Sustainable Business Transformation

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Archive for the ‘Strategy’ Category

Key Business Technology Trends and Themes

Posted by Hemant Puthli on December 18, 2009

It’s that time of the year again — as the holiday season approaches and the calendar year draws to a close, everybody is out there, trying to assess the year that was and trying to forecast the year that will be. In keeping with that tradition we have put together a list of trends and themes that emerge prominently out of our assessment of important developments that have shaped the growth of the business technology market in the recent past, and which will carry over their impact and momentum into the near future. Some of these trends and themes are at the ascent of their curve and approaching their peak, some have reached steady-state where they will continue for a while, while the others have run through their course and are beginning to enter the last leg of their life-cycle before they fade away (only to morph into new avatars of themselves — technology seems to do that thing quite often — the ‘back to the future’ thing).

We present two lists here: a list of 6 trends and a list of 6 themes, in no particular order. Trends pertain to the supply side of the market and are characteristics of products and services that are produced and delivered by vendors and providers. Themes pertain to the demand side of the market and emerge from major pre-occupations of most CIOs and their teams — their key concerns and the stuff that keeps them awake at night. A good way of reading these lists would be for vendors and providers to ask themselves how they can innovate and continue to develop products and services that leverage these 6 trends and help address their customers’ needs and concerns in those 6 thematic areas. Similarly, a good way of reading these lists would be for CIOs to ask themselves how they can stay focused on these 6 themes and deliver results by effectively deploying products and services emerging out of those 6 trends.

Trends (Supply-side)

  • Mobility and Mobile Computing
  • Web 2.0 / Social Networking and Social Media
  • Outsourcing / Off-shoring / Globalization of services
  • Virtualization and Cloud Computing
  • Analytics and Business Intelligence
  • Content and Knowledge Management

Themes (Demand-side)

  • Business Alignment: IT Strategy & Governance, support organizational / operational innovation and business transformation
  • Stakeholder Relationship Management: accountability to end-users, staff, suppliers, corporate leadership
  • Enterprise Architecture: simplification, standardization, consolidation
  • ‘Green IT’ and Corporate Responsibility: supporting social and environmental causes championed by the business
  • Cost Management: real-estate footprint, power consumption, procurement, licensing, maintenance, salaries and wages
  • Security & Risk Management: data security, customer privacy, access control, disaster management, business continuity

We recognize that there may be many trends as well as themes, other than those we have identified here above, that may be equally (or more) important within specific pockets or niches of the business technology market world-wide. By not including more trends and themes we are not suggesting that they are unimportant — we just wanted to keep our lists reasonably short and so decided to pick around half-a-dozen points for each (again, it was not a pre-defined number). Our lists only seek to represent the top few trends and themes aggregated across all industry verticals (such as banking, manufacturing, etc.) and functional horizontals (such as supply chain, customer relationship management, etc.) that the business technology market covers, across all geographies.

Do write in with your comments, especially if you feel we’ve missed out on something really important that needs to be captured in a high-level scan.


Posted in Governance, Strategy, Technology | Tagged: , , , , , , , | 2 Comments »

HPA Perspective on Sustainability: FAQs – 2

Posted by Hemant Puthli on December 1, 2009

This is the second in a series of 6 posts on our perspective on sustainability, and deals with a set of questions around what we mean by ‘social relevance’, ‘environmental responsiveness’ and ‘economic viability’, and how vital it is for businesses seeking a path to prosperity to aim at these goals. (The first post in this series dealt with questions about our definition of sustainability and how it may be similar to, yet different from, other connotations associated with the term.)

You talk about ‘being socially relevant, environmentally responsive and economically viable’. What do these terms mean? How is this any different from Corporate Social Responsible (CSR) plus Green IT plus traditional profitability, all rolled into one? Isn’t it simpler to talk about concepts that are already known, using words that people already understand?

We’d love to use words that people already understand. After all, making ourselves understood is the first thing we need to do, if we are to be successful in our business goals as Trusted Advisers to our clients. Trouble is, the ideas we are talking about have not established their own vocabulary yet, and in many cases, are just slightly different from similar sounding concepts, and so we made up our own terminology as we thought-through issues around sustainability. We hope our terminology sticks! Let’s take these three terms one by one and then get to the other related questions.

