Implementation best practices VC projects

! G IMPLEMENTATION BEST PRACTICES FOR VALUE CHAIN DEVELOPMENT PROJECTS microREPORT #167 ! ! ! SEPTEMBER 2010 "#$%!&'()&*!+,%!(&) /'-!01!&'2$'+!3)&!*#'!45$*'-!6*,*'%!78'5/1!3)&!95*'&5,*$)5,:!;'2':)(<'5*=!9*!+,%!(&'(,&'-!01!>.*#! ?,<(0'::!)3!7?;9@AB?7=!"#$%!&'()&*!+,%!(&) /'-!+$*#!3.5-$58!3&)<!*#'!7//':'&,*'-!C$/&)'5*'&(&$%'!7-2,5/'<'5*! D&)E'/*=! ! IMPLEMENTATION BEST PRACTICES FOR VALUE CHAIN DEVELOPMENT PROJECTS ! micro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—RATHER THAN DRIVE OR REPLACE—THE ACTIONS OF STAKEHOLDERS 9 D. IMPLEMENTERS SHOULD CATALYZE BEHAVIOR CHANGE 11 E. FACILITATION MUST BE TAKEN TO SCALE 13 ! 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"'5!:',-$58!$<(:'<'5*'&%!)3!2,:.'!/#,$5!(&)E'/*%!+'&'! *#'5!,%K'-!*)!-'2':)(!%#)&*!(,('&%!'$*#'&!%.(()&*$58!)&! /#,::'58$58!*#'%'!K'1!3',*.&'%!+$*#!$::.%*&,*$)5%!-&,+5!3&)<! *#'$&!)+5!(&)E'/*!'G('&$'5/'= g !! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! ` !! ]4679;!,5-!C$/&)'5*'&(&$%'!;'2':)(<'5*=_!4679;=!addh! a !! 6(''/#!01!4679;!7-<$5$%*&,*)&!6#,#!,*!L))-!6'/.&$*1!61<()%$.<J!V,%#$58*)5J!;?J!C,1!adJ!ad`d=! ! c !!Z.%$5'%%!;'2':)(<'5*!6'&2$/'%!3)&!6<,::!S5*'&(&$%'%i!H.$-$58!D&$5/$(:'%!3)&!;)5)&!95*'&2'5*$)5=!"#'!?)<<$**''!)3!;)5)&!78'5/$'%!3)&! 6<,::!S5*'&(&$%'!;'2':)(<'5*=!L'0&.,&1!add`=! ! e !!!7//':'&,*'-!C$/&)'5*'&(&$%'!;'2':)(<'5*!D&)E'/*J!$<(:'<'5*'-!01!,!/)5%)&*$.<!)3!3)&W!,5-!5)5(&)3$*!)&8,5$I,*$)5%!:'-!01!7?;9@AB?7=! g !! "#'!Z'%*!D&,/*$/'%!$5!9<(:'<'5*,*$)5!%'&$'%!)3!%#)&*!(,('&%!/,5!0'!3).5-!,*! #**(i@@,((%=-'2':'0&$-8'=5'*@,<,(@$5-'G=(#(@>'%).&/'%ij;'%$85j,5-j9<(:'<'5*,*$)5! “The value chain approach has distinctive features in terms of both i) the scope used in analyzing an industry, and ii) the tangible and non-tangible considerations used in designing and implementing interventions:  A focus on end markets  Understanding the role of value chain governance  Recognition of the importance of relationships  Facilitating changes in firm behavior  Transforming relationships  Targeting leverage points  Empowering the private sector.” - Key Elements of the Value Chain Approach Briefing Paper, ACDI/VOCA, 2008. ! IMPLEMENTATION BEST PRACTICES FOR VALUE CHAIN DEVELOPMENT PROJECTS 2 L&)<!*#'%'!(,('&%J!%'2'&,:!*#'<'%!+'&'!-$%*$::'-J!,5-!,!(&,/*$*$)5'&%F!&).5-*,0:'!+,%!#':-!$5!V,%#$58*)5J!;=?=!$5! L'0&.,&1!ad`d!*)!3.&*#'&!-$%/.%%!*#'<=!"#'!*#'<'%!+'&'!(&'%'5*'-!$5!*#'!3)&<!)3!*#'!3)::)+$58!\.'%*$)5%i! `= V#,*!-)'%!$*!<',5!*)!0'!<,&K'*W-&$2'5k!! a= N)+!/,5!(&)E'/*%!0'!-'%$85'-!*)!&'%()5-!*)! -15,<$/!