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Innovation & Design

India Inc.: A Lesson in Business Design

Ambitious, resourceful, and unencumbered by convention, India offers the world a dramatic demonstration of business design

As a delegate to a Mumbai conference of the Association of Indian Management Schools (AIMS) in August, I had a chance to engage in an important meeting of the minds. Hosted at the Welingkar Institute of Management, participants included business school educators from across India along with industry leaders from companies such as ICICI, Aditya Birla Group, and Pfizer (PFE). The conference focused on the importance of grooming a new generation of "business creators" to lift the country's collective prosperity and position India competitively in the global marketplace.

What stood out was the collective ambition to radically reinvent models for India and the world. While not above the challenges of the current crisis, India offers the West an important source of inspiration. While there is no doubt India has its own special market conditions, there are some business design principles that everyone should consider.

Practice the Rule of 10%

Embracing constraints as a source of creativity, resourcefulness, and ingenuity may very well be India's greatest advantage. The "10% rule"—delivering goods and services to the marketplace at 10% of the Western world's average price—could drive accessibility and competitiveness to a whole new level. Aravind, for instance, set out to eradicate needless blindness despite the challenges of limited resources, remoteness, and poor clientele. Through establishing a research institute, a network of hospitals and training centers, sourcing of affordable ophthalmic products, and effective delivery mechanisms, Aravind is now able to provide expert service to those who have historically lacked access. Today Aravind is the largest provider of eye care in the world, examining over 1.7 million patients and operating on 250,000 patients annually. Instead of assuming big budgets and building from current economic equations, we must lower the starting point or even zero-base future-forward development projects more often.

Broader Platforms for Collaboration

Go beyond "interdepartmental collaboration" to pursue more joint ventures and cross-institutional collaborations. EDUSAT is an excellent example of an open source initiative that uses technology to pool resources for collective gain. Built and launched by the Indian Space Research Organization, EDUSAT is the first Indian satellite built to exclusively serve the education sector across India. EDUSAT creates a central hub for knowledge and resources that benefits everyone, regardless of physical location. By giving educational institutions of all levels across the country access to this central resource, they can access knowledge, curriculum, experts and interactive distance teaching tools that will extend the reach of education to every corner of India. The successful launch of EDUSAT also demonstrates the country's end-to-end capability in establishing space systems to undertake large-scale application programs for the benefit of the society. Imagine how much redundancy we would eliminate and costs we could cut out if we shared resources more broadly more often.

Technology as Infrastructure

Rapid and broad deployment of technology in lieu of physical infrastructure can accelerate delivery of both commercial and social services effectively and efficiently. ITC's e-Choupal system demonstrates how quickly an idea inspired by an unmet need can take off using basic technology to establish a pervasive infrastructure. By setting up Internet kiosks in rural villages, e-Choupal provides farmers with timely and relevant weather information, transparent price discovery and access to wider markets. Now serving over 40,000 villages and 4 million farmers, e-Choupal is transforming the way farmers conduct business and opening windows of opportunity to rural India. Not only is this creating economic value, it is linking business to a larger societal purpose. This developmental delivery mechanism is now being applied to pilot projects in health care, educational services, and water management.

Mobilize the Masses

Many countries like India have effectively tapped human networks to deliver both commercial and social services. Instead of devising models to pay the unemployed, devise models to employ the unemployed. The extraordinary Mumbai network of dabbawalas has delivered over 200,000 lunches to people in offices and schools from their home every day for decades. This organic delivery network employs a robust yet simple scheduling and dispatch system of barely literate delivery men to handle complex deliveries in a cost and time-efficient manner. Until only recently, this had been done every day without the use of technology.

Rethinking the Model

Creating new models requires challenging the status quo and rethinking activities that create value. India has a lagging education system and an enormous emerging workforce. By 2020, India will have the largest labor surplus in the world—45 million people. To capitalize on this resource and become a major global R&D hub, India has completely rethought the ways in which it recruits and trains its R&D workforce. Instead of counting on an army of PhDs to make their way through the educational system to serve the commercial agenda, Indian industry has developed a "surrogate education system" that can take workers with weak educational backgrounds and turn them into world-class R&D specialists by developing rigorous training programs and integrating best practices into a codified industry-based skill development program. With this resourceful new model, offshore R&D has become a booming business in India, and is expected to grow over 20% a year, to a $21 billion industry in India by 2012.

All of these successes represent new models of doing business, reflecting the principles of successful business design. Above all else, these examples emphasize that it is always worth challenging the status quo and asking "What if?" Sometimes the more radical possibilities inspire a smarter reality.

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