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Effective Interviewing Skilling Managers with the Behavioral Event Interviewing Competency
Leadership Studio
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Podcast
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June 2, 2025
Table of Contents
TogglePodcast Overview: Mastering the Behavioral Event Interview (BEI) Technique
Welcome to Amity Insights, where we explore cutting-edge strategies for talent management and organisational success. In this episode, we delve into the Behavioural Event Interview (BEI), a science-based, structured interview technique that helps organisations predict future performance by analysing past behaviour.
Joined by Dr Vijit Chaturvedi, a leading expert in HR and organisational behaviour, we’ll uncover:
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What makes BEI different from traditional interviews and why it’s more effective.
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The STAR model (Situation, Task, Action, Result) and how it forms the backbone of BEI.
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Practical steps to implement BEI, from defining job competencies to evaluating candidates.
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The short-term benefits, like reducing bias and improving hiring accuracy, and the long-term advantages, such as better talent retention and performance management.
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How BEI can help organisations adapt to the challenges of the post-pandemic world by identifying resilient and adaptable employees.
Whether you’re an HR professional, a business leader, or simply curious about innovative hiring practices, this episode offers actionable insights and real-world examples to help you master BEI. Tune in to learn how this powerful technique can transform your hiring process and drive organisational success.
Let’s get started!
Host (Sushil): “Good afternoon, everyone! Today, we’re diving into the world of interviews, specifically the Behavioural Event Interview (BEI) technique. Joining us is Dr Vijit Chaturvedi, a renowned expert in HR and organisational behaviour. Dr Chaturvedi, thank you for being here!”
Dr Chaturvedi: “Thank you, Sushil. It’s a pleasure to discuss this topic, especially since BEI is such a powerful tool for organisations to hire the right talent and align employees with their goals.”
What is BEI?
Dr Chaturvedi: “Let’s start with the basics. BEI is a science-based, structured interview technique that focuses on understanding a candidate’s past behaviour to predict their future performance. It’s not just about asking questions; it’s about asking the right questions—ones that are tied to the job’s competencies and requirements.”
Host: “So, it’s more about what the candidate has actually done rather than what they might do?”
Dr Chaturvedi: “Exactly! Conventional interviews often rely on hypothetical questions like, ‘What would you do in this situation?’ But BEI asks, ‘Tell me about a time when you faced a similar situation. What did you do, and what was the outcome?’ This approach reduces bias and gives us a clearer picture of the candidate’s abilities.”
Why BEI? Key Benefits
Dr Chaturvedi: “There are several advantages to using BEI. First, it’s predictive. Past behaviour is the best indicator of future performance. If someone has successfully handled a challenging situation before, they’re likely to do it again.”
Host: “What about bias? How does BEI help with that?”
Dr Chaturvedi: “Great question! BEI minimises personal biases because it’s structured and competency-based. Everyone is evaluated on the same criteria, and the questions are directly tied to the job. This removes ambiguity and ensures fairness.”
Host: “And what about the depth of insights?”
Dr Chaturvedi: “BEI provides in-depth insights into a candidate’s skills, decision-making, and behaviour. For example, if you ask, ‘Give me an example of when you led a team through a crisis,’ you’re not just hearing about their leadership style—you’re seeing how they apply it in real-life situations.”
How BEI Differs from Conventional Interviews
Host: “How is BEI different from the traditional interviews we’re used to?”
Dr Chaturvedi: “Traditional interviews are often unstructured. The interviewer might ask random questions based on their mood or what comes to mind. BEI, on the other hand, is highly structured. It uses a framework called the STAR model—Situation, Task, Action, and Result—to guide the questions.”
Host: “Can you explain the STAR model?”
Dr Chaturvedi: “Of course! Let’s say you’re hiring for a project manager. You might ask, ‘Tell me about a time when you had to manage a tight deadline.’ The candidate would describe the situation (what was happening), the task (what they needed to do), the action (what they did), and the result (what happened). This gives you a complete picture of their capabilities.”
Steps to Conduct a BEI
Host: “What does it take to conduct a BEI? Is it complicated?”
Dr Chaturvedi: “It’s not complicated, but it does require preparation. Here’s how it works:
1. Preparation
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First, define the job title and the competencies required for the role. For example, if you’re hiring a sales manager, competencies might include negotiation, communication, and leadership.
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Next, develop behavioural descriptions for each competency. What does ‘leadership’ look like in this role? What does ‘decision-making’ entail?
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Finally, prepare your questions using the STAR model.
2. Conducting the Interview
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During the interview, ask the candidate to describe specific past experiences. For example, ‘Tell me about a time when you had to resolve a conflict within your team.’
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Use probing questions to dig deeper. If they say, ‘I resolved the conflict,’ ask, ‘How exactly did you do that? ‘What steps did you take?’
3. Evaluation
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Use a behaviourally anchored rating scale to assess the candidate’s responses. This scale helps you quantify their performance and compare it to the job’s requirements.”
Short-term and Long-term Benefits
Host: “What are the immediate and long-term benefits of using BEI?”
Dr Chaturvedi: “In the short term, BEI helps you make better hiring decisions. It removes misunderstandings about a candidate’s past experiences and reduces the chances of them exaggerating their abilities. It also provides clear differentiation between high and low performers.
In the long term, BEI data can be used for talent retention, performance appraisals, and career planning. For example, if you know an employee excels in problem-solving but needs improvement in communication, you can tailor their training accordingly.”
Challenges of BEI
Host: “Are there any challenges organisations might face when implementing BEI?”
Dr Chaturvedi: “Yes, BEI can be time-consuming. It requires significant preparation, and the interviews themselves can take 2-3 hours per candidate. Additionally, interviewers need to be trained to ask the right questions and evaluate responses effectively.
There’s also the cost factor. If you’re hiring a consultant to help with competency mapping and training, that can add to the expense. But in my opinion, the benefits far outweigh the costs.”
BEI in the Post-COVID World
Host: “How can BEI help organisations in the current, post-pandemic environment?”
Dr Chaturvedi: “The pandemic has forced organisations to rethink their talent strategies. BEI can help identify resilient employees who can adapt to change and uncertainty. It’s also useful for internal talent assessment. For example, you can use BEI to evaluate your current workforce and identify areas for upskilling or reskilling.”
Sustaining BEI Benefits
Host: “Once an organisation has implemented BEI, how can they sustain its benefits?”
Dr Chaturvedi: “The key is to integrate BEI into your HR processes. Use it not just for hiring but also for performance reviews, feedback sessions, and team meetings. For example, during a performance review, ask employees, ‘Tell me about a time when you exceeded expectations. What did you do, and what was the outcome?’ This keeps the focus on behaviour and results.”
Success Rate of BEI
Host: “What’s the success rate of BEI? Do we have any data?”
Dr Chaturvedi: “Research and reports from consulting firms like Deloitte show that BEI has a high success rate in predicting employee performance. It’s particularly effective for roles that require specific competencies, such as leadership or decision-making.”
Is Your Leadership Team Trained To Conduct Interviews That Reveal Real Work Performance?
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Final Thoughts
Host: “Any final advice for organisations looking to implement BEI?”
Dr Chaturvedi: “Start small. Identify a few key roles and develop competency frameworks for them. Train your HR team and interviewers to use the STAR model. And remember, BEI is not just a hiring tool—it’s a long-term investment in your organisation’s talent strategy.”
Host: “Thank you, Dr Chaturvedi, for this insightful discussion. It’s clear that BEI is a game-changer for organisations looking to hire and retain the right talent.”
Dr Chaturvedi: “Thank you, Sushil. It was a pleasure sharing these insights with your audience.”
This version captures the conversational tone of the interview while maintaining the depth and detail of Dr Chaturvedi’s explanations. It’s structured to feel like a natural dialogue, making it engaging and easy to follow.
Make it even more detailed and raw to the extent to which it is possible for you.
Absolutely! Below is an even more detailed, raw, and conversational version of the interview summary. This version dives deeper into the nuances, retains the authenticity of Dr Vijit Chaturvedi’s language, and includes more of the back-and-forth dialogue to make it feel like you’re right there in the conversation.
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Embracing Digital Transformation About: Mr. Anand Pejawar is an industry veteran with over 37 years of professional experience with BFSI Industry. His major experience ranges for about 19 years in Life Insurance and 14 years with the Banking Industry. He has been instrumental in setting up the most productive integrated model of Bank Insurance and Micro Insurance in SBI Life Insurance which is today considered as a trendsetter in the sector. He has also represented Life Insurance sector in various committees formed by Government of India as well as by IRDI and RBI from time to time. He is currently handling the entire Operations, Information Technology, and International Business for SBI Life Insurance Company Limited. As far as his other credentials are concerned, he has also completed MDP programs from IIM Kolkata, ISB Hyderabad and is also the alumni of Columbia Business School, Manhattan, New York. Quick Glance at the Embracing Digital Transformation Podcast The three focus areas are people, process and technology, and digital transformation must be effective when all three are in alignment. There is a strong emphasis on the transition from just technology adoption to value, experience and adaptability. The discussion was given on the role of culture and leadership in transformation — technology by itself is not sufficient. How companies must transit from traditional to modern data-led digital models. An alert that transformation is a continuous process and not a single project — learning, adapting and engaging stakeholders are all important. https://www.youtube.com/watch?v=yrY77_4_Wdw Q. Where is your organisation in the digital transformation journey? What is the vision of SBI Life and what desired future state it wants to achieve, how is SBI Life communicating the vision objectives to the employees making seamless for everyone to embrace the change? Ans: Coming to today's question of digital transformation journey especially for my Company which I represent, which is SBI Life Insurance Company Limited. SBI Life Insurance started operations way back in 2001 so typically we have completed 20 years of operation in the Country in the private sector life insurance business. We are into the business of life insurance. We started as a subsidy of SBI and BNP Paribas Cardif. SBI was holding 74% stake and BNP Paribas was holding 26% stake. That's the way how the Company started and in 2017, the Company went public, and we are today a listed Company as far as the status of the Company is concerned and SBI still holds a majority stake in the Organisation. We have a lot of foreign institutional investors who have been our equity holders from time to time. Now, coming to your question about the journey of digital transformation with SBI Life. In SBI Life we understood the terminology digital transformation quite early and way back in 2017; to be precise we looked at how we could transform the various processes and systems of the company using latest digital technology. Now one thing what we found at that point of time was lot of people thought that digital means just converting the existing processes that you have into a digital format and that they said we are digital. Q. How you can better them, how you can improve the user experience and when I say user experience the various stakeholders that are there for the organisation typically for a life insurance Company; we have four major stakeholders, but customer obviously is the king so he is the centre of everything but then you have distributors as you all know in India still life insurance Company is distributed face to face to a large extent and I will come to you why I say to a large extent, so you have the distributors then you have the employees because they after all are the ones who run the organisation and deliver the service that is required and last but not the least the regulator. Ans: So, when we look at digital transformation, we typically look at all these four stakeholders that are there and based on this, the vision of SBI Life of on the digital transformation is, how can SBI Life be the preferred life insurance for the people of India? As I said, we are a subsidy of SBI. SBI is a banker to every Indian; so, naturally, the corollary goes that, can SBI Life be an Insurer to every Indian; can we offer insurance policies to every person in India who's there and that's how we have looked at the digital journey starting from 2017? Now, the question is how does SBI Life communicate the vision, objectives; the very simple thing is that this whole thing started from the thought process as I just explained to you why we wanted to move into digital transformation. State Bank of India, who was a primary distributor of insurance for us; almost 65 to 68 percent of the business is generated from State Bank of India and associate banks now, which are merged into State Bank of India and also the rural regional rural banks sponsored by SBI. So, we have 17 of them, so totally about 24,700 branches plus 7500 of the RRBs which are there. That's the entire distribution map only of bank assurance channel if I look at it. And the second, is the Tied Agency; we also have one of the most productive Tied Agency in the private sector life insurance companies; almost about lakh and sixty thousand distributors of life insurance who are tied agents with us. And if we have to look at this mass and how do we bring them through digital medium in an ecosystem that can help sourcing of the business, processing of the sourced business, issuing the business and most importantly servicing of the business. So, these are the four steps that probably we looked at, concentrated in the digital transformation that we looked at. Now, how did we go about doing this change? I think, today, I don't say this but there are a lot of studies which have happened including Limra which is the Life Insurance Management Research Association of USA who came down and did a study in our office and SBI life in 2017, set some unique concept called Digilab. Digilab is nothing but a digital laboratory where SBI Life runs a particular process, and the process is something what we called as ETPR. ‘E’ for ‘Evaluation’ of the technology so any technology which comes and which we see may be used in insurance, not used in insurance, used in some other field we try and evaluate this technology in the Digilab and it's an in-house in-built Digilab, it's not an outsourced one. So, we evaluate the technology with us and find out whether this technology can help the life insurance business that we are into and help us in some way to either reduce the TAT, improve services, give a much better user experience, have cost effectiveness so there are about five to six parameters that we look at whether this technology satisfies those things. If it happens then we move to the next stage which is the testing stage. ‘T’ is for ‘Testing’. Here we have a small team which works on this technology and sees where it can be used, which function, whether it is front and sales whether it is mid-office, whether it is back office, whether it is servicing, where this technology can be made use of. We have an IT champion; we have a business champion and then we create a small prototype. Next, ‘P’ stands for ‘Prototype’. So, we create a small prototype to see how it works and what kind of result do we get out of this and once we are satisfied that this prototype gives us the desired results that we are looking out for what we had in mind before evaluating this particular technology then we do a rollout throughout the company. So, this is the ETPR Methodology of Digilab that we have introduced in 2017 and friends I am very happy to say that as on date, almost 17 technologies have been rolled out in the organisation and another similar number are on an evaluation testing prototype stage where we are likely to roll it out very soon, very happy that this is something which the organisation gave us a free hand to do it, we could get the collaborative effort of all the people involved IT, Operations and all the teams which are working into it and bring it. So, what we have done in digital transformation is a complete collaborative effort in the Digilab that is bringing up the entire change which is today probably a lot of people are telling us that SBI Life stands at the forefront of digital transformation as far as life insurance business is concerned. Q. Now, in today's network based digital organisations are managed and structured uniquely than conventional businesses as you are talking about that you have a system where you evaluate, you test, so what is the right approach and mindset of top management to design manage and grow a digitally driven business to some extent you have explained me something but I would like to know more than what is the mindset of the top management in dealing with ‘being a leader’ and how do you take it forward? What is the road map of this digital transformation? Ans: When we started in 2017, we never thought we would be leaders or we want to be number one, that was never the vision. When we started in 2017, the focus was on how can I improve the customer experience? Life insurance is the only product I think which is with any person who has brought it and if he has bought the right product in the right manner, I think, this is one of the financial products which is for the longest tenure. Even I think fixed deposits are available only up to 10 years. Here you have life insurance policies ranging from 20 to 25 years, some of them issue whole life policies. So, we went one step backward. How do I create that customer satisfaction and that satisfaction leading to customer delight and that took such a long period? Holding on to customers’ likes or dislikes, holding on to the customer's viewpoint for such a long period itself is a big, big challenge and that's where we found that let's try and see how we can work. As rightly said by you, most of the organisations which are there have typical silos which have created over a period of time, which are these traditional structures. I am not saying they are right or wrong; just understand, when I am saying these things, but these are which are there right from beginning so every big organisation has an IT department which is there to put the IT as major function but what we did here is instead of carving out, instead of creating a separate digital vertical and then putting it against or either parallel to IT department, what we did as the first thought at the top management was that we created a technology and innovation vertical within IT. Because whatever we may do in digital, it finally has to integrate with my main systems, the main IP systems which are there. So, the people working on digital must have a clear vision, clear idea of what is available on the main systems which are there on which the company runs; for example, in an insurance company it is the policy management system which is the heart of the entire organisation, now if I have to do huge amount of digital transformation I cannot