Heartlines, Headlines, Bottomlines: Impact of Marketing & Communication on Gross Development

Read Time:10 Minute

Heartlines refers to emotional equity in connecting with people at the grassroots level. Social entrepreneurship is all about impacting and changing the lives of the under-served—not undeserved—consumers, thus targeting the Heartlines; making good business decisions and capturing the ‘Headlines’; and turning the ventures profitable and generating healthy Bottomlines.
A smile on the face of a farmer or bangle-seller is the first sign that corporate goals are meeting human needs. It is also a sign that alongside wealth creation there is a commitment to improving the quality of life of the underserved. And, it is a sign of changing times.
Dr Lata Rajagopalan Kumar commenced her speech with a quote of John F Kennedy, “If a free society cannot help the many who are poor, it cannot save the few who are rich.” She narrated the story of an ancient king of Asia whose kingdom flourished in trade. The king imposed three rules on these merchants in his kingdom:
They can sell the products at any price provided they sell their products to poor people at a lower price.
A portion of the profit must be deposited with the royal treasury.
The traders must engage with the people and bring back valuable information about their needs and well-being to the king.
This story talks about business goals, social impact and feedback mechanism. The emphasis was on serving the poor and keeping them happy while filling the coffers. This is the essence of social entrepreneurship: targeting the poor and deserving yet making a business model out of it. It involves keeping the ears on the ground to know what people (customers) want and accordingly serving them.
Excerpts from the talk:
Underserved segment includes urban and other neglected groups, but a majority lives in rural India—places where there is iniquity in demand and supply; places which have inadequate infrastructure and technology; places where there are traditional asymmetries in accessing information and affordability. With all these issues, can you even believe that the size of this market was estimated at hundreds of billions of US Dollars according to a Nielsen report of 2018? That is about several lakhs of crores of rupees.

And did you even know that India had digital transactions of over 25 billion real-time online transactions in 2020, beating China which was at 15 billion?

The Four Vectors
How’s that even possible? Over the years, there have been many noticeable developments in these markets. Four important vectors have either changed, transformed marginally, disappeared or completely adapted themselves. They are:
All these happened because of the disruption in technology, the most significant change being in the transformation in the mode of commerce. It has leapfrogged from cash to credit and digital. Digitization has empowered rural India. Between Aadhaar and Jan Dhan, India has the largest electronic repository in the world. And did you even know that India had digital transactions of over 25 billion real-time online transactions in 2020, beating China which was at 15 billion? Digitization has overcome many of the structural challenges and equities and created new opportunities.
Bill Drayton is widely credited for coining the term social entrepreneurship in the early 80s. He founded Ashoka, a global association of social innovators. Ashoka identifies mentors and supports social entrepreneurs across the world. They try to learn from the patterns in their innovation and mobilize a global community of change-makers.
‘Touch and Tech’ Change-Makers
I am sure all of you have read about the people here in India who created headlines with social impact business ideas. Social media is exhausted with information. Still, we talk about a few innovators who have made significant impact using market principles and technology for change and adding purpose to profits. I call it Touch and Tech. Let me go through two or three categories which have made an impact.
Fintech: Finance with Technology
Fintech has empowered and made capital available for small businesses in small places. In fact, World Bank has published that financial inclusion is a fastest way to reduce poverty and boost prosperity. India has about 150,000 bank branches and 210,000 ATMs as of December 2019. It is probably more but still access to commercial cash remains a challenge in rural and semi-rural areas. Borrowing at very high rates has ruined families; it has made doing business unsustainable over the long run.
The Story of ARTH
I would like to talk about Seema, a mother of two in UP. She lost her husband in 2018 and her world fell apart. She had no savings for livelihood or access to microloans. ARTH, founded by Shweta Aprameya, stepped in and transformed her life.
Shweta is an alumnus of Sloan, MIT, with long years of experience in Fintech. Arth is a social impact finance company, giving access to credit and livelihood services to micro entrepreneurs. In India, the company works with communities to create more inclusive and sustainable growth opportunities for the underserved. Arth gives affordable credit loans through a deep branch network that is supported by user-friendly digital processes. It is very important to be user-friendly.
The impact has been a footprint of a phenomenal 18,000 pincodes, 25,000 self-employed women, 2 lakh micro businesses and 350 crore microcredit disbursement. These are just not numbers. Each is a story with a name behind it. This is the power of transformational finance. It has given social and economic independence to micro entrepreneurs, especially women.
The Edutech Sector
We look at another sector. Education with technology is one of the biggest sectors in India where startups can emerge and create an impact. According to India’s 2011 census report, there are approximately 99 million children in the 3 to 6 age group. While the government runs anganwadis to provide preschool education to 35 million children, most of these lack basic infrastructure facilities and have severe manpower issues with the result that only 31 percent of the children attend the centres regularly. That’s not very good.
Private, preschool segments are largely unaffordable for low-income communities. According to the 2007 Annual Status of Education report (ASER) on Rural India, 86 percent of students in the 14 to 18 age group are still within the formal, education system, yet poor education quality and teaching techniques and lack of infrastructure and facilities has kept the rural areas lagging behind.
LearnFatafat is an edutech company that converts educational content into videos. The startup was founded by Pankaj Chhajed in a small town called Bhusawal which gave him a better understanding of what the students needed. It was a challenge to arrange amenities and to find suitable regional content. It had to be affordable and accessible. LearnFatafat was able to cover nearly a hundred percent of the syllabus into affordable videos.

The basis of social entrepreneurship is about having empathy for the less fortunate, underprivileged and the underserved.

