THE ENTERPRISE LEARNING AND NETWORKS INITIATIVE
Why, What, How
WHY SHOULD YOU THINK ABOUT IMPLEMENTING THE ENTERPRISE LEARNING AND NETWORKS INITIATIVE?
Most of our clients are crowded into highly competitive, low value-added markets. Most work long hours just to survive. Many face additional challenges to business growth such as poor machinery, poor business management skills, limited knowledge of marketing and of sales. Credit alone is not enough for most microenterprises to break out of the subsistence cycle. To be competitive, micro and small enterprises need access to information and markets in addition to financing.
WHAT IS THE ENTERPRISE LEARNING AND NETWORKS INITIATIVE (ELN)?
ELN mimics what entrepreneurs do naturally in the market - constantly LEARNING about how to run their businesses more efficiently, identifying new market opportunities, and forming LINKS with other businesses to increase their profitability. ELN presents a framework and a methodology to help clients work through this process.
When Women's World Banking (WWB) talks about LEARNING, we believe that what microentrepreneurs really need is access to practical information; information that can easily be absorbed and applied to their businesses. ELN provides clients with information such as:
- How to improve the design of their product so that it can sell in a higher value-added market niche.
- How to change their production process so that they can produce more goods of a higher quality at a lower cost.
- Where they can access cheaper raw materials so that they can make a bigger profit.
- Where they can sell their product in larger quantities at a higher price.
WWB believes that the best place to learn this information is the factory floor, not the class room. WWB also believes that the best teachers are those who have built businesses themselves - other business people not traditional trainers.
When WWB talks about forging commercial LINKS, we mean a range of activities from identifying sellers of raw materials who are prepared to sell at a lower price, to identifying buyers of the final product who are prepared to pay a higher price. These are just some examples of commercial LINKS:
- Production Networks: Collaborating in the production of orders; specializing in specific operations
- Non-exploitative Subcontracting: Clients work as sub-contractors for larger firms
- Information Broker: Identification of sources of cheaper raw materials
- For Profit Marketing Arm: Promotion and selling of your client's products
HOW DOES ELN WORK?
There are three components of ELN: Research, Learning and Links. All three occur simultaneously.
COMPONENT 1: RESEARCH
- The affiliate hires a person to be the ELN facilitator. His/her job is to coordinate the implementation of the program. S/he must be strategic, pragmatic and above all, have strong entrepreneurial instincts.
- The facilitator starts to conduct RESEARCH along three dimensions:
- Investigation of the sub-sector with the fastest growth potential amongst your target clients.
- Identification of the clients within that sub-sector with the most potential to grow their businesses. These clients become the participants of ELN.
- Cultivation of the best business people from outside your participant base who are willing to act as LEARNING resources for your participants. We call these individuals key players because they are the key not only to the LEARNING of participants but are also key in that they will likely be the source of many commercial LINKS.
The ELN facilitator conducts interviews with each potential participant and key player. S/he conducts what is known as a SWOT analysis of their business - identifying the Strengths, Weakness, Opportunities and Threats that each business faces. This analysis has multiple purposes. First, it enables the facilitator to get a sense of the comparative advantages each business has in order to assess the opportunities for creating LINKS between each business. Second, it allows the facilitator to get a sense of the kind of LEARNING that is necessary in order to enable each business to reach its potential. Third, it helps the facilitator build a map of the sub-sector so that s/he can develop a clearer picture of where the greatest potential for forming LINKS may be. This mapping should be complemented by data from the affiliate client database and/or secondary data such as government reports on the relevant sub-sector.
COMPONENT 2: Best Practice LEARNING
Having identified the participants and key players, the facilitator then arranges visits between them so that participants are exposed to more efficient ways of doing business. Following the visit, the facilitator works with participants on an individual basis to help them articulate where they want their business to go and, based on the visits, what kind of LEARNING they need. In this way the facilitator ensures that LEARNING is demand driven not supply driven. There are a variety of ways this LEARNING can occur ranging from one-on-one counseling provided by the key players to workshops on specific topics such as product design and marketing. As the facilitator builds up knowledge of the sub-sector, s/he becomes a key learning resource so that each time s/he meets a participant, knowledge is transmitted and LEARNING occurs.
COMPONENT 3: Commercial LINKS
The identification of commercial opportunities and the facilitation of LINKS both amongst the participants and between participants and key players occurs throughout the RESEARCH and LEARNING components of ELN. This is a constant and organic process, just as it is in the market place. Every LEARNING opportunity must also be a LINKING or selling opportunity. LINKS can be facilitated but they cannot be imposed. The facilitator in effect, acts as the information broker, constantly looking for commercial opportunity for her participants.
DOES IT WORK IN PRACTICE?
ELN has been implemented in nine WWB affiliates over the past two years. Each affiliate has demonstrated extraordinary ingenuity in adopting and adapting the framework. WWB has learned that ELN is a very powerful model if approached in a strategic manner. Here is one such story:
ASSOCIACION DOMINICANA PARA EL DESARROLLO DE LA MUJER (ADOPEM)
ADOPEM operates one of the network's most successful ELN programs. After careful research it chose textiles as its sub-sector of focus. ADOPEM identified as participants not only growth oriented entrepreneurs from within its credit base, but also some from outside its credit base. This helped to grow ADOPEM's client base. ADOPEM not only used the organization's prestige in the community to attract and motivate successful business people as key players but also presented them with the opportunity of finding sub-contractees. It then arranged a series of exposure visits in which ELN participants began to LEARN what their business potential could be and organized workshops and one- on-one technical assistance to fulfill identified needs. Soon, participants began to see marked improvements in their production capacity. Commercial LINKS were continuously forming throughout this process. With these successes in place, ADOPEM has decided to launch a for- profit Resource Center which will provide its clients with a variety of additional services including specialized machines to increase production capacity, top notch technical assistance, and a marketing service with sales agents who will generate orders for ADOPEM's clients both nationally and internationally. The clients will pay for all of these services and will also be shareholders in the center.
WHY DOES ELN MAKE SENSE FOR A MICROCREDIT INSTITUTION? When your clients' business grows so does your loan portfolio. Successful clients require larger loans more often. They are also better credit risks so your repayment rates increase. Improved repayment rates increases your capital base thus allowing you to expand your credit opera- tions. Enabling your clients to grow their businesses grows your business.
For More Information:
If you would like to find out more about the Enterprise Learning and Networks Initiative and whether your affiliate qualifies for participation, please do not hesitate to contact:
Inez Murray
Business Development Services Coordinator
Women's World Banking
8 West 40th Street
New York, NY 10018
Tel, (212)768 8513
Fax: (212)768 S519
E-mail imurray@swwb.org
Women's World Banking
Hari Srinivas - hsrinivas@gdrc.org
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