68203 JANUARY 2012 ABOUT THE AUTHOR GO LITE! Increasing Scale and Impact by SARAH OCKMAN is the manager of the Ukraine Combining Diagnostics and Training Lessons from the Ukraine Food Safety Project Food Safety Project, which was launched in October 2009. Previously, Sarah worked as a consultant on Access to Finance projects in IFC. She has The Ukraine Food Safety Project found that the typical way of providing presented the results of this lite-touch program at the GFSI firm-level assistance — conducting an in-depth diagnostic for companies in Global Food Safety Conference in London and for the Japan a pilot project, followed by an offer for assistance — was scaring off some Food Safety Day in Tokyo, both potential clients with the seeming complexity of the task and cost. But by in 2011. offering a “lighter,� less-intense approach at a cheaper price, we were able APPROVING MANAGER Patrick Luternauer, Manager, to reach more clients and have a greater impact. Sustainable Business Advisory, Europe and Central Asia. Background The programmatic approach in IFC Advisory • Reach more clients with demonstrable Services involves a combination of policy results and impact work, public awareness campaigns, and capacity building at the firm level. Typically, a This methodology can be replicated for just project rolls out firm-level assistance by about any firm-level intervention in a variety training local consultants, who in turn of sectors. We also feel that this could be a conduct diagnostic evaluations and train good way to conduct scoping in countries firms. These consultants might also be hired where a stand-alone project is not necessary to provide in-depth advisory services for but where IFC can still play a role. specially selected pilot clients. Lessons Learned While a project may reach many firms with training, it is difficult to measure results. Lesson 1: Using an incremental approach Meanwhile, pilot interventions are limited to increases the chances that a company will a select number of larger players who can engage IFC and allows you to track results. provide a demonstration effect. Is there a way to reach many companies while also Most advisory projects include some kind of measuring results? diagnostics and training. Often the diagnostics are used to get a foot in the door, in hopes The Ukraine Food Safety Project has found a formula that is effective for agribusiness In the words of one of our clients, the system projects and perhaps other sectors as well. started to “sink in� at her company; leadership The approach is simple: we combine three starting seeing the benefits, as did line staff: short assessments with complementary training, while also partnering with market “The Traceability system we put in place forced movers who are able to help ensure us to evaluate our suppliers. As a result we implementation. As a result, we are able to: found that a few bad suppliers were costing us much more than others in terms of bad quality • Demonstrate measurable results more products. Now our products last longer on su- permarket shelves, and we have a stronger part- quickly than we could by working with nership with our retailer-partners.� pilot companies alone Luidmila Chernous, Deputy Director, • Build a strong consultant base that will Kolos meat company ensure the sustainability of the product SMARTLESSONS — JANUARY 2012 1 that allows for comparisons between companies. For example, the first module contains 51 requirements in the form of a checklist. Each requirement is rated from 1 (not fulfilled) to 4 (requirement fulfilled). During a visit, the consultant reviews scores with the client and provides suggestions for how to improve the score for the next assessment. We are then able to track the effectiveness of the training and consulting visits. Ultimately, we saw that scores consistently increased after each phase. By offering a less-intense product and bunching the companies into groups for the training, we were able to keep costs down and offer discount pricing to our clients, thus providing a further incentive to participate. Our in- Luidmila Chernous, Deputy Director on the right. depth advisory package typically involves about 50 consulting days plus considerable IFC supervision, and costs Photo Credit: Sarah Ockman between $20,000 and $30,000—at least 50 percent of which must be covered by the company. This lighter program, by comparison, requires only three consulting days on-site, a that the firm will decide to engage IFC for more in-depth two-day training session, and minimal travel. In the pilot work. Sometimes the company is interested, but ultimately phase we offered a 50-percent subsidy to incentivize chooses not to engage IFC because the cost and time participation. Since the pilot phase completed last year, we required to make the recommended improvements are too have priced this package at market rates, with no subsidy, overwhelming. As a result, IFC has invested its own resources at about $1,000 per company. and time in a potential project and has nothing to show for it. How can we increase the chances that the firm will Lesson 2: Don’t Go Lite alone — when possible, adapt continue working with us? existing training materials from international associations. We found that with those