So students could easily access the information and study without books and importantly, without internet which is very significant. The impact was self-study through anytime, any-place videos and this has reduced the dropout rates in these places. It has enhanced learning and reached places where school, infrastructure and other teaching support were inadequate. Over 7,000 videos cater to 50,000 students.
HLC and Classle
Then we have the Bengaluru-based Hippocampus Learning Centres (HLC). This was founded by Umesh Malhotra in 2010 with the idea of opening preschools in rural areas. The startup recruits, trains and manages a network of teachers in rented village centres and charges an affordable, monthly fee for quality education services. They are now looking at online solutions.
HLC has raised a total of 21 million from multiple investors for the community-based kindergarten in rural India while creating employment opportunities in these areas. Look at the impact. KLC runs around 300 primary school centres with 700 teachers. In Karnataka alone, it benefits over 11,000 children and 500 communities, transforming early years education in rural Karnataka. This is sort of a viable low-cost model.
Our own Chennai-based startup Classle has a mission is to bridge the gap between learners and educators; employers and skilled people. It was started by V Vaidya Nathan, ex-global innovator at Cognizant. Classle has a two-faced model. One side has individual students and users, while the other side has customers who are potential employers of these students.
Classle is an online social learning platform and has included mobile services for students in rural parts of India. It has attracted funding by Chennai Angels. Due to their impact, currently Classle has 2 lakh registered users and over 100 partner colleges and other partners in their network.
Meditech: iKure’s Hub-and-Spoke Model
Yet another category is health care, where technology has just begun to fill the gap in demand and supply in India. Nearly 70% of the rural population (about 850 million people) is served by less than 30% of the country’s combined medical services. There is one doctor per several thousand people on an average. Many families simply have no access to good health. In rural communities, this is further complicated by long distances, lack of infrastructure, lack of education and poverty.
Around 12 years ago, iKure started providing comprehensive primary health care in rural and semi-rural areas. iKure was started in 2008 in Kolkata by Sujay Santra. It operates through a hub-and-spoke model, which is very interesting. It has a hub or centre where the core medical team sits. This centre is equipped with modern procedures and equipment. The centres are stationed in certain vantage points. They train community workers and health workers from the villages, after which the trained workers are sent to peripheral clinics on a regular basis. These peripheral clinics are farther away from the hub. On site, they are able to provide healthcare.
In addition to this, patient information is also uploaded and it can be viewed at the hub by the expert team, which in turn projects the course of treatment, if needed. After a couple of months in the program, these community health workers become self-sufficient and self-sustaining entrepreneurs. They generate their income by selling and promoting products from iKure supply chain.
The impact of this project was that iKure has touched 10 million lives in eight states in India. With 10 hubs and 160 touch points, 2.5 million have so far been treated in 6000 villages. They use the help of community workers and local self-help groups along with their several tech partners.
As an aside to this, I have personally been involved in a research project that studied the impact of product penetration on quality of life in West Bengal. The categories were two wheelers and cell phones. The study used the indicators defined by the human development index (HDI) to measure the quality of life.
The results were boringly predictable. The ability to communicate and commute naturally meant improved education, employment, healthcare and leisure. Leisure is a legitimate measure of quality of life according to HDI. One key takeaway from the study was that within a given region and time frame, development from penetration of products like two wheelers and cell phones was higher than that from UNDP programmes which were ongoing at that time in West Bengal.
What is Common in Social Enterprises?
The commonalities in all the social enterprises that we have discussed are as below:
They were started by professionals with empathy and conviction.
They have localised their models and used local resources.
They have come up with great ideas and innovation.
The products are affordable and accessible.
They offer technology based solutions.
They have run successful, profitable businesses.
They have attracted investors.
They have been able to attract and groom quality professionals.
They have achieved their business goals, created wealth and improved quality of life at the grassroots level.
They have added social impact to the bottom line.
A key metric for social entrepreneurs is how they impact the quality of lives. The basis of social entrepreneurship is about having empathy for the less fortunate, underprivileged and the underserved. The key difference between a social entrepreneur and a normal business entrepreneur is that the objective of social entrepreneur is to serve the needy people and make an impact on their lives. The rise of social entrepreneurship shows that most solutions to global problems do not necessarily depend on charity or government aid. They come from individuals from any background. If people like us can touch hearts and change lives without giving up our dreams, we must indeed do that.

Dr Lata Rajagopalan Kumar, Consultant – Communication for Development, Member – IAICS

Virtual CSR: A Refresher

Read Time:4 Minute

Mr R S Krishnaswamy, Founder & Chief Patron, CSR SPARK provided a brief update on the current CSR scenario. With the world and India hit hard by the pandemic, he likened it to a Black Swan crisis—which is characterised by three elements:

• Rarity
• Extreme impact, and
• Retrospective predictability

The challenges due to this are stalled activities and difficulties to stay afloat. There is an urgent need to collaborate, mitigate, prepare, innovate, learn and move forward.

He analysed the CSR spend over the first six years of implementation of the CSR law. “Looking at the CSR spend for 2019-20 from the national CSR portal (www.csr.gov.in), there has been a dip from the previous year. The amount spent by 1075 companies is 7823 crores as against 18000 crores in the previous year. This is no reason for gloom, as the portal has not been updated. Other sources have presented a much better picture,” he said and added that the national CSR portal is highly informative and useful.

This portal is maintained by the Ministry of Corporate Affairs and enlists the CSR spend over the first six years in total and also has details on state-wise, district-wise and corporate-wise spending. A perusal of these details will help Implementing Agencies (IAs) approach the appropriate corporate for partnership.

Amendments to CSR Rules

The Government on its part notified amendments to the CSR Rules, effective from 22.01.2021. Several important changes have been notified, including a registration for all Implementing Agencies (IAs). Mr Nikhil Pant, Chief Executive Officer, REACHA, Former Chief Programme Executive, National Foundation for CSR, IICA, Ministry of Corporate Affairs, highlighted all aspects of changes, its intent, and also provided guidance in the registration of the IAs.

He dwelt into the evolution of CSR over the first seven-year period and explained the basic legislation under Section 135 of the Companies Act. The prelude to the current amendments were the recommendations of the Second High Level Committee, whose key points were:

• Thrust on budgeted spending
• CSR expert in the Board
• Monetary penalty for non-compliance
• Utilization as spend
• Mandatory impact assessment
• Reporting / Disclosure
• Implementing Agencies as partners, not vendors/ service providers
• Annual CSR survey
• SDG alignment

The following are the entities approved to participate as IAs:

• The Company itself directly
• A new Foundation (Society, Trust or a Section 8 Company) of the Company with 12A and 80G registration, possessing UID on submission of Form CSR-1
• An external NGO (Society, Trust or a Section 8 Company) with a minimum of three years’ experience and with 12A and 80G registration, possessing UID on submission of Form CSR-1
• A Central or State Government vehicle with Form-CSR1 (may even be new)
• A Parliament or State established entity with Form-CSR1 (may even be new)
• Notified funds such as PM Cares, PM National Relief Fund, etc

The broad highlights of the CSR Amendments are:

1) Natural progression on compliance from 2014 onwards.