First let’s set the context by mapping all stakeholder communities that make up the ecosystem of a business enterprise. We use the term stakeholder here in the same sense as the ‘Stakeholder Theory’ propounded by R. Edward Freeman in the 1980s and it is useful to clarify this because sometimes people confuse stakeholders to mean (only) shareholders. In our context, a stakeholder is any entity (could be a legal entity such as a business, a not-for-profit organization, an institution, a cooperative, or just a community or group of people) touched or impacted by the business. Increasing globalization of the creation and delivery of goods and services is adding to the diversity and complexity of the types of entities in the stakeholder ecosystem. As you can see from the diagram (below), the stakeholder ecosystem of a business enterprise has a core and a periphery, surrounded by the society in which the enterprise functions and the world at large.

Enterprise Stakeholder Ecosystem

Enterprise Stakeholder Ecosystem

Being socially relevant means constantly striving to anticipate and fulfil specific needs of all stakeholder communities in the ecosystem — including first, the customer community, followed by other stakeholders in the core ecosystem of the business: its stockholders, its alliance partners and suppliers and its employees. Being socially relevant also means constantly striving to meaningfully engage, partner with and contribute to participants in the peripheral ecosystem within which the business functions — comprising industry associations, market institutions, the media, special interest groups or collectives formed by communities that its operations involve or impact, and the various institutions that form part of the legal and regulatory framework within which the business conducts its affairs. For a large globalized business, this could represent a much wider scope in terms of size, scale, diversity and complexity.

Being environmentally responsive means constantly striving to increase the level of awareness within the business ecosystem concerning environmental issues such as climate change, energy conservation, waste management, etc., so as to lead to a commitment of resources by the business towards improving conditions in the locations where it operates (or has other interests) or at the very least, neutralizing the impact of the business on the environmental conditions at those locations.

Being economically viable means constantly striving to remain profitable in the short as well as the long run. It is obvious that economic viability is vital for success, since a business cannot effectively achieve its goals while its survival is constantly threatened by financial problems. However, businesses that narrowly focus only on their own profitability in purely ‘single bottom line’ terms, to the exclusion of the other goals, or, worse still, to the actual detriment of their host society (or societies, as in the case of globalized businesses) are unlikely to prosper in the long run.

Social relevance and CSR do appear to be similar, and to a large extent the activities of a business that strives to stay socially relevant may not appear to be very different from what they might have been doing by way of CSR. The important thing is the attitude of the business: while CSR is essentially based on some kind of altruistic or charitable notion, social relevance is based on the belief that pursuing the common good of the stakeholder ecosystem will drive sustainable profitability. The roots of CSR type of thinking go back to the feudal concept of noblesse oblige. In the post-Industrialization era this has translated to the notion that prosperous businesses – the ‘new nobility’ of free market economics, are morally obliged to help underprivileged communities. We are not saying this is wrong, or even that it is not sustainable: we are only saying that it is a comparatively less sustainable approach than one where businesses see themselves as partners of, and not as patrons of / donors to, communities in their ecosystem for mutual benefit. (For more on this please see earlier HPA posts — one on Charity 2.0 and another containing an embedded video clip of a TED talk by Jacqueline Novogratz.)

Green initiatives have typically put environmental issues ahead of everything else, and Green IT, as the name implies, tends to focus on how to make the IT function as a whole more eco-friendly. While this is not a bad thing as such we believe that the emphasis should be on a holistic, three-dimensional approach to sustainability rather than a one-dimensional one. There is a lot of learning that could be borrowed from Green IT and we are not suggesting that Green IT initiatives must be abandoned, just that they be re-aligned to the broader and more holistic idea of ‘Sustainable Business Technology’.