clients that are not ready to commit to a longer intervention, breaking down a typical Normally in our in-depth pilot work, we help clients diagnostic into short, focused assessments lasting no more achieve an internationally-recognized food safety than one day each is a more effective approach. That way, certification. Many major retailers will work only with we can focus on a shorter list of requirements (which is those suppliers that are certified according to international more manageable to the client), we have a good baseline standards; achieving one of these standards makes to start from, and there is a smaller, less overwhelming list business sense for our clients, since it helps increase their of follow-up items. sales. Examples of commonly used best practices are Hazard Analysis and Critical Control Points (HAACP),1 We then follow up with a standardized training workshop Good Manufacturing Practices (GMP), and Good Hygiene for all companies participating in the program, followed by Practices (GHP). Implementing these systems helps a one-day consulting visit about one month later — then a companies ensure that the food they produce is safe for final assessment one month after that. Since all the on-site visits are scored, we can measure how much the companies improve from visit to visit. In our pilot program conducted in 2010, client companies’ scores improved on average from 49 percent in the baseline assessment to 93 percent in the final. Preliminary results from our impact survey also confirm that these clients were able to increase sales significantly to major purchasers — in some cases doubling sales — since clients were able to demonstrate that they had made progress on food safety. In order to keep the results as objective as possible, we assigned a different consultant to perform the final assessment. Stage 1 Stage 2 Stage 3 Stage 4 Initialon-site Training On-site Final on-site Luidmila Chernous, Deputy Director. assessment consultations assessment 1 day 2 days 1 day 1 day Photo Credit: Markian Lysejko 1 HACCP is an internationally accepted food safety management system Combining diagnostics and training enabled us to measure that is required by many governments, including the European Union and the results of our work, and we developed a scoring system the United States, for food processors. HACCP is a critical component of any international food safety certification plan. 2 SMARTLESSONS — JANUARY 2012 their customers, and helps them achieve the international standards required by retailers. In the past, however, helping a client achieve certification has been a lengthy process — taking one or two years. Recently, the Global Food Safety Initiative — a collaboration between experts, retailers, and food companies that attempts to harmonize international standards in food safety—developed a shorter, three-module approach to certification. We have begun using these materials and this approach in helping our clients meet international safety standards. Using existing content that has already been endorsed by market movers has helped us encourage more companies to start improving their food safety levels. One of our consultants, Albert Vorontsov (2nd from left), We now offer a standardized certification process, with providing advice to a client company. group pricing, for the three levels developed by the GFSI: Photo Credit: Sarah Ockman • The Basic Level — roughly corresponding to the prerequisites for HACCP, including GMPs, GHPs, control of allergens, and traceability Lesson 3: Engage market movers — they can provide incentives for companies to improve performance. • The Intermediate Level — this includes HACCP and also food defense, transport, and logistics Just as we engaged a global association to develop content for the training, it was also important to develop relationships • The Advanced Level (in development) with companies and policymakers that had the power to transform the market. In our case, we worked closely with Metro Cash & Carry Ukraine, a global retailer. Metro Ukraine signed purchasing agreements with their suppliers stipulating that international food safety certification must be reached by 2013, and followed up with letters and presentations to their suppliers offering our program. So far, we have reached over 15 companies with the full program and hope to reach most of their 120 fresh suppliers in the next year. Metro Ukraine also provided the training space in-kind, which has helped keep our training costs down. Not only did Metro Ukraine provide incentives to join the program, they followed up with clients that were not making sufficient progress. For example, one company did not seem to be demonstrating enough commitment to improving food safety at its factory — its scores, unlike all others in the pilot group, remained flat from Stage One (First Assessment) to Stage Three (On-Site Consultation) with a below-average score of 39 percent. We were concerned and called Metro. Metro’s meat buyer then called the client and threatened to take the company’s product off the shelf for the lucrative holiday season. By the final assessment, the company had What’s important here is not the topic — which could be improved considerably and achieved a score of 92 percent. It food safety