MANAGING CHANGE FOR SUSTAINABLE
DEVELOPMENT :
“Emerging Markets and Inclusive
Growth
ABSTRACT
"Change is the window through which the future
enters your life." It's all around you, in many types and shapes. You can
bring it about yourself or it can come in ways that give you little choice
about its what, when, and how. Fighting against change slow it down or divert
it, but it won't stop it however. If you wish to succeed in this rapidly
changing new world "you must learn to look on change as a friend – one who
presents you with an opportunity for growth and improvement." The rate of
change in today’s world is constantly increasing. The magnitude of today's
environmental, competitive, and global market change is unprecedented. It's a
very interesting and exciting world, but it's also volatile and chaotic. This
paper is focussing on emerging market & inclusive growth as how company
needs to manage change.
Reaching out to the lower strata in emerging markets
has long been an admirable social goal and important aspect and, it also
represents the biggest business opportunity and helps in growing the smaller
market. The rapid change is happening where its imperative for organization
finding ways to capture “inclusive growth” by reaching the lowest-income segments
as both employees and consumers for their growth. It has been observed and found that the single most important thing to
do (around inclusiveness) is to manage change. Organization are focusing the
emerging market even if some feels that organization doesn’t have the time and
resources to do a large inclusiveness plan, then have to start with something
smaller and once you have that first step you see the results from it, will be
encouraged to take a step ahead. In both the scenario whether large or small
inclusiveness plan leaders role is very vital. His creativity and innovation
ability can help an organization to achieve the social growth. Having a small
gesture of showing respect for people; promotes fairness and equity; engages
the talents, experiences, and capabilities of others; fosters a sense of
belonging; works to understand the perspectives of others; and creates
opportunities for access can reflect and show great success. An inclusive plan
helps organization accomplish their missions with greater power and greater
success and managing change. Inclusiveness describes how people from all
backgrounds are involved in the organization, how their perspectives are valued,
and how their needs are understood.
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With inclusiveness approach we can invite talent from all
backgrounds as well as provide equal opportunity for each person to succeed in
a way that works for them. With diverse composition leads to learning-centered
organizations that value contributions of all people, in all aspects of the
organization and all can be achieved by the approach of leader. It is a
challenge in current scenario but if strategized can lead to sustaining and
support inclusiveness. The main purpose of this paper is to know how creativity
and innovation can be used to impact on inclusive growth. The study is focused
on what are the current trends in subject and how can further enhance in
following area:
·
Communicate
more effectively with diverse constituent groups and the public
·
Take
advantage of improved problem-solving
·
To increased creativity and innovation
·
Ability
to learn from people at all levels.
“Inclusive Growth means rapid and sustained
poverty reduction and allows people to contribute to and benefit from economic
growth”. “To provide the mass of our people to access basic facilities such as
health, education, clean drinking water etc. and the governments at different
levels have to ensure the provision of these services".
CERTAIN FACTS ABOUT INDIA -
2010-11
Share in Output and Employment of different
sectors
• Agriculture: 19% in GDP, 53.16% in Employ.
• Industry: 26.3% in GDP, 21.47% in Employ.
• Services: 54.7% in GDP, 25.37% in Employ.
• Employment growth increased in recent years
but quality is low.
• Unemployment rate in
India was last reported at 9.4% in 2009/10 fiscal year.
• There are 458 million workers in India in
2008-09
• Out of this 423 million workers are
informal/unorganized workers (92%).
• Growth in employment more in unorganized
sector.
• Workers in this sector do not have social
security.
Performance of human development has 6 basic
issues
1.
Low
level of human development: India’s rank in HDI (human development index has
improved from 132 in 1997 to 126 in 2004. Adult literacy rate is 61%.
2.
Slow
progress in human development
3.
Significant
regional and social disparities
4.
Low
levels of social sector expenditures
5.