2) Relevant recommendations of High-Level Committee (HLC) on CSR of 2018/2019 have been suitably incorporated. These recommendations were based on extensive feedback from stakeholders and data analysis of reporting as received by the Ministry of Corporate Affairs (MCA). Thus, Rules 2021 are much more inclusive as they have incorporated inputs from all concerned.

3) Compliance with impact is the way forward!

4) By defining Ongoing Projects, MCA has subtly provided encouragement for medium-to-long term projects. Corporates would be best advised to start incorporating sustainability elements as projects rollout so that once they phase out, community ownership kicks in.

5) Further re-enforcement of non-profit and charitable nature of CSR by clearly mentioning Sections 12A and 80G.

6) There is clearly increased requirement on governance, accountability, disclosure, and transparency at the Board level, with accountability of CSR Committee members by name and attendance being asked for in annual reporting.

7) Introduction of Annual Action Plan (AAP) at the Board level under CSR Policy will likely bring in more structure and alignment of Grant Cycle to the FY Cycle. This should assist planned CSR spending and lead to lesser unspent funds at the end of the FY if the intent is right. Also, where intent is right, there is leeway provided to the Board to make mid-course corrections in AAP as also to designate projects as Ongoing Projects based on reasonable justifications.

8) Government is clear that unspent CSR funds need to be deployed for development work and not held back.

9) Clarity presented on some unclear areas like Admin Overheads, Surplus, Set-off etc.

10) Role of CFO now becomes particularly important. Key collaboration must now be between CFO, CSR Head, CA and CS.

11) Business / for-profit activities must be clearly kept away from CSR activities.

12) International-based Sports Training finds its due. This should be a huge relief to the sports fraternity and will likely assist India strengthen its sporting outcomes.

13) Registration on CSR-1 Form will help bring donor and donee within the same umbrella of Ministry of Corporate Affairs. Later, this may also lead to NGO reporting on CSR utilizations against their allocated CSR Registration. This could then be tallied against CSR spends as reported by Companies through MCA21.

The link for IAs to register under Form CSR-1 is available in the Ministry of Corporate Affairs portal.

Customer Centricity Across Product, Service & Digital

Read Time:17 Minute

Customer centricity is a much used and abused word. It covers a wide space. It is not a marketing buzz word. It is something that I have used all my life to drive profit and growth. It is based on the belief that if you want to get value from a customer, you must first create value for the customer.

I was making a presentation on customer centricity to a team of private equity leaders. One of the questions that came up was: Which is more important—customer centricity or focusing on the bottom line? I believe that the two are inseparable. If you want to focus on the bottom line, then you need customer at the centre of whatever you are doing.

Let me focus on three parts of customer centricity:
1) Product Innovation
2) Communication and engagement: How do we do that in today’s digital environment?
3) Reimaging marketing for Omni channel.

Product Innovation: The NASA Story

Open source innovation has become popular today. It is also called user-led innovation and crowdsourcing. NASA’s International Space Station (ISS) is powered by the sun and has solar panels. As the station orbits, some panels face the sunlight and others are in the shadow. NASA engineers wanted to develop a complex algorithm to organize the orbit in such a manner that shadowing is minimised and maximum power is generated even in the most difficult orbital conditions.

In 2013, NASA launched a public contest to solve this problem. They had a prize money which was initially $30,000. It was really strange because NASA has the best engineers in the world and huge budgets. When the contest was launched, there was a fair bit of scepticism amongst NASA engineers as well, if this would yield any output at all.

Though user innovation has been around for a long time, it accelerated in the last decade because of the advances in communication technologies.

By the time the contest finished, they had 459 competitors and 2185 solutions. The amazing thing is that half the solutions performed as well or better than NASA’s own solutions. The total cost to NASA for this was an unbelievable $80,000. That’s not even a blip on the NASA’s overall budget and it included the $40,450 paid as the final challenge award. This brings out the tremendous power of open innovation.

User innovation is not a new concept. Adam Smith, the economist in his ‘Wealth of Nations’ written almost 300 years ago, talked about the role that workers had in redesigning manufacturing processes, because they understood their job better. Eric von Hippel, American economist from MIT Sloan School of Management, has been doing a great work on user-centric innovation. In 2005, he published a book called, ‘Democratizing Innovation.’ He says that user innovation is a very powerful phenomenon and that it is both a rival to and a feedstock for manufacturer innovation.

Though user innovation has been around for a long time, it accelerated in the last decade because of the advances in communication technologies. It means that users can collaborate amongst themselves and with experts.

Sunil Gupta, in his book, ‘Driving Digital Strategy (2018),’ says that most consumers modify products when they use them, to suit their specific applications. If a manufacturer understands what modifications customers make and why, then the manufacturer can get great ideas. For instance, like what we did in Tata Tea; Mr Sushant Dash, who played a key role in that project, will share his insights (Read ‘The Making of Tata Tea Gold: A Case Study in Product Innovation’ by Mr Sushant Dash, which appears separately in this article).

Key Takeaways
• Consumers can be a bigger source of ideas. So, get a deep understanding of how consumers use and modify your products.
• The more you involve customers in the development process, the greater the chances of commercial success.
• As product life cycles are getting shorter and development resources become scarce, internal innovation is not enough.
• User-led innovation is going to be critical to support growth expectations.
• User-led innovation is not the sole preserve of digital platforms. It has yielded powerful results across a wide range of categories, whether you take clothing, automobiles, home products and B2B Industries in as wide a range as oil refining, software and chemicals.

Rapid Experimentation
Innovation by rapid experimentation is also picking up. The benefits of early stage learning and rapid experimentation are clear to everyone. Yet, in the manufacturing sector, I have not seen too many cases of using things like additive manufacturing, which is 3D printing, for rapid experimentation. Before these technology tools were available, we had a heavy reliance on concept testing. At best, we could consumer check a few options and by the time we got the results for that, we were more or less committed to the solution. Today marketers have the opportunity of using technology for doing rapid experimentation and thereby cutting down costs and making innovation much more real.

Communication & Engagement: The ZooZoo Way
What ads say and what consumers hear are quite different. There is a lot of talk about digital marketing. However, the click-through rate of ads remains less than 1%. A key question arises: How can businesses reach out to this skip-ad generation? Clearly, the brand-push is moving to consumer-pull. The consumer will pull only what is exciting and informative.

