Changing Business Models to Change the World

Non-profits have the infrastructure and know-how to tackle the global malnutrition crisis, says Paul Murphy, CEO of Valid Nutrition. What they need now are for-profits with vision to be encouraged to help them.

Paul Murphy, CEO of Valid Nutrition.

Will businesses be willing to get knee deep into sustainability efforts if they’re not able to make a traditional business case for it?

That’s one of the crucial questions Paul Murphy, CEO of Valid Nutrition, faces as he works to partner with for-profit corporations to treat and prevent childhood malnutrition in developing countries.

“It does require them to look at a different business model, one that is less beholden to short term shareholder demands and much more focused on long term impact,” says Murphy.

Valid Nutrition was founded by Dr Steve Collins, who also established Valid International, a 13-year old company which developed the methodology known as Community-based Therapeutic Care. “Severe acute malnutrition affects about 25 million kids globally at any point in time,” says Murphy, and the community approach conducts treatment through local health centers rather than hospitals. Children are prescribed ready-to-use therapeutic food in one-week rations, and return regularly for assessments while living in their homes. That’s easier for parents who don’t have to split their time between home and hospital and more convenient in locales with limited hospital facilities. Because of the community aspect and related improved understanding on nutrition, it is also a fundamental change from a supply to a demand led dynamic for such products. “This is now the preferred intervention method for treating severe acute malnutrition in developing countries,” says Murphy.

To realize its full vision — of rolling out the distribution model to more countries, working with governments and NGOs to train locals and using social marketing at the community level to encourage parents with young children to come forward for prevention as well as treatment — Valid is working to partner with corporations that have the finances and the vision to fund this kind of work.

It hasn’t been easy. Murphy, who spent 27 years with Unilever and was the chairman and chief executive of Unilever Ireland before joining the social enterprise sector, says Valid is ready to scale up its projects but doesn’t have the deep pockets to do so.

In a conversation with Nina Kruschwitz, an editor and the special projects manager at MIT Sloan Management Review, Murphy explains what companies are skittish about and how he’s trying to get them to embrace “an entirely different business model” in their sustainability-related projects.

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2 Comments On: Changing Business Models to Change the World

  • TOM KADALA | June 21, 2012

    I like Paul’s mission to feed the bottom of the pyramid with high nutrition-value processed foods but feel that he is going about it in the wrong way.

    From the article, which I thought was well done, Paul is offering a solution that clashes with local NGO’s and local food providers including small family food stands, etc. Then he is asking for funds from corporations similar to Unilever (where he worked) that have a dominant logic or very specific way of doing business. Asking a Unilever to accommodate anything that does not fit their current business model is, in my opinion, a fruitless task. Paul needs a better plan.

    I would recommend that Paul consider a different approach, one that encourages constructive dialogue among key players. He should seek a buy-in at multiple levels before making dictates of his own. I believe he may be making a classic operations chief error, where raw material constraints determine a target market. It should optimally be done the other way around to ensure success.

    Instead of trying to solve the BIG problem himself, Paul should place the burden of discovery on his beneficiaries. Let his market dictate what it wants. Rather than seek funds and force through untested solutions, he should devote his time to managing the exchange of ideas first. Done right, especially with the help of NGO’s who thrive on community input, he will gain greater insights on how to best sell/position his nutrition-value concept for all players involved.

    I hope this advice is received in a constructive manner, as it was intended.
    Best of luck!
    Tom Kadala

  • javvadih.rao | June 30, 2012

    The issue on hand for Mr.Paul is not on demand side but on supply side. Paul’s effort for co-creation of value, by engaging with NGO, is laudable. However, Paul shall explore / consider the NGOs network with the community for sourcing the raw material. He can examin the formation of Self Help Groups (SHGs), with the assistance of NGO, whoose purpose, among others, is to procure the raw material of a given specs, aggregate and deliver at production facilities and in return take the finished product from the facility for further distribution.

    With large number of SHGs, it is possible to bring in the financial instituions, for initial seed capital for each SHG with group guarantees to mitigate the default risks. SHG is the seller of raw material and also the buyer of the finished goods, with less transaction cost for each cycle. This type of engagement would also generates, sustainable demand for the product.

    If this approach was tested earlier, probably needs refinement incorporating the learning and iterate for betterment.

    I wish all the best to Mr.Paul and his team

    Javvadi Rao

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