I teach a seminar each spring to twenty-four honors students from around the country and around the world. Last week we discussed the challenges of growing a social enterprise and more specifically the difficulty of creating sustainable revenue streams. The class became intrigued by the model suggested by Girl Scout cookies. What follows is a short essay by one of the students, Peacemaker Myoung, suggesting lessons social innovators can learn from the Girl Scouts.
How do you scale a social enterprise in a sustainable manner? The unlikely answer to the question is found in Girl Scout cookies, or more specifically, in the scaling strategy used by Girl Scouts nationwide to sell over 200 million boxes annually and generate over $700 million in total revenue. This highly successful but often overlooked strategy involves a unique method of marketing and distribution and a sustainable system of incented localization. The successful distribution and sustainable impact of mosquito nets achieved by local Tanzanian businesses and the Acumen Fund demonstrates the effectiveness of employing this scaling strategy in other social enterprises.
Girl Scouts use personalized marketing and distribution that takes advantage of existing trust, the power of the 'family salesman,' the interconnectedness of families, and incentivized localization to scale their operations. It is well established that trust is the most important component of business. Businesses put in a tremendous amount of effort and money in advertising and marketing in order to buy customer trust. Girl Scouts, by approaching family, friends and their community -- people who already trust them and genuinely care about them -- achieve for free what major corporations struggle to do. Girl Scouts are personal saleswomen with established trust, therefore the issue of scaling is not one of trying to convince customers and break markets but rather reaching out to more dads, moms, uncles and aunts. When 2.3 million Girl Scouts employ such a strategy with respect to each of their families, friends, and communities, the entire country becomes one big family to reach out to not an impossible market that only the biggest, baddest corporations can tap into.
Another critical aspect of the Girl Scout scaling strategy is incented localization. In every community in America, Girl Scouts are told that in order to continue doing what they love, they must raise funds. Each community of Girl Scouts in the country is given an incentive to raise money. This places the responsibility of sustainability on each community -- on each Girl Scout. The decentralization of power allows each community to specifically and personally address its needs.
The joint venture of the Tanzanian textile company A to Z and the Acumen Fund employ the Girl Scout scaling strategy. Unlike businesses, the purpose of social enterprises is social impact not profit. Similarly however, the means to achieve the ends are remarkably interchangeable. A small company called A to Z was given the incentive for profit by selling malaria preventing mosquito nets through the Acumen Fund. It was given the means to produce the good. To successfully distribute the product, the factory uses its female employees. These women market directly to their families, friends, and community. Just like Girl Scouts, the women take advantage of existing trust, the power of the 'family salesman,' the interconnectedness of families, and incentivized localization. Employees and businesses are incented to reach out to more people and sell more. Mothers who work at the factory become spokeswomen for health issues in the community. The matter of public health in the region is now personal, sustainable, and incentivized. Tremendous improvements in health, productivity, and self-sustainability have been observed in the areas surrounding A and Z and the movement is spreading rapidly across East Africa.
The scaling strategy employed by Girl Scouts is one of personalization and incented localization. Its successful implementation by Girl Scouts and Tanzanian businessmen alike demonstrates an incredible amount of potential to address not only the horrendous loss of life caused by malaria each year but also other social issues such as irrigation, sanitation, and agriculture. Its application is limitless.