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The Megacommunity
Approach to Tackling the
World’s Toughest Problems
Three projects in Rome are showing how companies,
governments, and other organizations can work together
to increase their effectiveness. Innovation as it continues
to push the envelope of management practice.
BY FERNANDO NAPOLITANO
REPRINT 10305
Photograph by Marco Di Lauro
features global perspective
Toughest Problems
Fernando Napolitano Also contributing to this article Previous pages:
fernando.napolitano@booz.com was consulting writer Poste Italiane CEO Massimo
is a senior partner at Booz & Lawrence Frascella. Sarmi in the company’s
Company based in Rome. He cybersecurity control room.
is managing director for Italy
and leads the firm’s organiza-
tion and change practice
there. He specializes in the
telecommunications, media,
and aerospace industries.
Cybersecurity. Hunger. Energy. Education. These work with other organizations and constituencies to
are challenges for civilization that can seem overwhelm- achieve its goals.
features global perspective
ing. They are deep-rooted and highly complex. They These organizations have boldly embraced the
have global reach and global repercussions. And they call megacommunity approach — which calls for companies,
for game-changing strides in policy and innovation. governments, and NGOs to reach out across sectors
Many organizations in many sectors have been working (private, government, and civil society) and join to-
diligently on each of these challenges for years, or gether to take action on compelling issues of mutual
decades; many others know they should be. importance, following a set of practices and principles
But in most cases, even the most well-intentioned that will make it easier for them to achieve results. Like
and capable organizations, when working separately, any business environment, a megacommunity contains
eventually hit a wall limiting their effectiveness. Con- organizations that sometimes compete and sometimes
sider a large and sophisticated company such as Poste collaborate. And like any business organization, it
Italiane SpA — which functions as Italy’s postal service requires structure, communication, and governance. It’s
and also as a bank and a communications company, pro- an approach that admits that certain crucial problems
viding credit cards and mobile phones. The leaders of can be solved only by a combination of organizations (a
Poste Italiane found that despite their state-of-the-art network of networks, if you will) that can bring many
cybersecurity operation, they needed to engage with a different capacities and points of view to bear.
3
suite of partners outside the company to deal proactively The concept of the megacommunity (explained in
with rising security threats. Or consider the World Food detail in Megacommunities: How Leaders of Government,
Programme (WFP), a voluntarily funded agency in the Business, and Non-Profits Can Tackle Today’s Global
United Nations system that since the 1960s has fought Challenges Together, by Mark Gerencser, Reginald Van
to reduce hunger. Despite dramatic progress in lowering Lee, Fernando Napolitano, and Christopher Kelly
the percentage of the world’s hungry (it has been [Palgrave Macmillan, 2008]) has engendered substantial
reduced by half since the program’s inception), the WFP interest on the part of policymakers, business leaders,
is now seeing the absolute number of those living in and others. But because it is a new idea, it must also
hunger rise as world population increases — and, prove itself in practice. Many questions persist as to how
as a result, it has begun to employ a strategy of working — and how well — the approach might work; what
with other organizations to do more. Finally, consider type of leadership it might demand; and how it might
Enel SpA, the world’s second-largest energy company, change an organization, a company, or an area of public
strategy + business issue 60
headquartered in Italy. Enel struggled in the last policy. Since 2008, successful megacommunity efforts
decade to locate and build new energy infrastructure to have begun to demonstrate the ways the approach can
keep pace with growing energy demand, while still succeed, including the three mentioned above: Poste
satisfying environmental and local land-use concerns. Italiane, the World Food Programme, and Enel. Inter-
The company found that it needed to reach out and estingly, these efforts have all taken root in Rome, which
is becoming a laboratory for megacommunity initiatives to transfer money via their cell phone SIM cards.