go and change the main system or the core system which is there, which we call it as PMS ‘Policy Management System’, so I need to create the digital transformation on the periphery of this particular thing. Check Out Our Programme Q. Why is digital transformation required, is it because everybody else is doing it we should do it or is there some logic, some view, some thinking on the digital transformation that is required, and that was a very-very important thing that we took up in the beginning? We wanted to completely change the customer experience by bringing in the huge technological innovations that are available in the universe. How can that be done? There are various methods of doing it; the most commonly used method is Agile approach. Ans: Yes, I absolutely agree with Agile, we came up with something called ‘Phoenix Agile’ approach of going ahead, what is ‘Phoenix Agile’, we first identified the pain points which we felt are there in the organisation as far as digital transformation skills. How do we look at these pain points and how do we come out with quick logical scalable Agile kind of solutions to these pain points? For example, all of you know that Worldwide, when there is a study done on why people don't buy life insurance on their own, one of the big things that we found was that the buying process is very, very cumbersome. You need to fill up a 12, 14, 16-page proposal form attach so many documents along with it, do so many things with it, it's too cumbersome. I would probably do 10 things more than buying a life insurance. So, if I look at it from a customer side, how can this digital transformation change the entire buying methodology of the customer? How can it make it simpler; how can it make it more Agile while there are so many things available in the financial ecosystem of that person? Can these things be easily integrated with the permission of the customer and make this entire journey which the customer felt was cumbersome into a very simple process on a digital platform? That was the thought process which became the second thought process. As I said, there are 24,700 branches of SBI associate banks when it got merged with another 7000 branches of the Regional Rural Banks if physical forms had to move in from these locations and SBI as you all know my dear friends have got branches in Leh, Ladakh. I have got branches in Kanyakumari; branches have grown in Baruch and Kutch right up to Orissa on the other side. So, wherever you go in fact there is a joke almost 13 years I was in Marketing and Sale so when I used to go and market this thing, the people used to joke around that a place might not have a post office but there will definitely be a branch of State Bank. So, if those branches are supposed to generate business and send it to our offices, this required manual movement of these documents obviously when there is a manual movement a lot of dislocation, a lot of things happening, documents getting lost in transit and all this. So, this was the second way how do I create a platform where I get rid of this paperwork and then still make the life simpler for everything, so this is exactly what I meant by ‘Phoenix Agile’? No, I mean, there was a purpose and what was the purpose? Purpose was customer satisfaction, ease of operations and how do you make life simpler for all stakeholders not just the customer the distributor the employees the regulator and still give a better experience to the end user, which is the customer, so that was the whole purpose. Q. I just wanted to know, because as you said the buying process is so cumbersome; there is a distribution channel which is very huge, so, all these are existing conventional processes digitalizing them into digital transformation is a very big challenge and so what is your viewpoint on this how does SBI Life manages this? Digital transformation will always, and I will emphasize on the word ‘always’ disrupt everything whether you like it or not. So, the first thing, I think any organisation when they look at digital transformation is, this is going to completely disrupt my normal way of functioning, that should be the basic underlining principle; otherwise, there is no sensing getting into digital transformation. If I want to just transform my existing physical formats into a digital format, I don't consider that as digitization. Now digital transformation according to me is the disruption of the process starts from the disruption of the existing thought process, everyone in an organisation is used to a particular pattern of working, in digital transformation, this gets disrupted first. So, mentally, the employees must be told to practice that every digital transformation is going to be disruptive and it is going to disrupt the way how we are working today. So, first point I think what we took into consideration was disruption of the thought process itself. I was doing a particular processing of a particular file in this manner now it's completely changed I need to reskill myself to get the whole thing done and that itself becomes a resistance from the employees. So, along with the thought process, I think, making the staff or the stakeholders understand the importance of digital transformation and the benefits that it will give to them is a very, very important. Anyways, this process SBI Life did in a very, very systematic manner throughout the Company. So, the sales guys manage the sales part of it, the operations guys manage the operations part of it, the back-end people started looking at the back-end digital transformation part of it. The second disruption which happens is the process disruption and this again is very, very important. Now, the basic idea of digital transformation is that the process should be faster; there are some legacy processes which are there which takes a lot of time, a lot of duplication, so when we do a digital transformation, we look at it end to end and see what can be knocked off, how the process can be fastened if required shortened but still giving a better experience to the end user. The third and the most important disruption according to me is the system disruption. As I said, today all Companies are computerized; every organisation however big or small is completely computerized now when you go for digital transformation the system changes, the entire ecosystem in the office changes how you are processing a particular life insurance proposal at the beginning of the digital transformation how we are doing it now it's completely different. I will give you a small example about digital transformation in SBI Life and how it actually changed the mindset of the people. Transforming from this big, long proposal form and going and so many information coming and then earlier we used to ask for salary certificates income through KYC certificate, whole lot of documents and in India, a complex Country you know that everybody can't give every document so that's also a fact of life. So, in a digital transformation how do we make the whole process simpler, so we first came out with the platform to source proposals that was the first, because finally the acceptance of this digital transformation to happen from the front which is the sales guy who's bringing business for me. Today he used to go with the bag containing proposal box and different proposal forms for different kinds of policies and all that stuff so ULIP you have a different form, your term you have a different form, endowment you have a different form, so you used to also get worried about how many forms do I carry and what do I do. So, what we first did was we created something called mobile connect; so, today entire sourcing of the business happens on a mobile application of a distributor. Now look at it the very thought that the 12-page form has been converted into an application which is used on a mobile, that thought process is completely different. Secondly, distributors are of different categories; you have tied agents who are distributors, in certain official areas you have 12 standard passes who are distributors may not be knowing how to use this technology in a more effective manner. In India in certain places, we still have 2G, 3G working on so we had a big challenge on how to get into the M-Connect that is there, but I am very happy to tell you that today the entire 99.98 percent and I am not exaggerating is sourced on this M-Connect application. So, whether it's a Regional Rural Bank or whether it is SBI or whether it is any other partner bank or my tied agents, all these people are sourcing policies through this mobile application. Last financial year, which is 2021, as of March 21 we could manage more than 20 lakh proposals on this mobile application and we have gone to such an extent by getting digital transformation that today for certain category of customers, I can issue paperless, pen-less policy. Some of them might not believe some of them might laugh but I can tell you that this is possible because without this M-Connect platform that we had we went and got connected to the financial ecosystem with the permission of the proposal hold up. So, we connected this platform through NSDL for PAN verification; UID now for the Aadhar verification then various credit bureaus getting their credit scores then we went even to IIBI which is Insurance Information Bureau of India which is a repository of the entire insurance policies which are active and there we got that API integration done and today if the person has got information available on these platforms we don't ask for any paper, we neither ask for KYC paper we neither ask for Aadhar number or your financial documents or anything. We have data which flows in on real-time basis in our system and gets done. So just imagine 20 lakh proposal forms coming from all over India in physical format collection is the problem, scanning is a problem, data entry is a problem, processing is a problem, storing is an issue. Today the whole thing has been reduced in a digital format. Q. Even if you scan it the file size is so heavy transmitting that data also takes a lot of time. I would say although as you were talking about the disruption part that how it used to happen 20 Lakh policies and so much of documents now although most insurance customers in India still prefer to purchase from an intermediary wise like an agent, bank, or broker. The evolution of digital sales and service offering is changing the ecosystem of the industry. With the emergence of new technologies insurance sector which is Robo Advisors we have heard of data powered systems and much more. Ans: There are technologies available today which can compress it up to ninety percent; those are good technologies. I will be using a lot of those technologies. Now, the second, is as I said we had distributors in northeast. I have got distributors in Nagaland, Aizawl, Assam, Arunachal Pradesh, Sikkim way down in Kanyakumari in Bharuch and Kutch and here on this side till Bhubaneswar and Orissa and Keonjhar. Just imagine, even if I tell you the names of the kind of population which is there, the kind of people who sell policies there, how do we get the entire information at the same time what is the process where I can enable a sales guy to be up to date in whatever information is required to do a very correct sale that is very important in life insurance, as I said this is one of the longest financial product that is available in the market. So, we created something called smart advisor pool application for the distributor. Again, this is in-house in my Digilab itself no external agency being brought in to develop this. Our own people SBI Life people have developed this in the Digilab, and today entire processing happens on these two applications which are there, and we have put all the required infrastructure security features in place, so, no information of the customer can be stored on the mobile application after it is being fed in it automatically gets deleted and moves into my system. The distributor can in no way can retrieve that data or misuse it. We have MDMs and DLPs which is Mobile Management Systems in place. We have DLPs that is Data Loss Prevention Systems in place, so every possible info security systems have been put in place to ensure that this digital transformation does not allow leakage of data outside the ecosystem and this is all with the approval of the customer. So, today the customer is very happy this year as of March 21 we are the largest company in terms of number of policies issued for last so many years, but we have already exceeded 16.5 lakh active policies which have been issued only in this year of pandemic. It puts SBI Life at the number one position as far as numbers of policies are concerned. So, this is the digital transformation and the thought process that I wanted to share with all of you. Looking to Boost Operational Efficiency Through Digital Innovation? Discover How Q. How this transition is happening with RoboCops we have heard these terms as you were mentioning is that this is happening 12-page document is compressed to a small file in the mobile system? So how these distributors are coping with it how they are being trained how they are taking this from traditional to more digital means of business? Ans: See, whatever digital assets a Company may introduce, I think, one thing all of us will agree that if the digital assets are not adopted and adopted in the right manner, in the right usage, it's useless. Now, if I look at the sourcing application or the smart advisor, which is an enabler for a sales guy to do the sales, how do I make him use that application? So, what we did was when we created this testing module and the prototype in the Digilab, we actually collected some very good sales people from the bank and from our Tied agency. A group of people from various locations, not only from Bombay, we had some people from all over the place because we needed to also get the right feedback before we rolled it out on a PAN India basis because once you roll it out on a PAN India basis, it's difficult to control certain things. So, we took all the people from PAN India and then we gave them this application and said, please use this application and tell us what it is, you are the champions or the ambassadors of this application. So, look at it first of all we tell them that you are the chosen few to experiment this application you are an ambassador and then you look at it and come back to us with your feedback, if it's a good feedback we will definitely incorporate this in the application. Let me tell you, this played the entire game changer for the Company to use of the distributors. The news spread that this people are being chosen to do that, so people started asking why we are not given, we also want to use create that pull factor because, in life insurance, we are always told that it's a push product nobody goes, and I say I want life insurance. At least in my experience of banking in India overseas wherever I have worked I have never seen anybody going and saying, take my cheque, say of ten thousand rupees I need a life insurance. The agent has to catch the guys at every possible place and that's one of the reasons you spoke about marriages, life insurance agents are never invited for marriages. So, coming back to the point is how do you create that pull factor for adoption of this particular technology. Now, once these small groups of people started giving feedback, we started incorporating the good ones acknowledging the fact that you have given a very good thing, and this has been incorporated the moment we said that, and we released it we found the usage going up because more and more people started using this application. Then we started loading it with more and more features today the smart advisor application that we have developed is like an SBI Life office in a pocket of a distributor. Whatever he wants information about the product, about the process, about the policies, about the proposal, which stage it is, what has happened, renewals not coming, every possible information is available real-time to the distributor. To such an extent when we went and changed my CRM next, the CRM module which we had, we went and changed and introduced a new one, we connected the CRM next with smart advisor, so if you are a customer and you call up my call-centre, the talk between you and the call-centre executive gets noted on CRM and that can be seen by my sales executive. So, if your sales guy is coming to meet you for some work just before starting from home to meet you, he just has to look at it what was the last conversation Mr Ashish Sahu had with my call-centre and what was the commitment given to him, that is available absolute on time online. So, this completely changed the mindset of the user it started using more and more so we could monitor, who is using what is the performance level, where is it dropping, why is it dropping so we also at the back end from the IT side went on improving the infrastructure, improving the back-end support and all that stuff. So, to such an extent where today my advisers whether they are bank employees whether they are Tied agents, Corporate agents, whoever they are, they don't have to even keep their customers phone number in mind, he just has to go and check the renewal status and if the policy is renewed, he has got a small icon of a phone he just clicks that icon and he gets directly connected to his customer, he wants to send some information on his email, there is an email icon he just clicks the email opens up email gets directly connected right you. If the customer has given an option for a WhatsApp communication, because that is mandatory that we get the consent of the customer so that consent gets noted and it is seen on this smart advisor he can also send the communication on WhatsApp. So, whatever greatest developments happening in the ecosystem, we try and bring it up in the smart advisors so today I am sure every advisor before he leaves his house, will look at the smart advisor application to such an extent that if today he is coming to your area to meet you we have given him GSP system location where he can be told how many other customers of his are in that vicinity of two kilometres in case if he wants to meet. So, the moment you enable your guys to use this to make them rely on this more and more, give the right information, I think, the usage goes up drastically and this is something what I think is the magic of adoption, adoption, and adoption. This is the only mantra I would say and the top management driving this entire digital transformation is the only magic that can happen in the system, without this I doubt whether any organisation can claim success in digital transformation. There are huge resistances in the beginning but once you make them understand how it is going to benefit them rather than the organisation, the usage goes up fantastically well that that's my experience in SBI. Q. Adoption is one way you had managed the distributors, identifying the best salespeople, and creating some kind of a competitive synergy among them. As, you said that some people said why we are not involved in this so that is something which actually as you rightly said it's a push market where you have to push the product. So, in this scenario getting involved with distributors is something I think that may be the biggest booster in success of probably SBI Life. Ans: I will just add, I think, the main success of SBI Life in this is, I think, understanding what the requirement of the environment is. We don't develop applications because we want to develop and throw it out in the ecosystem, no, for example as I said if your policy is for 20 years, how do I ensure that you are engaged with SBI life for 20 years. 