This is the new and improved version of the synthesis document of the Lead Firms discussion which took place in MaFI in 2010. We hope that this new layout (with the “navigation bar”) makes reading easier for busy people like you; it was designed to help you spot key questions, convergences, divergences and additional resources without having to read the whole document. If you have comments about the content or ideas to improve the layout, please feel free to post them in the comments box here below. Thanks again to all MaFI members who made this discussion possible and to David Brownjohn and Olivia Comberti who helped with the synthesis and layout respectively.

1. MaFI Synthesis
MaFI Synthesis
Lead Firms in Pro-Poor Market Development
A pragmatic approach to impact at scale or a risky road to exclusion?
Introduction
Lead firms are an essential component of any market system. They are key
influential actors, which have the potential to influence other businesses, and
provide products or services that can address the constraints and challenges that
face small businesses or micro-enterprises. Those with a willingness to commit
finance, personnel or time in benefitting the value chain are the most likely to
bring about useful and sustainable change, and so many lead firms are large
companies, however they can also be small firms, or even cooperatives – the key
factor is their ability to influence and drive change. Lead firms are therefore
strategic partners that can help inclusive market development organizations to
bring about sustainable change for marginalised people.
MaFI Featured Discussion Synthesis
This document builds on the Lead Firms discussion paper produced by Richard
Illiffe and Lucho Osorio in May 2010i, which was circulated to MaFI members
to spark a debate on some key issues with lead firms. The document summarises
the results of this debate, which was held over a period of three days on the
Market Facilitation Initiative (MaFI) online forum from 27th-29th July 2010.
The discussion was divided into the following thematic areas:
Day One
Focussed on the definition of lead firms, creating vision for change, methods of
identifying lead firms, getting buy-in, striking deals and co-designing business
strategies.
Day Two
Looked into effective methods for implementation, building trust, solving
conflicts and monitoring progress.
Day Three
Focussed on the topics of crowding-in, phasing-out and detecting trends
towards sustainability, including the barriers involved in publicising a
project’s success.
July 2010
1

2. Within these discussions, further questions were also raised, such as the Contents
one proposed by Kamran Niazi on whether the community itself could be
empowered to act as a Lead Firm, and discussions on the motivations and
reputation of lead firms. For simplicity, the report has therefore been Introduction 1
categorised into the following sections:
MaFI Featured
Discussion synthesis 1
 Defining ‘lead firms’
 Incentivising lead firms Defining ‘Lead Firms’ 3
 Cutting out intermediaries
 Self-selection Incentivising lead
 Building relationships at the bottom of the pyramid firms 4
 Creating win-win situations
Cutting out
- Incentives and building reputation
- Other key considerations intermediaries 4
 MoUs – what to look out for in the small print Self-Selection 6
 Risks
 Knowing things are going well – and how to communicate this to Building Relationships
shareholders at the Bottom of the
 Confidentiality vs. publicising success Pyramid 6
 Avoiding taking all the credit
Creating Win-Win
 Measuring the strength of relationships
Situations 8
Incentives and building
reputation 8
Navigation Bar
Other key
Key points from the discussion are summarised in the side bar. They are split
considerations 9
into the categories of:
MoUs - What to look
out for in the small
Convergence print 10
Where contributors reach an agreement on a topic
Risks 10
Divergence Knowing things are
When contributors’ viewpoints differ on a topic going well – and how
to communicate this to
shareholders 11
Pending Questions
Where a conclusion on a topic has not yet been reached, or the topic Confidentiality vs.
was not discussed publicising success 11
Resource Avoiding taking all the
Further resources and information on the topic credit 11
Measuring the strength
of relationships 12
Acknowledgements 13
MaFI 13
2

3. Defining ‘Lead Firms’
Most people agree on the basic definition of lead firms – that they are key
drivers of structural changes in market systems to overcome bottlenecks
and constraints to the market, and that this definition is independent of A lead firm does not have to be
their size. a large organisation. Even an
However opinions diverge on the finer details. For example, whilst empowered farmer’s cooperative
Ekanath Khatiwada believes that minimum ethical standards should can act as a lead firm.
apply, this is countered by Lucho Osorio’s observation that this may be The market size and scope are
difficult to enforce in practise. key to the definition, as
different types require different
The discussion was started with Lucho Osorio-Cortes’ proposed definition of skills.
