yellowwood social innovation white_paper_2016_[1]

October 2016

Social Innovation: Gearing business to address social systemic challenges

October 2016

Social Innovation: Gearing business to address social systemic challengesThis report was compiled by Nokuthula Radebe,

Yellowwood’s Marketing Manager and David Blyth,

CEO, Yellowwood.

Written by Jessica Hubbard, Independent Writer

and Journalist.

Special thanks to Refilwe Maluleke - Strategy

Director, Yellowwood, Rhiannon Rees - Strategist,

Yellowwood and Gabriella Venter - Insights Analyst,

Yellowwood for their contributions.

Thanks to Leoni Joubert for the beautiful design

of this booklet and to Mlondi Zwane for the

excellent photography.

CONTENTS

1. Introduction: How can SA brands, tackling

a slowing economy, become

more relevant in a complex

marketplace?

2. Defining Social Innovation: The Yellowwood way

3. Ditch the silos: Take a broader worldview

4. Invest in culturally led solutions to make an impact

5. Move beyond GDP and focus on Social Progress

6. Innovate from the heart: How true understanding leads to

meaningful change in business

7. Tackling youth unemployment through smarter business and entrepreneurship

8. Case studies on Social Innovation All Safe

Rekindle Learning

9. Assessing the real impact of business work streams in society

10. Paving the way for policy disruption within global trade

11. Driving profit and positive change in communities

12. Leveraging the right tools and information to lead with vision

13. Guidelines for marketers to start forming targeted Social Innovation strategies

2

4

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12

15

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23

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30

32

36

© 2016 YELLOWWOOD. All rights reserved. www.ywood.co.zaPAGE 3

The local economy is stagnating and unemployment is soaring. As marketers, we are seeing the effects of this worrying state of affairs manifest in society in different ways.

From a political point of view, South Africans have run out of patience when it comes to putting up with failed service delivery, high levels of corruption, and an absence of the equal opportunities for all citizens that government had so enthusiastically promised.

As a result, a significant number of people are fed up with the environment they are living in. We see this in the rise of violent protests and in the rise of activism, as many citizens realise that this may be the only way to effect real change. Indeed, people expressed sharp-edged discontent in our recent local elections.

As marketers, we are now also dealing with a more skeptical consumer who has grown weary of organisations and brands. Naturally, consumers’ brand interactions are increasingly entered into from a position of deep distrust and they have a greater expectation from big businesses.

While businesses scramble in an attempt to survive this tough climate, one thing is clear: it is no longer ‘business as usual’. Consumer behaviour has changed and businesses must adjust their approach if they want to stay afloat and prove sustainable in the long term.

Moreover, it is evident that the lines between social and economic flux – and the resultant challenges – are blurred. For smart marketers, these blurred lines represent an opportunity to collaborate with businesses and governments to find sustainable solutions to deep-seated and systemic issues.

In our view, the businesses and brands that actively respond in tangible and sustainable ways – through social innovation – will ultimately thrive in this complex environment. Brands that aim to be ‘better for’ consumers, not simply ‘better than’ competitors, will achieve a competitive advantage.

How can SA brands,

tackling a slowing

economy, become

more relevant in a

complex marketplace?


The Yellowwood approach to social innovation in business and branding.

Crucially, Nzima witnessed first-hand the burdens of: finding the funds for transport to the clinic,the time spent waiting, the cost to have someone look after children left at home, and the loss of pay due to absence from work. To address this very real problem, Nzima’s business, Iyeza, now collects prescription medication for more than 250 residents in his township. For many, the dynamic young entrepreneur’s service is far more than just a pleasant convenience; it has helped improve the quality of life of those he services at a cost of only R10 per trip.

Apart from becoming a local sensation, Nzima was also one of five South Africans to be featured in Forbes 30 Under 30: Africa’s Best Young Entrepreneurs of 2013, an achievement, he says, that motivates him to work even harder.

Sizwe Nzima’s story shows that understanding people is the heart and soul of any true social innovation project. Marketers should first root themselves in people and communities when working to link social innovation to brand-building.

Medicine on Wheels:Customer-Centricity in ActionSizwe Nzima, a 24-year-old from Khayelitsha, Cape Town, is the founder of Iyeza Express Medicine on Wheels. When he landed a R10 000 prize for being the best entrepreneurial student at the Raymond Ackerman Academy of Entrepreneurial Development, he bought two bicycles and got to work on the business idea that he had developed as part of his coursework.