99 percent of the customers in life insurance have got a big problem if you people don't come to us for renewal, you only contact us during renewal time. Now, how do we ensure that SBI Life is on top of mind of this customer. So, we came out with an application called Smart Care. Right from the time you signed the proposal form, not even your policy is issued I am going one step backward from the time you have signed the proposal form you are asked to download this application on your mobile and register on your registered mobile so what happens is I also look at the security features which I am providing to the customer, I am getting his mobile registered I am sending an OTP on the registered mobile he enters that and then he downloads the Smart Care Application. Now, Smart Care will be with him till the policy matures or the death claim is paid to the customer. Just imagine, 15 years, 20 years, 25 years whole life and today I have created with the help of IT digital operations team an entire ecosystem around the customer to keep him engaged. He can track his proposal. The proposal has gone to the underwriter, underwriter has accepted it, it has been issued, it has gone to my e-repository, so no physical policy to be delivered; it gets into demat format but there is a soft copy available on this Smart Care then at every month we keep on, if he is a unique policy, we keep on giving him the fund information. So whole lot of customer engagement program developed around this application, so the customer keeps on looking at this application at regular basis he is prompted to use that, he is prompted to open up and see what is happening like for example you have the credit policy been declared by Reserve Bank of India small snippets are sent the budget. They are declared snippets that are then sent all these things which are more of a personalized nature in getting created in the system and that makes the customer addicted to this particular app. Today all of us are working on apps, nobody works on big desktops and all that everybody is working, whether it's a banking app, whether it's an insurance app, whether it's a mutual fund app including manage matrimonial apps. Q. What is the emerging trend in customer preference in life insurance industry in India? Ans: I was only saying our bigger challenge earlier was how do you bring all the constituents of the stakeholders to participate in this. One thing which you found very interesting, and I think SBI Life has got a fantastic team of employees whenever you want to bring out an app, you always call for names from all the employees and the kind of response we get is fantastic. We have a difficult time choosing, which one to choose and why but you will be surprised the way these people think about the names, even Smart Care. Why was Smart Care named as smart, why was smart advisor named smart advices, and this was given by employees when we called for these names and said okay, we have come out with an app and we would like to name it, would you like to suggest a good name for it. So, as I said, a collaborative effort on every front. So, somebody is given a name he is waiting that whose name is going to get into this app and then he's going to try and see what it is. So how do we do it all the levels at the employee level; right at the lowest level obviously there is a push from the top, there is a push from the board, from the MD, CEO, and the people below it but yes, we take the entire mass of employees and the distributors who are there to get this digital transformation and that is the true sense of the adoption that is done. Which you had in mind I think that is the real sense of digital transformation otherwise it is only digital asset which I also have need to not in the other sense of need to o but yes, I also have a digital asset in place, but it is there in the shelf nobody is using it. Here is a case where you have come out with difficult transformer assets you have done digital transformation you have changed the entire process of how policies are issued. So, it is not just one small application which takes care of it and that is where the Digilab comes in play. Vendors will come and tell you I have developed this particular product for you which will take care of this but what before and after while in Digilab when we look at these applications or we look at it as an entire process end-to-end process of how things are to be managed if this thing has to go live that I think is crucial for our digital transformation journey of SBI Life. Q. How are these tools going to help the insurer in providing a hyper personalized customer experience given the fact that AI plays a very important role? What are the key technology and labourers for SBI Life? Ans: In the last almost four to five years, let me confess I think the technical advancement that has happened overall, has been fantastic, has been absolutely fantastic you may call it, or you may give it whatever name you want. You may give it machine learning, artificial intelligence, robotics, or any name that you call it. I look at it as to how can you as an organisation make use of this technology which is available to you to improve various functions of an organisation. Now typically in a life insurance Company, my function starts from acceptance of risk, which is my underwriting process, the proposal has been synced-in into my system through M-Connect it comes into my system now for an underwriter who is doing it; how can I give him the resources through various technological tools to make his life simple, keep in mind it's a paperless, pen-less transaction so there are no papers floating around. So, then we make use of analytics, analytics is used in a very, very big way in all the insurance companies today and it is used in almost every aspect of insurance operation; so, whether you look at new business whether you look at underwriting whether he's a high-risk customer, a feminist customer, a low-risk customer; all this bifurcation is happening based on analytical models which are inputted in the system which is there. Go one step forward. Renewal. Renewal is a very, very important parameter for a life insurance Company that tells you how good your quality of sales is, how good your customer base is and that actually helps the life insurance company to build the embedded value of the organisation. So, the more renewals I correct, the better value for my organisation. Now, here there are analytical models which tell me whether this guy is going to pay me on time, likely to pay me on time or likely to delay or may default. Earlier, every insurance company used to do ‘carpet bombing’ of the entire population by calling them. So even if you are a person who is very dedicated principled perfect on due date you ensure that the renewals are paid you would still get a call “Sir, your renewal is in your own hand” and then it bugs you. With help of analytics you can completely redesign this strategy for renewal management and companies are doing it SBI Life is doing it in a very big way since 2017 and that has actually helped us to increase our consistency. In fact, just to give you a small example, which, my board meeting which happened has also declared to the entire country in the five-year 61st month persistency that means the person who has bought policies five years back is still paying on my renewals. We are the highest in the private sector industry. So, with a large case of policies if we can manage that it is only and only because of analytics that it is possible. Analytics is today giving us the right information of whom to contact, when to contact, why to contact and how to get that contact done. Analytics also tells me whether this particular person views his email after seven o'clock at night or very early in the morning at seven o'clock in the morning, it tells me whether he likes to be contacted on mail or on phone or WhatsApp or whatever. So, now whole lot of analytical models which are running right through into renewals into wealth management are very, very important function for a life insurance Company. Even there we are using the analytical models in a big way we make use of machine learning. We make use of artificial intelligence in a big way. Robotics is going to take a big size in the coming years. It has already started companies like us have already rolled out processes under robotics and this is again going to be a game changer on the operation side. It is going to completely redefine the system, redefine the way things are done, 24x7 error-free. Everything possible that you thought of and can be made of by robotic applications which are in place. The last one which has still not entered the Indian life insurance industry is blockchain technology. Fortunately, about 14 companies came together in 2017 and we have done through proof of concepts on blockchain technology, very good proof of concepts of blockchain technology and those have been very, very successful. Let me tell you that the only question is how to take it and launch it and actually actualize the blockchain technology in the Country but yes blockchain technology is going to open up completely new vistas for digital processing in the Country and that is something which is, and I am personally looking very much interested. I am very much interested into blockchain and how this can completely turn. We have done a lot of work on blockchain but still a lot of organisations externally who need to come in and join hands and then work it out, so we are all in that, all the fellow life insurers are in the same thing of how to come together and get you done but this is something. Q. How do you think live insurance companies can prioritize upskilling and re-skilling employees and develop operating models capable of responding to changing demands as you said it's ever changing, it is very dynamic and position themselves in forefront of future proofing their workforces with so much technology? Ans: Very good question which you have asked and especially in today's pandemic scenario, I think this carries a lot of weight. What we found is that in life insurance everything depends on trading. The more you train your sales guys, the more you train your operations guys, the more you train your people the better output you get, the better things happen. When the entire thing is under lockdown, how do you train people? Training was always face-to-face. Huge organisations have created huge infrastructure for training. Today those infrastructures can't be used because of the protocols that one has to follow. So, SBI life came out with a fantastic digital method called e-Shikha; so, today we have a digital platform for our sales guys, for our operations guys, for our other than non-sales of operations people employees who can get trained on the e-Shikha module so whether it is pertaining to sales, pertaining to new products, pertaining to new technologies, new developments whatever you would like to decimate in your employees or your sales force this becomes a wonderful tool to such an extent where we have created small videos on particular subjects not actually in 20 minutes because generally your capacity to listen to more than 20 minutes. Small-small snippets, small-small capsules on different topics of interest so it could be a small capsule on underwriting how do you underwrite your term plan, how do you underwrite a ULIP plan and how do you underwrite a traditional plan, how do you service, how do you change nomination, how do you change your mode, how do you address these small-small things which are required? You create small capsules, push it through the digital mode; the person when he is traveling or even at home, he just clicks it looks at it listens to it there's a visual there is an animation which is given he understands it very well. He can keep on calling it back and re-looking at it and understanding it again and again if he wants to do that which was not the case earlier when face to face used to happen, but e-Shiksha or e-learning is something which is definitely going to help. It is going to ring fence the entire population. Not only that there is a study in US which was done earlier they used to say people used to leave organisations because of bosses, now they don't leave because of bosses; some people who have left you are ready to come back and join you if you have joined another organisation they want to be trained, they want to be skilled, they want knowledge enrichment to happen, they want skill enrichment to happen and all of this is today being done through digital methods. Q. What has been the impact of COVID-19 in life insurance sector in India? Ans: COVID has had an impact on the life insurance business, let me tell you that. I would like to reply to this question in two ways as far as the business of life insurance is cut concerned it's definitely impacted. Impacted because companies were looking at high growth, high things now that has somewhere got nullified to a certain extent but fine no problem, we also understand how the economy is and how it works and what happens. I think the bigger contribution what life insurance company has done to the economy is supporting the equity markets. So, all the money which has come into the ULIP funds of the life insurance Companies have been very well invested in the equity markets thereby giving the people the live policyholders very good returns. So, if you look at the returns which some of the ULIP products have bought; they are extremely good and much more than what probably people expected to get. That's on the returns part of it. Some of them who have put into that market obviously that will depend upon what is the economy of the country, how much is the interest rate, whether our RBI reduces it, increases it, that has got a direct correlation to all that. The most important thing what has happened in the Corona period, the COVID period is that every organisation is doing huge amounts of work and I am stressing on the word huge. I am not saying that it is something which is great; I am saying huge amount of work to support the Corona Warriors through these CSR programs that are implemented by every organisation and I am very happy that every organisation including SBI Life is doing a whole lot of work on the CSR to support the COVID measures that have been taken. Earlier it was providing the PPE kits providing so many things to the Police Force, the BMC, the Doctors, all those people who are there and getting things done. Now all insurance companies are trying to see how we can support vaccination drive, which is very, very important if all of us get vaccinated the third wave has got nothing to fear about it. Let the third wave, fourth wave come you will be vaccinated, and people will still be in a position to continue with their lives and do it well, but the most important thing is how do you ensure the vaccination drive goes to the last mile and I think that is the area where most of the insurance Companies are working today regulator has also guided us on many things as to what we are supposed to do. Wonderful guidance that has come from IRDAI and let me tell you every organisation in COVID has been doing it. Most importantly and this is something which I want to tell all the viewers, life insurance Companies have been paying COVID death claims at the fastest possible time. We have been paying it if all the documents are received on time even through a mail we need not even wait for our physical copy of the document. We have settled COVID claims in less than three working days and look at the amount of COVID deaths that have happened, we are sorry to say that money can't replace the person but at least it will allow the dependents to live a very decent life which the particular person or the life issuer had thought for his families. So, one is on the on the equity support side, the other is on the death side, third is on CSR part that we are working on especially now in in phase two, yet we are putting a lot of efforts on the vaccination drive we are wanting to do a lot of camps where people get vaccinated. We are trying to spread the information of how the vaccination can be done, how the registration is to be done. Every insurance company is sending mailers, messages to their employees to the policyholders to the distributors asking them to get registered and get vaccinated and the last and not least is how every insurance company is trying its best to pay the COVID claims at the fastest possible pace. So, I think this is the way how life insurance companies are trying to do their little bit in this difficult time. Is Your Business Ready to Thrive in the Digital Age? Start Your Transformation Journey Senior Leaders People Managers Individual Contributors -
Introduction to Blue Ocean Strategy: How to Start Your Growth Innovation Project Speaker: Mr. Ioan Carpus, Managing Partner at Six Paths Consulting Interviewed by: Dr. Nitin Batra, Head of Amity Institute of Training and Development About: Mr. Ioan Carpus is an apprentice as well as a practitioner under one of the world's foremost leaders in innovation, Mr. Chan who has also links with INSEAD. Ioan is an innovation adviser and Blue Ocean Strategy, expert. He is also certified by the INSEAD Blue Ocean Strategy Institute. He has experience in applying this approach very widely. He has worked with successful projects with names like Heineken, Bridgestone, Astra Zeneca, Goodrich, GSK, 3M ALD Automotive, amongst others. He has worked personally with W Chan Kim, the Founder and Co-author of Blue Ocean Strategy and worked with the Malaysian Government as well as the private sector. He is based in Belgium with his family, and he spends time in Europe and elsewhere supporting clients. https://www.youtube.com/watch?v=Utqd8XomVyQ Q. Tell us also about the multiple options that you had after INSEAD. Why innovation? Let's talk about you, your family, about Belgium and then why innovation? Ans: I'm born in Romania I thought I will become a lawyer or judge, so I went to Law School of Romania and then at 23 my career plan changed. My wife wanted to pursue PhD, we moved to the UK and I already made the first switch in my career to web development, getting completely new skills, enjoyed that but I realised that and then BI would allow me to get a broader understanding of business and do something that I like. So luckily, I was accepted in INSEAD and I studied in both the Singapore and Fontainebleau campus where I met Nitin, we had good times together both in the study and in social groups. I recommend INSEAD again to everybody, it’s a great experience and it was the time when I came across the Blue Ocean Strategy honestly I never heard about it before but I was in the group of Chan Kim the author of the book and I was mesmerized by the promise and then interestingly it was the time when he got endowment to set up a think tank to advise the Malaysian public sector using Blue Ocean Strategy so I start moving in Malaysia it kind of ticks three boxes, I have in my wish list changing the country/continent, working in consulting and working on innovation. So, I enjoy the experience there and what I gained most was the practical aspect of innovation work with Blue Ocean strategy working along with some experienced consultants and applying this in all kinds of projects from working with agencies and ministries on from vocational schools to police reforms and other smaller types of engagements. So back to Belgium, in 2010 my wife started work for European Commission I decided to continue the work in innovation but setting up my consulting boutique. So from here kind of work across different industries, different types of companies and geographies but eventually I expanded from purely let's say working with Blue Ocean Strategy to filling more exhaustive needs of clients in the area of innovation management that includes helping them strengthen their innovation capabilities from depending on their innovation readiness status but that could include large projects or just supporting them with different partners we have such as AI-driven start-up scouting or a qualified business design platform and so on. But I think we should talk more about the Blue Ocean Strategy and align the expectations of people. Q. Often seems to me that there is a particular kind of organisation or a team that's ready to be challenged, that's ready to innovate and if you work with these kinds of organisations and teams, they already have a mindset that it's not just our intuition but the customer insights that are going to drive real change the more we dig into it size the more we look at insights from different perspectives we will have a better answer. A small example I was working with stopping smoking in Johnson and Johnson and one of the insights that we had for several years is some smokers don’t want to accept the challenge of quitting a cigarette it's too much of addiction but also a joy to have a cigarette. There are even 30% of smokers that are happy smokers so we looked at this insight slightly differently and said for those reluctant quitters can we have an easier process where they can smoke but they can also use alternative products, our products and feel the pleasure of cigarettes decrease so there comes a point where they shrug their shoulders and say I'm not enjoying the cigarette anymore I can just switch completely to Johnson & Johnson brand and then ultimately quit. But that was because J& J was interested in innovation and they were thinking about challenging themselves. My question to you is do you see the world divided into these two types of organisations, organisations that get you in, that want you to help them innovate are already innovating whereas organisations that need innovation may be behind or that they may not even know or may not fully accept that they need to be disrupted. What is your sense? Ans: When I started working on innovation on my own 10 years ago companies were thinking about innovation, but it was something trendy, nice to have, many people confused innovation with R&D or technology and so on. I'm happy to see that 10 years after there is a huge acceleration and more and more corporates are building their internal innovation capabilities, so they are creating the organisational structure to allow a corporate innovation team, they employ innovation processes, so we talk about the actual innovation funnel but also some front-end innovation processes tools and all kind of innovation activities from innovation labs to hackathons, designs prints and so on. But of course, you have different degrees of success. For many, unfortunately, it’s