About two months ago I wrote about an idea of applying social network theory to growing small businesses. There is plenty of evidence showing that the diversity of an individual’s relationships is strongly correlated with the economic development of community, so our idea was to apply this thinking to small businesses.
Our hunch is that the underdevelopment in northern Montenegro may come in part due to positional inequality - where some people are better off because of who they know and where they’re located in their network of contacts.
A wealthy person may attract other wealthy friends, thus becoming wealthier by being close to a source of good information, business opportunities and influential people, and vice versa.
Following this logic, we could help small businesses in the north by connecting them with better performing companies from developed regions – companies that have access to better performing markets. This might open up new demand, ideas and knowledge that could flow through a new network.
Our thinking was that a prize-based challenge might be the best way to provide incentives for north-south connections. We asked at least three businesses to form a team and design a new product (or improve an existing product) for one region – Durmitor National Park.
Those teams who partner with a company from a developed region would get extra points in their evaluation and higher chances of winning. The prizes are both financial and non-financial (mentoring), depending on the needs and the context of a proposal.
We received 12 proposals. And we wanted to share our experience, and hopefully get some useful feedback from those of you who have worked on similar initiatives.
Fantastic feedback from unexpected places. The initial blog post generated a lot of interest, which is not surprising considering the focus on the impact of networks on issues ranging from policy making to consumer habits.
But what never ceases to amaze me is the constructive feedback and offers for collaboration and ideas. Jenny Ambrozek (check out her fantastic blog) connected us to some of the latest research and thinking on network theory. Jillian Lipnack is now a firm co-conspirator who will help us use networks to better understand risks that our small companies are facing (ranging from climate and market, to political risks).
We learned about the fascinating work Spatial Collective does on mapping community assets, so we are curious to see where this conversation takes us next. We picked NESTA’s Alice Casey’s brain on working with communities and Will Perrin on empowering people through online collaboration.
Ease up on the complicated submission forms. Even though we set out to create a very simple way of applying for the challenge, businesses found it complicated and cumbersome (you can look at the documents in English, procurement case number CFP 013-12).
We wanted information that doesn’t necessarily relate to the challenge itself such as: gender makeup of staff, relationship with the National Park, environmental impact of operations. Our intention: gather as much information so we can better understand assets and risks that businesses face, that we can address in the post challenge phase.
On the other hand, local communities felt that filling out this information detracts from their focus on the actual challenge. So point taken – for the future, we could focus on figuring out the other information after we identify the winners.
Face-to-face beats computer-to-computer when it comes to clarifications. We held a series of local meetings with those interested to get involved in the challenge. In addition to having government partners in the meeting, the UNDP team who will continue working with the businesses was able to talk with, and support local communities from a variety of perspectives:
- Designing ideas that are cross border in nature (colleague Viktor Subotic has worked on the first round of European Union cross border projects in Montenegro)
- Specificities of business operations in a National Park (colleague Borko Vulikic has led our efforts in protected area management for the past several years)
- Characteristics of business clusters (colleague Sanja Medjedovic has worked with the Government and partners from other United Nations agencies on designing a cluster strategy for Montenegro)
More importantly, communities raised some interesting issues and we had an opportunity to clarify questions such as:
- Wait, we don’t understand why you want us to partner with companies from the south. We’ve never done that and we don’t know how, and we don’t understand the value.
- Wait, what is a business cluster and what do we get out of partnering with others who may become our competition?
- Wait, so if I provide accommodation, you say that you will support me partnering with someone who organizes transport for tourists from the south and someone else who brings tourists from Germany to the coast?
Next steps. Looking through the 12 applications, it appears that the challenge resulted in some concrete and tangible connections between the two regions.
Right now, we’re selecting the winning teams and designing a plan for joint work.
One part will include purchasing necessary equipment, another working side by side with the businesses and providing support in carrying these new ideas forward that will bring the northern and southern regions together.
Stay tuned, we’ll keep you posted!