lead firmsii, based upon the FIELD Facilitation Working Group’s Working
Paper “Defining Lead Firms and Principles of Facilitation”: Only firms which have potential
and enough incentives to bring
“Lead Firms are formal or informal enterprises of any size or about change in the market
individual entrepreneurs who buy from or sell to firms of similar or system in a sustainable way
smaller size or to individual entrepreneurs, and who are innovators who should be approached as leads
can influence their providers or clients to upgrade their capabilities, firms.
business strategies or structures guided by visions of increased
productivity, efficiency and sustainability”
This definition was expanded on further by Ekanath Khatiwada, who
suggested including the size of the markets that the lead firms cover – both in
terms of their physical size and their geographical scope (local-national-
international). This distinction was highlighted because the set of facilitation 1. Should minimum ethical
skills needed at different business levels is different. Some firms are working standards be applied to lead
within meso-level business environments whereas others may be dealing with firms, and if so, how could
these be measured?
more complex systems (ie. meso- macro – international environment). Similarly,
the incentives and services required may differ at different levels. 2. What is the difference
between lead firms and value
Ekanath Khatiwada also suggested the possibility of defining lead firms in chain drivers?
terms of their “cleanliness”, proposing a minimum ethical standard that they
must adhere to in order to fit within the definition. Whilst this may help to
address her concerns regarding monopoly, conflict and exploitation, it was
pointed out that enforcing this could be very difficult.
Linda Jones noted the similarity between the preliminary definition given of
lead firms and that of ‘Value Chain Drivers’, which highlighted a need to clarify
You can find the synthesis of
the differences between these distinct terms. the MaFI Local Learning Group's
Also, as Alison Griffith explained, the "innovators" term in the definition could discussion and definition of lead
be a loaded term that implies risk taking. This could be viewed as a positive or firms at:
negative thing, depending on the circumstances. http://www.slideshare.net/marke
tfacil/summary-paper-llg-bd-on-
The first ever MaFI Local Learning Group (LLG) in Bangladesh proposed the lead-firms
following regarding the definition of Lead Firms:
 There should not be a specific definition of lead firms for each country.
The definition should be broad enough to serve the demand of all
countries.
 Different development organizations define lead firms in different ways.
It is however generally acknowledged that only firms which have potential
3

4. and enough incentives to bring about change in the market system in a
sustainable way should be approached as leads firms.
They also pointed out that lead firms do not always have to be big companies:
"A local service provider or input seller can act as a lead firm if they provide
services needed to improve the situation of the producer and if the users are
willing to pay for the services”.
Incentivising lead firms
A key role of facilitators is to create an environment and visions for
change that will attract lead firms to work with marginalised actors.
How facilitators can induce
Hannah Schiff responded to the question of how facilitators can create this lead firms to work with target
groups:
environment for lead firms by highlighting two important considerations:
1. Make sure there is a solid business case for the transaction. Facilitators - Make sure there is a
always need to carefully identify the incentives for both parties to engage in a solid business case for
transaction that we would like to see repeated after our exit. We can use a the transaction.
variety of mechanisms to buy down risk, but we have to make sure that our - Build on existing
financial contributions alone are not the incentive and that our vision is relationships.
practical in the long-run.
2. Build on existing relationships. The lead firms may not want to work directly
with the poor or marginalized -- and indeed, they may not have to. It can be
a good idea to look for existing intermediaries who are close to our target
populations, as they can bear some of the risk involved and better
understand the needs and limitations of the target group.
Linda Jones agreed with these points and pointed out that the incentive can
often take the form of increased access to raw materials or the potential for
opening new markets. In this situation a lead firm can be open to working with
smaller producers, with or without an intermediary.
Cutting out intermediaries
“Why can’t the community itself be empowered to act as a lead firm?”
Kamran Niazi proposed the question: “why, as facilitators, do we want the lead Whether to cut out the middle
firm to work with the marginalised communities? Why can’t the community man or not depends largely on
itself be empowered to act as a lead firm? We (as facilitators) should be able to context, ie. what function the
cut out the middlemen and deal with the people directly.” middle men are carrying out,
However, he also pointed to the paradox of whether facilitators should support and whether this can be
the middlemen. Whilst a lot of the middlemen serve a very useful function, there replicated without them.
are many instances of them “squeezing” the producers, for example they make
money, while the producer is left with nothing. But even though they are taking
advantage of the producers’ lack of market knowledge, he points out that “we
4

5. do not have any other choice to improve matters (as the middlemen can offer a
portfolio of unmatched services)” and the other option of trying to do
something else “might not succeed also”.
