Success in the “new world” of utilities lies in the ability to engage communities of stakeholders in new ways, partnering with them to build an open ecosystem where assets in the ground are less important than the interactions that bind them together and the new experiences that they allow for all parties involved. This requires putting in place a new process of engagement and a new infrastructure allowing all stakeholders (utility management, utility employees, B2B and B2C customers, suppliers, regulators) to interact with each other in new and different ways. The future of utilities lies in becoming co-creative enterprises. Read more
Utility as a Co-creative Enterprise
Utilities have long lived in a closed, asset-centric world. Success historically has involved mastering the key value chain steps of generation, transmission, and distribution, developing good relationships with regulators to negotiate favorable rate structures, and providing a good-enough level of service to the customer.
Success in the “new world” of utilities lies in the ability to engage communities of stakeholders in new ways, partnering with them to build an open ecosystem where assets in the ground are less important than the interactions that bind them together and the new experiences that they allow for all parties involved. This requires putting in place a new process of engagement and a new infrastructure allowing all stakeholders (utility management, utility employees, B2B and B2C customers, suppliers, regulators) to interact with each other in new and different ways. The future of utilities lies in becoming co-creative enterprises. Read more
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Brian Shaad
Mera Gao Power (MGP) builds, owns, and operates micro grids in Uttar Pradesh, India serving off-grid villages with high quality, dependable lighting and mobile phone charging services. As of April 2013, MGP operates micro grids in 260 villages of Uttar Pradesh, serving 6,400 households with quality indoor lighting. The company is planning to raise funds for its operations through crowdfunding. In an interview to India CoCreates, Brian Shaad, Co-Founder, MGP, talks about his company's business model, positioning and future plans. Prior to founding MGP in 2010 Brian worked with many NGOs, donors, governments and the private sector developing multi-sector partnerships for solving simple, yet often protracted, development challenges. When he’s not overseeing MGP’s expansion in Uttar Pradesh, Brian can be found on his organic farm in Sacramento, California where he’s helping to revive the region’s small farm economy. Interview excerpts: From your own experience of providing power to villages, what have you seen as the multiplier effects of rural electrification? It's important to note that we provide villages their most basic needs - light and mobile phone charging. We are not an electricity supplier but a lighting utility. And our competition is kerosene. With our services, households get electrical light that is ten times brighter than the light of a kerosene lantern. They get twice the number of light points, a mobile phone charger. They get light for a longer duration, almost three times more. All this, while paying less than what they currently pay for kerosene and mobile phone charging. The most immediate impact of our service is household savings. In addition to savings, we've also seen people getting into secondary income activities (sari embroidery, bag weaving, etc) and extended hours for shopkeepers and tailors means more business. In our villages, the incidences of respiratory illness have come down, because there is no indoor smoke. Children are able to study longer, and communities feel more 'safe' at night. We've seen that socialising continues later into the night. To meet the growing demand for power, government encourage captive power generation by industry. What should it do to encourage power generation by individual households and small commercial establishments (traders, retailers, etc) through Micro-grid technologies? Individual households already have solar home systems. Selco, Orb Energy and BP/Tata are some of the big players in this space. But existing solar systems cater to lower-middle class and rural households well above the poverty line. Traders in many large villages and towns already operate off grid using privately operated diesel micro-grids, though they are often polluting and offer a few hours of light for traders. As with any emerging sector, the best thing government could do is to ensure the new sector is able to get off to a strong start. This means making sure that there is an enabling and favourable environment. It is not about regulating and trying to decide how companies should do their job. What we need is a hand’s off approach from the government. Some say subsidies are required. But MGP operates without subsidies and we believe any sustainable business model should not depend on subsidies. MGP plans to crowdfund its projects. Why are you looking at crowdfunding, instead of tapping traditional channels like banks and stock markets? The micro-grid sector is new and the markets MGP targets are not only off the grid but also the poorest of the poor. These factors present too many unknowns for traditional lenders. Traditional lenders and investors like to invest in a company with a 'product' like lanterns or solar home systems. But as a service company, we're unique in our approach and it'll take time before traditional lenders become comfortable lending to us. That said we're also confident in our business model, the market we're operating in. Our model allows us to offer far better interest rates/returns to potential individual lenders. We've also established there's a demand for individuals to make 'social investments'. But unlike Kickstarter and Indigogo, we're able to offer more than a t-shirt, we can offer a 6-8% return with the principle paid back in three years. What is unique of your microgrid model? What are your future expansion plans? We're the lowest cost micro-grid in operation. We also offer almost twice the amount of lighting / charging time than competitors. This allows us to prove our service in accordance to what our customers can afford (or what they're willing to pay). Our near-term goal is to serve 100,000 households by 2015.
