition and only working with one lead firm which increases dependency of producers on one buyer.

Linda Jones notes that, as with any type of partnership, “having stakeholder meetings, a management plan and committee, and designated leads representing each party (with the time and resources to fulfil their responsibilities) are ways to keep the lines of communication open and things running smoothly”. Peter Edward asks whether there is “a ‘checklist’ of issues that a facilitator might want to work through with the lead firm at project set up? If so, does it have (or should it have) a set of issues that can be discussed relating to the internal workings and motivations of the firm? It is too easy to assume that large firms understand what they need to do to get things right internally but often they don't. And the time to raise these matters is surely up front before the project starts to become contractual.”

MoUs - What to look out for in the small print Memorandums of understanding are legally unenforceable documents between two parties outlining the finite and collaborative nature of their agreement. They are preferable to contracts to avoid both over-formality and over-reliance between organisations, however checking the wording is no less important. Kamran Niazi recommends readers of the MoU to “Trust but verify. Check out the complete MoU, have 2-3 different people look at it independently and then have them cross check each other's comments. Be very clear about deliverables, M & E procedures and termination clauses.” Peter Edward agrees with the need to check small print carefully, however suggests that a better way to ensure that you are on the same page as the lead firm is to have a clearer understanding of their motivations –to identify risks by understanding their motivations, and likely ways those might change in the future. This reduces reliance on the small print when things go awry.

Risks Aside from the risks already discussed regarding motivations and reputations of the lead firms, Kamran Niazi also points out that, for facilitators, the main risk is the selection of the wrong lead firm. “Too many times, people select the lead firm on basis of its past performance, not realizing that, the team or the culture

How to build capacity and "market literacy" of lead firms and other market actors (including government agencies) to make market systems more inclusive, productive and efficient?

Read over the MoU carefully, get others to check it, and be clear about what you, and they want from the partnership.

Are the facilitators taking risks by trying out new strategies or partners, or is it a risk averse culture that frowns upon the implementation of new ideas?

Risk-aversion can differ between lead firms, smallholders and facilitators. Is this creating tensions or lost opportunities?

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may have changed. In the for-profit world, people are encouraged to take risks (not too many though), so the question is, are the facilitators taking risks trying out new things, strategies or partners or [are they bound by] a risk averse culture frowning upon implementation of new ideas.”

Knowing things are going well – and how to communicate this to shareholders Kamran Niazi presents another dilemma regarding showing evidence of progress in projects that, when done well, may take time to produce measurable results – “A lot of the projects, we work upon are time bound and the donors expect results at once. How do we ensure that we keep the donors happy by showing progress and at the same time set the ground for long-term paradigm shift? Lack of focus on this will give rise to conflicts between the donor, implementer and the beneficiary.”

Confidentiality vs. publicising success How can facilitators balance confidentiality with the need to publicize successful cases to motivate other firms to adopt them? Peter Edward asks whether confidentiality is ever a major issue. “It often seems to me that at the local level the community becomes quickly aware of how and why a good project is succeeding. I could imagine that on a wider perspective the lead firm, if it is looking to expand geographically, might want to publicise its success as it enhances the firm's reputation and hence supports their ability to make the most of their 'first-mover' advantage. I wonder if anyone has examples either for or contrary to my perception on this?”

Avoiding taking all the credit How to demonstrate that lead firm’s success is not the product of the facilitator’s help and subsidies? Linda Jones countered this question with the suggestion that “facilitation is help, isn’t it?” Even when we question instead whether the lead firm’s success is “the result not of subsidies or provision of services by the facilitator, but of indirect support (facilitation) that can be replicated by others in similar circumstances'', she argues that facilitation could still be considered as a sort of subsidy, in that the partnership of communities, support groups, lead firms and producers may not be replicable by a different lead firm and producers without the help of facilitators. To “mobilise communities, support group formation, develop capacity of groups to deliver on time in the desired qualities and

How to show evidence of progress in projects that, when done well, may take time to produce measurable results?

How to ensure that the donors are kept happy by showing progress and results, and at the same time set the ground for a long term paradigm shift?

How to deal with conflicts between different stakeholders? What are the most common conflicts and what cause them?

Is a successful lead firm likely to want to enhance its reputation by publicising this success, or is confidentiality an important issue to consider?

If so, how can this be dealt with to still allow other firms to hear about successful cases?

Is facilitation not a kind of help in itself? And is the lead firm’s success not largely down to the supportive work done by the facilitator?

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quantities, and help with contract negotiation” could therefore be considered as a sort of non-financial subsidy in itself.

Measuring the strength of relationships Markets are constantly prone to change, whether from the effects of new policies, production yields, or simply changes in demand. In order to endure future market changes, how is it possible to know that the relationships between lead firms and marginalized producers are becoming stronger? Christian Pennotti offers a suggestion based on the work done by CARE in its country offices: “One of the key things we are working on is to apply a framework similar to the DCED standards framework, breaking anticipated outcomes across three domains -women's empowerment, enterprise-level and sector-level outcomes. We're then working with teams to really think critically about leading and lagging indicators of progress. So, on the leading side, a strong focus is on understanding the desired knowledge, attitudinal and practice changes we want to see not only in producers but in those with whom they are working. This is intended to help our field teams pick up clues toward progress in strengthened relationships and also helping them think critically about how they can best facilitate this transition rather than intervening directly.” Lucho Osorio-Cortes responded requesting clarification on the meaning, and examples of “leading” and “lagging” indicators. He also expressed his enthusiasm for the approach, and that the indicators are designed to detect changes not only in “desired knowledge, attitudinal and practice changes in producers [but also] in those with whom they are working”. He points to the insight it provides regarding the link between the indicators of increased ownership and leadership on the side of producers and the process of becoming better facilitators – “The indicators we use have an impact on capacity building processes!”

The indicators we use have an impact on capacity building processes

How to partner with lead firms to influence policy? Producing evidence of success for government agencies How to defuse tensions with other firms around the use of public resources to give a few firms a competitive advantage?

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Acknowledgements and credits Special thanks to the following MaFI members for making this discussion possible:

Alexandra Snelgrove Alison Griffith Christian Pennotti Chris Pienaar Ekanath Khatiwada Hannah Schiff Kamran Niazi Linda Jones Luis E. (Lucho) Osorio-Cortes Peter Edward Sharad Rai

Discussion facilitated by Lucho Osorio Synthesis edited by: Olivia Comberti and David Brownjohn Graphic design: Olivia Comberti Coordination of synthesis production: Lucho Osorio (responsible for the mistakes or omissions in

this document. Corrections or comments are welcome at luis.osorio@practicalaction.org.uk)

MaFI The Market Facilitation Initiative (MaFI) is a working group of the SEEP Network with technical support from Practical Action. MaFI promotes learning and peer support amongst practitioners working in the field of inclusive market development facilitation. It also assists practitioners to move from design to implementation by advancing principles, techniques and tools.

Endnotes

i http://www.slideshare.net/marketfacil/lead-firms-discussion-paper-final ii Based upon the FIELD Facilitation Working Group’s Working Paper “Cycle 1: Defining Lead Firms and Principles of Facilitation” (2008, page 1) as a starting point for this shortened definition. http://www.microlinks.org/ev_en.php?ID=26643_201&ID2=DO_TOPIC ) iii The original SEEP webpage where this document was stored does not exist any longer. For related information about Hart’s ideas, go to http://www.brinq.com/resources/bop/criticisms-and-developments and www.bop-protocol.org iv http://practicalaction.org/pmsd-relationship-matrix v http://www.oxfam.org/en/policy/think-big-go-small