among major European cities and between Europe and Cybersecurity is not just a theoretical concern; it is
framework for this purpose.” was in telecommunications and given his position at the
Sarmi concluded that true security for his business company, was the perfect initiator for a cybersecurity
and customers could be achieved only through an megacommunity. Furthermore, Poste’s impressive inter-
international, multisector cybersecurity arrangement. nal cybersecurity operation functions as something of a
Cybersecurity itself was as much a matter of offense as it magnet and showpiece, underscoring Poste’s leadership
was defense. For these reasons, he needed a multiplicity position in this area. By analyzing 35 million transac-
of ideas. So he began the process of reaching out. “We tions a day, Poste has accumulated enough technology
started to realize that this phenomenon was global. And and behavioral science to help put any cybersecurity ini-
there was a question of growing in terms of capability.” tiative on a productive path.
As Sarmi’s experience shows, a successful megacom- The success of Poste’s megacommunity has been
strategy + business issue 60
munity initiator needs to be in the best possible position rapid and multifaceted, although built around a fairly
to attract other important participants. The initiator young set of initiatives. The company has signed a mem-
needs to be among the most motivated members of the orandum of understanding with the United States Secret
community. And he or she needs to have the proper Service and has been asked to join the electronic crime
diverse background. Sarmi, given that his background task force in New York City. The perspective and
Nancy Roman at the
World Food Programme’s
headquarters.
involvement of law enforcement is key to the develop- World Food Programme and Hunger
ment of a cybersecure planet — and underscores the Having experienced an initial round of possibility and
need for companies to recognize which of their prob- excitement from its megacommunity commitments,
lems are global problems, and correspondingly prepare Poste Italiane has become involved in other megacom-
to move outside their sector. munities. One of the new initiatives it has joined is a
Meanwhile, together with industrial partners such fund-raising effort for the world’s largest agency fighting
as Enel, Microsoft, and Visa/MasterCard, and with aca- hunger, the World Food Programme, which is also head-
demic partners such as George Mason University and quartered in Rome.
Photograph by Reed Young
Royal Holloway College at the University of London, Like Poste, the World Food Programme found itself
Poste recently opened a global Cyber Security Center of hitting a wall as it encountered new global challenges.
Excellence in Rome. This center will promote research The organization’s experience provides a look at the
into how security is reshaping the Web, as well as pro- megacommunity concept from a different sector per-
vide forensic and training support to its members and to spective. As Nancy Roman, the program’s director of
other organizations. The issue that the center plans to communications and public policy strategy, explains:
address first, according to Sarmi, is “international coop- “We’ve made a lot of progress in hunger over four
ambassador to Italy is the leader. far created 14 startup companies.
The Fulbright With a steering committee that One Fulbright BEST scholar went on
BEST Scholarship includes Fedele Confalonieri (presi- to win a national prize for innovation
dent of Mediaset), Francesco Starace entrepreneurship that included
(CEO of Enel Green Power) and € 60,000 (about US$74,000), with
Massimo Sarmi (CEO of Poste Ital- which he will develop and sell an inno-
created a separate megacommunity Clara University in California. Then, achievements, the scholarship pro-
initiative to improve educational and they spend an additional three months gram has created “an opportunity to
entrepreneurial opportunities. The in Silicon Valley at a startup company, make known an effective model of col-
result has been the creation of the pri- after which they return to Italy, where laboration between universities, in-
vate sector–backed Fulbright BEST they are mentored by steering com- dustry, and venture capital.” That is a
(Business Exchange and Student mittee members for six months. The succinct definition of the megacom-
Training) scholarship. This initiative is scholarship is now in its fourth year. munity spirit, and another example of
part of the U.S. Embassy to Rome’s Since its inception, the program has Italy’s burgeoning success as a mega-
“partnership for growth” program, raised €1 million (about US$1.5 mil- community laboratory.
which aims to augment foreign direct lion) and scholarships have been —F.N.
investment from the U.S.; the U.S. awarded to 34 Ph.D.s who have thus
decades. People are sometimes surprised to learn that been harder to get overseas funding from governments
from the 1960s to now, the percentage of hungry people — which are increasingly hamstrung by local demands.