<,&K'*!%1%*'<%k!! c= V#,*!-)'%!3,/$:$*,*$)5!&',::1!<',5! &$58!$<W (:'<'5*,*$)5k!!! e= N)+!/,5!(&)E'/*%!3,/$:$*,*'!0'#,2$)&!/#,58'k!! g= N)+!/,5!3,/$:$*,*$)5!,((&),/#'%!0'!*,K'5!*)! %/,:'k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i! 1. Interventions must be market driven. x 4%'!(&)2'5!<,&K'*!&'%',&/#!*)):%!*)!/)5 /*!$5W-'(*#!'5-W<,&K'*!,5,:1%$%=!! x 4%'!\.,5*$*,*$2'!,5-!\.,:$*,*$2'!$53)&<,*$)5!*)!.5-'&%*,5-!)(()&*.5$*$'%!$5!2,&$).%!<,&K'*!/#,55':%! ,%!+'::!,%!*#'!/)5%*&,$5*%!*)!'G(:)$*$58!*#)%'!/#,::'58'%=! x 6'8<'5*!*#'!<,&K'*i!75,:1I'!',/#!)3!*#'!()*'5*$,:!'5-!<,&K'*% *)!.5-'&%*,5-!*#'!&'\.$&'<'5*%J!&$%K%! ,5-!'G('/*'-!0'5'3$*%!)3!/)<('*$58!$5!',/#!)3!*#'<=! x 95/: '!2,:.'!/#,$5!%*,K'#):-'&%!$5!*#'!,5,:1*$/,:!(&)/'%%!*)!*#'!'G*'5*!()%%$0:'=! x N':(!2,:.'!/#,$5!%*,K'#):-'&%!*)!&'%()5-!*)!,5-!,5*$/$(,*'!<,&K'*!*&'5-%=! x ?)<<.5$/,*'!*#'!&'%.:*%!)3!*#'!,5,:1%$%!*)!$5 %*&1!%*,K'#):-'&%!*)!#':(!*#'<!%':'/*!<.:*$(:'!()*'5W *$,::1!(&)3$*,0:'!<,&K'*%=! x Z,%'!*#'!(&)E'/*F%!-'%$85!,5-!$5*'&2'5*$)5%!)5!.(W*)W-,*'!<,&K'*!,5,:1%$%=! x 4%'!,5!$5/&'<'5*,:!,((&),/#!+#'&'!*#'&'!$%!&'%$%*,5/'!*)!/#,58'!,5-@)&!:)+!:'2':%!)3!/,(,/$*1=! x 45-'&%*,5-!*#,*!2,:.'!/#,$5!,/*)&%!,&'!5)*!only <,&K'*!-&$2'5=! 2. Implementers need flexibility to be able to respond to dynamic markets and contexts. x 4%'!2,:.'!/#,$5!,5,:1%$%!*)!/)W-'2':)(!+$*#!$5 %*&1!%*,K'#):-'&%!,!2$%$)5!O)&!<.:*$(:'!2$%$)5%P!)3!,! <)&'!/)<('*$*$2'!$5 %*&1=! x V)&K!+$*#!3$&<%!,5-!8&).(%!)3!3$&<%!*)!-'2':)(!&),-<,(%!3)&!,/#$'2$58!/)<('*$*$2'5'%%=!! x ?)5*$5.,::1!<)5$*)&!&'%()5%'%!*)!(&)E'/*!$5*'&2'5*$)5%!,5-!,-E.%*!$5*'&2'5*$)5%!,//)&-$58:1=! x L&)<!-)5)&%J!$<(:'<'5*'&%!5''-!3:'G$0$:$*1!*)!/#,58'!/).&%'! &$58!2,:.'!/#,$5!-'2':)(<'5*! (&)E'/*%=! x ;)5)&%!,5-!$<(:'<'5*'&%!5''-!*)!0'!+$::$58!*)!*,K'!&$%K!,5-!,/K5)+:'-8'!3,$:.&'=!! ! 3. Implementers should facilitate—rather than drive or replace—the actions of stakeholders. x L,/$:$*,*'!*#'!-':$2'&1!)3!8))-%!,5-!%'&2$/'%!01!<,&K'*!,/*)&%!&,*#'&!*#,5!-$&'/*:1!(&)2$-$58!*#'<J! +#'5'2'&!()%%$0:'=! x ;'%$85!$5*'&2'5*$)5%!*)!/&',*'!,!('&<,5'5*!%#$3*!$5!*#'!0'#,2$)&!)3!,!:,&8'!5.<0'&!)3!3$&<%=! Roundtable Participants  Ruth Campbell, ACDI/VOCA  Giuliana Canessa Walker, Chemonics International  Joe Dougherty, Cardno Emerging Markets  Jeanne Downing, USAID  Emiliano Duch, Cluster Competitiveness Group  Mike Ducker, JE Austin and Associates  Bill Grant, DAI  Rob Henning, OTF  Frank Lusby, AFE  Luis Osorio Cortes, Practical Action  Bob Rabatsky, Fintrac  Simon Winter, TechnoServe ! IMPLEMENTATION BEST PRACTICES FOR VALUE CHAIN DEVELOPMENT PROJECTS 3 x Z.