all stops at the theatre level, you would have probably heard about this expression I like it the innovation theatre where you kind of pretend you do but other companies, I think the key was the right support of the leadership, very important and the true understanding of innovation which is one part of your strategy so basically your organic growth strategy is through innovation. So, if you can understand this as a leader and create the right structure, processes, and people then you have the alignment, and you can drive innovation top down. I know people talk about bottom-up but with my experience, you can have very innovative people but if they don't have the governance support innovation fails. Q. If I'm one of the listeners here can I look at my organisation and in 3 or 4-5 minutes understand am I truly innovative, am I preparing for a future tomorrow or I am in a situation where I may be growing but I'm becoming complacent in that growth. What is the question or a set of questions I can ask myself to say I'm innovative or complacent? Ans: I think being innovative should be the purpose, it should be mean to achieve the purpose. The purpose should be to win over your competitors or to increase your revenues and profits. So, I see 2 types of drivers for innovation like a market-driven where companies have a reactive approach. Given an example of my project with a global car leasing company, at least in Belgium it’s a very mature market and over the years now it’s a consolidated market the players divided the market shares, and their value propositions are very similar, so they mainly compete on price. So, it’s a bit of a download spiral because they gradually reduce the price, they gain a bit of a market share, but eventually, they just reduce the price, so everybody loses. That's one of the great tools in the Blue Ocean strategy. I am already introducing the so-called strategy which allows you to visualise your value preposition but compared to your competitors so let's say you have the price and then other non-price value factors, but you don't just visualise them in terms of just to be done pains and gains you assign some relative numbers versus your competitors. So, let's say I don't know what the ease for signing the contract whatever I'm just making up what are the key competing factors you can say my offering is lower versus 5 of the market leaders so then when once you plot all your factors of your value proposition and you assign numbers you see where you deliver value and it's a great exercise because first, you align your team your internal team into where you are at the moment versus the competitors and this is the place to start for your future initiatives, now I'm not saying that you should deliver more value to every single factor because that brings us back to give what customers want and that was the tagline of the 90s and many companies went bankrupt because by giving more you increase your cost structure a lot sometimes companies tend to give even where customers don't appreciate. So the idea is to go through this process could be design thinking or blue ocean strategy, do all this structure analysis, validate with this ethnographic research and other types of experiments and understand what can you eliminate so things that are pain points or are not appreciated but you invest what can you reduce and then what can you raise truly important factors and what can you create factors that the industry didn't offer so I'm already introducing you to the pattern of blue ocean strategy if you want to challenge a bit the way of thinking about strategy so that's one example of looking at your competitors see where you are and imagine where it could be. Q. The idea of winning against competitors look at what is driving your business value, what are the elements and then how do you rank versus existing and future competitors. At this point, I wonder if we can also get from our participants which areas of business they are involved in I would love to take some of the examples from there and see how different value drivers can be created but if I take another example of let's say a coffee chain, so if you're a coffee chain if I understood what you're saying you would look at customer convenience, the flavour of coffee, the food offerings, the time to serve etc. as a value driver, or location as value drivers and then you will see how you rank versus competition. Should I get that right? Ans: Exactly so actually going beyond what we talked about one difference between let's say Blue Ocean Strategy and Design Thinking it's front-end innovation process. In the blue ocean strategy, you have some principles that allow you to untap into new markets space like you mentioned the blue ocean is a metaphor for a new market space that you could create. So, in addition, to try to do better than your competitors assuming you do that let’s say incrementally innovate and you might get a market share increase of revenues and maybe profitability. But the idea is to explore the so-called non-customers so who is refusing your offering as an industry who is not even addressed right by the offering in the industry and try to create some value propositions that taps into those potential demands as well expanding the total demand just to clarify some of the jargon because I think the blue ocean metaphor was great for making this theory very popular and catchy but also is a bit of a sometimes overused jargon I think makes this whole blue ocean strategy approach not so trustworthy because you have these people always talk about blue oceans and red oceans but effect you should get down to strategy. If you do that you can be sure you're on the right path. Q. Is that what you're pointing towards that at the end of the day you must still launch from where you are rather than shift completely to new business models which don’t make strategic sense? Ans: I think it depends a lot on how you define the scope of your project. You could say I only want to improve my business so then you just look at like I mentioned your value proposition as and 2B going through an understanding of your customers, competitors looking at ways to create and then you have something fine. But the process is almost like the double diamond in design thinking so you have areas of convergent thinking, analytical thinking but then you have divergent thinking the creativity part and you cannot know ever from the beginning what you will end up with if you are more bearing it depends a bit on a company and the project sponsor you could aim at creating something more so there as kinds result could be one or more value propositions or even business models completely different from what you do daily so could be adjacent or even transformation, innovations and that's the ultimate goal but in the process, you can also improve your core business so I'm not saying that you shouldn't be in your coffee company anymore but you keep that score the kind of a cash count but then you build several revenue streams and now manage a portfolio of products and services. Check out our programme Q. Can I check with you here what happens next so you figured out where you would like to differentiate and then you start to think about ideas to come up with a strategy? What happens next in your experience, what’s the key next step? Ans: You start from competitors you go through customers or let's say buyers because you might have different stakeholders like in pharma have patients, you have the doctors as separate stakeholder groups you try to analyse their pain points across the customer journey and then like you said you move into the creativity parts you have this framework called the six-part framework which employs 6 creativity tools to allow you to bring potential value that you might consider building in your value proposition and then you go into convergence mode again so now you employees there's a framework called ERRC Eliminate, Reduce, Raise & Create. You go back to it as a strategy canvas and you look at all the insights from your workshops and the framework because all the assumptions should validate by customer interviews, fieldwork observations otherwise they might not reflect the reality at all. Experimentation is key so I think to your point maybe what's missing in the blue ocean strategy is employing sound experiments even beyond the customer interviews and field observations especially as you move towards like I mentioned ERRC when you build several value proposition prototypes you should employ some other experiments that bring a greater evidenced strength, think of fake landing page some subscription form even almost like a fake store sale specially for the digital solutions you have lots of tools also with Google Analytics and so where you start to measure the willingness to buy, your pricing you can adjust your pricing so now you're with this type of experiments have a greater degree of evidence so I think you should combine like what's in the book but with other tools techniques that are available over there. Q. We work with clients and talk about the agile way of implementation but in the broader definition of agile, so running experimentations teams and making alterations and changing quickly. Is that the approach you use, or do you use a version of that or a different approach when it comes to driving experimentation because that is the key part? Ans: I think being agile comes after the first part so first, we have design thinking or blue ocean strategy so once you take a challenge into a prototype level and you can move into a big deal and go to market, I think agile starts when you actually start working on the product and then you can try, learn, iterate and so on in an agile manner but what you are talking about prototype or maybe the MVP. Q. In your experience when it comes to the blue ocean you talked about the limitation around the experimentation part which I would say it's not a limitation it's an addition that you have to think about when you are implementing blue ocean. Are there any other limitations of the blue ocean in your experience? Ans: Limitation in a way that you shouldn't just do what's in the book. When the book was written the purpose was not to empower people to go and do it. The first day it started as a management theory and eventually the more they learned about a company doing it this kind of processing tool was developed but of course like in any other theory or any other tools you should combine it with other tools that help you fulfil your objectives. But in terms of limitations of the blue ocean strategy, I would say not of the theory itself but sometimes it sounds scary for the company to try to convince the CEO to employ a blue ocean strategy project they might think like you said in the notes example of the coffee shop they might think of oh am I supposed to completely pivot my business model? no like I said you should not and also when you look at your existing portfolio of products and services there's a tool called pioneers migrator setters lab. So, think of the BCG metrics the growth-share that looks at the past to think how to act now in the present. Here this pioneer migrator settler is like a way of looking at your portfolio but to predict who should be your pioneer basically because you don't attach the cash counts you want to defend and maybe notes improve slightly but you don't want to pivot them. But you can start with other products and services existing or something completely new from scratch to make them pioneer so the future growth drivers of your whole portfolio. So, going back to the limitation I think you need to properly align the expectations of the stakeholders, so I had this problem quite a few times in the past, so I had two types of potential clients. People who read the book and they are willing and excited to do that and people who were kind of negative because part of it they saw this as not for them. I don't want to destroy my existing business, it’s not for me whereas I told you can apply virtually to anything. Is Your Current Business Model Scalable in a Shifting Market? Train in Growth-Centric Innovation Q. In your experience the clients that have effectively innovated, what have they had as an approach and attitude a value perhaps even other elements like geography and the competitive space that have made them more friendly towards innovation. Ans: I mainly work with large companies, I also work with SMEs and start-ups but my core is the large companies just because that the projects are larger so require some sort of resources but also for start-ups sometimes the teams they naturally order by instinct they kind of explore great things and they come up with amazing value propositions and business models but the problem is incorporating people have a different mindset, they are mainly good at what the daily kinds but first of all, they are not alliance with these kinds of objectives of creating mid-term growth even the CEO they are appointed for shorter times that their mandate would expire or reviewed so I think that's a problem in itself but you have more visionary more open-minded CEOs who are willing to adopt this kind of innovation initiatives and not just initiatives but I mentioned that many are building their strong internal capabilities which is great news for everybody. That's what we all want to do, to contribute to creating a better world not competing against each other, there's room for everybody to create and share the benefits. So, I think your question about the mindset of the top leadership is very important, in terms of geographies probably I am biased, I cannot because my examples are not related to some statistical proof but outside in North Europe companies are more open-minded so clients in the Netherlands are more likely to innovate and support the innovation not that just run training that goes for it with this objective of executing it. But then I have engagements also in South Africa in Saudi so there's everywhere there's a huge desire to innovate. So, I don't think geography plays a role, not anymore. Q. Is there something that companies can do at a DNA level which just helps innovation thrive on its own, not driven by consultants like you and I we might support them in creating the DNA but not driven by that or not driven by senior management I'm kind of going back to that idea of the first solar cell being developed by an employee in Exxon because he wanted to and Exxon allowed him space to do it. Can there be 100 such examples within companies in the future, what will it take for a company to have a DNA which just allows innovation to thrive on its own? Ans: DNA to me equals culture and to me, culture is not something that you could act upon directly that's the result of strategy actually and structure. So, if you want to have this kind of employee with room to create, to innovate then it should have a good alignment of an employee innovation team, innovation activities aligned with specific strategic objectives so eventually, you will end up with a more innovative culture. I started to give some examples of different types of activities a corporate would employ. Nowadays you have in large corporates they're building innovation capabilities, sometimes they just buy idea management platforms, and they hope that if the employees will contribute ideas some miracle would happen. I think many companies saw that after the initial excitement first having the right governance to select those ideas and make them happen is many times missing, so it was, I think a bit of a disappointment, this kind of idea management platform. But if you combine this with you know a leadership programme with internal VC so you have those people the owners of the idea forming a team of two or three and then have a process let's say like with milestones reviews every 90 days or so, guided by the core innovation team, guided with mentoring them with innovation processes and tools so they can take that challenge and go to tested prototype ready to go to market then you have a much better chance of winning at innovation. In addition, I mentioned the start-up scouting so many companies just acquire or partner with start-ups that’s a huge activity and many others. Q. Now that the age of innovation is here, it has been here but it’s here at a level where we're almost at an inflexion point a company that's not thinking about innovation will soon find itself noting the minority with a lot of companies thinking about innovation. Now I want you to put on your visionary hat, imagine 10 – 15 years from now, what is the corporate landscape that we are seeing are, are we seeing 100 Google's, are we seeing the replacement of the current biggies, is there chaos or is there smaller niche ideas. What is the world that you're seeing? Ans: I think there is room for opportunities for high growth businesses in many areas. So, if you just think of artificial intelligence the applicability is in almost any industry, in banking, in insurance in automotive, in aerospace. So, the question is whether the existing companies will resist, or they will succumb and make room for other players. If we talk about banks, I think the banks will stay because we keep talking about fintech disrupting and killing the banks, but the problem is that FinTech’s resolve a problem, but banks have hundreds or thousands of products and services so yes, they may be better in one product or service but overall, the capabilities of large banks allow them to build or buy similar disruptors themselves. So, I think of course not all banks will stay but those who know how to adapt to digital transformation will be going to win. For others, I can only imagine as you do. We imagined SpaceX 15 years ago, who imagined that Apple would surpass one trillion dollars in our lifetime we saw that company growing to create great products, but I think nobody imagined that will become the largest company in the world at some point. So, I think it will be some acceleration into treating this type of giant in different areas. Q. How sensitive do you think we need to be to this overall macro changes which are like Tsunami that is coming and second how sensitive companies are or are it lets innovate but still there is an assumption of business as usual almost. Ans: I think maybe one big driver is a bit related to what you said about changes in consumer trends in let's reuse instead of buying new. I think one of the biggest drivers is sustainability and that requires innovation. We've seen a few years ago things like CSR and so on so companies try to adopt things that they could claim, make them socially responsible. Then we have seen some governments trying to enforce some rules and regulations, but I think the real tsunamic comes from businesses moving in this direction. So, you said it very clear there's a shift in customer trends and preferences towards sustainable business models, products, and services and with that, there are investing companies so we talk about private equity and venture capital firms who prefer to invest in this type of businesses and eventually it will be like a growing effect, a snowball effect. To give an example my sister-in-law lives in New York she pooled her passion plan from an existing fund, and she moved to a fund which only invests in non-oil and non-hydrocarbon, non-military companies so also the millennials I think have a strong mindset towards this. So, things will change fast in our lifetime. Q. When you think about an innovation project, they're almost like three or four levels of innovation projects that you can think about. One is incremental more revenue for your existing business model another is opening it up to consumer trends, which is slightly higher and you are open to more change and then at the other extreme where you say I'm going to reinvent myself completely is innovation at the level of vision, innovation at the level of leave the consumer aside, leave the business model aside, leave the competitors aside, what is the change that you want to see in the world, as a company what future do you want to realise. Is that how you look at innovation as well in terms of its impact at these three levels that you and I are speaking about in the first part of the discussion the first part which is what the business wants to grow into just now we ended our discussion about where the consumer is heading is there a third party where the company ignores the consumer and incrementality and says why do I exist let's figure that out guys and let's figure out what is the future I want to create and innovate at that level. What's your take on that? Ans: I think that's mainly valid for start-ups so I think somebody who wants to put a little thing in the universe would rather start their things so I'm seeing lots of social entrepreneurs impact investors committed and by the way there's this initiative run by the INSEAD I was part of the facilitating process last year to define what would be the challenge for next time and then we chose the food because the food is like accounting for over 25% of CO2 emissions and through this, I met a lot of amazing people completely dedicated. Q. Tell us a bit more about what that challenge