Reading a business text explain that while the Indian economy is growing rapidly, the vast bulk of the populace still engages in subsistence work might dryly get the idea across. To really understand an economy, however, prospective students would be well served to look at both macro and microeconomic issues. That's why clicking the multimedia links in the first case of the Yale School of Management's Design and Social Enterprises Series provides a more modern approach to the case study method of learning. Hearing SELCO's Thomas Pullenkav explain that, "For about 90 percent of SELCO's individual clients, the solar system they purchase is the most expensive system in their household, and will probably be the most costly item they have ever owned in their entire lives," contextualizes household spending power in a way that a per capita income figure in Rupees never could.
Historically, the case method of studying business was pioneered at Harvard Business School. Early teachers found that there were no business textbooks, so they examined existing businesses and their problems by interviewing executives. Out of that primary research, they built case studies as historical narratives describing the business's past and then asking a series of questions about what it should do in its operations to better prepare for the future. Nowadays, Harvard's cases include exhibits and multimedia links, but remain focused on business and management issues. We at Core77 (perhaps because industrial design is a multidisciplinary craft) tend to see things more holistically. For a teacher or student in a design field then, Yale's Design and Social Enterprises Series will be a very welcome tool, and an intriguing step forward in how the intertwining strands of business and design can be articulated and shared. In partnership with Design Observer and with funding from Rockefeller Foundation, the first case, on Indian solar lighting company SELCO is now available under a Creative Commons license for free noncommercial use. (More backstory from Design Observer can be found here and here.)SELCO was founded by Harish Hande in 1995 to sell and service photovoltaic systems (predominantly lighting) in his home state of Karnataka, India. Offering clean lighting solutions to India's subsistence workers would allow them to continue their work day into the evening hours. By doing so, SELCO's decentralized lighting solutions provide a value proposition to India's poor, even at their (relatively) high costs. Consequently, SELCO needed to tie every aspect of their business model to the needs and capabilities of their target market. As Hande explains in another multimedia video, "Because it's need based, you need to customize. If it was want, you need to standardize." SELCO even ties their financing terms to the specific income schedule of their customers. For a paddy farmer, their loan comes due once a year, at harvest, while a government worker would be expected to pay with every paycheck.
Precisely because the Indian market is so profoundly different from the Western market, it offers insight through extrapolation. Readers see selling tactics akin to "guerilla marketing" where, because the solar lighting is so eminently useful, but also rather difficult to comprehend, marketing teams would place the lights in a prominent village elder's home for a trial period and then come back to see how it worked out. Needless to say, between the community peer pressure and the inefficiencies of the kerosene lamps the solar lighting replaces, the conversion rate is rather high. Likewise, prospective designers could benefit from understanding that because service and maintenance needed to be done on a local level, it was a near necessity for SELCO to source parts from India so that design knowledge and application could remain in close proximity. An understanding of how that process happens under the extreme conditions in India could influence and inspire new modes of business in the West.
The SELCO case study is divided into several broad sections. "The Genesis of SELCO" provides corporate and regional background. "Organization 2009" provides strategic positioning, including financials, structure and governance. From an ID perspective, the next section, "Product Design" seems the least robust, precisely because as "experts" in that field, we'd like to see a higher level of detail and process. "Partners, Marketing, Service" provides information on how SELCO was able to integrate its selling apparatus with the financing necessary to provide products to the workers that need them, and the last section "Innovation, Impact, Growth" includes a discussion of innovation that should also be of interest to ID students and teachers, and then moves on to address the company's strategic positioning for the future. Oddly, the homework/discussion questions about the material are included in the first section, "Introduction," and while they're informative to review beforehand, they can really only be understood once the other material has been absorbed.
As a former financier, current entrepreneur, undergraduate economics major and ID grad school alumnus, this reviewer felt that even though SELCO founder Hande explained that each branch of his company had to be autonomous enough to function in isolation (just like his solar lights), the case study was far more difficult to compartmentalize. For SELCO to (barely) break even every facet of its business plan needs to function perfectly. The financing must be in place, marketers must have their feet on the ground, and the service staff needs to be at the ready to repair their products as they weather between the rains and the hot Indian sun.
As industrial designers, we found that the product design discussion questions seemed actually the least supported by the case. For example: "#8. Miner's helmets were an inspiration for the solar lights for midwives. Are there other ways to readapt other common designs to new uses that would make sustainable energy available to other segments of the Indian populace?" The answer is most certainly yes, but the only way to find out is to do ethnographic design research. Without supporting materials outside of SELCOs domain, the product design questions seem far more like a brainstorming exercise into new product fields than the business discussion questions, where the answers can be found or at least alluded to in the materials.
For ID students attempting to understand the choices that a business makes through the case method it seems to us far more interesting to analyze the influence that business factors have on product design (e.g. understanding that to have service people capable of maintaining a distributed network on a local level requires that the product be sourced with local parts). The real bounty that the SELCO case study offers to product designers is insight not only to how the company can grow through thoughtful product design and application, but also how corporate issues can shape design decisions. With that knowledge, designers can make manufacturing choices that ease the burden on their managers and guarantee a long and fruitful employment with their more profitable employer.
Check out SELCO: Design and Social Enterprise case series here.
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