This idea, Iyeza Express, emerged from a social challenge that many Khayelitsha families en- counter when collecting prescription medication from the local clinic. Nzima witnessed sickly, elderly people in his community having to get up as early as 4 am to make the long journey to the clinic to collect their chronic medication every month. In addition, any late arrivals would have to wait in excruciatingly long queues to be attended to.

Defining social

innovation: The

Yellowwood way

In recent years politicians, academics and professionals have pointed to the term ‘social innovation’ as an area of significance for business leaders and marketers.

To direct marketers down an effective and sustainable path to creating social innovation, we have defined ‘social innovation’ as follows:

‘A sustainable and profitable way of solving existing systemic challenges or needs in ways that benefit the public or society, regardless of their social class.’

PAGE 5 www.ywood.co.za © 2016 YELLOWWOOD. All rights reserved.

In our search for an all-encompassing definition, we discovered that social innovation is often misunderstood by marketers; falling into either the ‘social’ side of its definition (do good, focus on people, non-profit) or the ‘innovation’ side (R&D, digital, technological advances, etc.).

This polarised view of the concept obscures a more accessible, relevant and powerful definition. Moreover, we found many different terms used by marketers to describe concepts that are similar to social innovation, but that do not entirely capture the essence of the idea. For example, the term ‘social enterprise’ centres on the idea of being led by an organisation, while ‘social entrepreneurship’ is driven by an individual and focuses on the unique qualities of the people involved.

To put us on the same page – and to understand what social innovation is and how it applies to our businesses – we looked to Iyeza Express Medicine on Wheels. This is a small enterprise that, for us, clearly falls into the category of social innovation and indeed, exemplifies it.

Case study:


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To begin with, all South Africans need to get involved. Businesses can’t sit back and wait for governments or anyone else to solve social problems for them. Marketers, most specifically, must be proactive in designing solutions that adequately address systemic needs, rather than just business needs.

There are emerging opportunities here, but to harness them we need to interrogate

the current approach to marketing and communications. Engaging with consumers

is no longer a game of ten-pin bowling, where marketers, businesses or leaders can

take aim at a fixed and predictable target. The game has changed, and its rules are

forever shifting.

Remaining with the game analogy, it is helpful to view consumer engagement as

a game of pinball: to keep the ball in play, players must be flexible and quick to

move in the direction of the desires of consumers as well as that of the business

environment. The consumer is the ball!

This insight is important in light of the Meaningful Brand Index, which reveals that most people would not care if 74% of all brands disappeared1.

At a time when brands are battling to be noticed, marketers must do all they can to keep their brands out of the 74% that consumers so easily disregard.

Brands consumersactually care about

26%

Easily disregarded brands74%

Currently, we are seeing progressive companies actively shift their values, in order to orientate

their businesses towards ‘purpose’. They are doing this by driving initiatives and designing

offerings that make a tangible difference in the lives of the people in their communities.

Purpose and values, coupled with an ongoing quest towards engaging with and understanding

the consumer, is also shifting businesses towards the active pursuit of customer-centricity.

In our view, being authentically customer-centric leads to businesses creating innovations

that have the consumer at their epicentre.

This approach automatically places a business in a position where it is geared to address, not only consumer needs, but also systemic societal needs.

We believe that it is the task of big businesses to address and enable change in the area of

social challenges.

Sweet Spot for Social Innovation

Innovation Pipeline

Purpose and Values

Consumer Insight

Social ChallengeSocial Innovation

1 http://www.meaningful-brands.com

© 2016 YELLOWWOOD. All rights reserved. PAGE 9 www.ywood.co.za

Khaya Mtshali, former design lecturer and current Strategic Designer at Village Strategic Design, suggests that the world is becoming more and more complex from a socio-economic point of view.

Ditch the

silos and

take a

broader

worldviewHe argues that one of the drivers of increasing complexity is the growing interconnectedness between people, communities, organisations and the macro environment.

According to Mtshali, education instructs us to

deal with challenges within their distinct silos. As a

result, we use the same siloed approach in business

– believing that it makes us better and more efficient

in our problem-solving. This is a flawed approach,

warns Mtshali, because we never truly harness the

power that lies within the inherently interconnected

nature of all things.

“We realise that we haven’t been trained to respond to complexity – because we are trained to answer structured questions … [but] when the world becomes more complex, the questions become unstructured,” he explains.

Mtshali argues that discovering new questions

will help marketers and businesses reframe and

weigh strengths over the opportunities, as well as

design competitive advantages that are beneficial

beyond the company.

He poses the following question, which is worth

considering: “Could it be that our challenge as marketers is that, when we ask questions, we are already unconsciously assuming a certain perspective – and as a result, missing out on the richness of a new perspective?”