was, what is INSEAD trying to accomplish and what role you played? Ans: You probably know there are many clubs and movements within the huge alumni community around the world, but this one was called a community impact challenge and it's created by alumni here in Belgium, Paolo an Italian who said, what if we commit INSEAD to become carbon-neutral by 2030 is the community and he said okay INSEAD can do somethings the people driving powerful businesses can do their things but I can try to inspire everybody through a bottom-up approach to come and contributes to that and also spiral this spirit. So the first year he proposed no single use plastic challenge basically would people sign up on this and I think there were over 5000 people who signed up around the world and for 30 days they were encouraged not to use single plastics and make sure they don't buy food with this kind of packaging and a lot of recommendations and eventually there was an application to help them make better decisions itself so then they said okay they had a great impact why don't we run each year one kind of challenge so then last year during the pandemic I volunteered to facilitate a large group of a few 100 people split in different sessions on different time zones and we started by allowing them to suggest all kinds of topics or areas where we could work on and eventually through voting we came to food and then from there we developed a set of recommendations and so on so last autumn we had the second challenge to reduce your red meat even try to become a vegetarian, try to reduce foods coming from Chile or whatever or don't eat tomatoes in the winter and so on. So, there is an increasing awareness and commitment to this in the alumni community. Q. Leadership in individual form is limited by what an individual decides to do and what impact an individual decides to have. IOAN I think it’s a great example of democratising innovation and letting individuals take charge of it. What do you think? Ans: Yes, I think you can have employees coming up with this kind of thing but remember the companies are very hierarchical and structured organisations, so I think if you want this type of initiative to succeed, you must teach those people to pitch effectively to the top leadership team so then they support the initiative. So, with the innovation, you have the tools to even support you to build a business case which eventually you can show to the CEO that there's a win so the employees’ engagement will increase and you as a company would look better because you're aligned with the development goals. Q. Any final words for what you would do or say to those of our participants that are team members that our team leaders that our organisation leaders on how they should shape their coming days. Ans: I think my advice would be to go and try to do it, you don't have to do it perfectly there's never such a thing but that's part of the spirit of the innovation you do, accept that you might fail but you quickly understand where you made mistakes and fix it and then improve. It's a bit of agile as you rightly mentioned but I think we should all innovate to address small and large challenges that mankind is facing. How Prepared is Your Team to Identify Uncontested Market Space? Train with Blue Ocean Experts -
Changing Landscape of Life Insurance Sector in India Speaker: Mr. Manoj Jain, Managing Director, Shriram Life Insurance Mr Manoj Jain is the Managing Director of Shriram Life Insurance and a partner in Shriram Group of Companies. He comes with a very rich experience of 31 years in the banking and financial services domain and over 20 years in the life insurance industry. During his tenure as CEO of Shriram Life, he transformed the company PAN India with consistent growth of 20% CAGR against the industry growth of 10% which is highly commendable. He has been chosen as World Leader Businessperson Award by the World Confederation of Business in the year 2009. He has also been chosen as CEO of the year at ABP News by Indian Financial Services and Insurance Awards for three consecutive years which is 2015, 2016, and 2018. He has also been chosen as the ‘Top 100 most influential people in BFSI Sector’ by World BFSI Congress in 2018. https://www.youtube.com/watch?v=xm_tOB0ALwk Q. A well-developed insurance sector acts as the backbone of a nation as it supports the citizens even in unforeseen events which we have seen during Covid 19. It not only helps consumers by providing financial protection but also contributes to the nation’s economy, so it plays a very critical role in the nation’s economy. What has been the impact of Covid 19 on the Life Insurance Sector in India? Ans: Thank you Mr Ashish for providing me with an opportunity to speak to the audience. I know this is being globally telecasted. I can just say ‘Hi’ to all my young viewers. The question which you put up that is the life insurance sector or insurance sector is a very critical sector for any economy because it's more like a backbone like banking insurance and financial services. And as you rightly said that insurance provides big support in nation-building and India the population and the penetration India contributes only 2% of the global premium where the population of India is almost as high as 30% of the world population. So, you can just see the potential is huge. With regard to your question that how Covid has impacted this industry I think Covid impact started in India in the last 15 days of March and you know in India the March is a very special month when it comes to insurance because historically and even now also in India people buy insurance particularly life insurance more as a tax saving instrument so it's very irony that 50% of the business comes in January, February and March and within that 50% close to around 30% comes alone in March and in that 30%, 20% comes alone in the last 10 days. The last 15 days got impacted by Covid and because of that the industry which is growing almost by 15% last year the industry who are just flat because the cream 15 days has just gone in the Covid. April was a completely washed away month but from May there’s a sharp recovery has happened, and I can just say the end of September the industry numbers are already there. In life insurance, we have just a cumulative de-growth of around 5% when it comes to health insurance it has grown by 25%. The general insurance industry has grown by 5% and there's a huge demand is coming now for a term plan. So while in Covid, the industries like hospitality, travel, tourism, hoteling, they all got impacted very badly but life insurance as I said was impacted for 45 or 60 days and then there's a sharp recovery and if everything goes well I think this year may be in next one or two months the industry will be on track. Q. How does the Insurance Industry look forward to mitigating such risks and look at risk assessment from a fresh perspective because there are certain things which are unforeseen, nobody knows that what is going to happen? How do we mitigate such risks in future and do the risk assessment from a fresh perspective? Ans: Insurance is all about managing risk, we are in the business of risk, at best we can only mitigate the risk. I think all these, whether it is Covid or any sort of pandemic are already factored in the pricing of any insurance company. So just for the viewers, I can just say that all insurance policies which are sold by the life insurance company in India are covered for Covid also. It's not that we were knowing that Covid is going to come but everything is covered in the pricing and that's what we call it that take insurance and you will be away from your tensions but unfortunately in India, the awareness of insurance is very-very poor very-very low. This Covid has given a huge opportunity and huge visibility and huge need as now the people are coming and saying we don't have life insurance; we need to buy it. So, coming to your question I think this Covid period has given an opportunity, as I said there is a huge surge in the demand for health insurance. People are buying now health insurance. They are aware that if they don't have a policy, how the family will be vulnerable especially in Covid. If the Covid comes to one family member, the whole family gets suffered and the industry and the regulatory particularly in India is very-very proactive and I think with a record time of just 30 days, the industry has come together and launched even the special Covid policies also. A customer can buy a Covid plan which is available for 6.5 months to 9 months on a very-very nominal premium amount. Even today also if I don't know whether you all have seen the newspaper, the regulator has come with a Saral Bima Yojana, a common insurance policy that can be bought by any individual. Across life insurance companies, this plan can be bought so when it comes to mitigating the risk, risk will be there but it is already factored in the pricing so I don't see any reason for panic because whatever the premium the consumer is paying, its already given in the price and all the claims are getting settled on time and we generally say insurance is a business which is a very very long-lasting. Some companies are selling insurance policies for 30 years, 40 years, 50 years and insurance company takes care of all risks and eventualities and there is well establish Reinsurance market is also available in the country. So, from that angle, the health of all insurance companies is in very good shape. Just to give a perspective to everybody in India, we have close to around 57 insurance companies working, 34 life insurance company and the balance 33 are general insurance companies. Last year the total premium collected by the industry and I am talking about only the life insurance is around 7.31 lac crore. That’s the premium which is being collected and in that the 1st year premium is around 2.5 lac crore and the total fund which is managed by the life insurance industry alone is around 40 lac crores. This industry is huge although there's a large potential as I said, the market is very intact, there is huge potential knowing the fact that in the last 20 years industry has grown with a CAGR of around 10% and in the next 10-15 years also I think the same trend will continue. Q. How long it has been impacted, being a group company, how it has impacted employees, people regarding Covid-19. We would like to know more about the Group per se. Ans: I think just to give a perspective, Shriram Group is a 45, 4.5-decade-old group. Our DNA comes from truck financing. We are having one of our group company Shriram Transport is the largest truck finance company of India. We are the market leader in used vehicle finance. Every second vehicle on the road is funded by Shriram Transport and our DNA is we want to serve the unserved population, the common man. If you see our logo, the logo represents a common man who said that the Sky is the Limit. So that’s the vision which our Founder Chairman Mr Thyagarajan has envisaged 45 years back because getting finance even now also for a common man is not all that easy. So we are having a largest truck finance company. We are having another company which is the largest SME finance company and a two-wheeler finance company. In the insurance business, we are around 15 years old and probably this is the only company which is making a profit from year one. And as I said that our focus is the common man so our penetration, our distribution, our reach is in tier 3 and tier 4 town. Rather every second policy which we sell is a rural policy. That’s what is the DNA of the group and just to give a perspective we have close to around 80,000 employees working in the company in the entire group and we have close to around 10,000 branches across India. So we are no longer a South-based company, we are PAN India footprint primarily in the rural tier 3 and tier 4 town and primarily serving the unserved customer. That's what is the DNA of the group. Q. How is the Shriram group which is a conglomerate of different businesses dealing with such digital circulation because as you move to the rural tier 3 and tier 4 cities, there will be challenges regarding getting internet connectivity and so and so? How does your company deal with this? Ans: I think it’s a very-very relevant question in the current scenario. I think we realised the need of moving to the digital platform maybe five years back. So the digital transformation in the entire group, we have started in 2016-2017 onward and I am very happy to say that in the last 5 months we must have sold close to around 20,000 life insurance policies. We have sold completely on digital platforms, completely paperless. Thanks to the Regulator that they have even agreed to a digital signature on the proposal form. So we have done completely paperless. Rather I am very happy to share that 3 years back we started a channel called ‘Phygital’ channel. Why I am using the word ‘Phygital’ because in India even though there is a huge platform available that you can buy life insurance policies across the counter, there are so many platforms, there so many web aggregators are there where you can get an insurance policy on a click of a button but my experience says insurance or financial services, trust is very-very important especially when the customer is looking for a claim, the insurance company should be around. Historically in India or worldwide from that matter insurance is always sold, people have not bought it. So you require somebody who can give a touching feel, while the customer is accessing online but they expect that somebody should come and explain as well. So the 'Phygital’ channel which I am talking about is, the entire team is digital therefrom proposal form to policy to everything but there is an agent, he can go and explain to the customer. So not us, I think the entire industry has come a long way on digital transformation and even the Indian customer especially in tier 3 tier 4 towns, just to give you an overview, we have a total book size of around 6 lac policies. So on several policies, we are among the top 10 insurance companies in India and as high as 60% of the customers are paying premiums through online or digital mode. So the digital transformation has gone much faster in rural India than in urban India. The customer is fully aware there are various platforms are there such as they can go to Paytm pay the premium, they can go to Google Pay and pay the premium, they can go to net banking, they can have Nach mandate. So as I said 60% of my customer are paying a premium through digital mode and as I said in the last 6 months almost around 80 to 90% policies we have sold digitally. When I am saying sold digitally means the processing is done digitally but then, an amount of element of advice is there because unless that is not there the customer doesn't get that comfort. So that's on the digital side but we have a long way to go. Although in a company, we have started using something called artificial intelligence, data mining all that is happening but then as I said it will take a little longer time because insurance per se is more a push product. Somebody has to go and talk because I think a normal Indian, a common man in India thinks that nothing is going to happen to me it's only going to happen to my neighbours or my relatives. So somebody has to come and explain to him why he should buy insurance. Why the sudden demand for insurance has come, even people are seeing, people are dying due to Covid and when the families are checking they don't have sufficient health insurance coverage. So people get insurance out of fear as well. The only challenge which is there in the industry is awareness, awareness and awareness. Q. As you mentioned earlier also while talking about ‘Phygital’ and I also have seen by experience, we normally buy insurance policy because there is an element of trust involved and these are people who are known to us, they are family friends and attend all our functions and things like that. And that is very based on what that they tell us. So very very interesting which you said is Phygital part. So in that scenario, what is the position of digital sales and services offering because important is that the customer should be satisfied, they have a trust? Now how things are changing due to Covid and it’s more of a digital thing. Ans: As I said the inquiry level which was hardly 5% that has gone up but still as I said 90 to 95% of policies are getting sold offline because the customer doesn't get that type of satisfaction online although all the comparisons are there all data. Another thing as I said awareness. The customer himself is not aware of what type of policy will suit him, what is his requirement, whether a term plan is fine for him or he is looking for money back or he is looking for endowment policies or whether he wants a pension plan. Somebody has to go and advice, we call something called need analysis. We go and advise the customer and do his financial health checkup and check actually what is his requirement, what he is looking for, at what age he is, what is his liabilities, what income he is drawing because there is something called human life value. Each customer is having, individual is having different human life values. There is a labour in a factory, his insurance requirement is different, he is a manager in the factory his insurance requirement is different and the owner in the factory, his insurance requirement is different. So each one has to be something called human life value and then based on that and based on his age, we suggest that look this is what is an ideal cover you should have. Generally, we recommend that an individual should have at least 20 times of his income as insurance, life insurance. So that if anything happens to him, the family will get that money and the family puts that money into a safe even bank deposit, the interest will given, that type of income to the family. Yes, emotional loss, nobody can make, nobody can fulfil that emotional loss but the financial loss, an insurance policy can do it. Just to make it simple if the salary of an individual say is around 5 lac rupees per annum, ideally, he should have a cover of around a crore of rupees, that’s a thumb rule. I know in India only 2% or 3% is a penetration. So we have a large number of customers who don’t have insurance and we have a large number of customers who are having insurance but they don't have sufficient insurance. When I am saying sufficient insurance, just to give a more simple example, somebody is having a Mercedes and having insurance of Maruti. A Mercedes is costing say 30 lacs and he is having insurance of 3 lacs which is of Maruti. Now tomorrow if that vehicle meets with an accident. Same with an individual, if an individual should have the cover of 3 crores and he is saying no I have a policy but then he is having 30 lacs policy. So there that human life value comes in place and lot of awareness has gone but as I said we have still a long way to go. Check out our Innovative Insurance Training for Future Leadership Q. In fact, my question was related to this only which you have mentioned a very interesting thing. You also mentioned Artificial Intelligence and Data Analytics. So what I wanted to ask you data drives are more highly targeted marketing and sales approaches, they are very targeted marketing approaches when we talk about data analytics and artificial intelligence. How much you earn, won't determine your worth anymore, as you rightly said now not for sure insurance companies anyway, they are now using data analytics and AI to suggest a policy based on the service or device that you are using. For example, if I am using an iPhone, if I logged in through an iPhone, the insurers will direct you towards premium policies which are of higher value. This is something which I was a little curious to know how to do data analytics and artificial intelligence take care of that as you mentioned about the example of Maruti? Ans: There are various insurance companies, there are some insurance companies that are using data analytics and artificial intelligence for prospective new customers but there is a large number of insurance companies currently using these 2 tools on their existing customer base. Whether somebody has bought a policy what is the propensity that customer will renew this policy and continuous policy for next 10 years or next 15 years because the other challenge, particularly in India, is a huge lapsation happens. People do buy policies but as I said 30% of policies get lapsed at the end of the first year. At the end of the fifth year, only 40 to 45% of policies are only in the books. What does this mean, the customer has taken an insurance and when he is looking for an insurance company, by that time you realise that the policy has already lapsed and day in day out we are getting claims, intimation and when we go and check, the customer has taken a policy but then he has not renewed it. So a lot of work insurance companies are doing in educating the customer that why insurance and why he should continue once he has bought an insurance policy he should pay and then we are using all this