Mr Raja Shanmugam
Mr Raja Shanmugam is Chief People Officer of Happiest Minds, an IT services company promoted by Ashok Soota, a leading name in India's IT industry. Raja has over 24 years of experience in the IT industry. Raja holds engineering degree in Electronics and Communication from College of Engineering, Guindy, Anna University, Chennai, and an MBA from Bharathidasan Institute of Management, Tiruchi. Raja is a Member of NASSCOM Diversity and Inclusion Steering Committee, NASSCOM Foundation’s Disability Advisory Group and CII - Disability Forum. In an exclusive interview to India CoCreates, Raja shares his thoughts on how employee engagement is becoming increasingly important for IT organizations to shape right from their vision, mission, values and CSR activities. Excertps: How do you define employee engagement? What are the areas (such as development of strategies, core values, products to CSR) have you engaged your employees in the recent years? “Employee Engagement” is about how the Happiest Minds are physically, intellectually and emotionally engaged in the growth and success of the company and its customers on a continuous basis. This is the motivation that will help them get up every day and come to office charged up to give their best to whatever they do. Part of this process is to articulate aspirational mission, vision and values that align the team to a common purpose and common way of life in the company. As an early stage company, this also gives us the opportunity to enable the participation of Happiest Minds in the process of building them along with the policies that help us make these policies come alive in the day-to-day functioning of the company. As we grow, the more important process is to enable internalization of these mission, vision and values in every single Happiest Mind – This we do through Mission Vision Values (MVV) sessions by the Executive Chairman, the MD&CEO and the Business Unit CEOs and COOs and the Chief People Officer. Delivered by these leaders who are role models themselves, these sessions are an important means of internalization. The other means of engaging is through participation in social consciousness programs – like the Joy of Giving week, Employee contribution to the Mid-Day Meal program along with the company contribution, volunteering etc. Organizations like IBM and NEC Japan have co-created their corporate core values and business models with their employees. What do you think are driving organizations to co-create such business value with employees? I am not fully aware of the process by which these companies co-created their core values and business models. In general, co-creation helps buy-in from the people who have to ultimately live these values and implement these business models. Especially in large organizations, any such change management process is complex. If there is a prior understanding and acceptance of these changes and its implications among the team through the co-creation process, the chances of changes taking effect successfully are much higher than when the process is driven top down from the executive suites. What are your views or plans of co-creation with customers and other external stakeholders? Do you think it is becoming a business imperative in the software services sector? We already have an Advisory board with some of our key clients and external stakeholders participating in our business processes. We believe it is important for us to have this engagement at the strategy level to build in a much larger perspective of the market and customer expectations than what can be internally built up. The active participation of external board members in our strategy and governance process also brings in a very rich set of inputs that would otherwise not be available to us. In the private sector, your organization is perhaps the pioneer in upholding the vision of happiness. What made you to attempt introduce such an emotional, if not spiritual, subject in business? Our business depends on the emotional well-being of people. Whatever strategies we come up with, if they need to be executed successfully to deliver customer happiness, it is important that our people are in a happy state of mind. Also, if happiness is the ultimate purpose and aim of human life and if most of us spend a major portion of our waking hours working or thinking about work, it makes sense for the organization to make happiness as a central part of its business. Organizations (including nations like Bhutan) that give importance to happiness, have methodologies to adopt to make sure that all their decisions/actions result in enhanced happiness of people. They also have methodologies to measure the happiness periodically. Do you have similar methodologies? Yes, we have a 7 C’s Happiest People Framework that helps us to identify the critical parameters that enable happiness in the company – Culture, Community, Credibility, Contribution, Collaboration, Communication and Choice. Our Happiest People Pulse measures the Happiness of our people based on these parameters every year. Is your happiness-centric approach to business producing any tangible business benefits? I would think we need to wait for at least five years to provide a response to this question with reasonable data points. There are of course early indicators – high levels of retention and engagement among Happiest Minds, record breaking growth rates that requires huge effort and commitment from all concerned, customer affirmations about the difference in experience they have when they work with our teams. The best indicators are the spontaneous responses we get when people visit us – “you guys seem to be a happier lot!” The Indian and global hospitality chains are taking co-creative partnerships such as management contract, franchising, leasing and licensing, for expanding their presence in metros, tier I and tier II cities in India. The underlying aspect of these