Im sure you know the book Men are from Mars, Women are from Venus (by John Gray, 1992). The book, as suggested by the title, asserts the notion that men and women are as different as beings from other planets. The book offers many suggestions for improving men-women relationships in couples by understanding the communication style and emotional needs of the opposite gender.

An example of the theories it offers is that women complain about problems because they want their problems to be acknowledged, while men complain about problems because they are asking for solutions.

Last week I was reminded about this book as we held a workshop in Nairobi, Kenya about ‘Enhancing access to Finance for agricultural producers’ the workshop marked the launch of the ForeFinance concept in the East Africa Region. Amongst the many participants were representatives from farmer cooperatives and representatives from financial institutions.

What followed was an animated and lively discussion about who is the cause of a lack of credit for farmer organizations. One farmer cried out to the banks “You send me people who do not know and understand agriculture. You give me lists with questions that are not relevant for my business. You offer me financial products that are not suited for my needs. What is it what you want?” Another coffee farmer remarked “Banks only look at my income statements and my collateral, when do you learn to appreciate the potential of my farm”

The banker replied “When you come to us for a loan you don’t give us the complete information. And when we give you a loan the management of the group changes and you don’t inform us. You are not reliable enough as an organisation”

If we want to move forward and solve the credit crunch that the agricultural producers are in for the last decades, we need to start by understanding the communication style and emotional needs of the opposite stakeholder group.

Farmers need to stop complaining and acknowledge that they are part of the credit problem. Bankers need to stop complaining and start to become active and entrepreneurial in looking for credible solutions.

ForeFinance, with its Credit Risk Assessment Methodology, will be the relationship counselor.  

For years the coffee industry has led the way in finding new ways for sustainable market transformation. This is not surprising when you realize that the coffee sector is the second largest commodity sector after petroleum. It counts tens of millions of people who are directly depending on coffee production and trade. And the sector suffers from almost all the known sustainability issues that you can find in commodity sectors.

A decade ago, new certification concepts where developed and entered the market joining the already existing programs Fair Trade and Organic. The new programs created exiting new ways for trade and industry to become involved and adding new market drivers for change. Programs like Utz Certified, Rainforest Alliance and the 4C represented new thinking and new momentum. No longer was a sustainable coffee market dependent on the conscious coffee consumer alone who tried to change the coffee sector one cup at the time. The new thinking that emerged was that the coffee brands themselves needed to take responsibility and integrate sustainability as part of their brand values. Or in the case of the Common Code for the Coffee Community (the 4C) a large part of the coffee sector (including coffee brands, traders, NGO’s and producers) gathered and defined voluntarly minimum sustainability production standards.

The effects of these new programs have been impressive. Within a matter of a few years many large coffee brands committed themselves to the path of sustainability. In the Netherlands the market share of sustainable coffee exploded from 3% in 2002 (Fair trade and Organic combined) to more than 40% only 6 years later. And this market share is still growing till this day. In several other countries in the EU market shares have jumped as well, in many cases tripling or quadrupling markets shares of sustainable coffee.

Applause, Great news. Fantastic, …..Lets do more.

Unfortunately the success in coffee was also its own downfall.

After the initial shock and awe and media, donor and marketing excitement the circus quickly moved on the next sector. The feeling was the nut was cracked. The puzzle was solved. Coffee was yesterday news.

NGO’s started to look for the next headline and the next sector. Donors needed something new to excite their audience. Media needed new stories and new target groups. Unfortunately as the pressure decreased, momentum got lost. And more and more coffee brands, once hungry for change and diversification, felt there was less and less to gain to keep driving the market transformation.

Unfortunately, the feeling that coffee was done was unjustified. The reality is that all program together about 10% of all the coffee production is currently certified. But this means that still 90% of the coffee production is not yet sustainable. And this 90% is the more difficult group to reach both in terms of producers as in terms of brands and retailers. The coffee sector is far from done!

In fact it is only the beginning. The coffee sector needs more then ever massive investments and deserves massive media, NGO and governmental attention. We need to get momentum back in the sector before it will slowly but surely fall back as the old market forces take over.

Yes, coffee has led the way in terms of innovation. But I fear it may now lead us in terms of a warning. The warning is that pulling out of a sector too soon can have serious negative effects.I hope we can learn this lesson and use it to our advantage. Becasue already we can see that the circus is leaving sectors like tea and cocoa and moving on the the next headline.

