Friday, 30 April 2010

CK: Next would've been what?

Quite unlike many other management gurus, CK was not a one concept wonder. Every five to seven years he would come out with a blockbuster idea that would change the way people looked at business globally. Be it around core competency and strategic intent, value co-creation with customers, business opportunity at the bottom of the pyramid or his latest thoughts on the new age of innovation where he set out the arithmetic that defined the future of business as N=1 & R=G!

What also stood out about CK was that he was a man who would hardly leave his ideas at conceptual level for the management practitioners to follow up. Instead, he would himself aggressively campaign and canvas for them and seek ways of translating concepts into action on the ground.

That said, I must mention that this piece is not so much about CK the man and what he was, but more about what his next blockbuster idea would've been and about which action agenda was engaging his mindspace.

Last year, while writing an update on ITC e-Choupal for the fifth anniversary edition of his book 'Fortune at the Bottom of the Pyramid', I concluded my piece articulating the vision of eChoupal using a metaphor from physics 'black holes for a green world'. CK, as many would know was himself a physics student and was quite intrigued; we had a long conversation on the subject. My idea was to pursue a pull based model (symbolised by black holes) to achieve sustainable development (symbolised by green world) as against the current approach of "pushing" sustainability that's obviously unsustainable. It was then that he shared his thoughts on how the challenge of sustainability was engaging his attention, and how it could be the new frontier of innovation. He was looking at creating a fusion in a manner that there was no conflict between the developed and emerging nations or business, Government and civil society organisations. Further, synthesising this domain with the BoP space, he was also visualising market mechanisms where poor people produced some kind of positive climate change instruments and trading them with rich nations thereby creating new sources of income for the poor. Alas, we have now missed out on the next blockbuster idea from CK!

On a different plane, CK was in the middle of cascading an action plan on India@75 to see India as a developed nation by 2022. If there was one programme to which he was giving his heart and soul in recent times, this was it! Interestingly our paths crossed on this front too! Around this time he was also guiding the field work of a team of Michigan students to write a case on 'the making of ITC eChoupal 3.0'. CK quickly picked up that personalised crop management advisory envisaged under eChoupal 3.0 was aligned with the core theme of 'the new age of innovation' i.e. servicing one farmer at a time (N=1) taking the unique circumstances of each one into consideration, and by leveraging the capabilities of multiple firms and resources (R=G) as against the traditional method of one generic solution serving a mass of farmers. He immediately wanted this approach to be an important component of the agri agenda in 'India@75' programme. He suggested that we develop a detailed working paper together along these lines, whereafter he wanted to meet the Prime Minister to propose this as a solution to rejuvenate Indian agriculture. I was to download his thoughts during one of his forthcoming visits to India before I worked on this. Any which way, India@75 was what he was keenly looking forward to as his pet action project. India would find it hard to replace CK in this journey.

It is at once stimulating and saddening to imagine the next steps of the master of next practices. May his soul rest in peace...


1. Published in Business Today issue dated May 16 2010 (page 84) with the title "What CK would have done next"

2. I wasn't sure if this piece belonged to Third Eye or Random Reflections! Cross posting in both...

Thursday, 29 April 2010

Evolving Landscape of Rural India: Role of Mobile Devices

Mobility will play a central role and significantly influence the very evolution of rural India hereafter. Therefore, rather than suggesting a plain list of ‘many ways in which mobile devices can be used in rural areas’, I would like to start with a quick look at the underlying drivers of rural India and then propose a framework to visualize the consequent strategic role that mobile devices can play.