As to why X is not the sum of A+B+C, I would say that the new definition of profitability (and please do look up the Wikipedia entry for triple bottom line for more on this) is a function of the lasting impact of the business on its ecosystem and the economic benefits accrued to the societies that host the business. There continue to be discussions and debates on quantification and measurement of economic impact of social and environmental efforts even today and a large part of the body of knowledge in this area is still evolving as we speak, but there is little doubt that it is an idea whose time has come and is here to stay. A silo-ed approach does not produce the same results.

The next post in this series will deal with the notion of ‘Common Good’ in contrast to ‘Self-Interest’, and why the pursuit of the Common Good leads to better sustainability.

Posted in Economics, Environment, Society, Strategy | Tagged: , , , , | Leave a Comment »

A World Without Oil?

Posted by Hemant Puthli on November 24, 2009

From TED: a talk by Rob Hopkins, founder of the Transition movement – a community-driven approach to eliminate dependence on fossil fuel, on how to prepare ourselves for life without oil.

We need to start thinking along these lines – worst-case scenarios have a tendency to manifest themselves in reality, more often than not!

Posted in Environment, Strategy | Tagged: , , | Leave a Comment »

Change Management Q&A

Posted by Hemant Puthli on November 13, 2009

Over the last month or so, I answered a few questions on the LinkedIn network on the subject of ‘Change Management’. The questions and my answers are reproduced below:

What is successful change management?

To evaluate the end, we must go to the beginning.

Good practices in change management require that the criteria for success be established before kicking-off the change program. Things change, of course, and when they do, those criteria need to be reviewed and ‘tweaked’ if (and as) necessary. If this is done diligently, the answer to your question will be self-evident at the end of the change program.

And as to who should spell out the criteria – well, it has to be those who are initiating and sponsoring the change (weighted towards the latter, in case they are different entities / individuals).

This may not always be as easy as it sounds, and the services of a skilled (external?) ‘change agent’ would be required to extract the success criteria out of the minds of those driving the change.

Please share what you believe to be the three most important attributes of a good change management strategy.

A good change management strategy is characterized by:
(1) Clarity of vision and strength of purpose
(2) Inclusion of all relevant stakeholders; alignment of goals; communication
(3) Effectiveness of mechanisms that deal with planning and governance

There could be others, but these would be the top 3 most critical ones, in my opinion.

Today’s challenges for Change Management?

There could be several triggers to the need for change, such as: regulatory imperatives, stakeholder demands, environmental / competitive forces, new leadership / outlook, etc. Each brings with it its own mix of issues and opportunities, but regardless of that, in each case, the organization would be better off building a consensus for change (or at least, a business case) and anticipating and planning for the change well in advance of commencing the journey.

That said, the most common dimensions of impact in any given change programme include:
1. Stakeholders – customers, suppliers / partners, employees
2. Operations – processes, systems, technology / infrastructure

Most challenges could be found in these two areas. People generally do not like change and carrying them along is perhaps the biggest challenge. I don’t think the current economic climate has significantly changed this fact. On the contrary, it has probably magnified the criticality of inclusiveness and communication with key stakeholders.


Two things come to mind, which are perhaps unique to our current ‘zeitgeist’ and they are: (1) cultural diversity and (2) economic (job) uncertainty. These two factors make it all the more difficult to bring people on-board toward a change agenda.

The body of knowledge on Change Management is quite vast, but in many ways, these three questions are key to “getting it right”: What is success? What is a good strategy? What are the big challenges? I hope that my answers, though brief, offer a helpful perspective.

Posted in Governance, Operations, Organization, Politics, Strategy | Tagged: , , | 1 Comment »

Off-shoring Destinations: LatAm gets Muy Caliente!

Posted by Hemant Puthli on November 8, 2009

Research reports released in the recent past by two top-tier global consulting firms — one by A T Kearney prepared on behalf of ‘Invest Chile / CORFO’ (the Chilean Economic Development Agency), and the other by KPMG , indicate that Latin America is rapidly becoming a preferred region for outsourcing / off-shoring.