As strategic consultants in sustainable market transformation we are often asked to support the design of new sustainability initiatives like for example designing new programs, new facilities or facilitating consortia of companies and NGO’s.

Since the start of the Silent Revolution (see blog the Silent Revolution) much has changed in the way we approache sustainable development and developing work. We have gone from a horizontal approach that focused on farmers and sustainable livelihoods to a more vertical approach where we use market demand as a driver for structural change on the ground. During this shift target groups change, priorities change, mentalities change and the criteria on how we measure success change. The old way we did developing work is gone. The new mantra is Economic Development and Market Drive. And I think in a few years time we will learn we actually need a combination of both approaches.

We work with many organizations that play a role in this. And in this changing arena we see many of them struggle with the question ‘What is our new niche?’ ‘What do we bring to the table that is unique?’ ‘What is our new role?’

All organizations think this question is unique to them. But working with several of them all over the world we see a pattern. A pattern of strategic repositioning.

We often use a very simple matrix to help facilitate the discussions on how to determine their organizations’ agenda and role. Imagine a 2 x 2 matrix. On the horizontal axe you have ‘Known activities’ and ‘New Activities’. On the vertical axe you have ‘Established sectors’ and ‘New sectors’. For those of you who have a business administration background you will probably be reminded of the well known Boston Consultancy Matrix (or portfolio matrix). Well, it is sort of a Portfolio Matrix, but then different. We call it the ‘Market Transformation Matrix™’.

Since the Market Transformation Matrix™ is a 2x2 matrix it has 4 segments. The four different segments are Scale up, Renew, Roll out and Innovate. Each of these segments represents different agendas, different priorities and, very important, each segment requires different skills, networks, resources and strengths as an organisation to become a champion in this particular field. You can do 1 or 2 segments. But rarerly is an organisation good enough to do 3, let alone all 4.

The question that then becomes important for more and more organizations is 'which segment(s) do I want to focus on?'  and 'do I have what it takes to be a leader in this segment?' 'And what are my strategies to become succesfull in this changing landscape?'

Copyright NewForesight™

Many of these organisations using this simple matrix find a new focus and a new strategic compass. Some of them however, dont like the answers they are getting. But I guess that is also part of market transformation.

The economic crises and its aftermath, war in Iraq and Afghanistan, threat of terrorism, global warming, the Dutch cabinet has fallen in times of crises. There is no shortage of bad and concerning news. Sometimes we have to remind ourselves that so many good things are happing as well. Encouraging developments with inspiring results.

Take, for example, the market transformation we see in the global agricultural commodity sectors.

It is about 10-8 years ago when a new age started. The age of mainstream certification and round tables. The Coffee sector was in many ways leading in this development with organizations like Utz Certified, Rainforest Alliance and the Common Code for the Coffee development (the 4C association).

I remember, in those days we did not even had the words to describe the ambition and the new certification concepts that would bring this innovation. Most of us were caught in a catfight with the angry NGO’s that were afraid that these mainstream models where a way to introduce ‘Fair Trade light’ systems and that these systems where nothing more than cheap attempts from the big corporations to green wash their reputation.

Now, 2010, there is hardly a sector left that is not exploring the journey towards more sustainable markets and market transformation. Where coffee lead the way Tea, Cocoa, Cotton, Soy, Palm oil, Sugar, Fish, Aquaculture, Tourism, Natural Stone, Electronics, Mining, Non Timber Forest Products, Biofuels, and many other sectors are following this path. All slightly different, all trying to learn and improve from the mistakes made in the past. But they are all doing it.

And more and more companies are committing themselves to go for 100% sustainable raw materials and new initiatives starting every month. Companies like Sara Lee, Kraft, Mars, Ikea, Unilever and even traders like Ecom and Cargill who for a long time where seen as evil and part of the problem are joining the race. The Dutch government started the Sustainable trade initiative (IDH). Its mission is accelerating and up-scaling of sustainability within mainstream commodity markets. Or take the Green Commodity Facility, a UNDP initiative to create multi stakeholder national platforms and involve local governments to create national strategies to make their agricultural production more sustainable.

I call these developments the ‘silent revolution’. Silent, because hardly a consumer knows what is going on, or takes notice. A revolution because it is a fundamental change in power and organizational structures that takes place in a relatively short period of time. And according to Wikipedia this is exactly the definition of a revolution.

I still have to remind myself that this started only a decade ago. And I cant wait to see what the next 5 years will bring.