$:-!:)/,:!/,(,/$*1!*)!&'%()5-!*)!-15,<$/!<,&K'*%=! x 4%'!$5/'5*$2'%!*)!/,*,:1I'!0&),-'&!/#,58'!+$*#).*!5'8,*$2':1!-$%*)&*$58!<,&K'*%=! x C,$5*,$5!,!:)+!(&)3$:'!*)!,2)$-!/&',*$58!-'('5-'5/1!)5!(&)E'/*!%.(()&*=! x 6,/&$3$/'!%#)&*W*'&<!&'%.:*%!3)&!:)58W*'&<!%.%*,$5,0:'!&'%.:*%=!! 4. Implementers should catalyze behavior change. x 9-'5*$31!<)-':%!)3!/)<('*$*$2'!0'#,2$)&!*)!%*$<.:,*'!%*,K'#):-'&!$5*'&'%*=! x 4%'!(,&*$/$(,*)&1!*)):%!*)!,::)+!%*,K'#):-'&%!*)!$-'5*$31!*#'!$5/'5*$2'%!*#,*!-&$2'!)0%'&2'-!0'#,2$)&=! x ;'%$85!$5*'&2'5*$)5%!*#,*!:'2'&,8'!$5/'5*$2'%!3)&!0'#,2$)&%!*#,*!%.(()&*!2,:.'!/#,$5!/)<('*$*$2'5'%%=! x 9-'5*$31!,5-!'58,8'!/#,58'!,8'5*%=! x ?)5%$-'&!.%$58!,!%':3W%':'/*$)5!(&)/'%%!3)&!(&)E'/*!(,&*5'&%=! 5. Facilitation must be taken to scale. x N':(!%*,K'#):-'&%!<,K'!0'#,2$)&!*#,*!$5/&',%'%!/)<('*$*$2'5'%%!*#'!$5 %*&1!5)&<=! x N':(!%*,K'#):-'&%!.5-'&%*,5-!*#,*!/)<('*$*$2'!0'#,2$)&%!,&'!'%%'5*$,:!*)!*#'$&!%.//'%%=! x 6*,&*!%<,::!,5-!/&',*'!<)<'5*.<=! x R'2'&,8'!,5-!(&)*'/*!',&:1!,-)(*'&%=! x ;)!5)*!&':1!'G/:.%$2':1!)5!&'(:$/,*$)5!,%!,!%/,:$58W.(!%*&,*'81=! ! ! IMPLEMENTATION BEST PRACTICES FOR VALUE CHAIN DEVELOPMENT PROJECTS 4 “An in-depth end market analysis looks at markets as dynamic systems constantly undergoing transformation and seeks to understand the key drivers of demand which are likely to affect the market in 5 to 10 years. It analyzes trends in key markets and discusses the most promising market segments. It describes how channels operate and how best to access them In addition to identifying the country’s products’ strengths and weak- nesses in export markets, an in-depth end market anal- ysis benchmarks these strengths and weaknesses against competitor countries.” - In-Depth End Market Analysis and Bottom-Up Business Environment Reform, DAI, 2008. “We define strategy as informed choice and timely ac- tion. Talk to different actors about what they need in terms of data. It depends on the products and the out- puts needed to mobilize people and get them excited.” - Rob Henning, OTF Group II. PRINCIPLES, PRACTICES AND CHALLENGES A. INTERVENTIONS MUST BE MARKET DRIVEN 95!8'5'&,:J!(&,/*$*$)5'&%!,8&''!*#,*!2,:.'!/#,$5!-'2':)(<'5*!(&)E'/*%!<.%*!0'!market driven=!?:',&:1J!(&) /$58!%)<'W *#$58!3)&!+#$/#!*#'&'!$%!5)!-'<,5-!+$::!5)*!:',-!*)!%.%*,$5,0:'!$5/&',%'%!$5!$5/)<'=!['2'&*#':'%%J!-$33'&'5*!$<(:'W <'5*$58!,8'5/$'%!$5*'&(&'*!+#,*!$*!<',5%!*)!0'!<,&K'*!-&$2'5!$5!2,&$).%!+,1%=!L)&!'G,<(:'J!%)<'!$<(:'<'5*'&%!,-2)W /,*'!,!*#)&).8#J!\.,5*$*,*$2'!<,&K'*!,5,:1%$%!(&$)&!*)!(&)E'/*!-'%$85!