According to both reports, the main factors that are driving this trend are:

  • Geographical proximity of Central and South American countries to North America (impact: reduced travel time for client and service provider personnel)
  • Compatible time-zones (impact: overlapping business hours leading to less disruptions of daily routine for client and service provider personnel)
  • Common languages and cultural affinity with North America (impact: promotes quicker and stronger team cohesion between client teams and service provider teams, and smoother communications on an on-going basis)
  • Lower attrition rates (impact: reduced ‘leakage’ of knowledge and expertise, resulting in better cost / benefit ratio for investments in knowledge transfer and training, and better response time)
  • Improved telecommunications and other technology infrastructure (impact: reduced infrastructure risks, resulting in greater business continuity)
  • Favorable business environment including political stability and tax incentives in several countries (such as the ones mentioned below) (impact: financial attractiveness, reduced geo-political risk)

Top Locations in Latin America (source: A T Kearney)

As we had noted in an earlier post in this blog, these are more or less the same factors that underpin the weaknesses of destinations like India (as also China and other Asian countries), and the more aggressive players in the Central and South American region are clearly positioning their advantages in these areas as complementary to India and China. However, there continue to be concerns in a few key areas — particularly with regard to team size and scalability. In order to overcome this drawback, several countries in the region are actively working towards improving the quality and quantity of their resource pools, by focusing on education and training in technical as well as soft skills. Clearly, the more aggressive players have recognized the criticality of growing a scalable, highly skilled workforce that is adept at innovation. Other challenges include the need to change client perceptions about countries in the region as being politically unstable and their main cities as unsafe or even dangerous. In that respect, it is useful to note that recent terrorists attacks in India and the authoritarian regime in China have rendered the latter destinations less attractive.

Service providers with a global vision will benefit significantly by investing in expansion in key Latin America destinations. As regards Indian ITO and BPO shops, the future will reward those who think beyond their domestic boundaries, venture into the global arena, embrace new cultures, learn to leverage the advantages of these destinations and learn to share their knowledge and expertise. Conversely, the ones who are less open and flexible, or who are too strongly rooted in the Indian geography and/or ethos, will be relegated to the position of helpless bystanders, as they watch their market share dwindle and see their survival threatened as the domestic competition for a diminishing slice of the pie becomes even more fierce.

Posted in Operations, Strategy | Tagged: , , , , , , | 4 Comments »

HPA Perspective on Sustainability: FAQs – 1

Posted by Hemant Puthli on November 7, 2009

Several pertinent questions often come up in discussions on the closely related subjects of ‘Sustainable Business Transformation’ and ‘Sustainable Business Technology’, which form the main theme of our work. What follows below is an attempt to consolidate them into sets of related questions, which have been answered in an interview format so as to capture the spirit of the live (and lively) discussions that we have had with clients and interested parties.

This is the first of 6 posts and deals with a set of questions about HPA’s perspective on sustainability and how it may be similar to, yet different from, other connotations associated with the term.

The concept of sustainability has been around for many decades, so why are you talking about it now as though it is something new? What’s new in what you’re talking about? What’s different about what you’re calling Sustainable Business Transformation through Sustainable Business Technology? Is this something you’ve invented?

‘Sustainability’ has been around for a long time, agreed. Neither have we coined the word nor have we been the first to talk about it in terms of business management (and won’t be the last either). Michael Porter introduced the concept of sustainable competitive advantage in the 1980s along with several other ideas that have dominated management thinking over the last couple of decades. We are not suggesting that those ideas are obsolete and need to be replaced with the apparently new ideas that we are putting forward — on the contrary, we are building on the theme and adapting traditional management thinking around sustainability to reflect current priorities. In a way, we are ‘marking-to-market’ the legacy of ideas around sustainable business and infusing into them some current thinking from other streams, which we shall talk about in a moment. So, in a sense we are saying that those concepts need to be updated and refreshed, but not replaced. Refreshment keeps good ideas alive, relevant and vibrant!

The current thinking mentioned a moment ago is, again, not all that new either and nor is it all our own work, but has its roots in studies on sustainability carried out by socio-economists way back in the 1970s. Environmentalists and economists have been talking about sustainable development for almost as long as management thinkers have been talking about sustainable business, perhaps even longer. As an aside, I would encourage you to look up the Wikipedia portal on sustainable development (the Wikipedia page on sustainable development would be a good starting point) which traces the history of sustainable development and outlines its scope and approach.