The Local Learning Group in Bangladesh addressed this issue in their
definition of lead firms, saying that “a local service provider or input seller can
act as a lead firm if they provide services needed to improve the situation of the When bypassing or cutting out
producer and if the users are willing to pay for the services. On a local level, lead market actors:
farmers can become service providers and take the role of the lead firm, - How to do it in ways that
introducing new technologies or services.” do not erode the market
system's resilience?
Hannah Schiff thought that the question “depends a lot on the context, and - Who should do it?
more specifically, on whether the ‘middlemen’ in question are fulfilling a useful
function or not. In many cases, intermediaries diffuse risk, transmit
How can marginalised market
information, aggregate product, and perform other such roles. Our job is actors like farmer groups or
therefore not necessarily to cut out or support anyone per se, but rather to local service providers become
facilitate the best solution or model to addressing a given constraint, and lead firms?
then ask ourselves what functions are needed and who can fulfil them (now and
in the future)”
For Sharad Rai, the question of “cutting out” or “bringing in” intermediaries is
not the issue. He gave the following example of markets in Nepal to support
this:
“In Nepal, where we work with small producers and in (usually) thin To what extent should
markets, there are not many choices for our target group members in the marginalized producers and
absence of various qualitative bottlenecks (skills, knowledge, attitudes) as other actors participate in the
design of the lead firm’s
well as physical (access to micro finance, health, transportation) business strategy or do the lead
bottlenecks. In this context what we try to do is to build individual as well firm and the facilitator know
as institutional capacities of our target groups in order to ensure that they best?
can assess the markets by themselves, build relationships and linkages as
required and decide with which intermediaries or value chain actors to
work with - in short enable them to make their own choices.
On the other hand, as we are trying to do in our current work in the dairy
sector in Nepal, we try to rope in lead firms and/or service providers
(such as small to large-size dairy plants/industries, micro finance and
insurance providers, private sector feed manufacturers, etc.) to fill in the
'gaps' for making dairy markets work for the poor. We have just started to
'think' collaboratively with these critical market actors to pilot a few
innovative interventions – for example micro financing models with
banks, market assurance schemes with small and medium sized
buyers/plants, and research on low-cost feed with private sector feed
manufacturers and others. While we are sure that the results of these pilot
models will be significantly important in learning and applying lessons in
terms of systemic development, we will still need to do more in terms of
bringing about a 'sustainable' model.”
5

6. Self-Selection
Is self-selection the only practical method of identifying these innovative
and visionary market actors? Or have you used other methods
successfully? What are the risks and
problems with self-selection?
The only mention of self-selection came from Alison Griffith, who noted that Have any other approaches
“it is becoming common to advertise open calls (e.g. in the media, on the web) worked?
to invite companies to be part of an initiative. Sometimes these can be quite
formal processes, such as the Africa Enterprise Challenge Fund (where NGOs Does self-selection help
cannot apply; the main applicant has to be a private firm). The idea is to get facilitators to identify the
most reliable and effective lead
companies to invest their own resources and to take a lead. In Bangladesh I
firms?
think the Katalyst program initially had difficulty getting interest from lead firms
in the vegetable seeds sector and much discussion and negotiation was required
before they could move ahead. In other cases there is more competition to be
involved and it is important to ensure that selection processes are transparent.”
Building Relationships at the Bottom of the Pyramid
Alison Griffith notes some interesting research on the Bottom of the Pyramid
approach that could be relevant to the understanding the motivation of lead
firms. “Hart presented at the [2009] SEEP Conference a reviewiii of the last 10 Building relationships and
understanding between
years showed that in many cases BOP initiatives did not work because companies and communities is
companies did not invest in relationship building. Some big companies had key to the success of BOP
their fingers burnt” As a result the next phase of BOP is paying much more initiatives.
attention to these aspects.
“For us facilitating lead firms this means we need to consider how we will help
big and small players develop relationships; how we will build capacities of
different players to become more ‘market literate’ (particularly getting a more
systemic understanding of the market); and how we will deal with power and
governance issues).”