*#,*!:))K%!,*!*#'!()*'5*$,:!8&)+*#!)3!<.:*$(:'! <,&K'*!%'8<'5*%=!B*#'&%!%.88'%*!*#,*!\.,:$*,*$2'!$53)&<,*$)5!(&)2$-'-!01!K'1!$53)&<,5*%!/,5!0'!<)&'!#':(3.:=!6)<'! :))K!3)&!0.1'&%!*)!\.$/K:1!,/#$'2'!%,:'%J!,5-!)*#'&%!,$<!*)+,&-!)(*$<,:!<,&K'*%!)2'&!,!3$2'W!)&!'2'5!*'5W1',&!#)&$I)5=!!! PROPOSED BEST PRACTICES Use proven market research tools to conduct in- depth end-market analysis.!! ")):%!%./#!,%!D)&*'&F%!L$2'!L)&/'%J!*#'!Z)%*)5!?)5%.:*W $58!H&).(!<,*&$G!,5-!6VB"!,5,:1%$%!#,2'!0''5!*#'! %*,(:'!)3!<,5,8'<'5*!/)5%.:*$58!3$&<%!3)&!<,51!1',&%=! ?)<0$5'-!+$*#!%*,5-,&-!\.,:$*,*$2'!-,*,!/)::'/*$)5!<'W *#)-%!%./#!,%!3)/.%!8&).(!-$%/.%%$)5%J!K'1!$53)&<,5*!$5W *'&2$'+%!,5-!(,&*$/$(,*)&1!<,(($58!*'/#5$\.'%J!%./#!*)):%! ,&'!.%'3.:!3)&!,5,:1I$58!-,*,!*)!,::)+!2,:.'!/#,$5!%*,K'W #):-'&%!*)!<,K'!$53)&<'-!-'/$%$)5%= h ! Use quantitative and qualitative information to understand opportunities in various market channels as well as the constraints to exploiting those challenges. l.,5*$*,*$2'!,5-!\.,:$*,*$2'!,5,:1%'%!,&'!/)<(:'<'5*,&1=! Z)*#!,&'!5''-'-!*)!.5-'&%*,5-!*#'!()*'5*$,:!%/,:'!)3!'/)W 5)<$/!0'5'3$*%!3&)<!*#'!-'2':)(<'5*!)3!,!(,&*$/.:,&!2,:W .'!/#,$5J!,%!+'::!,%!*#'!()*'5*$,:!3)&!,!%.%*,$5,0:'J!(&)W ())&!-$%*&$0.*$)5!)3!*#'%'!0'5'3$*%=!"#'!,<).5*!)3!\.,5W *$*,*$2'!,5-!\.,:$*,*$2'!,5,:1%$%!5''-'-!,5-!*#'!0,:,5/'! 0'*+''5!*#'%'!*+)!,%('/*%!-'('5-!)5!/)5*'G*.,:!3,/*)&%! ,5-!*#'!*1('!)3!$53)&<,*$)5!%).8#*=!L)&!'G,<(:'J!,!%*&)58'&!'<(#,%$%!)5!\.,:$*,*$2'!,5,:1%$%!<,1!0'!,((&)(&$,*'!+#'5! .(-,*'-!%*,*$%*$/%!,&'!.5,2,$:,0:'!)&!.5&':$,0:'J!<,&K'*%!,&'!5)5*&,5%(,&'5*!)&!*#'!$5 %*&1!$%!5'+!)&!&,($-:1!/#,58$58=! Segment the market: Analyze each of the potential end markets to understand the requirements, risks and expected benefits of competing in each of them. H'5'&,::1!*#'&'!,&'!<.:*$(:'!,/*.,:!,5-!()*'5*$,:!<,&K'*!/#,55':%J!',/#!+$*#!-$33'&'5*!-'<,5-!/#,&,/*'&$%*$/%!,5-!&'W !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! h !! L)&!,!()&*3):$)!)3!\.,5*$*,*$2'!<,&K'*!,5,:1%$%!*)):%J!8&).5-'-!*#&).8#!/,%'!%* $'%J!%''! #**(i@@+++=<$/&):$5K%=)&8@'2j'5=(#(k9;mcn``hjad`o9;am;Bj"BD9?!! ! IMPLEMENTATION BEST PRACTICES FOR VALUE CHAIN DEVELOPMENT PROJECTS 5 *.&5%=!9*!$%!*#'&'3)&'!$<()&*,5*!*)!segment!*#'!<,&K'*i!R$%*!',/#!)3!*#'!()*'5*$,:!<,&K'*!/#,55':%J!+#,*!$%!&'\.$&'-!*)! /)<('*'!$5!*#'<!OK'1!3,/*)&%!)3!%.//'%%!,5-!:'2':!)3!$5W 2'%*<'5*PJ!,5-!+#,*!0'5'3$*%!,5-!&$%K%!/,5!0'!'G('/*'-! 01!%'::$58!$5*)!*#'<=!;$33'&'5*!<,&K'*!%'8<'5*%!<,1!0'! ,((&)(&$,*'!3)&!-$33'&'5*!8&).(%!)3!2,:.'!/#,$5!%*,K'W #):-'&%=!6$5/'!'5-!<,&K'*%!,&'!-15,<$/J!$*!$%!,:%)!