standards, farmer productivity, resource continued to improve during the time between the Basic and efficiency, corporate governance, or risk management — Intermediate level modules and is now progressing well it’s the approach. We took care to ensure that the through the Intermediate level. Sometimes only the market assessments were focused enough to be conducted in one movers can provide the necessary wake-up calls. day, and the training was focused on this narrow list of requirements. However, to reach a critical mass and achieve true market transformation, we recognize that a partnership with one Companies that are not ready to commit to an in-depth market mover is not enough. We have recently launched a advisory intervention now have the option for a less- joint effort with the Ukraine State Committee for Veterinary intensive service that costs considerably less. Furthermore, & Phytosanitary Services, Ukraine’s de facto food safety because the modules are standardized and take less time, agency, to roll out the program. As with Metro, they will help we can reach more companies. And because the content push the suppliers to participate: we represent the carrot, was prepared by GFSI, it already had the buy-in from a while the government is the stick, threatening to revoke major market mover in our region: Metro Cash & Carry. export or production permits if companies do not comply. SMARTLESSONS — JANUARY 2012 3 We hope that we can get another major retailer below their normal rate, while less on board to help us achieve even greater experienced firms got paid the same amount impact. as the average. Lesson 4: Encourage mentoring. Conclusion From the start, we emphasized that this While we still offer in-depth advisory services program, despite the short time frame, is to select companies, we are finding in the first about mentoring the companies, not 18 months of this incremental approach that auditing. A Train-the-Trainer workshop— a limited engagement with clearly set one-week training for the consultants that milestones and deadlines forces companies to included a practical site visit—emphasized do more on their own. Consultants are not just the technical aspects of the program available for three days on-site, but otherwise but also how to support the clients. While have little time to offer customized advice. assessments and audits usually work with a We originally expected that companies would checklist as a starting point, an auditor only lose momentum in the six months between identifies where the company has not the end of the pilot program and the start of complied with the requirements, and offers the intermediate program. However, we no solutions on how to improve. During our found the opposite: companies continued assessments, the consultants provided improving on their own without hand-holding concrete solutions for how to improve scores from us or the consultants. We therefore before the next visit. In addition, the training believe this incremental approach could work specifically addressed the same checklist. not just in agribusiness, but for most advisory Because there were representatives from programs. about 10 companies in each training, firms also had the opportunity to learn from each other, not just from the trainers. We have been in a “continuous improvement� mode from the beginning, offering practical exercises for subjects that are difficult or new for Ukrainian clients. For example, we were particularly worried that inexperience with traceability and allergens, two relatively new topics for Ukrainian food companies, would cause our companies to fail the program. Therefore, we added practical group exercises and tip sheets to the existing training. In the end, we had significant progress in these areas, especially with regard to allergens—all companies scored zero in the first assessments and 100 percent on the final assessments. Lesson 5: “Going Lite� helps build local capacity by providing real-life experience in a controlled environment. DISCLAIMER SmartLessons is an awards The program is a great testing ground for program to share lessons learned in development-oriented advisory our consultants. We have found that the pool services and investment of consultants for our in-depth interventions operations. The findings, is now larger and more experienced. We are interpretations, and conclusions more comfortable working with consultants expressed in this paper are those after testing them in this lighter-touch of the author(s) and do not necessarily reflect the views of IFC program. or its partner organizations, the Executive Directors of The World But we made a mistake by paying a flat rate Bank or the governments they to all consultants, regardless of their going represent. IFC does not assume any responsibility for the rates. In the beginning we feared the completeness or accuracy of the paperwork would be overwhelming and information contained in this thought it would be easier to pay a flat rate. document. Please see the terms In the long run, this approach made things and conditions at www.ifc.org/ more complicated; one excellent firm did not smartlessons or contact the program at smartlessons@ifc.org. want to work with us, since the rate fell 4 SMARTLESSONS — JANUARY 2012