Perhaps understanding the interconnectedness

of things points to a way forward for the marketing

industry as a whole? Becoming a pioneering force

in social innovation requires a shift away from

operating like a communications-driven industry

(that drives messaging through broadcasting a

message), to a culturally led industry (that

understands the fundamental challenges, desires,

and lives of the communities it serves).



Drive meaningful change by understanding culture Kofi Amegashie, Executive Director at the African Leadership Institute, tells a story that highlights the mammoth challenge for marketers who do not understand the nuances of culture.

When Amegashie was working at a multinational corporation a few years back, his

team undertook a sales visit to Kibera, a slum area in Nairobi, Kenya. They noticed

many small stores trading next to one another, but selling the exact same goods.

From a ‘Westernised’ point of view, this doesn’t make sense, because it ignores

basic marketing principles relating to competition.

However, the reality in Kibera, is that each of the storeowners comes from a

different tribe. The community buys from the trader who is from their tribe (either

Kikuyu, Luo, Luhya or Kamba) because storeowners offer credit to individuals from

the same tribe. This reduces the risk of failed repayment, because traders know

how to locate debtors through their networks.

This example illustrates the lesson that a misunderstanding of the nuances of culture can keep brands at a superficial level. Sadly, marketers continue to miss out on the opportunities that culture offers up.



Invest in culturally-

led solutions to

make an impact In addition, an understanding of culture helps marketers anticipate where consumer behaviour may be

changing. Cultural insights indicate shifts in the values, attitudes, and behaviours that influence consumer

behaviour, and articulate how consumers respond to major changes in the environment.

Notably, social innovation hasn’t only adapted to the need for cultural understanding. It has also begun to

challenge established ideas of business, innovation and social good. In this way, it’s an empty space with

the potential to transform the way we do business and interact with society.

Marketers need to take an immediate and real-time view of culture. Our heritage is both rich and complex,

and we cannot afford to ignore what it offers us as communicators. Indeed, we need to harness the wisdom

that exists in our communities – not only to remain relevant in the professional sphere, but also to play a

meaningful role in the betterment of society.

What if a brand that targets men, like Nestle Bar One or Unilever AXE, took it upon themselves to engage with government, using content that could be woven into the syllabus to educate young boys in schools? For example, a brand could take on men’s issues and confront negative attitudes towards gender, presenting a healthy perspective on what it is ‘to be a man’ in society today.

At Yellowwood, we believe that cultural under-standing offers a pathway for marketers to leverage different perspectives within a given environment. Culture also creates in-roads for businesses to initiate fresh conversations that will solve critical needs.

Innovation Pipeline

Fragrances that make menmore appealing to women

Purpose and Values

AXE believes that a man’s individuality is what makes

him attractive

ConsumerInsight

The dating game has

changed, women have become

a lot more assertive

than before

Social Challenge

Men are struggling to adapt towomen who

act outside of ‘traditional’

gender norms

Social Innovation

Overcoming gender issues by enlightening

men on how to positively engage with women



*notional example


3

1

2 This is the thinking behind the Social Progress Index2, which covers the social climates of over161 countries. Michael Green, who is part of the team that created the Social Progress Index, says,“Sadly, we live in a world where GDP is considered the only benchmark of success in a global economy; [where] our societies have become mere engines of production.”

In contrast, the Social Progress Index offers a more practical way of measuring the wellbeing of a society, by ascertaining how citizens experience living in a specific country, above and beyond GDP. It doesn’t measure the effort or intention of a country or economy, but rather its real achievements.

For example, the Social Progress Index does not measure the amount of money a country puts into healthcare, but rather the length and quality of the lives of the people in that country. It doesn’t measure whether governments pass laws against discrimination, but rather whether people who live in that country experience discrimination. The key is always the real, human experience.

Move beyond

GDP and focus

on social

progress

GDP – and its betterment – is what economies and businesses doggedly chase, year after year, because it has shaped and defined how countries’ successes are measured. But GDP ignores the environment, not taking into account factors like happiness, community and how people in each country experience life.

The Yellowwood approach to Social Innovation

Identify the problem areas

Build a platform for implementation with network effect

Find the intersections(purpose, values, consumer insights

and innovation)

Are there similar products / services out there that address the issue?

Define what your brand is better FOR, not simply who your brand is better THAN

Understand culture & communityUnderstand external factors

Can we add to something already in existence?

Can we better what is already out there?

Can we partner with a citizen or another entity to achieve this goal?

Is there a way that we can mainstream the idea?