$<()&W *,5*!*)!,%%'%%!*#'!%*&./*.&'!)3!*#'!<,&K'*!,5-!#)+!$*!$%! '2):2$58!,5-!/#,58$58=!Z1!benchmarking!K'1!,**&$0.*'%! O'=8=J!\.,:$*1J!(&$/'J!&':$,0$:$*1!)3!%.((:1J!3:'G$0$:$*1J!*$<'! 3&)<!)&-'&!*)!-':$2'&1P!,8,$5%*!/)<('*$*)&%!,5-!$3!()%%$W 0:'!:))K$58!,*!*&'5-%!$5!*#'%'!&'%('/*$2'!,**&$0.*'%J!$5 %W *&1!%*,K'#):-'&%!/,5!%''!+#'&'!*#'1!#,2'!,!/)<('*$*$2'! ,-2,5*,8'!,5-!+#'&'!*#'1!5''-!*)!.(8&,-'!$5!)&-'&!*)!/)<('*'=! Include value chain stakeholders in the analytical process to the extent possible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x *#'!.%'!)3!%*)&$'%!*)!<,K'!*#'!3$5-$58%!,//'%%$0:'!,5-!&':'2,5*! x #':($58!'5-W<,&K'*!0.1'&%!/)<<.5$/,*'!-$&'/*:1!+$*#!)*#'&!%*,K'#):-'&%!*#&).8#!$5W('&%)5!<''*$58%!)&!&'/W )&-'-!$5*'&2$'+%! x <''*$58!+$*#!&'(&'%'5*,*$2'%!3&)<!,::!(,&*%!)3!*#'! 2,:.'!/#,$5!*)8'*#'&!*)!2'*!$53)&<,*$)5!,5-! /&',*'!.5-'&%*,5-$58!)3!*#'!5''-!*)!+)&K!*)W 8'*#'&!*)!'G(:)$*!<,&K'*!)(()&*.5$*$'%! x <''*$58!%<,::'&!8&).(%!)3!%*,K'#):-'&%!*)!3,/$:$W *,*'!.5-'&%*,5-$58!)3!*#'!$<(:$/,*$)5%!)3!*#'!,5,:1%$%!3)&!(,&*$/.:,&!3.5/*$)5%!$5!*#'!/#,$5! Help value chain stakeholders to respond to and anticipate market trends. D,&*$/.:,&:1!$5!$5 %*&$'%!+$*#!/)5%*,5*:1!/#,58$58!<,&K'*!-'<,5-!O'=8=J!#)<'!,//'%%)&$'%P!)&!+#'&'!%.((:1!).*%*&$(%! -'<,5-J!$*!$%!$<()&*,5*!*)!%*,1!,#',-!)3!*#'!/)<('*$*$)5J!&,*#'&!*#,5!E.%*!K''($58!.(!+$*#!$*=!V#$:'!%*,K'#):-'&%!8'5W '&,::1!/)5%$-'&!5'$8#0)&$58!3$&<%!*)!0'!*#'$&!<,$5!/)<('*$*)&%J!/)<('*$*$)5!$%!)3*'5!(&$<,&$:1!,*!*#'!2,:.'!/#,$5!:'2':i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“A stakeholders’ workshop early on is a good way to vet findings and get some agreement with stakeholders; it is important to have government people there to hear it as well.” -Bob Rabatsky, Fintrac “When talking to buyers and other value chain stake- holders, three things are important: 1. Do your homework: Don’t go in and ask stake- holders questions you could answer before you get there by reading a report. 2. Watch your sources: All stakeholders have vested interests and may be resistant to change. 3. Keep doing the analysis because markets are dynamic.” - Joe Dougherty, Cardno “Competitive strategy starts with a detailed understand- ing of the needs and requirements of specific customer segments and the way in which competitor value chains configure and position themselves to win in these seg- ments. This knowledge should be the cornerstone of all value chain upgrading initiatives.” -Butterflies, Elephants and Icebergs: Using Language and Data to Mobilize Value Chains, OTF Group, 2008. ! IMPLEMENTATION BEST PRACTICES FOR VALUE CHAIN DEVELOPMENT PROJECTS 6 “Markets change after the analysis is done… Too often we look at past market analysis when we need to be looking at the current situation and future trends.” -Mike Ducker, J.E. Austin and Associates (&)2'!