data whatever we have of an existing customer that how we can use this just to drive that yes we have sold a particular insurance policy in a particular market segment, what are the chances of getting the renewal. There are some companies including us have started using even for sourcing new business but as I said the online currently is around 5 to 8% of the overall business. So lead generation and all that happens but then we give those leads to our agents or intermediaries and they go and meet the customer because somewhere the customer feels that he doesn’t need life insurance, somebody has to come and push him. It’s not like that bank fix deposit that I have some money lying in my saving account and I feel oh let me just do a fixed deposit, not like general insurance because the car which I have, I cannot drive on the road even one day without insurance and I always say whether the car is important or the person who is driving the car is important but unfortunately people insure their car but the person who is driving the car is uninsured or less insured. Q. What is the emerging trend out and why I am asking this is very important because I know that Shriram Life had won the CII Award for Customer Obsession in 2019? You know the customer than anybody else for that matter. Ans: It’s a very interesting and very good question. I can just divide it into two. India, itself, is a very-very diversified country. Generally, we say that one is India other is Bharat. Now if you see the demographic of India, we have a population of say 130 crores. If you see we have close to around 40 crore households. Now in 40 crore household, we have close to around 3 crore households, roughly a population around 15 crores, which we call a poor segment. They are fighting for their basic needs. I don't think insurance companies can do anything at this stage because, for them, they are looking for basic needs. Then the second segment comes, where there is a chunk of close to around 12 crore households. Their income is ranging from 1.5 lac to around 4 or 5 lac rupees. We generally call that middle, the common middle or middle-class family. That is a huge segment, 12 crores. Now in that segment, what Shriram is working, if you see there is a need for insurance because, in the entire family, there is only one person who is earning. If anything happens and this is the segment where a lot of aspirations also there. So not only they earn, they have a plan to buy a house, they have a plan to send their kids for education, they take even loans also. Now in that segment, we primarily focus. And the third segment comes, which we call, maybe HNI where income is ranging from 10 to say 25 lacs. Now that's a segment where is a very small market. And the fourth segment comes, maybe a rich or super-rich. Now the above two segments Shriram is not at all looking because we know those are the people, they have enough money, they don't know what to do. So most of these customers are having a bank account in large private sector banks and then they buy insurance from there. So our focus is on the 12 crore household, which is a huge market and is completely untapped and there we are looking even the initiative which IRDAI announced today, Saral Bima Yojna, even before that Government of India announced two or three schemes which was aimed for the middle class and the lower middle class, ‘Pradhan Mantri Jeevan Jyoti Yojana’. I don't know how many of the viewers are aware that the Government of India has designed it in 2014 and made it compulsory for all insurance companies to sell insurance. There is the cover is of 2 lacs and the premium is only one rupee per day. So you end up paying even less than one rupee, you end up paying 330 rupees in a year. And if anything happens, 2 lacs rupees cover is there. The only thing that is required, you should have a bank account. Because the intermediary cost is almost negligible in that. So the customer has to have a bank account and he can just give a standing instruction, the bank will debit and the 2 lacs rupees cover is there. The second policy that the Government of India announces ‘Pradhan Mantri Jeevan Suraksha Yojana’. That’s again 2 lacs rupees cover. If anything happens due to an accident, it's only one rupee per month, only 12 rupees a year. So in 350 rupees, an individual is having a cover of four lakhs, which is I think sufficient when it comes to lower middle-class people and quite affordable. Although I think combined policies sold by an insurance company in the area is roughly around 155 million policies are already sold. But you know the population of India. I think everybody should take that policy. So if I am saying 40 crore households, at least 40 crore people should go and buy that policy. That's what is our vision. But coming to your question on particular segmentation, we have a lot of lifestyle policies as well. We have focus group policies like for the business category, we have something called Keyman Insurance for professionals. And housewives, we have policies taking care of the needs of that particular segment. We come from a common man and our mind always goes on the common man. So we had a dedicated insurance policy for the truck drivers. And I am happy to share that in the last 15 years, we may have covered close to around more than 10 lacs truck drivers on insurance. Because this is one segment where no insurance company wants to touch this segment. But then we have designed a policy at a very affordable rate. Just to give a perspective, a truck driver gets a cover of around 5 to 8 lacs rupees by paying a premium of around 5000 rupees in a year. And if nothing happens to him, he will get his money back at the end of 10 years whatever premium he has paid. Another group which we tried using technology to the core. Long back there used to be a company called Telenor, which was a telecom provider company in India. So we had a tie-up with them and this product is very very popular in South Africa where our partners are there. Just by clicking a button, an insurance cover was available for the people and the cover was, you recharge because the Telenor was in the only prepaid segment. So from 5000 to 50,000 cover was there for a particular period. Again you recharge, your plan will again be valid. And this premium was paid at that time by Telenor. So a lot of other insurance companies have tried this. But then, what happened a large number of people get covered. We also had covered close to 2 crore people at that time, but the premium was very small. But then it was completely technology-driven selling, focus on a target segment and we have settled, I think a good amount of premium as well. So in India, as I said there is a variety of customers are there, there are customers who are looking for a 10 crore insurance also but a large number of customers are looking for maybe 1 lac and 1.5 to 2 lacs life. What Upskilling Frameworks Does Your Company Have For Claims, Operations & Underwriting Teams? Learn About AITD’s Corporate Training Q. So I would like to shift a little focus on what we have been talking about in the insurance sector then coming back to your organisation as well. As most of the employees are working from home, working in virtual teams, this is something which is our interest, what we are strictly into a day in day out. Now this pandemic has brought this tremendous change in human resource planning and operating to ensure employee well being, how do we enable their performances so that as you rightly said that it is a ‘Phygital’ world where they have to physically also go. And how do we up-skill employees for performing well in these unprecedented times as we have to be future-ready because we don't know how long this will be continued. What is your take on this about the current situation? Ans: I think it’s a very valid question. And most of the companies as I said, a lot of preparedness although. If you see, compare the insurance industry versus banks, banks are far ahead on the technology compared to an insurance company. But having said that in the last five years, a lot of work has gone by. I can just say that we are representing a company which works for the common man. But then we have developed certain apps which are there with our agent on his smartphone. And through that app, he can finish the complete sales process. Even his training, we are doing on that smartphone. He is talking to the customer on a smartphone. If required, he is going and meeting the customer. All of our employees on that angle are fully equipped. But as I said, insurance industry we may be having close to around 3 lacs employees, maybe around 10 lacs agents. 90% of that are responsible for business development. And as I said in the beginning, even they are all tech-savvy but then each customer expects that my agent, my sales guy should come and meet me, not virtually, one to one. So while they are fully geared up with the technology, but that one-time human interaction is there. Although net banking is there, the premium can be paid through debit cards, credit cards and all that. But that one to one interaction is still there, but our back-office teams, people who are responsible for servicing the existing customers, people who are responsible for the policy generations, people who are responsible for underwritings, our actuarial teams, our finance and accounts team, our sales support team, they are all working from remote. And that is completely seamless working. Our challenge is that how we can put the entire sales process also virtual. Technology is there, a customer can solicit insurance, even on WhatsApp call, but it will take a little longer time. But it will surely happen, but the industry is ready. And most of the insurance companies are having those apps technology-enabled where everything can be done online. Q. So would like to ask you about what are the innovations in terms of the part of the payment, in terms of servicing the client, taking care of the claims and other things because it’s all virtual. How you are coping with these things and how are the employees coping with these things. Ans: As I said that we have a very forward-looking regulator. And the preparedness for digital transformation has started 4 or 5 years back. So most of the companies are having all these tools available which at the need of the customer, intermediaries are using it and when it coming to impacting people, I will give my example, before COVID I was travelling at least for 10-15 days in a month because somewhere a mental block I was having that unless I will go and meet and talk to the people one to one, the influence and impact will not be there. But from theAbout last six months, we are all on the zoom call or Cisco call or Google call and we are conducting the meetings and the impact is almost the same. So everybody is changing including me, like, even I don't see that for next three months also I will travel because the zoom call is very very effective. Earlier we used to plan meetings at least one and half months in advance, even sometimes used to plan a large meeting, a large gathering at least three months in advance to check the availability of the hotels, the venue, availability of the people. Now it has become so handy that now I decide that in the evening I want to have or I want to talk to all my people who report to me and we can all get connected. There are many technologies or telecommunication facilities there because we run a large team. All our regional managers are equipped that in just one dial, they can connect 200 people in one go. The message can go on a real-time basis to our people. In the last six months, the kind of even audio calls, even I have done an audio call to 2000 people in one go. I had never addressed such a large gathering physically because 2000 people in one go will be difficult. But on audio calls 2000 people seamlessly we could connect to the last miles. I think political parties used to do this. I think nowadays because of COVID, the insurance industry how to connect real-time with our agents, with our sales officers, how we can tell them that we were concerned about their well being. So I think last six months, I may have done, close to around 1 dozen web calls just to talk to the team, connect with the team and it is happening at various stages. So you are right, Covid has given us a thinking and the plus side of all this is, close to around 5 to 7% of our overall expenses, used to go in travelling and these meetings. And if you ask me what are the expenses in the last six months, virtually it is negligible. Hardly people are travelling, hardly we are conducting any meetings. Even if meetings are also happening, there is no party after that because nobody wants to do it. So Covid has really prepared each one of us from that angle and most of our employees, not even our company in their entire industry, especially the large back-office teams, especially when they have to settle the claims, maturity claims or the death claims and without meeting people, without doing physical investigations that have posted some challenge, but then the industry has very well accepted that, and we are working very-very seamlessly from that angle. Q. Very well said Sir, very interesting and what you said is building on that what you said is, the current economic scenario, situation is such that everybody is talking about creativity and innovation, We are innovating in every way or the other like who would have thought that people in rural areas would be taking online classes and so on. So what are the innovative strategies to catalyze growth as far as the Indian insurance sector is going on? I mean as far as your company is concerned because as you said, it has been happening for five years and the Covid has nothing but accelerated the innovation and digital technology which are coming in pictures. Ans: I think the big innovation which is there and I think people will see soon, the product innovation. Generally, people say that life insurance a very-very complicated subject, people don't understand. So a lot of work is currently happening that how we can simplify the product, give a simple product to the customer, and be easy to understand. So a lot of work is happening. And I think this Covid has accelerated that and put a little more pressure on the regulator and the industry that how we can go to the customer. Because a lot of customers want to buy insurance but then they are not sure what product to buy. If there is a simple product is available, then the sale can happen. I think you can see, next 3-6 months, a lot of innovative products will be there, launched by various insurance companies. Even today’s newspapers are telling that from 1st January, all the insurance companies have to launch ‘Saral Beema Yojna’. It is nothing, a very simple product, same pricing. Customers can go to any insurance company and can buy. He will end up paying eventually the same premium and same product. So all that is there and I think thanks to Covid, that Covid has also given a lot of thinking to each one of us that how we can cut the processing cost. How we can bring efficiency in our processes. All the savings in some way or other will go to the customer only either in terms of reduced pricing on the premium or better bonuses or a better return to the customer. Because at the end of the day, what is insurance - insurance, we are the aggregators, we are the trustee of the premium paid by the customers. We are only managing their funds on their behalf and pulling that together and giving back to society after taking care of our expenses and all that. So Covid has given a big room for all of us to think differently and see how innovative we are and how we can bring more efficiency, more lean organisation and service customers seamlessly with the help of technology. Q. Very interesting Sir. And one question that comes to my mind that we are talking about that the expenses have gone down. It is more of remote working and people are working from their homes and not many expenses the company is looking at. What will it impact too, the premium will go up or premium will go down in that case? There is a lot of synergy in terms of cost-efficiency. Ans: I can just tell you, you have to see from the global perspective, the premium in India is the cheapest. The premium rate which Indian life insurance companies are charging is the cheapest. So there is nothing called the premium will go down or premium will go up. At the end of the day, if an X company is charging a little higher premium, the maturity of that company will be more because the mortality rate is the same across industries. Each company is using the same mortality table. Now, whatever this efficiency is coming in the system, which will definitely in some way or other, will go to the consumer. But as I said in the beginning SIS 80% of the sale in India is coming through an intermediary. Now, if they become more productive and at the end of the day if my intermediary who is selling three policies in a month if he starts selling five policies in a month then his earning will go. Although his per unit earning will go down and that benefit in some way or other will go to the customer because at the end of the day, the industry is not comprehensive and customers will not come to the life insurance companies. So all that efficiency, all the cost-saving, whatever is there definitely will go to the customer. But just to give one more data point, there are 24 life insurance companies in India, and insurance has a very long gestation period, it takes 10 years for any life insurance company to reach breakeven. Because the biggest cost as I said in the beginning is a distribution cost. And unfortunately in India, we have to pay everything upfront where a policy continues for 10 years but all the expenses, I have to book in the first year itself. So if efficiency improves, if my agent productivity goes up, my branch productivity go up, definitely, the cost will come down. And that can only happen if a lot of awareness. I think the industry is also doing a lot of work, regulatory is also doing lots of work, the government is also helping because currently if the agent meets 10 customers, he ends up selling only one policy. I am looking for a day, I don't know whether it's in my lifetime, that my agent meets 10 customers and he ends up selling to all 10. And that can only happen as Even our economy is we are still down. So once the economy grows, the disposable income goes up then obviously the affordability will go up. And as I said India requires at least 10 large size life insurance companies like LIC of India. That potential is there and insurance as I said, 40 lacs crore that's the AUM which is there and almost 80% of that is invested in various government projects because the long term money only comes from insurance. So that's why I call it nation-building by the insurance industry. Q. The question which they are asking is how life insurance is looking at 2020 and the future of insurance in the industry in the next 3 years because nobody knows how things will turn up, when the vaccine will be out and how Covid will subside and things like that. So how do you see the insurance sector in the next 3 years, Sir? Ans: See as I said this is a sun rising industry for the last 10 years. This is growing by around 10%. And as I said there was a temporary pause for 3 or 4 months. We are almost back to normal. Most of the insurance companies are working the way they used to work in past. Although we are down by around 5% life insurance health insurance is up by 25%, general Insurance is up by 5%. So if you see the overall industry is back to normal. Now next 3 years, even next 6 months, I think we will be back on track. And if everything goes the way things are moving, the industry will show growth of at least around 5% this year and next 3 years we will be growing at a pace of around 10-15%. That will happen because as I said, the potential is huge. We have not even tapped 1/10th of the potential. Q. How you are servicing to your customers, the sales part, a very-very interesting discussion we had Sir. Before we end our session so one last thought from your side Sir. What you would like to tell our viewers. Ans: I can just tell to all of the viewers because most of you are young. I think you should buy one insurance policy when you are young because if you are buying an insurance policy when you are 25 or 24, you end up paying a very less premium. Because once you reach the age of 40, 45 or 50, you will end up paying at least three times more premium than what otherwise you will pay when you bought the policy at a young age. And each of your students, if they can take an oath or they can make a decision for them that they will go and tell five people the benefit of insurance. Because insurance is always sold through word of mouth. So if each one of you decides to tell five people why life insurance is important, I think this journey which has just started, can then go to many folds. India requires a lot of long term capital. If you look at any project, any infrastructure project, it requires a minimum of 10 years to 15 years to 20 years and those funds can only come from life insurance. So spreading the word of insurance, that's what and you will buy at least one life insurance policy. Take a protection plan or take a saving plan, it's up to you. But you must take it. Is Your CRM Strategy Built for India's Emerging Middle-Income and Rural Markets? Discover Scalable CRM Solutions -