Yes No

Yes Yes


2 http://www.ted.com/talks/michael_green_what_the_social_progress_index_can_reveal_about_your_country

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Social Progress Index Regression Curve 2016

Social Progress Index Chart 2016

Chad

IndiaSenegal

China

RussiaSouth Africa

France

UK

CanadaNew Zealand

Costa Rica

Brazil

USA

Kuwait

GDP PER CAPITA

SO

CIA

L P

RO

GR

ES

S I

ND

EX

0 10,00030

40

50

60

70

80

90

100

20,000 30,000 40,000 50,000 60,000 70,000 80,000


Innovation Pipeline

Improved services and communication in the healthcare sector

Purpose and Values

Keep people connectedand make consumers

lives brighter

ConsumerInsight

In the rat race of life,

I oftenforget theimportant

things

Social Challenge

Poor quality of life

attributedto chornic

health conditions

Social Innovation

Digital text reminderfrom MTN to citizens as

a reminder to collect chronic medication

The above regression curve underscores the relationship between GDP and the Social Progress Index. Notably, in poorer countries the curve is steep. This indicates that if poorer countries can generate more GDP and invest it in social areas (nurses, sanitation, etc.), those countries can generate significant ‘bang for their social progress buck’.

As the curve flattens out, each dollar of GDP is buying less social progress, making GDP less useful as a guide to social development in developed countries.

“In the 21st century, we face different challenges, such as obesity, ageing, climate change, etc., and so we need new tools,” Green says.

He poses this question: “Imagine if businesses didn’t just compete around their contributions to the economy, but also around their contribution to social progress?” Without doubt, the Social Progress Index offers a good starting point for marketers to search for areas that need intervention and to identify where their brands can provide a solution.

This presents an opportunity for a brand – like MTN, who’s mission is to keep people connected and make consumers’ lives brighter, for example – to partner with clinics. Perhaps they could text individuals, reminding them to get chronic medication and assisting in the area of healthcare by leveraging technology?

It is only when we begin to approach systemic issues with innovative solutions that we become real pioneers: able to create social innovations that drive visible and sustainable change. *notional example


Innovate from

the heart:

How true understanding leads to meaningful change in business.

Dr Garth Japhet co-founded the Soul City Institute for Health and Development Communication in 1992, and currently heads a company called Heartlines. The company aims to drive social change through media and community, by telling stories that people can relate to and engage with.

Japhet says that, at Heartlines, they believe in allowing people to tell their own stories. He emphasises the under-standing of where people come from, before trying to solve their problems. For this reason, Heartlines embraces the Social Behavioural Model as its core approach to engaging with audiences and communities.

“This model states that the individual is not an island, and that individuals are a part of social networks, communities, organisations, etc.,” explains Japhet.

“All of these environments and relationships have an impact on the individual … an individual’s decision is never made in isolation.”

According to Japhet, any messaging that

is directed at the individual should carefully

consider these environments.

“The model helps us to target messages and design strategies around how we solve certain issues,” he says.

“We look at each of the circles and establish the barriers to the desired behaviour…”

Interestingly, Kofi Amegashi believes that

marketers haven’t fully leveraged this concept

yet. He says that, when marketers conduct

research, they give the people they wish to

target a questionnaire that guides and shapes

the conversation and feedback.

“If marketers are going to find new solutions that drive social innovation and break through the clutter by offering people actual solutions to problems, we cannot keep asking the same questions,” says Amegashi.

Social Behavioural Model

Public Policy

Community(cultural values, norms)

Organisational(environmental, ethos)

Interpersonal(social network)

Individual(knowledge, attitude, skills)



Amegashi states that, “Socio economic develop-ment and new ways of doing business in Africa will ultimately be driven and led by the youth. However, current leaders in Africa are mostly over the age of 70. And the youth haven’t been given the education or the platforms required to express themselves in ways that will effect change.” He also says that the current African education system is not adequate – and that it hasn’t transformed at all over the past 50 years: “In Africa, we haven’t trained people to succeed in the new economy.”

On the bright side, it is encouraging to see organisa-tions across Africa applying social innovation to bridge the gap between skills and education.One such example is Harambee Youth Employment Accelerator, created to empower young people from disadvantaged backgrounds to succeed in the modern global economy.

According to Bryony Maxwell, Head of Marketing at Harambee Youth Employment Accelerators, the challenge is this: the youth get through Matric, but then get stuck and cannot find full-time employment. As such, they are often excluded from key networks that can provide meaningful work opportunities for them.

“Only about 12% of jobs are advertised, and the rest are shared via word of mouth or referrals,” Maxwell explains.