What ads say and what consumers hear are quite different. There is a lot of talk about digital marketing. However, the click-through rate of ads remains less than 1%. A key question arises: How can businesses reach out to this skip-ad generation?

We launched the Vodafone ZooZoo ad around 2008. Consumers loved this ad. The egg-headed creatures became the most loved characters in advertising over the next six or seven years. Originally it was designed for IPL. We were the co-sponsors for the IPL, right from the beginning. With IPL spread over 50 days and 60 matches, we do 300 ads. It has a viewership of 400 million people of which 150 million who are the core viewers keep coming match after match. If you run the same ad again and again, it becomes tedious and boring for them.

In the ZooZoo campaign, we did two new executions every week. In the semis and finals, we would run all the ads together. ZooZoos became iconic and viral. We were able to leverage them across all channels. We had 20 million followers on Facebook. The Hindu BusinessLine reported that the ZooZoos stole the thunder in the IPL. ZooZoos became part of the conversations. Thus, if you want to break through the clutter and the skip-ad generation, you need to do breakthrough advertising.

L’Oreal’s Dermablend ad uploaded on YouTube got 25 million views. To go viral, you have to do something unusual and take some risk which is over-rated at times.

In product demos, Home Depot collected 4 million views on how-to videos. Providing useful information is one way of reaching out to this generation. Creating communities and advocacies is another option. Chalk paint brand by Annie Sloan engages ‘furniture distressing’ enthusiasts across platforms. If you have a dull product like soap, you can broaden your message. Dove’s ‘real beauty campaign’ goes beyond product and category to create a conversation on how women and society view beauty. Though it looks simple, such a campaign is not that easy. The caveat is that it has to be real, consistent and true to your brand. It takes lot of time.

There are many who tried at this and failed. Pepsi in 2010 put up 20 million dollars and invited ideas from people for doing social good. Many ideas that came had nothing to do with Pepsi. Some like reducing obesity were in conflict with Pepsi’s selling. Finally, the venture came to nothing. Moment-based marketing is another big thing which is coming up. Red Roof Inn has many hotels next to airports. They track flight cancellations and sends messages to stranded passengers on availability of rooms using geo-targeting. They have been able to drive up the traffic by 70%. This can also be done by digital tracking. For instance, if somebody wants to buy a car, they are most active in searches three months before the purchase. The idea is: Can you target the customer at the right moment?

With mobile phones, 92% of the time is spent on apps. So what can be done to run ads on apps? The first is banner ads. If you want to avoid beaming an irritating ad, you need to move to storytelling and storymaking and creating communities.

The Making of Tata Tea Gold: A Case Study in Product Innovation

By Mr Sushant Dash, President – India & Middle East, Tata Global Beverages, Bangalore

Tata Tea started in the early 80s as a plantation company. The management realised that real money was not so much in the plantation business but in the brands and packaging part. So they forward integrated and launched brands in 1985.

There were two sets of brands that the company had. One was Tata Tea, which is now called Tata Tea Premium, which was a national brand. We also had specific brands in the South catering to the regional preferences like Kannan Devan in Kerala, Chakra in Tamil Nadu and Gemini in AP. The launch of the Tata Tea brand by itself was quite innovative and in many ways, is a great story of consumer centricity.

Tata Tea realised that one of the most important things the consumer wanted was freshness in the tea and that was something the consumer was not getting then. So we set about solving it and created some of the competencies on which the brand grew.

The Four Core Competencies
1) Plantation sourcing was a big differentiator from the competition because Tata Tea brands were sourced from their own gardens. They were grown and packed there. So the freshness story was amplified.
2) Tata Tea was one of the first brands that got into polypacks. It was then seen as a major innovation (it has now been phased out due to environmental issues) and a big differentiator in retaining freshness as compared to the carton packs.
3) Tata Tea name was a strong brand.
4) Because of the plantation background, they had a good understanding of blending teas and the consumer requirements of each region.

Thanks to these core competencies, Tata Tea brand had grown from 1985 to late 90s. The company grew in double-digit both top-line and bottom-line, and took on competition quite robustly. However, by late 90s, there was a glut in the commodity market. Tea was available quite cheaply because of the Kenyan and Sri Lankan tea imports. Our export market nearly collapsed. Even within the domestic scenario, due to better crop production facilities, there was much larger production and hence a glut.

The challenge is that tea is a habit like reading a newspaper and people are averse to changing their habits. Since the early 30s when the category took off, there were just two or three big innovations.

The polypack was no more a differentiator as anyone could do that even at the back of their houses at a low cost. The strong brands gave way to a proliferation of local brands. Every city had six or seven of these brands. They offered high discounts for both the trade and the consumer legs, and the brand name did not stand for much at that point of time.
Obviously, the company was on the defensive. That was also the time some of us like Vivek Mathur and I joined the company in early 2001. It was the first time that the company reported decline in growth of the brand. For 16 years, they had grown in double digits. It was a huge shock to the system. They launched brands like Agni to take on the local brands.

HUL, the other competition at a national level, faced the same issues with their brands. To counter the local brands, they launched A1. However, the low price, mass brands did not help the company because the locals did a better job. So the only option for us to be on the offensive was to do innovation.

Incremental Innovation
We did incremental innovation by modernising the packaging and redesigning the packaging graphics, bringing in both emotional elements and functional benefits in terms of body and mind refreshment. We put more money to build brand equity.

We were lucky in roping in a young tennis player for our new advertisement. It so happened that a week later, the player reached the quarter finals in the Australian Open to take on Serena Williams. It gave us a lot of publicity. The player was Sania Mirza, our brand ambassador.

Such incremental innovation is very important and we as marketers need to do it regularly. But it has limitations. It helped us to stabilise the business and stop the decline. But to get back to high growth rates, we needed some disruptive innovation.

The challenge is that tea is a habit like reading a newspaper and people are averse to changing their habits. Since the early 30s when the category took off, there were just two or three big innovations. Tea was not a category known for innovation.

Looking for Disruptive Innovation
When we studied the way consumers were using tea, we realised that one of the prevalent habits in households mainly in the northeast was that they mixed two kinds of tea—one, the Assam tea or CTC and the Darjeeling tea or longleaf. They believed that Assam tea gave them strength and taste while the longleaf or the Darjeeling variety gave them the aroma and flavour. They mixed them in different ratios of 70/30, 80/20 or 90/10. This gave us the idea for our disruptive innovation. In a couple of centres starting from Delhi, we used a method called sequential recycling and experimented with various components of Assam and Darjeeling tea. We invited housewives, set up kitchens for them and provided them with utensils, milk, sugar and water to replicate their daily preparation of tea in their houses. We encouraged them to try different blends and give feedback in real-time if it met their expectation. We had our blenders who were then and there making changes in the components.