('&3)&<,5/'=!;)5)&W3.5-'-!(&)E'/*%!%#).:-!#':(!2,:.'!/#,$5!%*,K'#):-'&%!-'2':)(!*#$%!/&$*$/,:!0.%$5'%%!/,(,/$W *1=! Communicate the results of the analysis to industry stakeholders!to help them select multiple potentially profitable markets.!! C,&K'*!,5,:1%$%!$%!5)*!,5!'5-!$5!$*%':3J!,5-!,:)5'!+$::!5)*!8'5'&,*'!,!<,&K'*W-&$2'5!$5 %*&1=!C,&K'*!,5,:1%$%!<.%*!0'! $5*'&5,:$I'-!01!%*,K'#):-'&%!,5-!:',-!*)!.(8&,-$58!$5!&'%()5%'!*)!<,&K'*!)(()&*.5$*$'%=!H'5'&,::1J!%*,K'#):-'&%!%#).:-! 0'!'5/).&,8'-!*)!%':'/*!<.:*$(:'!<,&K'*!%'8<'5*%!*)!&'W /'!&$%K!,5-!)(*$<$I'!&'*.&5%i!3)&!'G,<(:'J!%':'/*$58! <,&K'*%!3)&!2,&$).%!8&,-'%!)&!*1('%!)3!(&) /*=!",K'!$5*)! /)5%$-'&,*$)5!&$%K!,5-!)*#'&!5)5W'/)5)<$/!3,/*)&%!,%%)W /$,*'-!+$*#!2,&$).%!<,&K'*!%'8<'5*%J!,5-!*#'$&!potential! &'*.&5%!)5!$52'%*<'5*!$5!, $*$)5!*)!/.&&'5*!&'*.&5%=! Base the project’s design and interventions on up-to-date market analysis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se an incremental approach where there is resistance to change and/or low levels of capacity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nderstand that value chain actors are not )5:1 market driven. D')(:'!$52,&$,0:1!#,2'!<.:*$(:'!/)<('*$58!/)5%$-'&,*$)5%! *#,*!$53:.'5/'!*#'$&!-'/$%$)5%=!"#'!-'%$&'!*)!$5/&',%'!'/)W 5)<$/!&'*.&5%!$%!:$K':1!*)!0'!0,:,5/'-!,8,$5%*!)*#'&!/)5W /'&5%!%./#!,%!&' /$58!&$%K!,5-!'5#,5/$58!%)/$,:!/,($*,:=! ",K'!*#'!*$<'!,5-!.%'!(,&*$/$(,*)&1!*)):%!*)!.5-'&%*,5-! +#,*!<)*$2,*'%!2,:.'!/#,$5!,/*)&%!0'3)&'!-'%$85$58!$5*'&W 2'5*$)5%=!D$:)*!,/*$2$*$'%!)5!,!%<,::!%/,:'!,5-!<)5$*)&! 2,:.'!/#,$5!,/*)&%F!&'%()5%'%!/,&'3.::1!*)!'5%.&'!:)/,:! &':'2,5/'!0'3)&'!%/,:$58!.(=!! “It is very important to consider where the passions of farmers are in terms of the different possibilities. What are farmers excited about? Sometimes practitioners focus too much on technicalities.” - Luis Osorio Cortes, Practical Action “When value chain actors are given opportunities to develop the skills they need to make changes, they de- velop an increased sense of confidence. After hope, confidence is one of the most important factors that enable players, especially microenterprises, to cope with change and to negotiate with people that are per- ceived to be able to wield greater power.” - Facilitating Behavior Change and Transform- ing Relationships, SDCAsia, 2008 “Sometimes we present a market opportunity to bene- ficiaries and expect them to automatically agree with our assessment. But most people we work with have many sources of income. And every investment represents a trade off.” -Ruth Campbell, ACDI/VOCA [...]