7
in the world has dropped from 37 percent to 17 percent. Certainly, this development is due in part to the down-
That’s huge progress, but we’ve also seen a big demo- turn in world and local economies, but Roman also sees
graphic shift and population growth. Now we’ve more it as a function of increased scrutiny in the age of the
than doubled the world population, to 6.8 billion. So the Internet and 24-hour cable news.
raw numbers of the hungry are rising. And people rec- Thus, although the government sector continued
ognize that, strictly on a charity basis, you’re not going and still continues to play a significant role in the WFP,
to wipe out hunger among the bottom billion. We need a larger and clearer need began to emerge for new part-
hunger solutions. We’ve got to take a different tack.” ners. The WFP decided to explore the concept of the
These new challenges are further complicated by a megacommunity. Its leaders were drawn to the idea of
shift in the culture of the government sector. When the reaching out to new sectors, to building bridges, and to
World Food Programme was founded in the 1960s, uncovering where they might find some significant over-
Roman notes, “President Kennedy could sit down with lap in their vital interests.
strategy + business issue 60
Senator McGovern and determine that they were going “Governments,” Roman says, “have become more
to take excess grain and share it with the world. That was parochial. But find me a company that’s in 100 coun-
something you could pretty much discuss over a coffee tries, and I will find you a company that understands
or a whiskey at night and have it done.” our issues cold: hunger, water, demographic trends.
But the WFP has found that in recent years, it has That’s a real shift. It used to be that government knew
“In the old world, companies wanted
to write a check, get a picture in the newspaper,
and move on with their business.
Today, they want to solve the problems.”
all that. Now, business has it all over government.” a “solidarity card” to Poste Mobile customers whereby
Like Massimo Sarmi, Nancy Roman (who took the a percentage of their payments would be donated to the
munication and information. According to Comin, media relations, and sponsorships. These representatives
“When we began the project two years ago, we started both explained Enel’s plans and position and collected
with an analysis, and we used this model to understand information on potential problems and needs within
better the context in which we are working. The first specific communities that might be affected.
step was to identify all the people who needed to The interaction with stakeholders helped informa-
features global perspective
10
tion flow in both directions. Enel was now in the posi- ies, developed with a neutral university rather than with
tion to clear up misconceptions and point out potential organizations that had started as friends of the company,
gains for all involved. Meanwhile, the other stakeholders to be very productive. As a result, Enel’s plans now
could make their issues known, and the company could receive strong regional support. Comin is determined
see that appropriate action was taken to address them. to prevent the work of his megacommunity from being
As Comin explains, “It’s a flexible mechanism. You must seen as propagandistic in any way. “The point is to
change because the context changes.” involve the people,” he says. “This model is not static.
For example, when Enel proposed a coal plant in You learn every day how you implement it, how to
Photograph by Reed Young
the Veneto region, the University of Venice was con- adjust to different conditions, in different situations, in
cerned about the flow of water going back into the Po time and in geography. It’s very interesting because [in
River. It feared that the water would damage both the other projects] you have a platform and a model, and
fish population and the vegetation. So a technical assess- you proceed in a very straight line, making sure all your
ment was conducted with participation from the people work with this view. With a megacommunity,
University of Venice, and the issue was resolved. you need to change and continue studying the applica-
Comin — and Enel — found these kinds of stud- tion to adapt to reality. Reality changes very, very fast.”
Through its megacommunity models, Enel expects
to gain an understanding of the public’s view
of nuclear energy, and hopes to communicate where
those views are supported by current research.
