July 8, 2024. Scaling Strategies is a course developed by VIVA Idea, designed to help companies, especially MSMEs, negotiate impact for resources while maintaining a market focus on impact creation.

For more than ten years, VIVA Idea has studied the entrepreneurship and impact ecosystem in Latin America, generating knowledge from in-depth research with concrete cases to design solutions to the main problems of companies and organizations that seek to grow while generating a positive social or environmental impact.

Thus arises Scaling Strategies, a course based on the book Scaling Strategies for Social Entrepreneurs: A Market Approach (Palgrave MacMillan, 2020) oriented to help companies negotiate impact for resources while maintaining a market approach in creating impact.

The course is an opportunity for micro, small and medium-sized enterprises (MSMEs), as well as large companies that work with value chains and organizations whose beneficiaries include enterprises or companies or that seek to strengthen entrepreneurship in the communities where they work.

For MSMEs, Scaling Strategies is an opportunity to understand their potential impact and scale their business, taking into account the social or environmental contribution they make.

The course is based on research conducted by VIVA Idea with MSMEs throughout Latin America, success stories, support and observation on the best techniques to scale the impact, mainly and project themselves as a triple purpose company.

The challenge of scaling up

When a company considers scaling up, it must be able to visualize the possible scenarios and know that it will not always be successful, since its expansion potential depends on multiple factors, as well as the context of its venture.

Therefore, before making decisions, companies and organizations should explore aspects such as relationships with their stakeholders, their environment, available resources, operating processes and leadership structure in order to have a thorough understanding of their options for increasing their impact.

To provide tools to help overcome this challenge faced by many companies and gain an understanding of the components that need to be adjusted to achieve their goals, as well as to develop new capabilities to access new resources and skills, VIVA Idea launched the Scaling Strategies course, based on the research presented in the aforementioned book.

This book was written by Urs Jäger, research coordinator of VIVA Idea and professor at INCAE Business School, Felipe Symmes, Academic Outreach Coordinator of VIVA Idea and professor at EGADE Business School, and Guillermo Cardoza, professor at INCAE Business School.

The book delves into a market-based approach to create effective scaling strategies from cases of social entrepreneurship in low-income Latin American markets. “Based on the analysis of more than a hundred successful cases in the Latin American region, our book serves as a guide to not unbalance the dual social and economic goals of these entrepreneurs as they expand their business,” explained Felipe Symmes.

This course is based on a three-phase model that acts as a framework for companies to identify and overcome the challenges they face as they attempt to scale their economic, social and environmental impacts.

Through an approach that integrates theory with practice, participants are guided to think strategically about their organization’s key challenges, facilitating the generation of complex discussions and the development of a scaling strategy tailored to their specific context. This course is especially useful for early-stage companies seeking to align their growth with sustainable and lasting impact.

Jose Valverde, executive director of VIVA Idea, noted that “the key point of the course is to understand the possibility of trading impact for resources and maintaining a market focus in creating impact”.

Three-phase model

Phase 1: Negotiate impact for resources

In this phase, companies begin to build their strategy by identifying with which actors they can negotiate the impact they offer in exchange for the resources they need to grow. These actors can be public organizations, international NGOs, private companies, institutional or individual impact investors, customers, etc.

According to Scaling Strategies’ market approach, the value of the impact offered by a company depends on how others evaluate this impact. In other words, it must be measurable according to certain standards and indicators. If these standards do not exist, companies can propose their creation. This phase includes impact analysis, resources, standards and negotiation.

Phase 2: Design operations

Once the negotiation strategy is defined, entrepreneurs design an operations plan to generate revenue and generate impact. Companies link revenue generation through the creation of products and services with efficient operations to achieve the impact that customers or beneficiaries want.

One way to do this is to create standardized products or services focused on a customer/beneficiary need, being able to increase their impact in quantitative terms while reducing operating costs in the value chain. In this phase, supplies and assets, products and services, and distribution and revenues are analyzed.

Phase 3: Integrating the financial logic and the impact logic

It is natural that when talking about a scaling strategy, there are conflicting views within the organization on how to achieve this growth. This phase is about balancing the economic logic of the venture with the logic of social or environmental impact. This integration is done in light of three elements to be analyzed: mission, leadership and communication.

Actionable knowledge

Scaling Strategies is one of the courses offered by VIVA Idea, each one focused on responding to the needs of companies and organizations seeking to scale while making sustainability their competitive advantage.

Another such course is “Cinco Capitales” which shows how to leverage existing resources at the community level.

VIVA Idea transforms its experience and knowledge in the entrepreneurial and impact ecosystem in Latin America into practical and executable solutions in the short term that contribute to the design of business models capable of leading current changes and innovating while scaling their impact.