Low
quantity and quality of education and health
Inclusive growth is a broader concept covers economic, social and
cultural aspects of development. Can inclusive growth have synonymous with
equitable development? If we analyze there can be complimentarily between
growth and equity, as economic growth can create opportunities for wider
participation of people and equity is important in itself as well as for as
economic growth by harnessing human resource in broader scale by leader.
Inclusive approach is not a new concept for the world. There has been a
perception that globalization and liberalization policies which have given more
weightage to market have excluded many section of the population. But inclusive
approach is much wider concept and goes beyond great subjects. Inclusive growth
objectives is related to examine performance, challenges and policies in four
inter related elements : agriculture, poverty reduction, decline in regional
disparity and human development.
Inclusive growth has long been proclaimed as the key to reaching the lower
strata and geographically remote area. But is it used as a major opportunity
for businesses by the leaders in emerging markets. Such growth embraces the
customers, employees, distributors and intermediaries. To do business in this
market, organization are showing great interest and credit to be given to leaders
of the companies who are entering in the market, making products and services
available not just at low cost but require innovative manufacturing, marketing
and delivery solutions. In past it was discouraging and had great challenges.
India’s business frontier lies in the thousands of small towns and tiny
villages as well as in the many poor sections of cities. Indian manufacturers and
organization have the means as well as the motive to reach the hundreds of
millions of India’s poor - and has been using innovative business models to
drive inclusive growth.
To better understand how India’s manufacturing sector and various
companies is approaching growth through inclusive innovation. A research was
carried out by Accenture – a survey with 55 senior executives at a
cross-section of companies and analyzed: Manufacturing companies in India have
a big advantage over many of their counterparts in other countries. India’s population
in the income group of $4 to $20 a day, its emerging middle class, is expected
to explode, increasing from 16.5 percent of the population to 49 percent by
2030. The 725 million people who will make $4 to $20 per day in 2030 will
coexist with 710 million people earning less than $4 a day. Large consumer
demand spread across a range of low- and middle-income segments will provide
Indian businesses with opportunities to experiment with different scaling
strategies. Even during the economic downturn, India added 10 million mobile
connections each month, thanks largely to a surge in new cell-phone accounts among
the poor. India’s also benefits from a large pool of entrepreneurial talent. Businesses
now also have the Indian government as their ally on this journey.
Indeed Leadership at the
different levels of managing a business brings dimensions to the organization
go beyond mere knowledge or basic and also uses essential management skills.
Leadership, according to the traditional definition by such classical authors
as C. Barnard and A. Selznick, brings something significant to a business: it
helps to define the company’s direction over the long-term, and gives sense and
coherence to the combination of strategy, policies and action plans, both
inside and outside the organization.
The leaders identify location to work in low-income markets
and with the right mix of approaches help to motivate people and in the process
create a great culture.
GREAT EXAMPLE OF INCLUSIVE GROWTH
1)
The Kolkata-based Indian conglomerate ITC has
figured out beginning in 2000, the company set up Internet kiosks, or
“e-Choupals” (choupal is the Hindi word for “village gathering place”),
that give farmers access to information in the local language on the weather
and current crop prices, offer guidance on agricultural practices and risk
management, and make it easier both to buy farm supplies and sell produce. Some
6,500 of these kiosks can be accessed by more than 4 million Indian farmers who
grow coffee beans, rice, soybeans and wheat. ITC has now also deployed advanced
analytics and mobile technologies to track data from individual farms so the
farmers can improve their pricing, target the right customer segments and
improve their logistics, including crop transport and storage.
2)
ITC-Aashirvaad
is India’s premier brand of packaged flour. ITC has attained the lead by
building on key attributes of its network of village-based Internet kiosks to
create best-in-class products for middle- and high-income households. With the
help of its network, largely made up of farmers in 40,000 villages in 10
states, ITC is well positioned to consistently and cost-effectively procure
different varieties of high-quality wheat. ITC also returns a portion of the
profits from every pack of Aashirvaad product to water conservation efforts.
This initiative has already employed 26,000 people, made possible irrigation on
31,000 acres, and implemented soil moisture conservation measures on more than
37,000 acres.