... failure means - Simon Winter, TechnoServe that these lessons are lost as projects seek to gloss over implementation challenges IMPLEMENTATION BEST PRACTICES FOR VALUE CHAIN DEVELOPMENT PROJECTS 8 C IMPLEMENTERS SHOULD FACILITATE—RATHER THAN DRIVE OR REPLACE—THE ACTIONS OF STAKEHOLDERS An increasing number of practitioners agree that projects should facilitate upgrading by industry stakeholders, using market... with and through specific firms Activities of facilitation projects continue to include training, technical assistance and other services, whelmed by problems and requiring the help of outsiders to overcome them.” - Facilitating Behavior Change and Transforming Relationships, SDCAsia, 2008 IMPLEMENTATION BEST PRACTICES FOR VALUE CHAIN DEVELOPMENT PROJECTS 9 and the use of subsidies However, the way these... System Development, Practical Action, 2008 IMPLEMENTATION BEST PRACTICES FOR VALUE CHAIN DEVELOPMENT PROJECTS 11 Design interventions that leverage incentives for behaviors that support value chain competitiveness When project interventions are being designed, their expected impact on economic and social incentives and behavior should be considered Similarly, during implementation, the intended and unintended... suc2008 cess include the dissemination of successful business models, partnerships with private sector firms, collaboration and cross-learning with other projects and communication of lessons learned IMPLEMENTATION BEST PRACTICES FOR VALUE CHAIN DEVELOPMENT PROJECTS 14 ... management and an orientation towards cooperation, and make them central in value-chain enhancement efforts.” - Value Chains and the Cluster Approach, Chemonics International, 2008 IMPLEMENTATION BEST PRACTICES FOR VALUE CHAIN DEVELOPMENT PROJECTS 7 country benchmarks, the support of industry leaders and careful use of the media can all help to create urgency in the process Firms and groups of firms need to... value chain actors to self-select into the project may indicate that project assistance is not valued or that there are more heavily subsidized sources of assistance available IMPLEMENTATION BEST PRACTICES FOR VALUE CHAIN DEVELOPMENT PROJECTS 12 E FACILITATION MUST BE TAKEN TO SCALE Facilitation approaches rely on working through