arrangements, “asset-light strategy”, has it that the independent investor owns the property and the brand holder owns the operations. The industry is all for partnerships between brand and land owners as that make business sense. High Land Cost Prohibits Budget Hotels from Investing in Real Estate High land cost prohibits budget hotels from investing in real estate. It costs anywhere from Rs 18 to 40 lakhs to build a budget hotel room – this estimate excludes the land cost. Land owners know they cannot design and build hotels, which calls for a high level of expertise. Even if they do, marketing them is difficult, as most travelers are looking for branded accommodation at affordable cost. Ginger Hotel’s Chief Executive P K Mohankumar, explains the win-win in an interview to The Hindu BusinessLine: “In places such as Guruvayor, there are many big wedding halls, but no accompanying facility for lodging, especially in the branded hotel category. In many of these places families own large pieces of land, but they don’t have the bandwidth to design and architect a hotel.” For Luxury Hotels, Brand is Asset and Not Real State The luxury hotels, on the other hand, can afford to buy land but they think that investment in real estate is not very strategic to their business. Says Mr Dilip Puri, Managing Director – India, Starwood Hotels and Resorts, one of the largest operators of four and five star hotels in the world, in this interview: “We invest in building brands. The brand philosophy is important to us simply because that’s all we are. We spend millions of marketing dollars in building awareness for the brand and that’s where my investment is. Not in real estate.” Starwood is planning to take its current India number of 36 hotels to 100 by 2015. In the luxury hotels segment, the property owners are also looking for the brand’s ability to market, distribution, strength of loyalty programs, and operating capabilities. Some of the other hotel chains that are keen on the asset-light strategy are Marriott (which is going to have 50 hotels), Tata’s Gateway Hotels (looking to create 50 hotels in the next three years), Park boutique hotels, and Hilton Hotel. The new core competency Apart from brand building, the ability to convince land owners for partnerships is proving to be the new competency for hospitality that can hardly think of building their own properties any more.
Ginger’s Mohankumar tells that his company is focusing on conversion of existing operations, management contract route, and franchise option but forging partnerships is not easy. “There are thousands of hotels in the budget segment in the unorganised sector. To convince them to take up the Ginger brand and be part of the organised sector, is a challenge. Especially in the south, this market is highly mature, unlike the north or east. But most family-run hotels are now facing the heat with branded hotels entering the market.” Starwood, which has about nine brands including St. Regis, Sheraton, Le Meridien and Aloft, lets the land owners and building promoters to decide on what brand they want to have. “But for us, the most important is to make sure that it is the right place, the right partner and the right product. Often, there are some trade-offs, simply because we don’t find that commonality of objectives between what the owners are looking for and what we are. Some people tell us they want to build St. Regis (Starwood’s most premium hotel) in a Tier II town. Clearly, it’s not going to work. So, I should first look at whether the owner is looking for ROE or ROI, ROE being return on ego. Very often, owners get into building hotels as it is a status symbol to own one, maybe because they are in the real estate business. If that happens, to them big is beautiful. They may want a big, opulent hotel. Often, that opulence may not suit the chosen brand. Because, to provide the consistency of a brand you can’t have one hotel which has a 10,000 sq. ft. lobby, and another which has a 2,000 sq. ft. lobby,” says Puri. Last year India had over 700 million domestic travelers. The number of international business travelers is on the rise. Travelers from these two segments look for value for money that the budget hotels offer. According to HVS, hotel consultancy and valuation specialist, there is a requirement to add about 50,000 to 70,000 rooms in the budget and economy segment in India. This segment accounted for 50 per cent of the branded hotels category under construction in 2012. Hotels that invest in required managerial expertise in excelling partnerships with individual land owners, building promoters, construction companies, can be expected to grow well in the Indian market On the occasion of World Environment Day, Coca-Cola India came together with its bottling partners to install solar based microgrid in the Tapkan Government School, making it the first school in the country to be on the solar micro-grid. According to a press release, the school has been revitalized with contributions from Tetra Pak, SRF Foundation and Enrich Agro Food Products Pvt. Ltd. This is an initiative under the Coca-Cola NDTV Support My School campaign, which aims to revitalize schools in rural and semi-urban schools with facilities such as separate toilets for boys and girls, improved access to water and more. Support My School has received nationwide success with the revitalization of over 100 schools over Season 1, which touched the lives of more than 43,000 students across 10 states. The Tapkan Government School was dedicated to the children and community by Mr. Pravin Malik, Environment Manager, Tetra Pak; Mr. Varinderpal Kandhari, Executive Director, Enrich Agro Foods (p) Limited; Dr. Suresh Reddy, Director, SRF Foundation and Mr. Manik Jolly, Director - Solar Solutions Rural, SunEdison. Speaking about the event, Mr. Jaideep Gokhale, Communications and Environment Director, Tetra Pak South Asia Markets said, "We are proud to be part of an initiative