Capacity building for market systems development

detailed analysis, root causes and ways forward

Published by
BEAM Exchange

Increasing use of the market systems approach has led to a growing demand for skilled practitioners and high-performing teams. However, the current system of training and capacity building falls short of meeting the needs of programmes. This constraint threatens to undermine the effectiveness and credibility of the approach.

BEAM Exchange commissioned this study to analyse the capacity building system for market system development practitioners. Its aim is to identify problems, weaknesses and gaps and the reasons behind them, and learn from what is working well. The study also proposes a vision of a better system and how interventions could achieve it.

Main findings

The study reveals a capacity building system that is more complex and nuanced than initially thought. Our findings show there is a partial but significant mismatch between the supply and demand of capacity building services. Practitioners mainly learn by reading, and attending webinars and classroom-based training; but they want more mentoring and coaching.

The demand for training is driven by donor funding, either directly, through the procurement of training services, or indirectly, through programme budgets. Furthermore, transactions between trainers and end-users (practitioners) are mediated by donors and/or the organisations that implement programmes. This helps to explain the supply-demand mismatch and may limit end users’ ownership of the capacity building process. On the other hand, donor funding and support plays an important role in furthering the market systems approach and the community of practice that is now demanding more relevant and affordable capacity building.

The supply-side of the market is highly concentrated around a few providers who focus on in-person, classroom-based training. Yet, new providers are emerging who combine in-person, virtual formats and mentoring with their training. Several implementing organisations are creating internal capacity building units to support their staff. This is motivated by organisational cultures that value learning as a source of competitive advantage and strategic decisions to increase cost-efficiency, relevance, practicality, outreach and performance.

Capacity building has been focused around classroom-based training, but mainstream theories and studies on adult education and learning show this is just a small component of a much broader, multi-dimensional and iterative process. This process combines on-the-job training, cycles of trial and error, learning reviews, coaching, mentoring, communities of practice and peer-learning networks. Furthermore, capacity building is not just about individuals; it includes programme teams and the organisations within which they function.

Another important finding is that there is no broad agreement on what a well-implemented market systems programme looks like. The focus of most learning and codification efforts is on the effects of market development strategies, methods and tools on market stakeholders and poverty reduction. Information about good managerial practices in different subsectors and contexts is scattered and seldom analysed with the purpose of finding patterns and heuristics to help team leaders manage their programmes more effectively.

Online learning methods are perceived to be more challenging and logistically difficult than in-person methods. Practitioners appreciate online formats most when they are mixed with in-person interactions. The value of online discussions (e.g. on LinkedIn) however, is questioned by some interviewees due to posturing by some contributors and insufficient discussion of practical applications.

There is a general over reliance on individual experts ‒ such as team leaders and external consultants ‒ who are expected to provide all the answers. Less importance is given to cohesive, capable teams and the supportive organisational environments in which they operate. Some organisations are using competency frameworks for market systems staff to build well-rounded teams.

Donors are under increasing pressure to show results early on in a project. This may divert resources away from systemic change strategies and into direct delivery of inputs, investments or services, which in turn, reduces the impetus to build capacity of staff to think and act systemically. However, in some cases, donors and implementers have agreed to longer implementation cycles so there is more time to detect structural changes; in other cases, innovative methods to detect early signals of systemic change are being explored.

Improving the system

Our findings suggest to us a set of feasible and impactful initiatives to improve the system of capacity building in market systems development. We prioritised the findings and determined causal connections between them. After a process of analysis and discussions with the advisory group we identified three important root causes:

  1. Lack of documentation and agreement about what well-managed programmes using a market systems approach look like
  2. Lack of consensus about what capacity building processes are required to shift individuals and organisations to higher performance levels
  3. Lack of safe spaces for regular and constructive dialogue between donors, implementing organisations and capacity builders about capacity building policies and investments.