So, as you have correctly pointed out, sustainability is not a new thing in either business management or socio-economic or environmental conservation circles. But for a long time these have been like parallel tracks running in parallel universes. In more recent times, pressure from environmentalists and others, exerted on countries and businesses to get smart about the other definitions of ‘sustainability’, has compelled contemporary management thinkers — academicians, consultants and practitioners alike, to see things from a different perspective. So much so that some harsh critics unfairly accuse these pressure groups of having hijacked the meaning of sustainability to serve their own ideological pursuits. It is almost as though the word means different things to different people, which is ironic because it is not at all difficult to synthesize these apparently diverse notions into a single set of concepts and principles.

Ideas like the ‘people-planet-profit’ approach and the ‘triple bottom line’ try to bring all those seemingly disparate views of sustainability together into an integrated and, if you like, holistic definition, which we believe will gain traction with businesses as those ideas crystallize on one hand and businesses become more aware on the other.

The three great crises the world is dealing with as we speak: the great economic crisis (manifesting in the slowdown / recession over the last year or two), the great environmental crisis (manifesting in significant climatic change and unprecedented natural calamities in recent years) and the great socio-political crisis (manifesting in the ‘conflict of civilizations’ and the threat of terror strikes), have underscored the need to meld economic, environmental and social / political perspectives into a new definition of sustainable business. Each of these three crises reflects a fault line in each of the ‘three pillars’ respectively i.e., economic, environmental and social. On the plus side, there are tremendously important lessons to be learned from these crises and we aspire to distill some of them and pass the benefit of our learning to our clients.

Now, if you were to leave this aside for a moment and look at the history of Business Technology, you will observe that it has always quickly adapted itself to serve emerging business imperatives. When management thinkers talked about BPR, for instance, Business Technology moved quickly to support that trend. Some may even argue that packaged ERP software is what drove the genesis of BPR, but that’s a moot point. So this is nothing new either — the fact that technology trends support and drive business trends. That’s technology’s job!

To summarize, what we’re saying is: (a) businesses will start thinking about sustainability in terms of a more holistic and multi-dimensional definition as compared to traditional management thinking, and (b) technology will do its job, as it always does, which is to support business in envisioning and planning its future: in this case, a sustainable future. This is somewhat new stuff … in the sense that we don’t know of too many management professionals out there today addressing the issue of Sustainable Business Technology as an enabler to, if not the driver of, the Sustainable Business Transformation journey. It is new but not all invented by us, as you can see from the number of references we make to other sources on this topic. We are only bringing our unique perspective on this, through our own ideation.

Long answer, but hopefully it clarifies the issue regarding what’s new and what’s not and why what we’re talking about here is a bit different.

The next post in this series will deal with what we mean by being ‘social relevant, environmentally responsive and economically viable’ and why these are important goals for businesses seeking a path to prosperity.

Posted in Strategy | Tagged: , , , | Leave a Comment »

Global Warning

Posted by Hemant Puthli on October 27, 2009

The Warning

If “global warming” doesn’t kill us, then “global war” will.

The Background

The new book entitled “SuperFreakonomics: Global Cooling, Patriotic Prostitutes, and Why Suicide Bombers Should Buy Life Insurance” by Steven D. Levitt and Stephen J. Dubner seems to have stirred up a hornet’s nest in the communities centered around the subject of ecological economics. Apparently the authors have injected a provocatively contrarian view into an already heated debate on why and how to control carbon emissions, by suggesting that this may not be necessary after all.  Andrew Winston, himself a noted author on the subject of climate change, very neatly sums up the state of play as regards the controversy in his recent post “SuperFreaknomics Ignores the Business Case for Sustainability” at his blog.

