Businesses must transform to create value

Businesses continue to transform, and transform they must, as competitive forces create more choices for end customers, and an abundance of capital and access to capabilities lowers barriers to entry, while innovation drives old models to their rightful dusty death.

As businesses seek to transform to create more value for their stakeholders, they must not choose the middle path of mediocrity or the path of least resistance — where they seek to be reasonably good without trying to excel. Businesses must seek out operating models that embody the best in thinking that will engender a degree of efficiency and innovation that is easy to understand but difficult to execute.

The opportunity for companies in India to truly transform and create value is significant. What we have seen over the years, helping organisations transform, is that in most cases the problems are well known, it is the answers that require smart connected thinking.

The additional challenge will be to address the impact of change itself — employees, customers, and investors alike can be averse to change that they do not understand easily or perceive as being complicated. Hence, the need for simplicity.

Customised models

Imagine, an insurance company in India which is able to underwrite, process and hand over a customised printed insurance policy, all at the home of a client in under ten minutes. The company will have to use automated underwriting models, have a trained sales force that can both sell and service using a scripted form-driven applications, will need intuitive, connected interactive devices. They will finally have the ability to print securely at a remote location without compromising any security or regulatory provisions.

This example, if implemented in many of the insurance companies operating today in India, will result in nothing short of serious transformation. They will have to change roles and responsibilities, the underlying technology and the associated architecture, the way internal risk management is applied, to how customer facing associates interact and service the end customer.

Recovery unit

Instead of each of these tasks being performed in siloed organisations and being serially handed from one department to another, the processes will be collapsed, some roles made redundant, technology leveraged and service levels improved by hiring individuals who are focusing on selling to validated clients who have a higher propensity to buy. The quality of risk should also improve, given that customer targeting becomes more intelligent.

Imagine now a government that is able to have a disaster recovery unit that springs into action within minutes of a devastating cyclone passing through a village. Quite possible, on the back of advanced weather pattern path predictors and with the ability to deploy highly trained rescue personnel.

Imagine receiving medication associated with your blood pressure and diabetes treatment from your local pharmacy without having to visit a doctor. This can become possible using advanced sensors that are able to test the health parameters as you lead your daily life.

The results will be remotely monitored by your family physician, the medication dosage changed if needed, the prescription transmitted to the chosen pharmacy and ultimately delivered to you — all activated post an SMS, wherein you have consented to the transaction in real time.

Delivering value

The scenarios above, when implemented, will result in operating models that will help deliver not incremental, but significant, value to the end user. Done right, this will create significant competitive advantage.

However, to ensure that they are sustainable, organisations have to become “learning organisations” where transformation happens on the basis of changes in their ecosystem.

Intelligence has to be built in the way people work, think, the way they are motivated, rewarded and the way they come together and collaborate. This intelligence is a function of an interconnected group of individuals working together for the common good of the organisation.

It happens over a period and usually follows a period of change that is difficult and results in people embracing large change — but appreciating that the change will help deliver measurable value in the medium-to-longer term.

(The author is Partner, Head — Management Consulting.)

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