3)
Indoor
Air Pollution takes a heavy toll each year in India, with over 4,00,000 women
and children dying prematurely from respiratory illnesses. Shell Foundation
reached out to districts of Mysore, Koppal, Udupi and Raichur in the state of
Karnataka, India, through Khidki Amma and talked about simple ways to minimize
smoke in the kitchen. The "My Kitchen, My Pride" campaign by Shell
Foundation in 2008-09 focussed on raising awareness of Indoor Air Pollution in
villages. Typically, villagers use poorly designed, wood fired stoves resulting
in toxic pollution in their homes. The campaign included lessons at schools,
street plays and van campaigns, village gatherings (baithaks) and games.
4)
"Lijjat
Papad-Women and Entrepreneurship" describes the successful entrepreneurial
venture set up by seven semi-literate women from a small community in rural
India. The case gives an account of the
setting up and functioning of the Sri Mahila Griha Udyog Lijjat Papad (SMGULP).
SMGULP
was a cooperative system in which women over the age of 18 could become members.
Starting humbly, with an initial capital of Rs 80, borrowed from a local money
lender and social worker, SMGULP grew phenomenally. In 2002, it had a turnover
of Rs 3 billion and exports worth Rs.100 million. It employed 42,000 people in
62 divisions ....
5)
Godrej
& Boyce that was responsible for developing the Chotukool - an innovative
cooler designed for the poor - spent a long time in the field to learn about
the habits and lives of consumers in low-income groups across rural India. By
systematically applying tools such as observation and interview methods,
language and image-processing skills, and reflective thinking, the Godrej &
Boyce team was able to unearth insights that ordinary surveys would not have
divulged.
6)
Eureka
Forbes launched AquaSure, a water-storage purifier, through its traditional
distributor-dealer channel in rural markets, sales did not pick up. It then
teamed with Basix, a microfinance company, to sell the product. Sales jumped by
20 percent. Eureka Forbes built on Basix’s network of loan officers, who serve
as the link between the company and rural populations, providing customer
intelligence while also marketing the purifiers to the self-help groups that it
meets regularly.
7)
Marico
continues to occupy the number one position in the hair-oil segment across
rural and urban low- and middle-income groups. The “low-cost/fail-fast”
prototyping model has been key to Marico’s success. This model has helped
Marico repeatedly fine-tune product characteristics and packaging of coconut
oil to suit the budgets and usage requirements of low income.
Inclusive innovation is sure to become
increasingly important as all emerging markets - not just India - begin to find
ways to bring poor and rural people into their economies. In the decades to
come, those groups will become critical to business growth in much of the
world. Inclusive innovations will spin off new technologies, give rise to
disruptive business opportunities, and create new avenues for employment and
consumption.
The Evian Group defines inclusive growth as a process which
entails sustainable and responsible creation -- as well as just distribution of
– both wealth and welfare. The notion entails three main pillars that should be
mutually reinforcing:
1. Sustainable & responsible business where opportunities for
those excluded from current growth models are created and where self
empowerment is generated.
2. Social progress and human well-being have to be a pivotal
element of the model and should be demonstrated by the right metrics.
3. Good Governance involves the provision and distribution of
adequate public goods. It should sustain and frame robustly the two axes above
and provide the necessary secure environment to protect livelihoods.
C.K Prahalad coined a number of terms in his landmark publication The
Fortune at the Bottom of the Pyramid. He referred to what he termed the “aspiring
classes” and to the fact that the approach to the market that he advocated
would result in what he called “a more inclusive lens of capitalism”. Indeed a
more inclusive lens of capitalism is the basic survival kit of the 21st
century global economy and global society.
THE CHALLENGES
After profitability, the problem identified is the absence of the right culture for putting inclusive business models into practice and also believe that the talent in their organization is either partly or completely nonaligned with the launch of inclusive models.
After profitability, the problem identified is the absence of the right culture for putting inclusive business models into practice and also believe that the talent in their organization is either partly or completely nonaligned with the launch of inclusive models.
