So what the heck is transformational change?

PPPLab’s Joost Guijt (WCDI) asks if public-private partnerships are a potential catalyst for transformational change, then what is that level of change we should be considering? This was the focus of one session on PPPLab Day, November 30 2017.

Experience from Bonsucro, the global sugarcane platform, was shared by Simon Usher, the former CEO of the platform. Beginning in 2005, Bonsucro was set up as a credible multi-stakeholder organisation for better sugarcane, initially focused on creating a global objective performance standard for everything that mattered about producing sugarcane and its primary derived products. By 2010, it had the standard, but only 0,1% of global production was certified; hardly the driving engine of a transformation of the way the sugarcane sector global operates.

In 2011, Bonsucro fundamentally shifted the way it tackled certification. Rather than enforce a single standard, it shifted its standard to become a global benchmark. Companies could be certified to Bonsucro standards, but they could also demonstrate how they compared to the Bonsucro benchmark. Most importantly, the standard started looking more structurally at how compliance with the standard could demonstrably help companies operate better businesses. And from being a fixed target system, it shifted to a continuous improvement program, with extensive data to support change.

Over the next four years, the platform demonstrated the ability to manage and maintain both the framework behind the standard as well as a credible third party certification. Certification – despite being less ‘compulsory’ for the sector – expanded by a factor 40. An impressive growth and equivalent to 100% of the USA’s annual sugar import and 100% of Coca-Cola’s annual sugar consumption. However, given that 90% of global sugarcane is produced in Brazil, again hardly transformational.

The conclusion for now: transformational change means transforming the goals aimed for; from market-driven incentive based, to tackling core business practice. And policy. An example given was China. China is currently the world’s largest importer of sugar. Any change in Chinese policy would therefore automatically drive the global production base to comply with such standards. If  China were to set far-reaching sustainability goals – and invest in its national supply to meet those standards – the sugarcane world would follow. But who is going to get China to shift its goalposts?

Shifts in thinking on transformational change in the sanitation sector was discussed as comparison. Sanitation for all, by trying to make single-user toilets available to all, is not leading to structural access and use of sanitation facilities. The current transformational change in thinking is that sanitation needs to be tackled as a value chain, from ‘production’ of waste, to collection and processing into valuable end products. The nut to crack here is: what processes can be set in place and funded long enough to allow the sanitation sector to transform itself into a value chain based service sector?

Three critical steps can be identified:

  1. The demand for services needs to shift to the end use of waste, not to the point of production. That is the basis for transforming behaviour change.
  2. Enforcement is required to make sure that all parties in the value chain play their role. Currently there are too many incentives for individual links in the chain to choose for their own direct benefit, which sabotages the ability of a chain to function effectively, and finally;
  3. Patient finance is needed to allow sanitation services to evolve into linked value chains.

In the sanitation sector the question is which platform can create a critical mass that can aggregate change at scale? And which could ensure there is direct pay-off for all parties? Bonsucro is tackling similar questions in the sugarcane sector, and since 2016 has therefore shifted to becoming a platform organisation for the sector, rather than primarily a certifier/standard upholder. For both, pathways to transformation can be seen to be built on three steps; 1) a trigger to kick in,  2) a process to achieve change with 3) incentives to drive that process.

Find the trigger, process and incentives, connect the dots, aim high, and transformation should be possible.