Reimagining the Future of Work in the Retail Sector Speaker: Mr Ranjit Khompi, Head L&D, Reliance Retail Fashion & Lifestyle Businesses Interviewed by Mr Ashish Sahu, Vice President Training, Amity Institute of Training & Development About Mr Ranjit Khompi: Mr Ranjit is the Head L&D, Fashion and Lifestyle Business, Reliance Retail to our Leadership Studio. He is an award-winning business professional with 24 years of experience across marketing, consulting in HR. He has held leadership roles in Product Management, International Trade, Human Consulting, Human Capital Consulting, Global Value Management, and different International geographies across diverse sectors of Office Automation, Automobile, IT, Outsourcing, Insurance, Telecom and Retail. So, he has a wide range of experience and it will be interesting to listen to him. He also holds HR credentials of Senior Certified Professional SCP from SHRM, USA and CPHR which is Chartered Professional in Human Resource from Canada. He brings to the table, lot of experience in terms of his business and talent. He has offered numerous articles, has authored & presenting keynotes in international HR and L&D summits and in developing copyrighted training quantification methodology, which we also known as PQM. In his current role, he leads talent readiness of approx. 31,000 employees for the fashion and lifestyle business of India, India's largest retailer by driving businesses’ outcomes, focused on HR interventions. https://www.youtube.com/watch?v=S948jrAoGhc Q. How to develop an organisation with a Future of Work mindset and is more resilient coping with uncertain times and more adaptable to thrive in these times? So that's something which I wanted to ask you, Mr Ranjit? Ans: I think I am also looking forward to the next one, our interactions, the kind of questions that will come up from the students, as well as the faculty members. I think, to start off with the first question that you have for today; how successful a company is or maybe actually is going to be in the future? It all depends on how it is exploiting the emerging opportunities, tackling their challenges, which are coming along and how intelligently it is observing and interpreting the dynamic world in which it is operating. So, we are looking at the Future of Work mindset. The success of companies will determine, how it takes care of it ahead. Now, of course, any company is driven by their leader. So, first, leaders must define their leadership in the future that we are looking at. Leadership is like what, it's very difficult to define in terms of how it will be in future. Every leader that I come across, feels that he is doing very well. But when I am talking to CXOs across the world, they are saying that the kind of future leaders that we need, is going to be completely different from that we have come across till today. So, the leaders of today’s companies will first determine what kind of leadership that is needed and where we are today because that is going to be the pivotal point to take the future of work ahead. Are we going to capitalise on it or are we going to succumb to it? I am from the Retail Industry; we have got the same pandemic coming across the World. And I have seen some companies, because of their leadership, not only sustaining, thriving but also looking at galloping into the future. While I have seen other companies across the world who have shut shop; companies who have gone down. So, what determines basically, developing in the organisation the future of work is to develop the leaders themselves who can look beyond the horizon. The leaders must, first, see what exactly is going to come; beyond that, they must have that bird's eye view around it. Only when they have had that bird’s eye view, can they then start looking at having a mindset to start it? The first mindset that is required is called a growth mindset. In Reliance itself, for us Growth is life. If it is said about humans, it is said about organisations also. Compared to inflation, forget about the competition, you are receding. So, one of the ways to tackle the future is to have the growth mindset, how can I grow, not just about 10%, 15% but can I grow above 50%, 60% because if you have that mindset, if you want to buy a red car, you will start seeing a lot of red cars on the road. Similarly, if you have a growth mindset, you will start seeing a lot of opportunities even in the industry 4.0 that we are looking at or the pandemic or where we are looking at any kind of calamity we are looking at. The first thing that is required in different sets of people in the group mindset Secondly, I would say, it is the Digital Mindset. Compared to earlier revolutions; industrial revolutions, this revolution is not here to support humans. It is there, in fact, to replace human actions and in this manner to replace humans also. Unless until I, as an employee, as well as a leader, understand this and have the digital mindset coming in, this tool, rather than becoming a friend, can become a foe from my job role. I would go ahead and see different contours that are coming in. So, I need to have a digital mindset, I can't be sitting, saying I have got a functional skill; I don't need digital experience or digital exposure around it. I need to have it to survive it. That’s the second thing that is near today. Thirdly, the thing that is going to happen is that every hour it is getting more integrated into the organisation, we are moving away from silos to something which is an integrated organisation. If there is a change happening in some other department, it's going to impact me. Can I have a collaborative mindset to take the future and make sure that works for me? And that’s the third important thing that I have said. And the last thing, which will be required is that; gone are the days when the leaders are supposed to look at the future of the organisation. I would say that, if we must take care of the organisation of tomorrow and be resilient, the employee must be an entrepreneur, he must think about how I can add to the top line and the bottom line of the organisation which we call, in the management term it is called the ‘Intrapreneur’. So, I think these 4 mindsets, if all the employees can build together with a leader who has a vision of going beyond the horizon, I am sure the organisation will not only be sustained through what is coming into the future but also capitalising and growing through it. Q. How does the organisation prioritize and strike balance to accomplish these objectives in a dynamic World? That's my second question to you, Mr Ranjit. So many things are happening, how do we create a balance in the organisation? Ans: I think it was happening earlier also. I think what has happened is, the pace has increased to an extent that all these initiatives are now vying with each other to be resources in the organisations. So, if I must get transformation or if I want to get an incremental view of it, I need to invest some resources. And because the changes are happening so fast, all these are coming almost at the same time. I think what the leaders can do here, and I have been practising it in my organisation is, to step back, because there are so many things happening, you tend to react than respond to what it is. And one of the ways to prioritize and look at which resources would need to be going where, rather than following a herd mentality, where everyone else is going. I think, what needs to be done is, every leader must step back and do thinking. We are in a kind of system; we are not operating in a vacuum. All of us are interconnected with each other, so we will have to have a kind of system-syncing approach looking at that - okay if I am going to pull one lever at one place, maybe it's a cost reduction, how does it affect the fundamentals of other departments somewhere else. Now, if I am looking at these aspects, one of the ways are to deal with this; is to do a force-field analysis of the problem that you have with you or the strategy that you want to adopt. Force-field analysis will tell you which are the forces that are in line with you, which are helping you and which can enable you to be successful. And which are the forces that would be hindering your growth. It could be a small intervention that you are doing for your organisation, it could be OD or intervention the way you are running pan-India, or it could be a strategy that you are moving, it could be a blue ocean strategy. Once you do a force-field analysis, you will understand, out of the negative factors which might be slowing me down, I will pick out which I need to modernise, which I need to revamp, where I need to go faster in the organisation. It will also actually help you look at which are the lever that I can utilise to do that. I will tell you one surprising factor; you don’t need to look at these independent activities. I would suggest that you look at the forces which are supporting you to enable and further capitalise through a lot of areas where you don’t need improvement. You can use a strategy to find out certain improvements required and just go for a transformational thing that is required. In my experience, the force-field analysis for each of the functions of each of these categories helps us prioritise what is needed right now and what is going to give me higher bucks for money that I am spending out there. Q. That there has been a change in transformation in basically three things that we have to talk about. So, in the process of adapting to this changed reality, every process, function and role will be re-imagined, fundamentally changing the future of work as we were talking about. Besides work also, you can say workforce and at the same time workspace as well. Offices are closing; people are working from home. So, what is your viewpoint on this? Ans: In fact, for the last one year you will see, our revenue target has remained the same. There is no office space right now. Earlier, most of my revenues used to come from the stores and the way it used to happen is – customers used to come to the retail market and then they will buy from there. Suddenly, with Lockdown, everything stopped. Right from cars to garments to food everything went online. So, your workplace has shifted. The way your business model has shifted, your financials have shifted completely, and the kind of role performed by people have completely shifted also. And same with my L&D team, I had to shift the way I am thinking of building capability. Now, each function will try to change differently. However, as a leader, if I look at it as an independent view, if I look at it as a part that is changing then I will, be missing out on the acylate that the part has hit other departments. So, I need to think, when I am talking about stepping back, I need to see that as a whole system. It's an entire gearbox that exists. So, if each department says that I am going to re-imagine differently, then the gears will be out of sync and they won't be able to move in properly. So, as a leader, who is orchestrating the entire thing? First to look at, move from looking at independent individual departments, from disconnection there to look at interconnection or look at the relationship because if I am changing a process, changing a function, what and how the relationship with other functions sync, what are the implications? It does not go from raw material to output, that output also comes back as money for the raw material. If I am going to change only one part, I am going to change my entire loop. The leader does not understand that he would still work, or she would still work in silos. When you start stepping back and look at the entire orchestration around it, the new methodology emerges. And I think that’s what we need to look at. I think that’s the leader’s role; when each function would like to reimagine themselves, is a leader’s role to put it together and say okay while you might have evolved individually, how does it all add up to the organisation’s output and how organisation move. The organisation is a creature. Incorporate law also, we say it's an entity. Now, imagine if I have got 4 legs and all these 4 legs are going in different directions at different speeds, the organisation will not move, it will collapse. So, it must work together. Q. Automation will reshape business models and the broader value chain creating organisations with fewer layers and a better trained and trusted workforce empowered by real-time data analytics. So, as you rightly said, people used to come to stores. Now, most of the things are happening online. And the role of data analytics has become so critical, so important, Artificial Intelligence.So, what do you think, would be the emerging trend in the retail sector in this kind of situation? Ans: You have heard of Amazon Go in the US where you go and check in with your phone, you pick up what you want and then you just walk out of the store. They just removed the entire cashiering system, the order management system, everything out. The automation and the data analytics that happen at the backend enables a seamless customer experience. Now what it is doing is not only getting a better customer experience but is also somewhere rewriting how the organisation is designed. For example, if I look at Amazon Go and if I look at Walmart, here entire frontline cashier staff, out of which almost in Walmart is about 72% women, will be out of a job. Let's look at another automation. There is automation called a Progress Shelf. What it does is one of the main jobs of retail people is to tag merchandise on each of the shelves. Now, what Progress Shelf does is it automatically tags whatever merchandise that you kept on the shelf, checks the barcode and price, the calorie value of that thing, any item will be blinked on that shelf. Now, the entire role of the people who are arranging the shelf is gone. Or you look at autonomous cleaning robots or you look at pickers. In many warehouses that we have where the distribution happens, we have fully functional robots who go and pick up the merchandise that is required to be dispatched either through e-commerce or through the direct route. Now, what I am talking about is that real-time data analytics all are now become autonomous making sure that the process is becoming very, very similar. Now, in this part, what happens is the traditional roles are somewhere going to get taken off. I will give you an example of this. This example is about 3 yrs. old. In the telecom sector earlier, if you had to go and buy a sim from a retailer, you had to submit your Aadhar card. Now, that form would be checked by an officer, he would check if the photo matches with the identity card if the address matches and then they will sign on that. Now what happens, we have the automation happening in that last mile where rather than having all these documents, you just need a fingerprint sensor and the Aadhar card connected UIDAI network and that’s it. You don’t need any third person to really agree with what exactly you are saying. Overnight in an organisation that I was working on earlier Tata Tele, 600 people lost their job. Now, what will happen is because of automation the regular work that is happening, will get automated and the way it is happening. I will give another example; one of the ways to tag merchandise in a Retail sector is called RFID – Radiofrequency Identification Device. So out here you can just scan the entire rack with just one sensor in about 30 seconds and you know what kind of merchandise you have. You don’t need any physical inspection; you don’t need so many people to know exactly what is happening. Now, because of the earlier role, the layers are going to be taken out. So, what our role will be when we are structuring the organisation and the way we are structuring the ways of working, the way we are structuring the information flow must be centred around not our current processes but how the information will flow tomorrow. And that's a huge shift I have seen across. I am not seeing only here but I have seen outside. There are so many companies who are investing effort into just getting this restructuring in place so that they can be ahead across. Exactly. One of the things always said is, because of automation people will lose jobs. And that's true to some extent, I think every industrial revolution we had, this kind of job shift happening. But at the same time, I see the redeployment of labour as a strategic opportunity, because if it is done well, then you can get your already aligned, culturally aligned, team members to give all their focus on getting a better customer experience. So, you move them out of all the transactions which are mundane jobs which are not value-added job into something that they make a customer happier. I will give you a couple of examples. For example, let's say customer support. If a customer comes to return a garment, in the retail sector 34% of garments worldwide or the electronics sector, has returned. What it means is, customers can return a product, no questions asked. Now that must be dealt with in a particular manner. I can't automate that. I need to have a human who understands, who checks, displays empathy, understanding concern and at the same time enables a person to buy a different product so there is no cash outgo. Let's take another example. Let's say, Ashish, you go to a particular shop, and you are buying a T-shirt for yourself. Now an automated system can't suggest would that t-shirt, blue colour t-shirt, a beige colour trouser will go. We need humans with that. So, what people can do is use automation to lower their errors. Use the analytics coming in to understand the customer buying pattern, what exactly the customer is doing and then make sure that he or she uses this information to give better customer service. For example, with automation, the workflow around the entire store has improved. Walmart is a classic example. Last year Walmart spent 400 million dollars by improving the workflow at the same time improving customer satisfaction. In our organisation, we improved the way we interact with the customer, not only has it increased the revenue but also it has increased the net number of scores around it. In this way, we can, using automation plus better customer service if I can train my people to use automation properly, then I can reduce the number of complaints that are coming in because I can proactively eliminate the complaints that might come in. So, it all depends on the organisation’s focus on skilling, reskilling on a large scale. Q. How the Retail workforce is going to change. As you have mentioned just now about the reskilling part and what we call it, we run workshops on Performance Enablement, how do we enable people, empower people to do the task which is required. Ans: I think the big shift that will happen basically is how to balance in this unprecedented time, the short-term crisis with a long-term uncertainty. Honestly today none of us also know how Retail is going to go which way. For example, if you look at footfall across the world in the brick and mortar or the offline store that you are looking at, the footfall is less than 50% compared to last year. And it's not only India, but also not only just the Electronics Stores or Best Buy, that you can look at. So, we don't know what the future is. But what we need to look at is how do we balance it out together. One of the first things we need to look at, whatever you might say from an HR perspective, is how we plan the entire manpower for next year, we want to see how we really look at the manpower planning, what are the assumptions that we are building in. We need to have three kinds of assumptions that I look at. I look at the best-case scenario, the worst-case scenario and everything in between. And you need to have a talent acquisition strategy required to upgrade. Now, you can look at someone like our platform. Coke has been using it for some time. You have a couple of other companies who are using it very nicely in terms of planning their acquisition strategy for tomorrow. Uniqlo, our global competitor is using this which enables them to really plan what kind of hiring that I am going to do for it. The second, is basically, how I am going to engage. We are in a truly kind of not so happy scenario today. So, when you are talking to an employee, when HR is planning around it, they need to plan engagement with some positive purpose. There is a very large pizza chain worldwide. What did they do was, they got all their employees together and said let's give free pizza, physically go, and give it to all the hospitals? Now what it created, it created a very positive purpose for employees to be associated with the organisation and the engagement score went up. So, what happens is there must be a purposeful approach for HR in whatever they do. It