Roping in Sania Mirza was advantageous to the brand.

We finally arrived at the right blend from this user led innovation and settled at 15% long leaf Darjeeling orthodox and 85% high grade Assam CTC.

We got lot of insights from this experience. We understood that there are three or four critical things at getting it right. We understood that the longleaf is important not just for the aroma or the flavour that comes through but the visual clue was equally important. We also learnt that aroma is just an indicator of great taste and it is not an end benefit.
In the user-led innovation, we had long leaves which were golden or green or greenish. When one opened the pack, one immediately realised that this tea was very different from all teas they had used in the past. That is how we launched Tata Tea Gold, a premium blend completely developed by the consumer. This was the first launch that the company did in 15 years.

The communication depended on which school of advertising you belonged to—Tata or HUL. The Tata School will have its ad themed around a single girl dancing in the garden and HUL School will pitch it around a housewife in a social setting. But for the first time, we changed the category cues and came out with an ad in a social setting on the theme, ‘You’ll regret saying no,’ to showcase Tata Tea Gold.

We did sales 3x the target. We launched it in October 2013. We were out of tea by the following Feb or March, though it was off season. We priced at 15% premium and managed a gross margin which was 30% higher. This brand has gone from strength to strength and today it is one of the largest brands in our portfolio. It is a huge brand upwards of 500 crores. We proved that we could create a larger portfolio using innovation as a way to conduct business within the company. It showed results over a period of time. In 2007, we became volume leaders overtaking HUL and in 2011-2012, we became value leaders.

Customer-Centricity Across the Buying Journey: Reimagining Marketing for Omnichannel

By Mr Ram Iyer, Worldwide Director—Digital Strategy and eCommerce, Microsoft, and co-author of the book, “Leading through the Pandemic”

The customer today, in search of the product, jumps across physical and digital channels. So how can we reimagine our marketing for this Omni-channel? Let me focus on three areas:
• Our Opportunity
• Customer Journey
• The Future

Our Opportunity
It takes a crisis to change our mindset. Covid-19 has been a perfect storm of sorts for us to embrace digital. Satya Nadella said during our Quarter 2 results, “We have seen two years’ worth of digital transformation in two months.” In the seven months of the pandemic, we have actually achieved 10 years of growth in digital. The reason for this is that we are living in a world where we are digitally and socially connected.

We need to get into the minds of the shoppers to find out their habits. We are going into an era where there will be far more online shopping, and mobile is going to be the centre of gravity. In the next four years, in India, we are going to have 400 million digital wires. This is a huge opportunity.

Customer Journey
The old customer model was about mass production and mass communication. Today the consumer is the channel. The consumer is on a connected journey always. They move between online and offline constantly. These connections create a network effect. For this, you have to keep the customer at the centre of everything that you do.

If people cannot go to the store, then you have to bring the store to the home. We can use the concept of video call and extend it to shopping.

E-Commerce has done a great job so far. But what is important is how to deliver a great experience online. For this to happen, you have to eliminate points of friction and interruptions and make it easy for customers to buy. You have to walk in the shoes of the customer.

Friction Points
• Too many choices
• You cannot touch and feel the product online
• The recommendations can be irritants

If you search for buying a laptop, you will get a flurry of options. Buying a PC online can be more complicated than buying a car. We have to make use of technology, like conversational AI, to make it useful for the customer to shop online. By asking simple questions, we can frame the customer’s behaviour and offer suitable choices.

What can we do to get a feel of the product online? We can use augmented reality to showcase all the features of the product. If people cannot go to the store, then you have to bring the store to the home. We can use the concept of video call and extend it to shopping. A retail assistant can talk to you while you are shopping online and provide a one-on-one consultation to help you find the best product.

Post-pandemic, we need to reimagine and align with the future of the shoppers.

Irrelevant offers suppress the buying momentum of the buyers. The offers have to be introduced at the right moment in the customer’s online journey. You can make use of the power of AI to offer intelligent offers and choices. The conventional marketing funnel makes use of the broadcast model. The new approach is totally driven by the consumers.

Talking of the future, we all have a choice: Taking on the baggage of the past or reimagining the future. Post-pandemic, we need to reimagine and align with the future of the shoppers. So we need to bear in mind that:
• Customer behaviour is constantly changing
• We need to meet the customers at where they are in their journey and deliver a friction-less experience.
• Along with our partners, we need to reimagine that customer experience.

Actualizing the new statement

Read Time:7 Minute

It is said that our collective consciousness knows things that we are consciously not aware of. For more than a decade, US businesses have been sending signals on the importance of being a better human being in a roundabout way.

On October 30, 2006, Pete Engardio and Jena McGregor penned an article in Business Week titled “Karma Capitalism” whose byline read, “Times have changed since Gordon Gekko quoted Sun Tzu in the 1987 movie, Wall Street”, and continued, “Has the Bhagavad Gita replaced The Art of War as the hip new ancient Eastern management text?” The article never defined Karma Capitalism nor did it explain what Sri Krishna’s teachings were and how they were relevant to businesses.

In the eighteen chapters of the Bhagvad Geeta, Sri Krishna prods Arjuna, and through him, humanity, to engage in the struggle to rise in internal excellence and emerge as a better human being and teaches him how to do so with the various yoga paths.

On August 19, 2019, the prestigious Business Roundtable issued a New Statement redefining the purpose of a corporation. The 181 CEOs of leading companies such as Amazon and Apple who signed the New Statement, committed to lead their companies for the benefit of all stakeholders—customers, employees, suppliers, communities and shareholders, and away from the shareholders-first ideology.

The link of internal excellence to the performance in the external world has significant implications for the New Statement.

I had been sensing the societal importance of the idea central to the New Statement for more than a decade. In 2008, Six Sigma and Advanced Controls, Inc., published my monograph, “A Small Step for Man: Zero to Infinity with Six Sigma (amazon),” which defined Karma Capitalism as “freedom to engage in business within the constraints of civil laws for the purpose of turning a profit while keeping in mind the wellbeing of all concerned parties (suppliers, employees, customers and shareholders) and not just shareholders.” Dipak C. Jain, the then Dean of Kellogg School of Management at Northwestern, wrote the foreword to the monograph.

