Anyone who has spent time on solving problems of financial inclusion will confess that it is hard work. The gap between the financial services that those of us reading this have access to, and that which is available to the poor around the world, is both disturbingly large and tantalizingly solvable. But the really hard part is moving from the realm of possibilities to the reality of scalable practical ideas – ideally, with the inherent lift-off velocity of market forces.
At Janalakshmi, we have always believed that what truly constrains us is not government regulations – of course, regulations are major sources of unnecessary friction – but our own inability to innovate to find powerful solutions that add value to our clients. And the wellspring of this innovation is the voice of the customer.
Our own journey of building a ‘360-degree financial services company for all the needs of the urban poor’ began in 2000. Over time, we came to understand the enormous process constraints of delivering credit services in small ticket transactions across thousands of slums in cities across India. Based on these insights, it took us four years – 2006 to 2010 – to build an industrial-strength technology platform that provided the backbone of scalable, small-ticket loan disbursals. On this platform, we built a field organization where roles were clearly distinguished between sourcing, collection and cross-selling. Once we got it right, this platform helped us scale. Today, we have a nationwide business spanning 70 cities, serving 1.3 million clients and growing at a healthy rate.
The years of work behind this innovation came from thinking about the client’s needs, blueprinting a complex solution, and then relentlessly iterating it until we got all the hundreds of moving parts right.
But the same innovation that got us to this stage risks trapping us into becoming an ‘inside-out’ organization whose entire measurement framework focuses on how well we execute this operating model. The problem is that where we are today is still far from the original vision for the firm.
We needed to think deeply about how to proceed from this point. Even as we continued to scale the core business, we needed a parallel effort of significant strategic importance: to focus on taking our client understanding to the next level, and then using these insights to develop the next range of financial services and business processes.
Over the past 12 months the partnership with CGAP and their on-ground resources has been driven by this goal. We told ourselves up-front that there would be no sacred cows – current business processes and delivery platforms would not become a barrier, and we must be willing to cannibalize our processes if there is a compelling reason to believe that the new structure would better serve our clients. Four months ago, we synthesized all our learnings from the customer deep-dives into a new instrument called ‘Kaleido,’ which you can read more about here. The question now is ‘What do we do with Kaleido?’
We are planning three inter-linked activities as we look ahead: first, we see enormous potential in Kaleido becoming a core instrument in sensitizing our senior management – starting with me – to be constantly thinking of our customers, their aspirations and needs. To meet this objective, we have set up a Customer Centricity Council, made of senior management, which will meet once a quarter and prepare a joint report for a newly-constituted Board Committee on Customer insights. All members of the Customer Insights Council will undertake at least one Kaleido customer immersion every quarter, a process that takes about two hours of deep immersion with a client and her family. Kaleido gives us a framework for these customer immersions, and for this to result in a collective coherent conversation about our clients. While this will begin with senior management our goal is to eventually roll it out across management levels in the organization.
Second, although we see enormous value coming out the Kaleido process in terms of product ideas – and the first one is a daily collection savings product that we have called ‘Goal Based Savings’ – we don’t want Kaleido to become hermetically linked to any such product because it risks reducing the tool to a ‘check-the-box’ process that will soon lose value. This means defining how we will administer Kaleido so that even as we get product insights, we don’t make the process dependent on getting such product opportunities. The requires careful organizational design and performance metrics for the administration of Kaleido, while simultaneously ensuring that the business opportunities in terms of products are handled with rigor and uncompromiusing sing performance yardsticks.
Third, we need to think scale and process. As a start we intend to take up the Kaleido process for all our clients who graduate from the group loan product. Over the next 12 months this means thousands of Kaleido immersions with all the attendant details : massive process protocols to be set up, digital data capture issues to be addressed, and back-end database architecture to be designed, so that we can not only ‘use’ this information in a productive way, but also continuously assess the usefulness of various data elements on an ongoing basis.
All in all, in Kaleido, we have found something tangible that we can use to think about our customers in a more robust way and drive both insights and innovation to push the frontier of financial inclusion. Proud of this accomplishment, we know there is an enormous amount of heavy lifting yet to be done in executing on these possibilities, because, as we all know, the devil is in the details.
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