My presentation is set in four parts:
  1. Aspirations of rural people
  2. Fundamental characteristics of rural India and how they come in the way of fulfilling those aspirations
  3. Components of value in general, and their relevance to rural India vis-à-vis the aspirations and characteristics
  4. The role mobile devices can play in this backdrop
Over the thirty years I have been working in rural India, the most remarkable facet I observed is the transformation of rural mind-set from one of ‘resignation due to deprivation’ to ‘aspiration arising out of empowerment’!
  • This transformation occurred as the rural infrastructure improved (especially roads and telecom) and their incomes rose. And the sources of income expanded too - within agriculture diversification helped, while the non-farm activities multiplied (livestock, sales & services in rural markets). Several Government schemes as well as remittances from the kin who migrated to towns brought in more money into rural hands.
  • The aspiration is primarily for better basic services (education and health), and superior quality of life (access to consumer goods used in urban India, financial services and entertainment). People, naturally, are also looking for opportunities to step up their incomes further (new livelihood sources and appropriate production inputs are the needs here) to be able to afford such products & services.
However, three characteristics of rural India come in the way of realizing these aspirations…
  • The wide geographic dispersion of our villages constrains access to products & services mentioned earlier, in terms of timeliness, quality and cost - if they access at all. Because villages are a long way away from the centres of action (urban areas) where specialists reside or these products & services originate.
  • Extreme fragmentation in terms of the size of rural production units reduces their bargaining power when they buy their inputs or sell their output. This is true even for financial services and consumer goods as well, as the ticket size of their purchases is very small. Aggregation can empower them, be it in the form of cooperatives, or self help groups; whether physically or virtually
  • Wide heterogeneity in circumstances of the people across rural India requires products and solutions that are personalised to their unique needs. Delivering such solutions is expensive as is, and is further unattractive when the unit volumes and paying capacities are small.
Value has three components. Value Creation, Value Delivery and Value Capture
  • By a logical extension of the three characteristics already described, it is obvious that value can be created in rural India by delivering services remotely (overcoming dispersion), by personalizing solutions (that address heterogeneity) and by democratizing access (neutralizing scale / class disadvantage, eg. for poor people & women).
  • What is not commonly appreciated is the fact, that the same three characteristics constrain rural people from taking advantage of even the available products & services unless they are delivered as a complete end-to-end solution. For example farm productivity won’t rise unless relevant agri advisory, real-time weather / market information, credit, seed, nutrients, crop protection chemicals etc are all available in a coordinated fashion. So, a well-orchestrated ecosystem is needed for actually delivering the value created by using the ideas mentioned in the first bullet.
  • For any enterprise to scale and sustain over time, some of the value created & delivered must be captured for its financial investors. All of you know the famous examples of many dotcom companies that created value for their customers, yet went bust as their business models could not capture enough value for themselves! In case of rural markets, plain vanilla business models that try to capture more share of the small wallets find it difficult to sustain. Innovative models leverage aggregate volumes of these markets and get interested third parties to cross-subsidise (much like the media business), besides capturing some value from the rising incomes (having facilitated such rise in the first instance)
Interestingly, with their wide-ranging capabilities, mobile devices can play a central role in all the three components of value in rural India
  • Remote delivery of certain virtual elements in areas like education, health, entertainment; both information & transactions in income generating areas like agriculture, financial services, governance & citizen services; exchanges for employment and matrimonial; social networking platforms etc are all already happening at some basic level using mobile devices by extending the applications designed for Web.
  • Additionally, by integrating features like unique identification, crowd sourcing, GPS, GIS, visual mapping, text-to-voice, multi-player collaboration etc., several other value creating applications can be developed which wouldn’t be operationally feasible without mobile devices.
  • Finally, with targeted delivery of content & advertisements mobile devices will facilitate the value capture process.
  • Remote delivery at door-step, personalized solutions for relevance, virtual aggregation for economies of scale, collaboration for putting end-to-end solutions together, unconstrained access even for the disadvantaged – all so necessary for development of rural India, are now possible due to mobile devices
Let me now illustrate these propositions with some specific uses of mobile devices along these lines
  • In education, e-learning will morph into m-learning; further moving to potentially deliver books over mobile devices as the screen sizes expand; with the ability to stay in touch on an ongoing basis, life-long delivery of continuing education is possible
  • Last mile access in health services, drawing upon experiences from web based tele-medicine services. Mobile device itself as a medical instrument (eg pulse reader) is not a distant dream.
  • Entertainment applications do not need much elaboration; will have instant demand
  • Location based information services like Yellow Pages (eg doctors, agri input stores) can morph into mini meta markets
  • In agriculture and other livelihood activities, starting with elementary services like information provision - delivered as text or voice - (eg. weather forecasts, market prices) to transactions (eg e-procurement through auctions, negotiations) to sophisticated applications like precision farming through personalized crop management advice (with the ability to click and transmit photographs on one hand, and integration with GIS on the other hand)
  • Banking transactions
  • m-commerce transactions like railway ticket booking
  • Calendar integrated notifications and alerts
  • Remote monitoring and activation of farm automation systems (eg irrigation, fertigation), some of which is already happening as a grassroots innovation
  • Supply chain management applications in rural marketing (for FMCG, medicines etc) like order taking, promotions, information uploading, remote stock management in rural outlets
  • Governance applications like voice / text alerts of Government Scheme; or operational activities like uploading of local data by Village Accountants, Anganwadi Workers, Warehouse Keepers etc
  • Citizen reporters generated news and other local information, or even poll based market research, visually mapped by integrating with GPS for reading patterns & movements and re-casting for local action
In short, a mobile device can become a hand held transaction platform, a personalized bank branch, a retail store, a cinema screen, a teacher, a doctor and many such, besides being the good old communication tool. Thereby, playing the role of a key enabler in taking rural people forward with rest of India; delivering the much desired inclusive growth :)