The Context

Andrew Winston’s post lays out a fair and reasonable assessment of the various positions around the controversy and presents a sound rationale as to why the focus must be on the business case for sustainability, and why the shift to a low-carbon economy is beneficial even without considering its impact on restoring the environmental balance. However, some of the reasons that he offers to support the latter argument (i.e., benefits other than mitigating climate change risks) involve perspectives that are mostly American rather than global. The post concludes with the following paragraphs:

As many have repeatedly argued, we also place ourselves at great risk globally by continuing to pour money into oil markets. We send hundreds of billions of dollars a year to parts of the world that don’t like us very much. And we place ourselves at personal risk — the National Academy of Sciences just estimated, conservatively, that fossil fuels cost $120 billion per year in health costs and cause 20,000 premature deaths (that’s more than six 9/11s if you’re counting).

So while we find new ways to pour attention on “contrarians” and have a debate that most of the rest of the world has already stopped having, we risk our health, fall further and further behind the countries we compete with (China and Germany, for example, in renewables), and become more indebted to our enemies.

Solving climate change is not really about asking people to hold hands and sing “Kumbaya,” but about political will and making it easier for business to create the low-carbon solutions we all need. Regardless of the climate science, the benefits of action and the costs of inaction for business are astronomical — and worth superfreaking out about.

While I really appreciated and agreed with the content in the earlier paragraphs of the post, I was a bit disturbed by a couple of phrases in these last few paragraphs, such as “… parts of the world that don’t like us very much” and “… (become more indebted to) our enemies”. Was this necessary? Is this one of the benefits that Andrew Winston believes is important enough for global citizens to favor control of carbon emissions?

The Issue

Clearly, in his opinion it does merit consideration, else there would have been no mention of these so-called benefits along with many other benefits that justify carbon control. Not only is this disappointing but also dangerous, for reasons that my comment to the post (reproduced below) highlights:

Thank you for a sane and rational assessment of the various discussions to date on what seems to have become a highly controversial and polarized subject. It’s time people like you brought a mature and balanced approach to the climate change round table, and I hope voices such as yours are being heard in the relevant quarters. We (i.e. mankind) have already lost a lot of time and we simply cannot afford to lose more, especially on the inane polemics provoked by contrarians.

I was just a tad disappointed, however, with your comments towards the end, especially in the third and second paragraphs from the bottom. Statements like “We send hundreds of billions of dollars a year to parts of the world that don’t like us very much” smack of an “us-and-them” standpoint on world affairs and therefore don’t have a place within a global perspective on a global problem. You take a distinctly American / Western Hemisphere position when you say something like that and I do appreciate the sense of patriotism, as it were, implicit in the underlying sentiment. However, there’s a thin line between patriotism and jingoism, generally speaking, and clearly there’s no place for the latter when it comes to developing solutions for a planet in crisis. If there are parts of the world that don’t like “us” very much, then it is up to “us” to find out why and try and fix it, to the extent we can. There are already many divisive forces that want to deepen the chasm between the “us” and the “them” that you implicitly refer to in that statement, and one must be careful not to play into those hands. President Obama’s vision of a more inclusive foreign policy and his approach towards global diplomacy are highly welcome in this regard.

The fact that you are sending hundreds of billions of dollars to parts of the world that don’t like you very much should not, taken on its own stand-alone merit, be a reason for you to be less dependent on oil. There are already abundant and adequately strong reasons for weaning yourself away from dependency on fossil fuels, as you have cogently argued already (in this post as well as elsewhere, in your body of work), and including this one weakens the argument rather than strengthens it. The global socio-political landscape is yet another dimension to the global environmental problem, though sadly not many are focusing on this while addressing climate change issues. IMHO, it is only an integrated view that will work, or else we will end up trying to fix one problem at the expense of exacerbating the other.

Talking about “parts of the world that don’t like us” and “our enemies” is very 20th century / cold-war / Bush-era kind of talk. The new global diplomacy is about inclusiveness, about engagement and partnerships, about forging new relationships with allies and adversaries alike, in areas where collaborative action is critical for the preservation of life on the planet as we know it. And leveraging the collegial spirit of these new relationships to resolve conflicting agendas in other areas that are perhaps bilateral and/or less critical at a global level.