Enel has enhanced its marketing efforts with inno- The megacommunity doctrine has had a positive
vative IT and software, specifically in the way it moni- effect on Enel’s public image. “Since we began the
features global perspective
tors and measures consensus, and also in the way the megacommunity,” Comin says, “many things have
data and know-how are shared throughout the com- changed: our market approach, the way we monitor and
pany, across functions, and with the CEO. Previously, measure consensus, our approach to our colleagues. All
such information was stored in separate silos within the of these have changed the image of Enel. But I think
company, which often proved to be counterproductive. the strong result of a megacommunity is a different
One of the biggest changes happening in the en- approach about our external reality, more of a con-
ergy sector is the renaissance of nuclear energy. Enel’s sciousness about reaching out.” In the highly complex
megacommunity experience should prove useful as world of energy, Comin finds that Enel is able to inform
plans proceed for increased production of nuclear en- and educate stakeholders in a much more effective and
ergy. Following the Chernobyl disaster in 1986, the efficient manner. Enel has become a trusted party in
Italians passed a referendum abolishing nuclear plants this field, while making it clear that compromises have
throughout the country. All plants, finished and unfin- to be struck to combine growth and prosperity with
ished, were shut down. That referendum has now been low-cost energy.
amended, or more precisely, bypassed, by a new law that As part of the megacommunity initiative at Enel,
allows nuclear energy production. The government is the company has joined with Harvard University to pro-
11
currently in the process of identifying the locations mote policymaking on climate change through the Enel
where new nuclear plants will be built. Endowment for Environmental Economics. It is also
“We are working with the methodology and the involved in Poste Italiane’s cybersecurity initiative, the
mind-set of a megacommunity for the new nuclear Center of Excellence (once again demonstrating that
Italian plan,” Comin says. Through the megacommu- involvement in one megacommunity project begets
nity models they have developed, Enel expects to gain a involvement in another, as the organization’s network,
thorough understanding of the public’s view of nuclear awareness, and definition of success expand). Because
energy. And the company hopes to be able to commu- Enel is the second-largest utility in the world, covering
nicate where those views are supported by current scien- 23 countries, it has its own type of cybersecurity con-
tific research and where they are not. “Our goal is to cerns, especially as the world moves toward an intercon-
have maximum consensus,” says Comin. nected smart grid.
Enel’s leaders want to use not only the tools of Enel has also successfully launched a quarterly mag-
strategy + business issue 60
communication and the contacts their megacommunity azine called Oxygen, in both English and Italian, which
experience has brought them, but also the goodwill promotes awareness of scientific thinking and dialogue
that the initiative has engendered. This was one of the and highlights its involvement with the megacommu-
unexpected but welcome side benefits of building a nity. All these commitments have strengthened Enel’s
megacommunity. position in its field.
The Future of the Megacommunity says Nancy Roman, “that it’s just a matter of the
As these organizations’ experiences show, the megacom- hours in the day to exercise all the potential.” At this
are helping to shape their respective missions, strategies, Mark Gerencser, Fernando Napolitano, and Reginald Van Lee, “The
Megacommunity Manifesto,” s+b, Summer 2006, www.strategy-business
processes, and capabilities. .com/article/06208: Why public, private, and civil leaders should confront
All three organizations have recognized which kinds together the problems that none can solve alone.
of megacommunity projects truly reflect where they Mark Gerencser, Reginald Van Lee, Fernando Napolitano, and
need to invest their time and effort. As a result, each is Christopher Kelly, Megacommunities: How Leaders of Government, Business,
and Non-Profits Can Tackle Today’s Global Challenges Together (Palgrave
climbing certain walls it hadn’t been able to get beyond
Macmillan, 2008): The origins, development, and methodologies of the
before. Each effort is also increasingly interconnected megacommunity concept.
with the others. Looked at from that perspective, Rome Art Kleiner, “Fulvio Conti: The Thought Leader Interview,” s+b, Autumn
can be seen as a Venn diagram of megacommunity, with 2008, www.strategy-business.com/article/08309: The CEO of the world’s
these initiatives and organizations intersecting with one second-largest utility explains how energy companies must reach out to
other entities to adapt in a fast-changing global marketplace.
another at different points, each effort giving energy to
For more thought leadership on this topic, see the s+b website at:
the others. www.strategy-business.com/global_perspective.
“The megacommunity sets up so much potential,”
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