To bridge the gap and to give the youth the best possible chance of succeeding in the job market, Harambee offers access to networks that will provide real world opportunities and relevant skills. The organisation conducts a series of assessments that cover various factors; learning potential, numeracy, literacy and work readiness.It also creates behavioural profiles to help match young people to opportunities and roles at the companies that they are most likely to succeed at.As it stands, where notable employers look for university graduates, they tend to look only at the top ten universities. This puts students graduating from other universities at a severe disadvantage.

“Unemployment in South Africa is a challenge that cannot – and will not – be solved by government alone,” says Maxwell. “Government and business need to work together to address the issue.” She adds, “Sadly, businesses don’t think about the burden of the initial costs that someone who has just started working has to take on. For example, how do you cover transport costs in that first month of work?”

To assist young people entering employment, Harambee offers them a set amount of money to cover transport costs when they are attending work readiness training. They also engage with businesses to negotiate stipends to cover other major expenses within their first month of employment, before they receive their first salary. According to Harambee the South African who gets and keeps a job for 12 months or more has a much greater chance of remaining employed for the rest of his/her life. Big corporates must be aware that this is a trend that directly impacts their longevity and profitability. Importantly, it also provides a platform for youth brands to equip young people with the tools and information they need to build better lives.

At Yellowwood, we challenge big business to take this issue seriously, because prevailing methods of selecting candidates for employment simply perpetuate unemployment at the bottom of the pyramid. The alternative is to help to overcome it by offering young people a career path.

We want to encourage businesses and marketers to be the front-runners in driving change within their areas of influence, and to behave like ‘Positive Deviants’ in every possible way.

Tackling youth

unemployment

through smarter

business and

entrepreneurship

Yellowwood’s Social Innovation value cycle

Word of Mouth

12%

88%

Suppliers, Distributors

Consumers,non-users

Your categoryeg. books

Social needsof category

eg. education


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Positive Deviance3 refers to a behavioural and social change approach, premised on the belief that, in any context, individuals confronting challenges, constraints and resource deprivations, will employ uncommon but successful behaviours or strategies to enable them to find better solutions.

Brands need to become ‘Positive Deviants’ in their unique spheres of influence

Case study:

Social Innovation through targeted community engagement Rowan Spazzoli, a Masters Student in Development Economics and Assistant Lecturer, together with Tsakane Ngoepe and Louis Buys, were inspired to get involved in curbing violence in Cape Town, in response to attacks in Khayelitsha and Tokai in early 2016.

They began to investigate how people structure their security in less affluent areas, speaking to people who live in these communities they discovered that eachstreet had a WhatsApp group. If anyone wasin danger or felt unsafe, they could messagethe relevant group to request help.

Spazzoli explained that these WhatsApp security groups brought communities together to fight crime, as an alternative to private security services like alarms, beams and patrol vehicles (which many cannot afford). This insight inspired the group to form a company called AllSafe, and to create a wrist device known as the Guardian.

When a user presses the panic button on the device, it is linked to the AllSafe app that sends his/her location and information to people on the Guardian database, including the police and family members. Because the idea is to make the device as low-cost and inclusive as possible, it is Bluetooth-enabled and doesn’t require data to send the signal.Spazzoli says that, although they can’t ever completely stop crime, “…we can help to stop an attack before it gets really serious.”

As this example demonstrates, social innovation within the ‘informal’ space is a rich area that marketers must purposefully tap into to discover new opportunities. In many cases, someone in the community has already solved a specific problem in an informal way.

However, the discovery of such innovations only comes about when approached with intent. Many marketers come in as ‘educated experts’, trying to provide solutions to problems that they don’t fully understand. We need to shift our approach if we want to make a meaningful impact. Sweet Spot for Social Innovation

Innovation Pipeline

Provide peace of mind throughmaking people feel more secure

Purpose and Values

To reduce violent crimes

ConsumerInsight

I often feelunsafe whenI am alone

Social Challenge

High crimerates inSouthAfrica

Social Innovation

The Guardian wrist device:Sends an alert to police

and loved ones whenyou are feeling unsafe

Critically, these individuals identify solutions

where others don’t. As a result, they’re the key

to spreading and sustaining required change.

At Yellowwood, we support the notion

of creating white spaces for brands. In our

view, Disruption® is far more than a noun,

a book, or a process. It’s a way of thinking and

acting, and a way to look at our clients’

businesses and find new opportunities for

them. In addition, it’s a way of defining how

brands should behave, and how agencies

should do business every day.

We look at two examples of ‘Positive Deviants’,

demonstrating lessons for marketers and

businesses in problem solving and innovation.