existing market actors, convincing them to take risks and enter into new markets,... Cluster Approach, positive feedback via respected community or industry Chemonics International, 2008 leaders or government representatives, or by promoting media attention IMPLEMENTATION BEST PRACTICES FOR VALUE CHAIN DEVELOPMENT PROJECTS 13 Leverage and protect early adopters Early adopters of more competitive behaviors need to be “An influential core group can be leveraged to involve successful if... measurable short-term results in terms of sales or income gains Adapted  from  “A  Synthesis  of  the  Making  Markets  Work  for   the  Poor  (M4P)  Approach”  DFID/SDC   IMPLEMENTATION BEST PRACTICES FOR VALUE CHAIN DEVELOPMENT PROJECTS 10 D IMPLEMENTERS SHOULD CATALYZE BEHAVIOR CHANGE There are various methods used by practitioners to promote new behavior by firms that leads to increased value chain... the life of the project Value chain projects should also be based on realistic timeframes (more than three years) because some of the issues they include—e.g., infrastructure upgrades, policy barriers, human resource capacity—can take many years to resolve Donors should therefore structure sequential projects to address such issues and build on the gains of previous projects Donors and implementers need... development projects Goal-focused, less prescriptive solicitations and projects “Donors and implementers need to commit to learning: are helpful in allowing implementers to maintain the flexto discuss what is good and not so good in scopes of ibility to change course when needed to achieve desired work; to gather information about best practices and to results Performance needs to be redefined in terms . beneficiaries.” - Successful Practices in Value Chain Develop- ment, J.E. Austin Associates, 2008 ! IMPLEMENTATION BEST PRACTICES FOR VALUE CHAIN DEVELOPMENT PROJECTS 12 Design interventions. /'-!+$*#!3.5-$58!3&)<!*#'!7//':'&,*'-!C$/&)'5*'&(&$%'!7-2,5/'<'5*! D&)E'/*=! ! IMPLEMENTATION BEST PRACTICES FOR VALUE CHAIN DEVELOPMENT PROJECTS ! microREPORT #167 ! DISCLAIMER "#'!,.*#)&%F!2$'+%!'G(&'%%'-!$5!*#$%!(.0:$/,*$)5!-)!5)*!5'/'%%,&$:1!&'3:'/*!*#'!2$'+%!)3!*#'!45$*'-!6*,*'%!78'5/1!3)&! 95*'&5,*$)5,:!;'2':)(<'5*!)&!*#'!45$*'-!6*,*'%!H)2'&5<'5*=. CATALYZE BEHAVIOR CHANGE 11 E. FACILITATION MUST BE TAKEN TO SCALE 13 ! IMPLEMENTATION BEST PRACTICES FOR VALUE CHAIN DEVELOPMENT PROJECTS 1 I. INTRODUCTION 4679;!,5-!)*#'&!-)5)&%!#,2'!&'/)85$I'-!*#,*!]$5!*#$%!'&,!)3!8:)0,:$I,*$)5J!8'5'&,*$58!'/)5)<$/!8&)+*#!$5!-'2':)(W $58!/).5*&$'%!+#$:'!&'