  1. This blog is a summary of my talk at the Nokia Strategy Summit in Amby Valley (Lonavala) on 29th April 2010.
  2. I am thankful to so many friends (a record fifty four in all) who shared their thoughts via Twitter, Facebook and LinkedIn as valuable inputs for this talk.

Wednesday, 14 April 2010

Investment Opportunities in Indian Food & Agri Business Sector

Here is a summary of my talk at the BRIC-IBSA Business Forum in Rio De Janeiro on 14 April 2010

Investment Opportunity in Indian Food & Agri Business Sector is founded on Four Pillars

  1. Large Sector with further tremendous upside

  2. Indian Consumer is seeking new products

  3. Production system has potential to supply those new products

  4. The Business environment is very conducive

Pillar 1: Large Sector & Further Upside

  • Size > US$ 200 Billion

  • 50% of household expenditure is on Food

  • 50% of workforce is engaged in agriculture

  • That rest of the economy is outgrowing agriculture, is a signal for investment opportunities in agriculture

Pillar 2: The Consumer Dimension

  • More than 1 billion consumers

  • Rising incomes & rapid urbanisation changing the profile of consumption

  • Global experience: US$ 1000 per capita is the sweet spot for shift in food consumption patterns, from basic to value added food

  • Consumer is looking for new value: quality, variety, safety, convenience etc.

  • Besides this domestic opportunity, there are export prospects too in several products

Pillar 3: The Production System

  • Large arable area > 150 million ha

  • Rich & diverse agro climatic zones

  • Characterised by small farmers

  • Good scope for productivity enhancement through technology induction

Pillar 4: The Business Environment

  • Significant private participation after policy reforms in the last decade

  • Traditional farm labour seeking new jobs

  • Large infrastructure investments in the recent past: roads, telecom, irrigation etc

  • Thrust area for Government as a strategy for “inclusive growth”

The Investment Opportunities

  • Innovation at the consumer end of the chain (Processing, packaging, retail formats)

  • Effectiveness at the farmer end of the chain (Productivity, quality - pre & post harvest, labour saving technologies)

  • Efficiency along the whole chain (Integration, coordination, infrastructure)

  • Cross BRIC-IBSA collaboration imperative (Food Security, Climate Change)