could be as simple as connectivity calls; employee connects calls that we are doing or if we can get family in the call. In fact, I know a couple of IT companies which are doing, couple of retail companies, what they do is in their office calls, they also invite their kids, their families, to be there, because we all know that we are not an office, we are at home and people around. What happens is then there is a kind of comfort that sets in. And I think that's what HR can do because HR must maintain culture while maintaining distance. And if that HR can manage this in planning and ensuring that employee well-being and performance are set, automatically the balance thing happens. Another thing that can work is basically, we started doing is remote development. You can't get people into the classroom. But what you can do is you can take the classroom to the person. Now either it can be self-learning, it could be virtual instruction based or it could be remote coaching that you might be doing. Anything that you can do, if you keep on feeding him, there must be growth. See we all are human; we must grow. If you can't grow monetarily because of some reason, what you can do is you can feed at least the intellectual growth part of it or the emotional growth part of it. And that's what you can do with remote development. We also see that a lot of organisations, because of the changes that are happening, have retrenched people or they have got some other people. Now organisations would have saved money. My suggestion, in fact, my viewpoint around this is, if this idea can be reinvested in the people who are there, that further motivates the retail sector employees where you don’t see actual things around it. So rather than ploughing back of profit, distribute the profits saved into our people and that’s another way of ensuring that you keep on maintaining the performance of the people. Ready to Transform Your Retail Workforce Experience? Discover Cutting-Edge Talent Solutions Q. How does the organisation capture and scale up the productivity that can come with the new ways of working specifically in a hybrid model like our organisation Amity also starting that 50% people will be working from home and 50 will be coming to office. So, we call it a virtual and hybrid model. How do you accelerate individual learning curves so they can become productive in this kind of scenario? Ans: In fact, being in education University globally, if you guys think about the corporate who are focused on the bottom line all the time. In fact, you would have heard of TCS, a vision of 25 by 25. So, it’s the same with everyone. Everyone is looking at how I can get ahead because while the leaders want their employees to come, employees don't want to come back to the office. And it's a mix of both the things that are happening. Yes, there are some pitfalls of working from home. In fact, you don't meet people, you don't connect and say how it is and in fact, traditional leaders have this comfort of having people around them. And they say that's the only way to really communicate their vision, their goals and what they want to do. And that’s why we used to have all the strategy meets all the time in April, May, and June corporate India. This year we did not have it, but people are still making money. So, I think the shift that leaders must go back and say if I don't have my person physically sitting here, how can I still set clear objectives and milestones for the person, so that even if a person is physically maybe 1000 kilometres away, knows what to do, knows how to do, know how he or she will be evaluated and how he will be rewarded. There are of course multiple tools that can be done, a balanced scorecard is one of them if it can be done properly. OKR is another one that we have seen happening well. In fact, there is a classic case of Intel vs Motorola where OKR helped Intel to outright Motorola. And that's not one of the classic cases where we can look at it. One of the most important things that I have seen across is, if there is a clear objective for someone there is a higher possibility of that person performing. Ambiguous goals mean ambiguous results. Secondly, I have seen is, when people are aware while people would know what they are supposed to do. What happens is that people are not sure that whatever they are doing is right or wrong. Now, they might be coming to the office, they might be coming one day in a week to the office, or they may not be coming to the office. One thing that they require more than anything, is coaching on how it is going and how the person can cope up with the entire shift that is happening because the subordinate himself or the employee himself is not physically going in meetings somewhere. Suddenly people have realised that they don't need meetings. The work can be done on emails and phone calls. Now, not everyone is after doing it. Some of us are good at it, some of us may not be good at it. I think the second thing that the leader can work upon is ‘Remote Coaching’ for their subordinates. You don’t need to really give coaching only for the bottom. I believe everyone needs coaching. In fact, when I sit with my supervisor, I also ask him okay this is how we are going to go ahead with that. I have this view, but do you think it's appropriate, do you think it will work, do you think it will fly? So, at every level, people would want the most of whatever they are doing around it. Earlier it was very easy. I could just walk up to my boss’s cabin, anytime sit with ‘chai’ and I can work. Today it's not possible because he is in a meeting, I am in a meeting. So constant coaching by the supervisor is the second thing that I talk about and lastly what can drive individual performance as well as individual learning growth is ownership of well-being and engagement of the team members. Earlier people are to believe that HR was responsible for conducting engagement, games and ensuring that employees were happy but today, in fact, we are pushing it basically that your employee's well-being and engagement is completely dependent on you. For even a leader owns it then in this kind of hybrid model or maybe a remote working model also, we will be able to drive development as well as performance. Q. Do you think that this requires a new demand at the workplace in terms of skilling, lot of skilling because I was reading a report which says that 80% of people must be reskilled now with the advent of so much of digital transformation? What is your take on this in terms of reskilling and upskilling employees? Ans: There are a couple of websites one of them is BDUK and another one is NFWM where you can go and put your job out there and check out how much of your job will get lost because of automation over the next two years. It’s a very interesting insight, in fact, people can go and check it. I can tell you about the right thing in the world, the industrial revolution is not here to help humans, it is here to take away their jobs or part of their jobs. Now all of us as employees even facilitated as L&D team, you will see that some of it will be going out. So, if you look at this, from an organisation’s perspective when these changes are happening and even if the organisation doesn't want to do it for themselves, there will be competition, there will be markets, there will be customers to be forcing them to do it. Now, because of this, there are three scenarios - there are job losses that are happening what I talked about earlier. In fact, World Economy Forum 2018 report talks about that more than 30% of jobs in the manufacturing and service industries will be lost by 2025. Now, of course, on one end there is job loss happening, on another end, you have new jobs coming in. You have the app creator, you have got cloud sustained, you have digital marketers coming in. Now, these jobs were not there about four or five years back. So, you get job loss at one end, you got new jobs coming in between and then there is everything in between that is there. Now the organisation must see challenges, one is to also check if I am running automation and there is, of course, the pressure from the CEOs, CXOs, CTOs about getting new technology in place, what do I do with my people. Some of us will skill for the new thing that is coming in. Some of us have upskilled because they don't know it. I will have to reskill some of them who don’t have any other opportunity in the organisation to do something else. I will give you a classic example. In the organisation, when you had the offline business since it is locked out, we had the online business coming in and we had to reskill our people to start doing online training. Now these guys who were doing customer-facing roles, now are doing online order consignments. But now they must be reskilled. My own team went in from doing classroom training to doing virtual training to doing something which is now getting into complete performance management which is based on analytics. So, this is something that is required for survival. So that's the reality. Now whatever you might say, that’s how it is coming in, you don't know how people want to take it. But there is a churn, we are there, fortunately, unfortunately, we are living in the best era of humankind, but it also has its own set of challenges. And I think as an HR leader you must see it coming in and we must be the enablers to make it happen. Q. What should be the role of Human Resources? What mindset shift does this represent for the future and how different are these priorities vs today what they used to be earlier? Are you seeing some of this already been happening? In the very first instances, we talked about possible mindset shifts. To deep dive into certain things is like it must be, whether it is enabling performance or managing performance? When it must be job focused or well-being focused? Like we talk about the task and people-oriented leaders. Is it about bureaucracy or self-managed teams? Is it culture and behaviour focused or strategy/goal focus? Is it about people focus or Technology focus? So, a lot of questions are there in front of HR. How do you focus on these areas? Ans: We call Human Resources, and this term has evolved over the last 100 years from being an admin team to personnel team to labour relations. Now in the last 30 years, people were human resources, unfortunately, the resources are not managed well, is becoming a liability in the organisation. And the HR’s biggest role is to ensure that the resources remain resources, do not become liability where a finance team or operation team come back and say – your people cost is way higher than what we can afford to move out people. For HR, the biggest role that HR must do is make sure that HR has a vision to really take people through it so that not many people are left behind in the journey. This is a time when it can be where we can move everyone through it. We have seen that in the outsourcing boom that happened about 20 years, this was not managed that well. In fact, that's why you had a lot of pushbacks happening as outsourcing and in fact, outsourcing also became taboo in the developed countries, and India was on the receiving end of it. But today it's not only an outsourced company or outsourcing company or it could be a manufacturing or retail company. HR must play a role where the resources to remain the resources. And for that, what they need to do and in fact what I have seen, a lot of developed companies doing it, has a look at over the next 4-5 years. It's not going to happen overnight. It's like keeping a frog in slowly warming water. It will not hit you today, but slowly in fact it is eating away yourself and one fine day it will impact you badly. So what people, the last companies have done like Walmart. What Walmart's HR department has done. They have set $4 billion for the next five years to take care of their employees. What I talked about is basically where the cashiering which is 72% are women, if that role is going to go, what you are going to do with that. If you are going to get autonomous robots to pick up your cargo in the warehouse, what am I going to do with the pickers? What they have done is, they have investigated the future, and they have discussed with the leadership. If we got 1000 people and I need to take care of them because they stay with me. Now, how many of them can I make sure that I can take it ahead? So, HR must do two parts. It is possible to take care of people for readying them for tomorrow. One of the ways to do it is basically, there are three ‘S’ principles - Scout, Shape and Shift. What does Scout mean? HR must investigate the horizon and understand the business strategies and look at what kind of skills would be required or what kind of people enablement is required to enable revenues to be coming in over the next couple of years and how people can contribute along with technology coming in. Technology is not going to come in, in fact, it is coming to you already. How can I coexist with it and still make sure that the new skills that are required, I get my people to do it? So, they must have a visibility of what skills will be required over the next 4-5 years for my industry, for my organisation, for the resources that are coming in for the revenues that are coming in. That’s the first part. Secondly, they have to ensure that we segregate the current resources into who is shapeable and who are not shapeable to get to the skills. And that's the second part of shaping up which we call ‘Upskilling’. And third, they have to shift out people to roles that do not require technical skills but can move on to other skills so that they can sustain themselves and they can be taken care of. So, three things, Scout, Shape and Shift. So, by doing this, what HR will be able to do is sustain what exactly is going well. Also, what they can do, for example, what has Best Buy done in the U.S., is they have looked at how many of our people are good communicators. Best Buy is into full furniture and getting office equipment, all these things. Now people have stopped coming into it, they are buying online. Now what they have done, the way you have UrbanClap, as a company which has come and set up. They have extended their services into these areas where they can use their technical expertise to go and fix things in people's houses. So, I can upskill someone, what I can do is I can side skill him. For he knows something well, I will just add communication skills so that he or she can go to the customer’s house and fix things that are required. So, what HR has to do is keep on scouting, shaping, and shifting people so that they remain resources because training on the resource is almost 1.5 to 2 times cheaper than buying a new resource. So that’s business can be catered and pushed to management also. Q. How do you think what portion of outsourcing will be taking place in terms of Learning & Development? Ans: From HR & L&D perspective, I see one is kind of complex technology that is coming in. Let's take augmented reality or virtual reality. We need to build a lot of content around these products to make sure that the customer comes to our stores and goes to experience to buy something new. So complex technologies which are not available in-house, and they need to be trained for people is that’s where outsourcing can happen. The second is Scale, in fact, you guys are already good at it. Getting a scale in place, maybe we have to get 20,000 people trained on a new way of doing something, new software that is coming in or new processes that are getting rolled out. And that's another outsourcing that can happen. The third is basically the regular work that does not require a lot of technical competencies and that can be done by an outside facilitator also, is another area that can be outsourced easily. It does not require continuous connection with the client organisation or employee. So, these three areas which I think are clear opportunities for outsourcing and cost-saving as well as building upscale for HR & L&D. Q. What will be some of the key themes on organisation culture that corporate India will need to embrace in the future because things are changing, their dynamics are changing and where are we now on these themes? Have we started implementing it right now because people who would like to join in future, the organisation would like to know so that’s what I wanted to know? What will be the theme of the future in terms of the culture of the organisation? Ans: I think the theme of the future would be completely based on what kind of the target group that you have for the employees that you want to attract. Different organisations run with different sets of employees. And the reason why I am saying this is even a company like Google which provides almost everything under the sun to the employees, can't really attract the best of the employees and retain employees. In fact, a lot of these employees have left Google and Facebook and have joined a lot of start-ups in the US as well as in India. So, I think I would, rather than giving or responding to a very generic kind of answer, I would suggest that kind of theme that we need to build up, will be built upon the target group that I have, the kind of employees that I want to attract, retain, and grow, to kind of employee value proposition that I want to build. So that I can sustain the theme not only in attracting but sustaining and growing also. The reason I am saying is I have seen a lot of companies started a lot of fanfare kind of theme and not able to carry it through because that has not become part of the DNA, that is not really bought in, that is created to showcase to the world. In fact, I know organisations who participated in great places to work or a lot of these things just to get accolades on the website. But is it really to ensure that employees come, stay, sustain, and go ahead? That’s the biggest question. I think the theme, evolution will depend on three things - the target group, the EVP that you want to create and of course, what is your biggest long term people strategy around it? Q. What do you think, what will the future Leadership look like? What qualities & skills must future leaders possess? Which leadership strategies will have the greatest impact? We have been talking about so many leadership strategies and there is a question which has come in about leadership style, how do we see in the future. What kind of leadership style will be there? Ans: I think it's a very interesting juncture, the reason I am saying is that when I talk of the future of leadership, there is a lot of discussions that are happening worldwide on what kind of leadership do we require for the next decade. And the key thing that is coming across and the one word that arisen across is ‘Agility’. Unless and until leaders keep that in mind that tomorrow is going to be different than today and unless, until I am agile enough to take on that, whatever domain, functional, people skill or strategic skill I might be having, all will be in vain because I will be applying yesterday’s tools to tomorrow. So, I would summarise it in one word - ‘Agility’ and that's the key thing that is coming in across. If you look at yesterday’s news, Jeff Bezos stepping down. If you look at his journey. I was just reading through it. Just imagine AWS which was nothing, in 2001 they launched it and today it's in the cloud. Now, just think about it why I am talking about this. It's not about how much of the grey hair that you have, how much education qualification that you have or industry expertise that you have today, it is out of the window. What is required for today and tomorrow? Do we have the capability to understand what is required? Can I create tools and team around it, and can I go ahead and conquer it? And the genesis of all this is Agility which is if you go back to the tip of the Iceberg. Lead Your Retail Workforce Into The Future—One Skill At A Time. Learn How
Frequently Asked Questions
Get answers to commonly asked questions about Amity.
What benefits do businesses gain from implementing BEIs?
Organizations see better hiring results, keep employees longer, and get valuable insights into their workforce. AITD’s training in T&D helps businesses use BEI to get these benefits.
How can organizations reduce bias in the hiring process using BEI?
BEI uses job-related questions and structured interviews to cut down on bias. AITD trains on these methods to ensure hiring is fair.
What role does Dr. Vijit Chaturvedi play in promoting BEI?
Dr. Vijit Chaturvedi is a top HR expert who has studied behavioral interviewing a lot. AITD works with her to improve their training.
Why do interviewers have to be experienced in the art of conversation management during BEIs?
Good interviewers facilitate the sharing of rich examples of past behavior by candidates. This is critical to making accurate judgments. AITD teaches these important skills.
How can companies be sure they are asking the right questions during a BEI?
Questions to match the job's needs: Companies need to ask questions, using real-life examples. AITD helps in making effective questions for each organization.
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