The world can end in many ways – with a whimper (deterioration of the environment, over a period of time) or with a bang (war between the have’s and the have-not’s, in a shorter span of time). Our prime interest is in not letting the world end, any which way. Environmental balance as a goal is merely a means to a greater end. So is world peace. Neither makes sense in itself / by itself / for its own sake, if we can’t have the other as well.

Post Script (added Oct 28)

Andrew Winston’s response appeared a few hours later (time-zone difference adjusted). And this is what it said:

Thanks to all for your comments. Hemant, you make a good and fair point about my language on ‘us’. I was perhaps being too casual in my tone and agree that we need cross-border cooperation on a grand scale to handle a problem as thorny and global as climate change. Regardless of where the hundreds of billions of money for oil goes (to U.S. ‘enemies’ or not), it’s a waste of resources that we could use to build infrastructure and invest in the long-term health of our economy and education…or whatever your priorities might be. We can build a more profitable economy by basing it on resources with zero variable cost (renewables). On this point, see this week’s cover story on how we can get to 100% renewables for all our energy by 2030 — it’s not only possible, it’s economic.

to which I wrote back:

Thank you, Andrew. I appreciate your acknowledging my point – it is refreshing to see that, given that the zeitgeist consists of provocative contrarians with hard stands and closed minds, as your post and its linked contents point out. I do hope delegates to Copenhagen later this year demonstrate a level of maturity in working towards the common good, and eschewing such inane polemics and self-centric political chicanery that this book has stoked.


Posted in Economics, Environment, Politics, Society, Strategy | Tagged: , | Leave a Comment »

Towards Customer-centric Design

Posted by Hemant Puthli on October 11, 2009

When it comes to customer interaction, the Indian business culture – specifically in the B2C space – seems to be remarkably insensitive to spam, unsolicited messaging and over-communication. Perhaps this is due to the absence of strong privacy laws, or perhaps it is the culture that explains why such laws are absent, to begin with. A few years ago, I had blogged about telemarketing spam and though things have somewhat improved (thanks to the TRAI-mandated ‘DND’ discipline) since then, the problem in essence has not gone away, but merely taken a slightly different form.

In the case of almost all of the service providers that I am a customer of (particularly those in the financial services, media/ entertainment and telecom industries — the relatively more buoyant sectors of the economy), I find that giving them your mobile number and/ or email address is like inviting a boorish bore to your house — you wish the incessant and at times tasteless chatter would stop and that you could focus on just that fraction of the conversation that is meaningful to you. These service providers take contact information from customers based on a legitimate reason: to alert customers about important information pertaining to their account, which is why customers like me part with such information in the first place. But they then use that as a licence to pump all sorts of completely irrelevant information (mostly cross-selling and up-selling messages) through those channels. Quite often such messages are badly timed as well, which is even more annoying. In the case of a specific service provider, I regularly receive text alerts on my mobile at odd hours of the morning or night. Then there is the problem of over-communication. In the case of one specific bank, where I have registered for an auto-pay bill payment facility, I get 3 text messages and 3 emails for every bill presented and paid — one text message and one email each: when the bill is presented, when the due date is approaching, and after the auto-pay transaction has been executed. I need only one post-facto email and no text messages, but there is no way on earth I can get them to change this. I do need that one message and my preferred medium is email, but I could do without the other five. Not only are redundant alerts annoying, but they’re also a waste of resources.

Several of these Indian service providers represent the local operations of reputed global brands and I am quite sure their operations in other markets are far more rigourously controlled in terms of privacy norms. So why don’t they do that here? I can’t believe they are new to permission marketing/ opt-in marketing and other techniques. It is really not difficult to set-up a web-page at their site, where a customer can check relevant boxes that specify what kind of messages they would like to receive, through what medium and at what time of the day and/ or day of the week. Several web-based free services do it. Social networking sites like facebook, for instance, allow you to spell out with pin-point precision, your choices in terms of why and how you would like to be contacted, if at all you do. If these service providers really mean to be as customer-centric as they claim to be, and if they really care about not inconveniencing their customers, they should make the right moves in this regard.