For short term partnerships, is
Expanding on this, Peter Edward added that “one issue for big companies can it worth the time, resources and
be not that they don't invest in relationship building between the company and potential harm to a facilitator’s
reputation to work with large
the local community but that they can overlook the need to develop companies? Will this help
understanding within the company of how the BOP activities contribute to smallholders to move up the
overall company strategy and are valued within the company. For these large value chain?
lead firms, building and maintaining internal relationships and networks can be
vital to ensure the lead firm’s project staff do not feel too disconnected from the
firm’s core business activities - I suspect that aspect often gets overlooked when
projects are started.”
Sharad Rai gives an example of how building relationships at the bottom of the
pyramid was important. “One of the challenges for the current dairy project in
Nepal will not only be testing innovative smallholder farmer-private
sector/service provider linkages models, but also to see how we can build and
maintain healthy relationships between critical market actors –between small
holder farmers and relevant market actors in particular. I think this is one area
6

7. which has been mostly neglected or overlooked. The Relationship Matrixiv as an
M&E tool could be useful to monitor this relationship building process.”
Chris Piennar takes the concept of relationship building one step further,
pondering “what would happen if everything began from the viewpoint,
values and passion of not just the farmer/producer but anyone within the
community who may wish to take forward some enterprising actions of
their own choosing but which could find a market locally? In working in
this manner the passion and energy comes from those driving their own
enterprises but working interdependently with other enterprises within the area
for mutual benefit –retaining their own independence to channel their own
passion yet operating interdependently for the benefit of all. The driving is in the
hands of the producer (no dependency and maximum energy) and the lead role
switches to one of facilitation of the initial ‘spaces’ or events for people to step
forward, the coaching of the start-up process and support network
development.” He sees this as not necessarily being mutually exclusive of lead
firms, but rather removing the main focus from these, so that they can simply
“be formed in due course where beneficial by those operating interdependently
or contracted into on an agency basis”.
In terms of trust and working together, he suggests a simple tool used on his
www.pluggingtheleaks.org programme called Perspective Wheel – Groups,
which he is happy to forward to anyone by request.
He claims that “the tool has been effective at teasing out the various
perspectives held by different stakeholders within an initiative, building respect Perspective Wheel Groups –
for these perspectives and allowing them to be “mainstreamed into the approach Helping stakeholders to work
together, understand each
being taken. In doing this, everyone is valued for their views, the others other’s perspectives and build
understand their motivation much better and perhaps most crucially, in this way trust
the values, passions and energy of all members are harnessed and pointing
forward to the best initiative that can be in the eyes of all of the stakeholders.”
As the saying goes, “time is money” in business, and so a lead firm’s investment
of time in a project must be carefully balanced by a facilitator. Linda Jones
notes that “lead firms are often concerned about the investment of management
and staff time,” and therefore “the upside of dealing with smallholders or small
producers has to be a strong incentive. This is one area where a facilitator can
make a big difference as the initial stages of any such arrangement are time
consuming and the process can easily go off the rails.”
Kamran Niazi picks up on this, questioning whether, when companies such as
McKinsey and individuals such as MBAs at Harvard want to work with large
firms for a limited amount of time, it is worth working with them at all.
Investment of management and staff time concerns by the lead firm, in addition
to requiring them to change their mind set from working on million pound
budgets to hundred pound budgets may mean that the help that they can give to
small holders is limited, and so may not be worth the extra time and resources of
the facilitator, or potential damage to their reputation.
7

8. Creating win-win situations
Key things to consider when drafting successful action plans and
promoting sustainable relationships: minimise the involvement of the
NGO, carefully select the lead firm, and understand the motivations Reflecting upon potential
(financial or otherwise) of the parties involved. motivations from the
perspective of the lead firm can
Incentives and building reputation: be very useful in cultivating
successful business
Kamran Niazi kicks off the debate on what to consider in the planning of a relationships and identifying
risks.
project by pointing out the importance of having a financial incentive: “there has
to be a clear reward for the lead firm and it should be considered as a business. It can be risky working with
Unless we can create win-win situations for all concerned, the lead firms whose main
intervention is not going to last.” motivation is reputation
building, as they may not have
However whilst the monetary aspect is clearly important, Peter Edward warns the interests of the
against only focussing on this, arguing that “the rewards need to be understood smallholders in mind.
as more than just monetary. Building or insuring reputation, or developing
better political influence and positioning can be strong motivators for a
lead firm.