3 The Power of Positive Deviance: How Unlikely Innovators ...Book by Jerry Sternin, Monique Sternin, and Richard T. Pascale

Assessing the real

impact of business

work streams

in societyLeveraging existing platforms to design targeted interventionsRapelang Rabana, founder and CEO of Rekindle Learning, refers to herself as a ‘technology entrepreneur’.

She says, “Among the millions of things that need to be fixed in education, the feedback loop is one simple thing that we can action immediately by using digital tools.”

LEARNING

Rekindle Learning was established when Rabana realised that individuals are not empowered to improve or correct their mistakes when learning. According to Rabana, one of two things happens in traditional learning today:“In the school environment you either don’t get comprehensive feedback or, two weeks later, when you get your marks back, you don’t remember what you were thinking when you wrote your test,” she explains. “In the work environment, employees are sent on training workshop courses for one or two full days, and employers hope that the staff will remember, retain and implement the knowledge they received. However, that usually doesn’t happen because staff just feel overwhelmed with information overload.”

In Rabana’s view, it is likely that a learner or employee will repeat the same errors in future, “so you perpetuate your strengths and leave your weaknesses behind because it becomes too hard to track”.

She refers to the learning model created in the 1960’s by Ebbinghaus, which notes that up to 80% of knowledge presented is lost without adequate reinforcement but that individuals can overcome the ‘forgetting curve’.

To address this challenge, Rekindle Learning is an app that helps individuals to put into practice the information that they are taught:

Rekindle Learning gives each learner the space to achieve the core mastery of knowledge required to reach higher levels of thought and critical analysis. This is done by enabling learning in small nuggets that are easy to digest and in a manner that can be measured. At the same time, educators and training officers are empowered with data to provide targeted learning interventions.

To illustrate this point, Khaya Mtshali shares a conversation he had with a homeless 26-year-old. The young man told Mtshali that he was homeless because his father had passed away years earlier, leaving him and his brother behind.

“Sadly, the bank sold the house … leaving the children on the street,” says Mtshali.

He argues that, from a business point of view, the employee at the bank who authorised the repossession of the home is held accountable to specific targets, and the bank is accountable to shareholders. As a result, these types of impersonal outcomes are inevitable.

But the critical point is that we, as businesses, need to assess the impact of our work streams on the environments around them. Furthermore, how do we intend to deal with impacts such as these?

For example, what if the banking sector undertook to drive financial literacy in a way that achieves the right impact? According to the World Bank, South Africans are among the biggest borrowers in the world, with 86% of the banked population in debt4. Competency must be accelerated in this area.

For marketers, it is a constant challenge to find ways to keep brands interesting and relevant to consumers. Changes in the speed of communication and access to information have introduced an age of greater transparency, and with transparency comes consumers who hold brands accountable for everything they do.


Innovation Pipeline

Methods that will assist learnersto absorb information easily

Purpose and Values

Rekindle Learning exists to reduce the time it takes to build

competency in learning

ConsumerInsight

I feel overwhelmed

when I am exposed to large

amounts ofinformation

at the same time

Social Challenge

Gap in skillsdevelopment

in thecountry

Social Innovation

Rekindle Learning App helps learners to immediately put into practice the information

that they are taught

Case study:

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4 http://www.rdm.co.za/business/2016/03/08/what-10-million-south-africans-struggling-with-debt-should-know


Paving the way for

policy disruption

within global trade

Karabo Songo, Group Founder & CEO of Olive Communications and Media Group, is a member

of the alliance and serves on its Board of Trustees.

According to Songo, the Alliance works on tackling the issues and policies that hinder young

entrepreneurs and businesses in getting started and succeeding in their respective economies.

In addition, the Alliance addresses ways to facilitate cross-border trade.

“The Alliance supports young African entrepreneurs as they seek to boost youth employment, contribute to trade, and support the Sustainable Development Goals – recognising that young people play an important role in wealth creation and poverty reduction” Songo says.

As they drive trade within and across borders, Songo asserts that the new union will give

young entrepreneurs and businesses a voice with high-level policymakers and enhance the

youth entrepreneurship environment. It will also create a peer network for support and

information sharing:

“At the Commonwealth Alliance, we are currently working out what we can leverage from each

other in our different countries, to help fill the gaps that exist by encouraging inter-governmental

assistance. It is important for young people to know that there are many markets out there that

they can work and succeed in.”

The Commonwealth Alliance of Young Entrepreneurs unites young business leaders from several countries in Southern Africa, seeking to promote entrepreneurship and trade across the region.



From the ground up: boosting the start-up sectorAs many entrepreneurs can testify, getting an enterprise up and running in African markets can be laborious and trying for even the most determined of characters.