To my mind, this is an excellent opportunity for a brand to demonstrate maturity and leadership, by respecting customer privacy even in markets where the regulatory framework does not require them to do so. Sadly, I am not sure any of them sees it that way.

Posted in Operations, Strategy | Tagged: , , , , | 1 Comment »

The Art of Giving

Posted by Hemant Puthli on September 25, 2009

Further to the last post (below), on the subject of Charity, here’s an interesting talk by Jacqueline Novogratz, the founder of Acumen Fund.

Clearly, it’s time to change the way we give!

Posted in Economics, Operations, Society, Strategy | Tagged: , , , , , , | Leave a Comment »

Charity 2.0: Partnership, Not Patronage

Posted by Hemant Puthli on September 21, 2009

While it is a fact that several charitable organizations, the world over, are doing good work in helping developing communities, societies and economies, it is also a fact that there are charitable organizations that are either wasting resources or subverting the very causes that they claim to espouse or, worse, doing both. This is mostly because the idea of charity, arising as it does out of a present-day variation of the feudal concept of ‘noblesse oblige‘ (which in turn arises from a benevolent variation on the theme of self-interest) carries within itself the seeds of its own failure. Presented below are examples of some of the risks that are intrinsic to charity initiatives:

1. Power: Charity tilts the balance of power in favor of the donor. It provides the donor with political leverage over the recipient, and therefore gives the donor the opportunity to determine the scope, pace and extent of the recipient’s development and also the opportunity to influence other incidental factors that impact the recipient’s growth and future prosperity. This could lend itself to abuse in situations where such power falls into the wrong hands. In many cases, charity has prevented recipients from evolving solutions that might have been better than the ones the donor is willing to fund or provide for. In such cases, charity serves as a strategy to suppress potential competition.

2. Dignity and Dependency: Charity tends to deprive recipients of their dignity and self-esteem, especially in situations where it does not provide them with opportunities to independently improve their own socio-economic conditions. Charity also undermines the basis for catalyzing entrepreneurship, drive and innovation in recipient communities and instead replaces it with a ready justification for complacency. Recipients grow dependent on aid and are not equipped to deal with a future that does not bring in as much aid as they require.

3. Dumping:  Charity easily becomes the vehicle for handing-down legacy products and technologies that are ready to be retired from their lifecycle or, worse, are being withdrawn from donor-side markets due to known defects or harmful effects. Obsolete products are usually more expensive to maintain, and defective / harmful products are clearly undesirable. In some cases, recipient communities could be used as testing grounds for new products (especially in the life sciences sector) whose impact is not clearly known. This is another potential area of abuse.

4. Wastage: Since charitable initiatives do not have a profit motive, there is no incentive to control wastage of resources (including money). Such organizations are open to the risk of becoming fertile grounds that breed inefficiency and/or corruption (if not one, then the other; worst case, both). In order to avoid this, controls need to be enforced through external audits and tighter internal checks and balances, both of which add to costs and thereby drain scarce resources.

A more effective approach to socio-economic development would be to shift the paradigm, from a traditional not-for-profit donor/recipient model built on patronage, to a ‘social enterprise’ model that is based on the same economic principles and financial disciplines of mainstream for-profit businesses, and which builds on a spirit of partnership. The fundamental difference between these two models is characterized by the fundamental difference between the spirit of patronage arising from self-interest and the spirit of partnership towards a common goal.

While the partnership-based social enterprise approach also brings its own risks (such as the potential to levy usury interest on loans), adequate competition in the social enterprise domain would go a long way in checking such exploitative tendencies and monopolistic opportunism. Suitable regulatory mechanisms (including the requirement for better corporate governance, and for standards in performance reporting) would also help in ensuring that social entrepreneurship initiatives retain integrity in their efforts to promote growth and development. This may not be a perfect solution, since every approach brings its own risks, but it would certainly be more sustainable than one based purely on the charity of patron communities.

There’s an old proverb that goes “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” To that, social enterprise can only add “Help him set-up a fishing business and you put him on the path to prosperity in his own lifetime as well as for his future generations.”

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