·
First challenge is human resources policies are not geared to
hire and retain employees who are willing to experiment.
·
Second, companies lack mentors, specifically
in the area of innovation.
MOTIVATION DEVOTION
It has been observed with the right mix of rewards & recognition and incentives, employees will dedicate them to inclusive growth. New Delhi-based Mankind Pharma, for example, has built a distribution network of committed representatives. The company’s fundamental belief is that medicine should be affordable and accessible to India’s poor and remote populations.
It has been observed with the right mix of rewards & recognition and incentives, employees will dedicate them to inclusive growth. New Delhi-based Mankind Pharma, for example, has built a distribution network of committed representatives. The company’s fundamental belief is that medicine should be affordable and accessible to India’s poor and remote populations.
To reach customers in low-income regions such
as Uttar Pradesh effectively, Mankind recruits its field staff from low-income
semi-urban and rural populations. According to the company’s CEO, these
recruits are entrepreneurial, persevering and innovative. Rather than hire
these reps as contractors, Mankind keeps them on its payroll to make them feel
a part of the business family. In spite of being very small compared with its
global counterparts, Mankind pays its medical representatives some of the best
salaries in the industry. It also makes it a point to recognize and reward
performance. During the most recent fiscal year, 4,000 of its 6,500 reps were
awarded medals for their performance.
Because of this strategy, Mankind’s
distribution network has become its major strength. The company reaches
practically every village in India with more than 1,000 residents, and is now
one of the country’s fastest-growing pharmaceutical companies, with compound
annual growth of 35 percent over the past four years. Its drugs are among the
most widely prescribed in India.
HOW
THE HUMAN RESOURCES CAN BE USED BY LEADERS FOR INCLUSIVE GROWTH:
the research, identified 4E
concept, if effectively use can help in inclusive growth resulting to
great reach and profitability.
1. EMPATHY
TO INTERNAL AND EXTERNAL CUSTOMERS:
Developing strong empathy is the biggest challenge,
especially when one is doing business with the lower segment. Difficult task is
poor customers or those living in remote
locations are reluctant to express their real views on products because of fear
of comparison with peers. Leaders therefore need to devise new ways to build a
sharper understanding of customer needs. The organization should ensure there
team to spend long time in field just to learn basic habits of poor and make
them aware.
2. PARTNERING
WITH ENTERPRENEURS :
Leaders should identify the true
entrepreneurs who are focusing in inclusive business and with collaboration
(after robust evaluation of entrepreneurs) can make inclusive initiatives more
viable. The focus should not only be in growing market but also educating poor
in health and safety.
3. EMERGE
IN CHALLENGING SITUATION:
Leaders should scale up rapidly once launched
in emerging markets. A prior planning, pilot run and final launch after
incorporating respective changes (if required).
The focus should be in maximum output with minimum inputs i.e The idea
is to think big, start small and scale up fast, but with minimum investment.
Exnovation does not actually mean propagating
a philosophy of not innovating within the organization but in reality means that once a process has been
tested, modulated and finally super-efficiently mastered and bested within the
innovative circles of any organization, there should be a critical system that
ensures that when this process is replicated across the various offices of the organization,
the process is not changed but is implemented in exactly the same manner in
which it was made super-efficient; in other words. The logic is that not every
individual is competent at innovating – yet, everybody wishes to innovate,
which is what can create a doomsday scenario within any organization.
From senior leaders to new hires, people in
the organization must learn to think and breathe inclusion if they are to make
it work and should make it part of their culture.
In 2009 the world can be described as composed of two globes. Two
globes between which there is no intercourse and no sympathy; that are as
ignorant of each other's habits, thoughts, and feelings, as if they were
dwellers in different zones, or inhabitants of different planets.
The rich and the poor…..We need focus on same and to manage as the role
of an organization is becoming very vital.
This is clearly unsustainable morally, economically, socially and
politically. The great and urgent challenge of the 21st century – especially
now as we enter its second decade – is to generate inclusive and sustainable
growth and manage better.
For more information contact :anubhawalia@gmail.com