To be able to truly understand the lead firms, and hence draw up an effective
plan, Peter argues that “it is important to step back from our desire to see
development take place and instead to reflect on what is motivating the lead
firm” by putting oneself in the lead firms position. This, he suggests, can help to
build up a “clearer (and perhaps ruthlessly cynical) understanding” of how they Is money or reputation the
operate, in order to identify risks, and understand motivations and the ways more important motivation to
those motivations might change in the future. He later clarifies that “if we want consider for the lead firm? And
what risks and benefits are
to understand the motivations of a lead firm –and hence their likely
associated with each?
commitment to driving a project in the long-term […] rather than merely
using the project to build a good [image and influence amongst powerful
actors], we need to look beyond the contract and the project aims and
funding.” In that way, “if (when?) the project starts to drift from its original
aspirations and timeframe, [the facilitators can envisage] what the driving
motivation are for the lead firm at that time.”
Do motivations of the lead firm
The flip side of focussing on reputation, as Kamran Niazi points out, is that matter if they are doing their
there is a risk of the lead firm having the wrong priorities. He recalls: “I have job of leading transformations
seen lead firms spend more money on the launch ceremony than on the in market systems?
program itself”.
Linda Jones discusses the equally important issues of negative reputation,
noting that reputational issues don’t just involve lead firms using a project to
raise their profile, but can also be “a lead firm concerned that a poor project will
harm the company. This might be true, for example, when large companies have Podcast from Mesopartners:
had more of a plantation style in agriculture and are reaching out to How to manage expectations of
smallholders. Their actions might be seen as a land grab (which indeed it could both the lead firms and the
be) and a company with the best of intentions will want to be very careful smallholders.
around this.” http://ledcast.libsyn.com/index.
php?post_id=340268
8

9. Kamran Niazi picked up on this point on creating a negative reputation, by
suggesting that larger companies might have better PR departments which could
“project the smallest of success in to seeming to be a paradigm breaking one.”
Christian Pennotti suggests a useful resource that may help clarify many of the
issues on reputation: Think Big. Go Small - by Oxfamv. He explains: “The
report is written with a multi-national corporation audience in mind and does a
couple of things that may be useful to [this] conversation:
Think Big. Go Small - by Oxfam
 It discusses about what sorts of information and opportunities prospective – a report covering information
lead firms may find attractive –though admittedly, very sophisticated lead and opportunities that are
attractive to Lead Firms, to
firms such as MNCs. A key message in the report is the potential brand clarify reputation issues
and reputational value that firms can generate through socially-conscious http://www.oxfam.org/en/policy/
smallholder engagement. think-big-go-small
 It provides a number of useful cases illustrating how companies have
actually worked as lead firms to advance smallholder engagement in their
supply chains.
 It outlines a framework and principles for effective smallholder
partnerships with lead firms in the food and beverage sector:
- collaboration and innovation
- linkages
- transparent governance
- sharing of costs and risks
- access to services
Opinions seem to converge in the discussions around the dangers of reputation
building and the importance of understanding the lead firms’ motivations, as
Peter Edward summarises: “I have in mind here some projects I have seen that
have been launched with much political fanfare and very good intentions by all
parties but when they went wrong the priorities for the lead firm were to
maintain reputation nationally and with political elites rather than to address the
local issue of development failure. I recall, for example, one project (which can
remain nameless) that notably failed to deliver development benefits but went
on to become a celebrated and fairly widely publicised success story for the lead
firm in popular business magazines in the ‘developed’ world. I am sure many Trying to do too much too soon
others in this forum have similar experiences.” is a bad idea
Other key considerations Using a checklist of issues or
standard framework may be
Even if the incentives have been carefully calculated from each aspect, there are helpful in guiding agreements
several other key points that must be considered. Kamran Niazi points out for with individual lead firms
example that poor execution can kill a project, so the team of the lead firm has
to be dynamic.