In 2011, Six Sigma and Advanced Controls, Inc., published the first edition of my book, Six Sigma for Karma Capitalism (amazon) which expanded the ideas further. Don Linsenmann, the then Corporate Six Sigma Champion of DuPont, wrote the foreword to the book, and Sadhguru Jaggi Vasudev was kind enough to answer several questions for the book.

My subsequent discoveries and the New Statement are even more intricately linked.

On March 3, 2013, I had an Aha moment, courtesy of an article in the Weekend edition of the Financial Times. The article spoke of very low defect levels in the Kumbh Mela’s tent city erected to house millions of pilgrims as though the tent city was located in a developed nation, in contrast to the shoddy performance outside. BBC News too supported the Financial Times reporting in their article dated 17 February 2013 titled, “Does the Kumbh Mela experience improve your well-being?”

These articles are telling us that high levels of internal excellence contribute heavily to exemplary performance.

The famed Dabbawalas of Mumbai are another example. These 5,000 semi-literate lunchbox delivery boys deliver 200,000 lunchboxes a day, six days a week, producing 1 defect (late delivery, wrongful delivery) in six million deliveries according to Forbes, and they have been at it since 1890. They are the envy of the corporate world keen to learn how these semi-literate folks with no training in statistics are able to deliver such incredible performance so that they too could replicate it. Unfortunately, they have been looking at it from the prism of reason. The X factors are not to be found there.

The X factors for the exemplary performance of dabbawalas are: (1) Their processes are designed and operated the six sigma way, and (2) Their internal excellence is high. The converse is equally true, an inadequate level of internal excellence is a root cause for shoddy performance in disparate areas of life, not just businesses. Boost internal excellence and the performance will zoom.

The link of internal excellence to the performance in the external world has significant implications for the New Statement.

Consider the 2004 Gallup survey of a large number of business units across many industries which found that there were more than 22 million workers in the United States alone who were “extremely negative” or “actively disengaged.” The report said this rampant negativity was costing the U.S. economy between $250 and $300 billion every year in lost productivity alone. When workplace injury, illness, turnover, absences and fraud were added, the cost could exceed $1 trillion, annually. This cost to the world economy must be in trillions of dollars.

In the light of such large-scale negativity, why and how will one group of stakeholders work for the benefit of all stakeholders? There is but only one way to actualize the New Statement, and it is to introduce a program to enhance internal excellence, emerging as better human beings in the process. No amount of training and the myriad of otherwise useful approaches will cut the mustard.

The high level of internal excellence in the case of Dabbawalas is due to bhakti, or devotion to God. They are all Varkaris (pilgrims) who travel 200 km on foot from one set of temple towns to another every year. To the Dabbawalas, their customer is God; how dare they serve lunch late or deliver it to the wrong address. Bhakti is also the X factor for low defect levels at the Kumbh Mela.

Bhakti cannot be produced on demand. You either have it or you don’t. Fortunately, the pursuit of higher levels of internal excellence to emerge as a better human being is also a well-posed scientific problem. Internal excellence cannot be measured but emotional excellence can, and this is fortunate because the two are strongly and positively correlated. The process with which to achieve a higher level of emotional excellence is meditation, or more generally, yoga, known for thousands of years. The availability of a scientific measurement device for emotions means progress can be audited.

There is an emerging awareness of the importance of emotional excellence in the United States. Peter Salovey, now President of Yale, and John Mayer of the University of New Hampshire, coined the term emotional intelligence in 1990. Harvard Business Review has carried multiple articles on emotional intelligence. Daniel Goleman’s 1995 book, Emotional Intelligence sold 5 million copies and it has been translated into fifty languages. Yale even has a Center for Emotional Intelligence whose motto reads, “Emotions Matter.” HBR says that Goleman’s article on emotional intelligence is one of the most archived in their publication.

Emotional intelligence is an intellectual inquiry to fundamentally understand the importance of emotions within oneself and in others while emotional excellence is the wherewithal of how to bring about the required positive changes from within with meditation.

In the light of such large-scale negativity, why and how will one group of stakeholders work for the benefit of all stakeholders? There is but only one way to actualize the New Statement…

Intuition, self-awareness, and emotional intelligence (emotional excellence) are now understood to be critical components of leadership. Yogic processes can enhance intuition.  The reader may also enjoy reading the article, How to Measure and Strengthen Your Intuition in Forbes.

Six Sigma Grandmaster Certification Program and Award Launched

Six Sigma and Advanced Controls, Inc., (SAC) has launched their first-in-the-world Six Sigma Grandmaster Certification program and award. The award is given to organizations and individuals who have understood the importance of internal excellence in the pursuit of exemplary performance in their respective fields of endeavor.

 In six sigma parlance, several awards are given in recognition of increasingly higher levels of expertise in six sigma: (1) Green Belt – entry level certification given for competence in basic six sigma concepts, (2) Black Belt – Advanced level expertise in six sigma, combined with project execution experience, (3) Master Black Belt- Teaching skills and experience in addition to the requirements for the Black Belt, and (4) Champion-Corporate level position who oversees the six sigma initiative in the company and interacts with senior management. Six Sigma Grandmaster Certification kicks up a notch the six sigma certification requirements and includes internal excellence and its link to the performance in the external world. Unbeknownst to the recipients, SAC has bestowed Six Sigma Grandmaster Awards upon several organizations. In India they include (1) Mumbai’s Dabbawalas and (2) Madras Management Association. In the United States, the recipients are (1) BizEd, a publication of the Association to Advance Collegiate Schools of Business, the body that accredits B-school curricula, (2) Bridgewater Associates, (3) Salesforce.com, Inc., (4) Chicago Cubs, and (5) Seattle Seahawks.

In Closing

Economic forces and the Covid-19 pandemic have thrown many challenges for businesses. Businesses will benefit tremendously by embracing the science and practices of external and internal excellence and the benefits will be self-evident. Embracing the science and practices of external and internal excellence is the pathway to actualize the New Statement. India is the ancient home of internal excellence and America is home to the framework for external excellence—six sigma. The two components of excellence must be front and center in the initiatives to further strengthen US-India ties.

