Three Kids in a Garage

Last week, I participated in GE’s global conference, ‘Disrupt or Be Disrupted’. The theme of the event was simple. As barriers to entry fall in nearly every industry, no company is safe or immune from being disrupted in a fundamental way. It’s no longer uncommon that industry leaders lose their edge in months, and wither to irrelevance in record time. Unless corporates have the courage to embrace and empower their ‘creatives’ they don’t stand a chance in sustaining their competitive advantage.

But how do you ‘disrupt’ your business from the core by building on your strengths and leveraging your assets? Jeff Immelt, GE’s CEO talked about the fear of losing too many engineers and scientists who don’t ‘fit corporate culture’ but proceed to found billion dollar businesses (Sergei Brin started at GE). It reminded me of a session at the Indian School of Business led by a senior Google Executive where he said that it’s not Microsoft, Facebook, or Twitter that keeps him up at night, it’s ‘three kids in a garage’. Hewlett Packard, Apple, Google, and Groupon, all started small, learned fast from failure, took risks nobody was willing to take, and then fundamentally disrupted business models and industries.

As I think about social enterprises in the developing world, many emerge as responses to market and government failure. M-Pesa in Kenya, for example, emerged in response to unbanked people having no way to safely transfer funds within the country. Britain’s Department for International Development funded the prototype with Vodaphone that fundamentally changed the financial services industry in Kenya. And yet no Bank saw this opportunity early on; not until more Kenyans used M-Pesa than all financial institutions combined. Ushahdi similarly grew out of a need to reliably and quickly communicate crisis information following elections.  What emerged was an open-source SMS cum mapping platform that has been repurposed many times globally. Vijay Govindarajan calls this reverse innovation. With access to connectivity, global expertise, and information at their fingertips, talented people from Africa, Asia, and Latin America are consistently demonstrating that they can lead global trends and create examples that are replicated in reverse.

But what does this mean for global development institutions like the World Bank particularly institutions with wide footprints in the developing world?  Unless we pay attention to what’s happening around us, much smaller and nimbler actors will prove that neither access to capital nor knowledge is a sustainable comparative advantage. Like GE, we need to figure out how to ‘disrupt’ ourselves and jettison services that no longer generate value to our clients. Are we lending institution or a development solutions bank that can play many keys on the keyboard? What’s the next idea, product, or service that can lift 100 million people out of poverty? Should we identify it ourselves or can we work with others to ‘crowd-in’ the knowledge, talent, and expertise to realize it? How do we leverage core strengths and assets without limiting ourselves to only what we ‘do’ today?

Innovation happens constantly and globally not least in the social sector (TB eradication in India). What if we developed the capacity to systematically ‘spot’ these gems and use our policy, finance, and knowledge levers to scale them up? And it’s not without precedent. Paying attention to transformative opportunity was central to the Bank’s success with Open Data and the spread of conditional cash transfers. It wasn’t that we came up with these innovations but we leveraged considerable resources to help them scale and pushed governments to take notice.

So what is the role of the World Bank today in alleviating poverty? Defining problems clearly and distinguishing between symptoms (ie growing carbon emissions) and root causes (renewables cost more than carbon) is a powerful place to start. By framing the right questions and being open about where we’ve succeeded and where we’ve failed, we could invite many potential solvers to the table. We may not get everything right the first time but agile development teaches us that rapid prototyping, cross-functional teams and quick cycle times lead to surprisingly good results. Remember the kids in the garage?


But it starts with listening better and engaging our end-users (citizens not just governments) to understand what matters most to them. Recognizing other important actors on the global stage like Foundations and NGOs is an important step in adding value to a crowded ecosystem. As we learned from the clock-maker who solved the challenge of longitude, experts may sit together but expertise is widely distributed and solutions come from unexpected places. In a complex, multi-polar and networked world, no one organization can act or win alone. Imagine the World Bank as an open platform bringing together the best people, knowledge, technology, policy, and finance to solve the world’s hardest problems?