Alexandra Snelgrove builds upon this warning with a list of critical mistakes
that organisations should watch out for when trying to develop linkages between
lead firms and producers, which include:
1. Trying to do too much too soon - i.e. introducing a range of finance and How to empower farmers to
negotiate effectively without
services on day one as opposed to a more gradual process of trust building getting too involved in contract
between diverse actors. negotiation?
9

10. 2. The NGO becoming too involved and actually handling contract
negotiations. Implicit hand-outs have a way of “sneaking in” to the model.
3. Failing to conduct sufficient due diligence on the lead firms to make sure
that they have a growing end market for their product; not to mention the
capacity and willingness to invest in their supply chain. How to build capacity and
4. Failing to introduce competition and only working with one lead firm "market literacy" of lead firms
which increases dependency of producers on one buyer. and other market actors
(including government
agencies) to make market
Linda Jones notes that, as with any type of partnership, “having stakeholder systems more inclusive,
meetings, a management plan and committee, and designated leads representing productive and efficient?
each party (with the time and resources to fulfil their responsibilities) are ways to
keep the lines of communication open and things running smoothly”.
Peter Edward asks whether there is “a ‘checklist’ of issues that a facilitator
might want to work through with the lead firm at project set up? If so, does it
have (or should it have) a set of issues that can be discussed relating to the
internal workings and motivations of the firm? It is too easy to assume that large
firms understand what they need to do to get things right internally but often
they don't. And the time to raise these matters is surely up front before the
project starts to become contractual.”
MoUs - What to look out for in the small print
Memorandums of understanding are legally unenforceable documents
between two parties outlining the finite and collaborative nature of their
agreement. They are preferable to contracts to avoid both over-formality Read over the MoU carefully,
and over-reliance between organisations, however checking the wording get others to check it, and be
is no less important. clear about what you, and they
want from the partnership.
Kamran Niazi recommends readers of the MoU to “Trust but verify. Check
out the complete MoU, have 2-3 different people look at it independently and
then have them cross check each other's comments. Be very clear about
deliverables, M & E procedures and termination clauses.”
Peter Edward agrees with the need to check small print carefully, however Are the facilitators taking risks
suggests that a better way to ensure that you are on the same page as the lead by trying out new strategies or
firm is to have a clearer understanding of their motivations –to identify risks by partners, or is it a risk averse
understanding their motivations, and likely ways those might change in the culture that frowns upon the
future. This reduces reliance on the small print when things go awry. implementation of new ideas?
Risk-aversion can differ
between lead firms,
smallholders and facilitators. Is
Risks this creating tensions or lost
opportunities?
Aside from the risks already discussed regarding motivations and reputations of
the lead firms, Kamran Niazi also points out that, for facilitators, the main risk
is the selection of the wrong lead firm. “Too many times, people select the lead
firm on basis of its past performance, not realizing that, the team or the culture
10

11. may have changed. In the for-profit world, people are encouraged to take risks
(not too many though), so the question is, are the facilitators taking risks trying
out new things, strategies or partners or [are they bound by] a risk averse culture How to show evidence of
frowning upon implementation of new ideas.” progress in projects that, when
done well, may take time to
produce measurable results?
Knowing things are going well – and how to
communicate this to shareholders
Kamran Niazi presents another dilemma regarding showing evidence of
progress in projects that, when done well, may take time to produce measurable How to ensure that the donors
are kept happy by showing
results – “A lot of the projects, we work upon are time bound and the donors progress and results, and at the
expect results at once. How do we ensure that we keep the donors happy by same time set the ground for a
showing progress and at the same time set the ground for long-term paradigm long term paradigm shift?
shift? Lack of focus on this will give rise to conflicts between the donor,
implementer and the beneficiary.”
Confidentiality vs. publicising success
How to deal with conflicts
How can facilitators balance confidentiality with the need to publicize between different stakeholders?
What are the most common
successful cases to motivate other firms to adopt them? conflicts and what cause them?
Peter Edward asks whether confidentiality is ever a major issue. “It often seems
to me that at the local level the community becomes quickly aware of how and
why a good project is succeeding. I could imagine that on a wider perspective
the lead firm, if it is looking to expand geographically, might want to publicise its
success as it enhances the firm's reputation and hence supports their ability to
make the most of their 'first-mover' advantage. I wonder if anyone has examples
either for or contrary to my perception on this?” Is a successful lead firm likely
to want to enhance its
reputation by publicising this
success, or is confidentiality an
Avoiding taking all the credit important issue to consider?