Pradeep B. Deshpande is Professor Emeritus of Chemical Engineering and a former Chair of that Department at the University of Louisville. He is also President of Six Sigma and Advanced Controls, Inc.

Champion play as one

Read Time:6 Minute

“If you want to go fast, go alone. If you want to go far, go together.” – African Proverb

Modern businesses are driven through teams. Readers would recall that there was an era when businesses revolved around talented individuals. Thanks to factors such as the rise of knowledge economy, globalisation, free availability of information, and high-velocity of information flow, the yesteryear philosophy of businesses revolving around heroic, talented individuals is slowly diminishing. The VUCA nature of the world, for which the ongoing COVID-19 pandemic is a very appropriate example, has further accentuated this. VUCA, for those who are unfamiliar, is anacronym that stands for Volatility, Uncertainty, Complexity and Ambiguity, and alludes to the character of the current day business environment.

‘Why teams?’ is an obvious question that merits discussion. Modern knowledge-driven businesses are intensely specialised. The vast knowledge spread across multiple domains, high information volumes, as well as high velocity and cadence of actions, is all beyond the grasp of a single individual. Add to this, the crucial factor of environmental complexity, which presents itself in the form of continuously shape-shifting ambiguous pictures. Both these aspects leave little time for business decisions and actions to be thoroughly analysed, de-risked and centrally-driven. The solution to drive business under such circumstances lies in creating high-performance teams. If teams were to become the fundamental entities through which work is undertaken, then the knowledge and wisdom of the collective can be fruitfully utilised to negotiate a VUCA environment.

Fundamental to the understanding of collaboration, is the principle of goal setting. When goals are set for employees in an organisation, the exercise can be done in two different ways, viz. individually for each employee, or collectively for a team.

Since this piece deals with teams, a clear definition of a ‘team’ merits recording. Scholars traditionally define a team as a bounded and stable set of individuals, who are interdependent and work for a common purpose. Thus, teams have two required elements—membership and a collaborative task. Notwithstanding the fact that teams are becoming ‘virtual’, ‘distributed’, ‘dispersed’, and ‘global’, the definition still remains relevant.

Assuming the above were true, what should be the character of these teams that drive successful enterprises? Teams would have to be autonomous, agile and flexible. Autonomy would ensure that decisions would be quick and appropriate to the scenario presented. Agility would mean actions are swift, timely, calibrated and effects local with minimal collateral damage. Flexibility would allow for the team to function without being restricted by excessively rigid boundaries and constraining SOPs.

Another aspect of such teams would be the high levels of collaboration and synergy, a pre-requisite for high performance. A lot has been said about collaboration in teams. A quick Amazon books search reveals the existence of over 8000 titles dealing with collaboration. That said, the statistics for collaboration in the workplace does not really inspire confidence. Surveys by Salesforce reveal that “86% of employees and executives cite lack of collaboration or ineffective communication for workplace failures”. Additionally, a survey by The Economist indicates that “33% of employees say the ability to collaborate makes them more loyal”. Clearly, a high level of collaboration is positively correlated with the two fundamental dimensions of every good workplace, viz. productivity and engagement.

Fundamental to the understanding of collaboration, is the principle of goal setting. When goals are set for employees in an organisation, the exercise can be done in two different ways, viz. individually for each employee, or collectively for a team. If goals are set individually for employees, when an interdependent task is required to be executed, then an employee, say employee A, would need the cooperation of another employee, say B, for execution of the task. This cooperation is dependent on the volition of the employee B, whose help is being sought. Further, employee B’s decision to cooperate is dependent on whether the act of extending support will assist him/ her in meeting their goal. Such is the nature of cooperation.

Collaboration, on the other hand, is predicated upon objectives being shared by the entire team. When goals are being set, if those goals are shared goals, every team-member strives to contribute to the achievement of the goals. This is in contrast to the scenario of cooperation, where the overarching goal is lost due to its decomposition into smaller individual goals. The concept of shared goals turns every collaborator into an equal stakeholder, and engages them strongly since they see themselves contributing to something larger than themselves. Shared goals are the juice that drives high-performance teams.

In an environment where safety is ensured, team processes such as periodic reviews, lay the foundation for team-learning. This happens because the review processes are crafted with the perspective of learning and improvement by dissecting actions with no attribution to people.

Setting shared objectives is just the first part of creating highly-collaborative teams. As discussed earlier, knowledge-based businesses require multi-dimensional knowledge, tremendous ability to absorb and process information, creative strategy, and innovative execution at every juncture. Consequently, no single individual is capable of meeting this wide swath of requirements. The expertise across domains is typically shared among the different members of the team. This also means every member of the team would need to contribute their expertise and ideas, to meet the shared goal. Consequently, team decisions need to emerge through discussions and consensus, rather than through the traditional paradigm of decisions being handed down to team-members.

If decisions are required to be arrived at through consensus, the team ecology should be open and accepting of the plethora of views and ideas from members, often diverse and probably contradictory to popular thought. Ideas, contrarian views and open discussions are best aired when members feel a sense of psychological safety.

Psychological safety was first discussed by Edward Schein as early as 1965. The concept describes the ability of team-members being able to present themselves to their team-mates without fear of negative consequences of self-image, status or career. Psychological safety helps members function without fear of ridicule, failure and loss of self-esteem. Research indicates that when members in teams feel psychologically safe, there is greater engagement, higher productivity and improved adherence to quality. Team-members feel a deep sense of belonging and inclusion, a willingness to learn, contribute and challenge the status quo. The last factor ensures that members speak their mind, fosters creativity since failure does not trigger ridicule or retribution, and helps keep decisions aligned with the overall purpose and values of the enterprise.

In an environment where safety is ensured, team processes such as periodic reviews, lay the foundation for team-learning. This happens because the review processes are crafted with the perspective of learning and improvement by dissecting actions with no attribution to people.

Safety also ensures teams bond better, politics are minimised, engagement is improved, overall attrition is reduced and employee’s health improves. In sum, any enterprise strives to achieve success through driving two connected employee related parameters, viz., employee performance and employee engagement. Both the parameters are most likely to be high if high-performing teams form the basis for work. Converting a heterogeneously skilled group into high-performing team involves defining shared purpose and shared mission, providing a safe and trust-filled space for members to collaborate and exchange ideas and views. End result, skyrocketing engagement levels, plummeting stress levels, both leading to increased productivity, reduced attrition and overall good health.

