Meaningful Revenue: What the hell is it?
In the last 5 years I have been bragging and nagging all my peers, my network and almost everyone that I encountered whether in business or personal my coined version of Meaningful Revenue. Almost everyone thought I was mad, giving up portion of profits into something that was out of context with the business I am in, yet I stood by on my beliefs that earning revenue meaningfully could boost growth of the business and contributed into brand values as well as into community building. Still they found me to be out of head.Well, meaningful revenue is not a term that I created, it has been around for many years and its popular term has been called CSR or Corporate Social Responsibility. However, throughout the years, CSR and Revenue have found their places and roles segregated. Revenue is about making it rich and CSR is all about taking portion of your profit to benefit others through actions that may not correlate with your revenue streams, most CSR are in fact out of context with your business.
Not all CSR is out of context though, there’s a cement factory in Sumatera that has been known to provide its closest community almost free access to its core product; cement. The company went to arms length to provide low cost housing development by giving its core product for free, in return for continuous support to the cement factory. Because the provision was free, the support is often based on returning the favour; no public demonstration, approval of corporate actions, etc. Yet, the same model was not able to be replicate to other cement factories in different regions due to differences in purpose. The first company’s purpose was to improve local economics and at the same time reducing competition by not only providing free cement, but also allowing local businesses to flourish that support the factory’s workers, distribution, and many more. So, when similar method is apply to other places with different intention, the results are not the same and tend to be rejected.
Another example is M-Pesa, mobile money and micro-financing service launched in 2007 by Vodafone for Safaricom and Vodacom in Kenya and Tanzania. The service has proven to be successful due to its purpose; providing people equal access to banking and loan without the hassle of physical banks nor the regular banking procedures. In countries such as Kenya and Tanzania where towns and villages are miles apart and infrastructures are almost non-existence, M-Pesa was a welcoming and disruptive change needed by the communities where majority are un-bankable. However, M-Pesa was not successfully replicated in some countries when its “Purpose First” vision is taken out, an example was during mobile money introduction in Indonesia using M-Pesa as role model and since then, mobile money and mobile payment have been slow to take up. On the other hand, where its “Purpose First” model is used, M-Pesa itself could then be easily replicated with equal success in countries such as Afghanistan, South Africa, India and later Eastern Europe. The service is also applauded by many for successfully reducing crime in an otherwise cash based society.
Today, I see that CSR and Revenue generation could work side by side prolonging that “Purpose First, Profit Second” approach is applied and to do that we need to merge both social responsibility with revenue generation as a single unit, theoretically. Truth be told, it’s not easy and welcoming to do that approach as companies are very much revenue driven where this model only applicable to government own businesses. Again without case study this “Meaningful Revenue” movement may find itself shelved before having a chance to emerge. An example is needed and yet people tend to ignore them regardless that it has been around with great success, see M-Pesa.
Then what the hell is “Meaningful Revenue”? –> my version
It’s all about building relationship with all of your stakeholders. Meaningful revenue generation is to care more of your business eco-system with particular attention towards stakeholders and less on shareholders.It’s about providing equal access to society that you have been benefitting from as business. For example; giving financial access by reducing red tapes to improve your stakeholders livelihood therefore producing sustainability to your business in the long run. A good example is the way Unilever is providing rural women of India financial and educational access to own a business without the complication of lending process often associated with banks, the project code named “Shakti” provide Hindustan women to start earning own income by selling hygiene products in their local community. Through Shakti-Entrepreneurship, the economic and social status of the women would improved considerably and it was also found that the Shakti-project does have a positive effect on some women in terms of extra income and empowerment.
Every profit that you make from your business should return in part to the community where your business is residing in a form of kindness and not cash therefore the continuum of your business will be depending on this sharing economy. The best practice has been among agriculture industry where the term “plasma” is associated with co-operative business among community and that of the producer. An immediate example; chicken nugget company is subsidising farmers with chicken feed, seeds, capital and training to build and run chicken farms if they sell their produce back to the company at a set price. Sounds monopolising but this model works and farmers are becoming loyal through assurance of having immediate buyer.