Kofi Amegashi explains, for example, that in big multinational companies: “You walk in as a new employee and everything works. You have a salary,

and they automatically deduct your PAYE, pension funds, medical aid, UIF, etc.

You just fill out a form and everything is sorted. Now when it comes to drawing

up an employment contract for a smaller start-up, sourcing all of these basics can

be very challenging. Currently, these benefits are created to cater to the needs of

larger businesses, and their structures are framed and created to be feasible

in larger multinationals.”

In Amegashi’s view, entrepreneurs need an organisation that considers all of

the gritty challenges facing start-ups.

“Entrepreneurs should be able to buy this ‘start-up kit’ or package online and get going…we are in need of a massive shake-up in social innovation in business,” he says. “Today, we talk entrepreneurship but we are not enabling entrepreneurs to succeed.”



Driving profit

and positive

change in

communities:

It’s not an

either / or…

The Bertha Centre for Social Innovation and Entrepreneurship is the first academic centre in Africa dedicated to advancing social innovation and entrepreneurship. It also supports activists and storytellers working to bring about social and economic change.

Unsurprisingly, the Centre attracts top talent

to its teams. One such example is Tsakane

Ngoepe, who is part of its Innovative

Finance team.

“The Innovative Finance team works with

social financial experts including government,

social enterprises and researchers.

It conducts research to identify innovative

practices that are solving social problems

in Africa” explains Ngoepe, “Bertha then

‘incubates’ the projects to help sustain them.”

The Bertha Centre also offers a social insight

bond, which is an outcomes-based contract

that is run by the government, together with

social purpose organisations and NGO’s.

The government will effectively pay out a

bond to the social organisation, should the

intervention prove to be effective.

The Centre also runs an Impact Investment

Programme for investments that have a strong

social upliftment element, and measures its

success in both financial and social terms.

“These types of investments are gaining traction, and are proving to be an established financial and social strategy,” says Ngoepe.

Indeed, the Bertha Centre has launched

the African Investing for Impact Barometer,

which is an annual publication that snapshots

Africa’s fast-growing ‘investing for impact’

market.

As marketers, we need to shift our perspective

on social innovation and its various offshoots.

Instead of thinking of it as abstract or

somewhat intangible, we need to embrace the

fact that the socially driven contributions we

make to society can be measured, profitable

and sustainable. Moreover, this work doesn’t

have to take place within the CSI space alone;

ideally, it should become central to how we

conduct business and grow our brands.

Yellowwood’s Transformative Innovation Model

Benefits: Better revenueand profit

Better valuefor existingcustomers

Growingcategories,developing

new categories and unlockingnew markets

Newemployment or entrepreneurialopportunities

Education,healthcare,

infrastructureand sustainable

natural resources

ShareholderValue

CustomerValue

MarketValue

DirectEmployment

Value

Long-termSocietal

Value

T-2 T-1 T T+1 T+2



Leveraging the

right tools and

information to

lead with vision

Today, consumers are watching their budgets closely and shifting their spending patterns to favour the essentials. While some changes in spending patterns may be predictable, we suspect that marketers may be caught off-guard by some of the less obvious trends provoked by the global downturn.

To help us to identify these shifts, Dr Mignon Reyneke, Senior Lecturer at GIBS

Business School and a marketing business strategy consultant, points to the

‘foresight effect’5, centred on international research conducted by Oleg Urminsky

and Adelle X Yang of the Chicago Booth School of Business.

“The foresight effect explores how local optimism motivates consistency in brand and purchase decisions, and local pessimism motivates variety and shifts in brand decision-making,” explains Reyneke. “Consumers sometimes prefer to repeat past choices, while at other times, the same consumer prefers to try something new.”

Foresight Effect Framework

Inferences from

availableinformation

Local Optimism

SituationalFuture Outlook

Preference forSelf-continuity

ConsumerChoices

IncreaseSelf-continuity

(Avoid Self-change)

SequentialChoice Consistency

(Repeating Usual Options)

DecreaseSelf-continuity

(Seek Self-change)Local Pessimism

SequentialVariety Seeking

(Adopting Novel Options)


5 http://home.uchicago.edu/ourminsky/Foresight%20Effect.pdf

© 2016 YELLOWWOOD. All rights reserved. PAGE 35 www.ywood.co.za© 2016 YELLOWWOOD. All rights reserved. PAGE 34 www.ywood.co.za

During uncertain times, people tend to try to control what they can, making adjustments and decisions that are within their control – with brands being one of the most obvious and variable elements.