Transforming India & Indian Business

Read Time:6 Minute

I am inspired to write this column for Business Mandate after witnessing the resounding success of the recent presentation of Ritesh Andre, Spokesperson for Mumbai Dabbawalas, and our associate Raja Atmamayan, Vice President, ASCENT Transformation Ventures, Coimbatore. MMA reported that two thousand viewers tuned in for a Sunday session and many provided positive feedback on the session. It is hoped that viewers would consider making a donation to the Dabbawalas. MMA is to be felicitated and thanked for this success.
The viewers learned in the presentation that exemplary performance is possible when and only when the level of internal excellence is high. In the case of Dabbawalas, theirs is a Six Sigma operation and the Dabbawalas are Varkaris, intensely devoted to customers and whom they consider as God.
Internal excellence and emotional excellence are two sides of the same coin. When emotional excellence rises, the level of internal excellence too will rise.
Pursuit of high levels of emotional excellence is a well-posed scientific problem. Emotions can be measured, and the process with which to enhance emotional excellence is meditation, or more generally yoga, known for thousands of years. Since emotions can be measured, progress can be audited.
As evidence on the need for emotional excellence, Gallup published a survey of a large number of business units across many industries in 2004 finding that there were more than 22 million workers—in the United States alone—who were extremely negative or “actively disengaged.” This rampant negativity was costing the US economy between $250 and $300 billion every year in lost productivity alone. Gallup estimated that when workplace injury, illness, turnover, absences and fraud were added, the cost could exceed $1 trillion, annually. In fact, they found that negativity appeared to have spiked across the world in recent years. Reporting on Gallup’s 2019 Global Emotions Survey, BBC said people around the world were angry, stressed and worried. Gallup interviewed 150,000 people in 140 countries for their 2019 Global Emotions Report and found that a third of them were stressed while one in five experienced sadness or anger. In this survey, the United States was 39th most positive country and India ranked 93rd. Clearly, negativity is a serious issue for India Inc., as well.
Negativity and negative emotions are synonymous. Negative emotions lead to stress while positivity attenuates stress. Successful pursuit of higher levels of emotional excellence will bring a myriad of additional benefits. They include:
• Health and wellness. Negative emotions lead to stress, a root cause of many serious illnesses including cancer. Nobel Laureate Elizabeth Blackburn has shown that high levels of stress shorten telomeres (the protective caps at the ends of our chromosomes) and accelerate aging. Medical researchers have also shown that meditation lengthens telomeres and slows aging.
• Leadership. Harvard Business Review has carried numerous reports on emotional intelligence. Researchers reported in HBR that intuition and self-awareness are critical components of leadership. Intuition is immediate cognition without the benefit of the five senses and the rational mind. Yogic processes can enhance intuition to a point it becomes possible to do numerous tasks blind-folded, provided training is given at a young age. For adults, meditation is a route to enhanced intuition.
• Less discord and violence. Improved interpersonal relationships, less discord and violence are natural consequences of higher levels of emotional excellence.
• Creativity and innovativeness. Pursuit of higher levels of emotional excellence is a pathway to connect to the source where all creation happens. India itself has provided ample evidence of such creation. One famous example from Tamil Nadu is S. Ramanujan. Barely a high school graduate, Ramanujan would formulate complex mathematical theorems and their proofs without knowing the steps in between. He told his mentor, G. H. Hardy at Cambridge, creation happened when he connected to the source via a prayer to his Goddess.

Emotional intelligence is an intellectual inquiry to fundamentally understand the importance of emotions within oneself and in others, and it indicates the capacity to be aware of one’s own emotions and intuit the feelings of others with obvious implications for decision-making.

Progress in America
Ancient India is the home of emotional excellence, but you would find it interesting that America is recognizing its importance independent of any scriptures.
In 1990, University of New Hampshire psychologist, John D. Mayer and his friend and a fellow psychologist, Peter Salovey, now President of Yale, coined the term “Emotional Intelligence”. By then, the importance of IQ was well-known globally but the profound implications of emotional intelligence or EQ (emotional quotient) had not yet been understood in the West.
Emotional intelligence is an intellectual inquiry to fundamentally understand the importance of emotions within oneself and in others, and it indicates the capacity to be aware of one’s own emotions and intuit the feelings of others with obvious implications for decision-making.
Relatedly, Daniel Goleman first published the best-seller, Emotional Intelligence in 1995. That book sold four million copies and was on the New York Times best-seller list for a year-and-a-half. According to HBR, Goleman’s articles on emotional intelligence are some of the most enduring in their publication.
Goleman says in his HBR article, “IQ and technical skills are important but emotional intelligence is the sine qua non of leadership.”
Goleman goes on to say in his tenth anniversary edition of Emotional Intelligence: “In 2002, UNESCO began a world-wide initiative to promote social and emotional learning (SEL), sending a statement to ministries of education in 140 countries.” He writes that he was most gratified to note that tens of thousands of schools worldwide offered children SEL. He says that in the United States, many districts and even entire states currently make SEL a curricular requirement mandating that just as students must attain a certain level of competence in math and language, so too should they master these essential skills for living.
The prestigious Business Roundtable released a New Statement redefining the purpose of a corporation in 2019. The 181 CEOs of some of the largest companies in the world who signed the New Statement, committed to lead their companies for the benefit of all stakeholders-suppliers, employees, customers, communities and shareholders, away from the shareholders-first ideology. A little reflection should convince the reader that enhancing internal excellence is the only route for one group of stakeholders to work for the benefit of all stakeholders.
The progress Americans have made in realizing the importance of emotional intelligence is laudable. However, as important as an intellectual inquiry to fundamentally understand the importance of emotions, emotional intelligence by itself cannot bring about the required positive changes from within.
Emotional excellence, the term I have coined, is the wherewithal of how to bring about the required positive changes from within and there is only one way to achieve this feat and it is through meditation, or more generally, yoga. No amount of training, rules, regulations, and policies, top-notch quality initiatives, nor intellectual pursuits will cut the mustard.
Alarmed by the aggressive pursuits of China, India Inc., appears to be making concerted efforts to wean companies away from China to India. There is also a reported effort at Government reforms. Pursuit of external and internal excellence is essential for the success of these initiatives.

Pradeep B. Deshpande is Professor Emeritus and a former Chair of the Chemical Engineering Department at the University of Louisville. He is also President of Six Sigma and Advanced Controls, Inc.