If so, how can this be dealt
How to demonstrate that lead firm’s success is not the product of the with to still allow other firms to
facilitator’s help and subsidies? hear about successful cases?
Linda Jones countered this question with the suggestion that “facilitation is
help, isn’t it?” Even when we question instead whether the lead firm’s success is
“the result not of subsidies or provision of services by the facilitator, but of
indirect support (facilitation) that can be replicated by others in similar
circumstances'', she argues that facilitation could still be considered as a sort of
subsidy, in that the partnership of communities, support groups, lead firms and
Is facilitation not a kind of help
producers may not be replicable by a different lead firm and producers without in itself? And is the lead firm’s
the help of facilitators. To “mobilise communities, support group formation, success not largely down to the
develop capacity of groups to deliver on time in the desired qualities and supportive work done by the
facilitator?
11

12. quantities, and help with contract negotiation” could therefore be considered as
a sort of non-financial subsidy in itself.
Measuring the strength of relationships
Markets are constantly prone to change, whether from the effects of new
policies, production yields, or simply changes in demand. In order to The indicators we use have an
endure future market changes, how is it possible to know that the impact on capacity building
relationships between lead firms and marginalized producers are processes
becoming stronger?
Christian Pennotti offers a suggestion based on the work done by CARE in its
country offices: “One of the key things we are working on is to apply a
framework similar to the DCED standards framework, breaking anticipated
outcomes across three domains -women's empowerment, enterprise-level and
sector-level outcomes. We're then working with teams to really think critically
about leading and lagging indicators of progress. So, on the leading side, a strong How to partner with lead firms
focus is on understanding the desired knowledge, attitudinal and practice to influence policy? Producing
changes we want to see not only in producers but in those with whom they are evidence of success for
government agencies
working. This is intended to help our field teams pick up clues toward progress
in strengthened relationships and also helping them think critically about how How to defuse tensions with
they can best facilitate this transition rather than intervening directly.” other firms around the use of
public resources to give a few
Lucho Osorio-Cortes responded requesting clarification on the meaning, and firms a competitive advantage?
examples of “leading” and “lagging” indicators. He also expressed his
enthusiasm for the approach, and that the indicators are designed to detect
changes not only in “desired knowledge, attitudinal and practice changes in
producers [but also] in those with whom they are working”. He points to the
insight it provides regarding the link between the indicators of increased
ownership and leadership on the side of producers and the process of becoming
better facilitators – “The indicators we use have an impact on capacity building
processes!”
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13. Acknowledgements and credits
Special thanks to the following MaFI members for making this discussion possible:
 Alexandra Snelgrove
 Alison Griffith
 Christian Pennotti
 Chris Pienaar
 Ekanath Khatiwada
 Hannah Schiff
 Kamran Niazi
 Linda Jones
 Luis E. (Lucho) Osorio-Cortes
 Peter Edward
 Sharad Rai
 Discussion facilitated by Lucho Osorio
 Synthesis edited by: Olivia Comberti and David Brownjohn
 Graphic design: Olivia Comberti
 Coordination of synthesis production: Lucho Osorio (responsible for the mistakes or omissions in
this document. Corrections or comments are welcome at luis.osorio@practicalaction.org.uk)
MaFI
The Market Facilitation Initiative (MaFI) is a working group of the SEEP Network with technical support
from Practical Action. MaFI promotes learning and peer support amongst practitioners working in the
field of inclusive market development facilitation. It also assists practitioners to move from design to
implementation by advancing principles, techniques and tools.
Endnotes
i http://www.slideshare.net/marketfacil/lead-firms-discussion-paper-final
ii Based upon the FIELD Facilitation Working Group’s Working Paper “Cycle 1: Defining Lead Firms and
Principles of Facilitation” (2008, page 1) as a starting point for this shortened definition.
http://www.microlinks.org/ev_en.php?ID=26643_201&ID2=DO_TOPIC )
iii The original SEEP webpage where this document was stored does not exist any longer. For related
information about Hart’s ideas, go to http://www.brinq.com/resources/bop/criticisms-and-developments
and www.bop-protocol.org
iv http://practicalaction.org/pmsd-relationship-matrix
v
http://www.oxfam.org/en/policy/think-big-go-small
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