Looking ahead, the opportunity lies in becoming a brand that is a ‘champion’ and that stands firmly against consumer frustrations during difficult times.

From our vantage point as marketing strategists, this is an important concept,

and one that could trigger a refresh of existing brand and marketing strategies.

If not, a slowing consumer spending cycle will surely worsen.

With this model in mind, Yellowwood was eager to explore current attitudes in

South Africa, and how consumers relate their attitudes to how they spend their

money and which brands they select. We conducted a mobile study on a

representative sample of n=1147 people6 in South Africa. The study revealed a

connection between people’s attitudes about their present and future, and

switching between the brands that they regularly purchase.

When asked about the current South African context with reference to economic

instability, lack of employment and the general political landscape, 1 in 4 people

reported that they are unhappy with where they are in life right now.

Notably, being positive or negative about the future seems to be driven by income,

with significant differences around age and race. Those who said they felt

negatively about the future were skewed towards people who were 50 years of age

and older, as well as people who have a household income of less than R4000 a

month. Individuals aged 25-34, were significantly more positive about their future

in South Africa.

This optimism translates into brand purchasing behaviour. A major proportion

of people who are negative about the future stated that they never buy the same

brands, while people who are positive about the future stated that they always

stick to the brands they regularly buy.

Interestingly, 23% stated that they always stick to brands that they regularly buy, with an overwhelming majority (72%) stating that they tend to change the brands they buy based on what they can afford. This affordability aspect speaks to the prevailing economic climate, with 54% saying they watch their money more now than they have in the past.

Taking these insights into account, it is important to look for ways to mitigate

the instincts of consumers to switch brands as a way of protecting their future

prospects – and Yellowwood believes that this can be achieved through

social innovation.

6 sample recorded in South Africa over the period of 5 - 14 July 2016


With this in mind, we have compiled a guideline for marketers to start forming targeted Social Innovation strategies:

Guidelines for marketers to start forming targeted Social Innovation strategies

1+1=3: How Can Social Innovation Change Cultures and Create Public Value? A Mediterranean Comparative Multiple Case StudyRicardo Altimira Vega, Ilaria Bassi Monica De Melo Freitas, Rocco Frondizi Marco Meneguzzo, José Manuel Resende

Young entrepreneur sees big potential in underserviced South African townshipshttp://www.howwemadeitinafrica.com/young-entrepreneur-sees-big-potential-in-underserviced -south-african-townships/

Interview with Khaya MtshaliFormer design lecturer and current Strategic Designer at Village Strategic Design

Interview with Kofi AmegashiExecutive Director at the African Leadership Institute

Social Progress Index Reporthttp://www.socialprogressimperative.org/ global-index/

Michael Green TED X TalkWhat the Social Progress Index can reveal about your country

https://www.ted.com/talks/michael_green_what_the_social_progress_index_can_reveal_about_your_country?language=en

Interview with Garth JaphetCo-Founder of the Soul City Institute for Health and Development and CEO of Heartlines

Interview with Bryony MaxwellHead of Marketing at Harambee Youth Employment Accelerators

The Power of Positive Deviance: How Unlikely Innovators Solve the World’s Toughest Problems Richard Pascale, Jerry Sternin and Monique Sternin

Interview with Rowan SpazzoliCo-Founder of AllSafe

Interview with Rapelang RabanaFounder and CEO of Rekindle Learning

Interview with Karabo SongoGroup Founder and CEO of Olive Communications and Trustee of the Board of the Commonwealth Alliance of Young Entrepreneurs

Interview with Tsakane NgopeInnovative Finance Analyst

Interview with Dr Mignon ReynekeSenior Lecturer at GIBS Business School and Marketing Business Strategy Consultant

Finally, we believe that it is critical to recognise that businesses can be profitable and drive Social Innovation at the same time. Armed with unique cultural insights, a broader world view and business prowess, local marketers can lead the change that communities so desperately need. At the same time, our brands will grow stronger and gain the relevance they need to survive in fast-changing and competitive markets.

Conclusion

Place Social Innovation at the core of business strategy. It cannot operate as a separate CSI project or tick-box affair.

Take the bigger picture into account and avoid working in silos - environments are interconnected.

Devise operating models that consider the socio-cultural impact of the business.

Listen to conversations before starting new ones. Marketers should gain a deeper understanding of the context in which key consumer trends arise.

Instead of trying to ‘lead a movement’, provide the platform to draw attention to the things that matter most to consumers.

Stop collecting more and more information and start creating and applying knowledge in ways that make you more relevant

www.ywood.co.za © 2016 YELLOWWOOD. All rights reserved.

References

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