that lays importance on the role of education within our communities. The solar panels installed here today will play an important role in revitalising the Tapkan Government School. We are also proud that this event coincides with the World Environment Day, and we are able to stand by our commitment to both the society and the environment." Speaking about the initiative, Mr. Varinderpal Kandhari, Executive Director, Enrich Agro Foods (p) Limited said, “The Support My School campaign has always approached the revitalization of schools through a holistic framework. The campaign offers amenities like sanitation and access to water to fulfil students’ most basic needs. The libraries and sports grounds offer students an opportunity to learn and grow within their environment. Now, these solar panels will power the classrooms through renewable energy, taking the campaign one step forward on its mission to revitalize the education landscape of rural India.” Dr. Suresh Reddy, Director, SRF Foundation said, "It gives me great pleasure be part of this occasion today. The schools have not only been re-vitalized with new sanitation facilities, playing facilities but also with micro-grid solar panels and soon the children will be able to enjoy the uninteruppted power supply. I would like to thank partners Tetrapak, Enrich Agro Food, Coca-Cola and SunEdison for their support in making this happen and we look forward to revitalizing more schools together. I would also like to thank all the dignitaries and community members who have come today and have shown their support.” Speaking on the installation of the solar panels, Mr. Manik Jolly, Director - Solar Solutions Rural, SunEdison said, “At SunEdison, it has been our aim to provide our stakeholders with the best solar services for their needs and budget. It has been a great experience working with the Tapkan Government School in Nuh and I sincerely hope that the students will reap the benefits provided to them. This is the first school in the country to come on to the solar micro-grid and I believe this is a moment of great pride for all of us. I would like to congratulate Support My School campaign partners for the initiative and hope we will together partner on more schools benefitting more children. Gram Power, a business venture, partners with local entrepreneurs to provide affordable, reliable power to rural, off-grid villages and communities. At the heart of the solution is a Gram Power's micro grid that comes with multiple generation options. Depending on the availability of natural resources, the input material - like solar, biomass, wind, conventional sources or a combination of all, can be selected. Gram Power first identifies off-grid communities or villages with less than 6 hours of power supply. With the help of bank or private funding and government subsidies, it sets up power generation and distribution infrastructure of the micro grid. The company deploys smart grid technology: it fixes "smart meters" at the customer's place to remotely monitor quality and quantity of supply and real time increase in demand. Smart grids can effectively eliminate power theft and energy losses. Gram Power then sells 'energy credit' to local entrepreneurs at a wholesale price. The local entrepreneurs in turn sell 'prepaid power' to local consumers. The entrepreneurs can remotely transfer exact power credit to consumer's meter. The company claims that a Rs 10/day of prepaid micro grid power can supply enough power to operate lights, fans, cell phones and TV in rural households.
A Western Union Office
According to the World Bank, only 35% of people 15 and older use bank accounts. Over 4.5 lakh of the total 6.5 lakh villages in India do not have any bank. Just 32% of India’s bank branches are located in rural areas, where over 60% of the population lives. Banks and non-banking financial institutions are evolving new business models and information technology interventions to reach the unreached. The latest to join the bandwagon is Western Union, one of the world’s leading remittance services provider. Having over 90,000 agent locations, including its presence in over 7,000 India Post office and 30,000 bank branches in India, Western Union is introducing a pre-paid card that can be used by people in villages (and the urban poor who do not have bank accounts) to save, withdraw money from ATMs, make payments at shops, and transfer money. Western Union has tied-up with ICICI Bank and Master Card for its pre-paid card business. In a news report, Mr Kiran Shetty, Managing Director, Western Union India, is quoted saying: “Largely, we are serving blue-collared workers, who have no bank accounts. These workers have no amount limit issue but frequency issue. This is a new category and we will not be just limited to payments but want to promote more such products, this year.” For ‘how it works’ details from ICICI Bank click here, and to get the Western Union press release, click here. A product is after all a token of a company's vision. Electrolux, the Swedish multinational and one of the global leaders in household appliances, is introducing a range of premium water purifier products in India, as part of its vision to align its brand with "healthy living products". Though Electrolux has expertise in developing a variety of household products, it does not have any experience in making water purifiers, a key product in the healthy living space. Hence, to fill this gap, Electrolux has just entered into a tie-up with Kent RO Systems, a reputed name in reverse osmosis in India, to develop designer water purifier products. For Kent RO Systems, the Electrolux partnership can help it tap the distribution network of the latter in India and abroad, as well as the opportunity to design its products for a new category of customers, who are looking for designer water purifiers. A win-win for both the companies. |
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