A Business Model for the New Normal

The lockdown due to coronavirus is an unprecedented event to rethink how we do business and the changes that can bring to the ecosystem to make it more sustainable. Growth is the most critical term that drives every business organization. For publicly listed companies, quarter to quarter growth is inevitable, and failing to meet the expectations of the market may lead to the collapse of the company. Even in private companies, the day-to-day business impulse is on the basis of its growth plans. But where did the term ‘growth’ come into businesses as a driving force?

Let’s have a closer look at the side effects of the vigorous growth tendency in businesses. Stories of corporate misbehavior are coming out daily. Marketing abuses, financial misconduct, transparency issues, etc. are losing their news-value due to excess of similar occurrences in that domain. As I am writing this article, the news about NMC Health is flashing on television screens. IL&FS, Yes Bank, PNB, Satyam, Coca-Cola, Facebook; the list is not ending. In the race to become more prominent and to capture market share, the companies are often forgetting the fundamental values of human existence. Is there an alternative strategy that can make businesses more profitable, sustainable, and value-oriented?

All of us are in the lockdown due to coronavirus now. For some of us, this is just another vacation, and for some others, it is like a real trial. We don’t know the source of coronavirus now; it may be from animals or some other origins. Climate change may be indirectly triggered the birth of the virus. Climate change has many reasons, and the primary cause is the pollution created by the industries. Contamination directly from the companies, abuse during the extraction of raw materials, pollution due to the processing of waste, and deterioration due to extensive usage of products are some of the variants of abuse made by corporate companies. In that way, the COVID-19 pandemic is not the only result of such destruction making by the corporate world through the ‘climate change.’ Floods that were happening in various parts of the world, the most consequential wildfire in Australia, etc. are also a result of climate change. I’m not arguing that every such disaster is humanmade, but many such catastrophes are an accumulated result of activities by human beings. Every abuse has an end, and this should be the end of the environment abuse by the extensive use of products.

Numerous phenomena of the environment change for good has reported from various parts of the globe. Photographs of deers roaming on roads, wild goats surmounted the streets, clearer vision of objects in the far, etc. reported from various parts of the globe. Many efforts have made to enlighten people to conserve the environment, and the effectiveness is not good enough to claim ownership. When Gretta Thunberg made her voice heard in 2018, things have changed slightly, but strong political determination has not seen. The coronavirus outbreak is a self-correction move by the earth to maintain its equilibrium. The environment has its ways of finding a balance. But in the process of the planet making a balance, humans and other creatures may suffer heavily. So, it is always better to correct before the environment corrects itself. But unfortunately, we are in the middle of such a correction that cost us close to 300,000 human lives.

Is this a wake-up call to humankind to rethink the way they are doing business? Do we have an alternative to the current system that forcing to grow fast? Can we have an alternate so that we need not bribe the political system both to grab the market and to protect the market? I think there is a solution, and I will call the SLOW (Sustainable Line of Winning) model of business. SLOW is not a new model but the original way of doing business. But in a rush, we have overlooked this way and embraced speed; and now end up in this embarrassment.

[ATBC is a business strategy consulting organization. It focuses on strategic consulting services to companies in the scale-up phase. Business Strategy Consultant, Asif Theyyampattil, and his associate consultants collectively frame the organization. ATBC includes Financial Planners, Chartered Accountants, Chartered Engineers, Management Consultants, Company Secretaries, Branding& Marketing Experts, Social Media Consultants, Event Managers, Process Designers, Business Trainers, and Project Management Consultants, etc. Our focus is to create sustainable and profitable companies within our value framework. For details of the activities, please visit Asif Theyyampattil at www.atbc.co]

To make the idea simpler, we can call it qualitative growth. In the current system, we often try to grow faster with the assumption that we will deliver quality stuff. That means there are no questions about overall quality as we see the arrangement just as product or service quality, i.e., how this decision will affect the stakeholder community at large? Corporations mostly cared (or worried) about the investors, who are only representing a part of the stakeholder community. The SLOW method suggests concentrating on the improvement of the total quality of a company. It will bring an organic growth. Quality here refers not just to the product quality but a holistic quality approach that cares about the wellbeing of all stakeholders, including investors, employees, customers, vendors, supply chain, society at large, etc. In the comprehensive approach, the stakeholder community also includes other creatures, plants, the future generation, and the environment.

The SLOW method derived from the Triple Bottomline (TBL) approach that suggests considering the planet and people in addition to profit while thinking about the bottom line. But it is not limited to it. The purpose of the organization is the most crucial point in the SLOW model. Whenever a business is making a decision, it gives importance to the core purpose, which is not the growth. It shall be the product, method of delivering the product, the need of the target customer community, etc. As the businesses focus more on its core purpose, the company grows organically, and that growth is risk-free in comparing with the traditional organizations. Even if it faces a crisis, it will be better prepared than other companies that follow established norms. To make the SLOW model to work, the investors in the company should have more patience than conventional investors. They should not be greedy and expect just reasonable returns for their investment. But as the advantage, they will get a more sustainable company that will give returns for more years than the traditional ones.

The SLOW model will work better if the government absorbs GNH (Gross National Happiness) in place of GDP. GNH is “a holistic and sustainable approach to development, which balances material and non-material values with the conviction that humans want to search for happiness.” (Source: http://www.gnhcentrebhutan.org/what-is-gnh/) and it used as an alternate to the GDP model. If the government is ready to change the playground, it will be easier for the corporations to follow the guidelines suggested by the GNH model.

If adopted by the corporate, the SLOW model suggests publishing their quarterly/ yearly performance not just on financial pointers but on an extensive list of indicators to ensure the wellbeing of the society at large. The performance report should include implications of life quality improvement of employees, influence in the life quality of customers, contributions to environment preservation including the carbon footprint, wealth created for the company and stakeholders, positive or negative impact in the business of vendors and supply chain agents, impact on the society at large, etc. This approach will drive companies to focus on the wellbeing of the people, which is essential for a developed country. In this way, the population may achieve its objective more efficiently and effectively.

There are many examples of SLOW model businesses. Aravind Eye Care Systems in Tamilnadu, India, is a model that adopted a model that shares the same values of the SLOW. They have developed a unique business model to keep the value system and purpose at the front of their choices. Narayana Health in Bangalore, India, also follows a similar business model. Paragon is a restaurant chain based on Calicut, India, and refusing to grow beyond its control to provide value to customers. The Managing Director of the company always insisting that he wants to give the same quality of food and service (he precisely calls it ‘feel’) wherever if they open a restaurant. The restaurant is now operating in multiple countries, and still keeping the ‘feel.’ These are the companies that bounce back after a crisis in the market, or not falling in such crises.

A Shift into the SLOW model is not just a matter of feel-good factor. Many other factors are forcing the corporate to adopt the style. Legal regulations are getting tightened day by day, and it will make any misconduct tougher. Besides that, social legitimacy also forcing the companies not to travel the off-roads. But most importantly, if a company loses its purpose, its strategy will be derailed. Values and purpose are the foundation where a company established. Sliding from the roots is suicidal, whatever the explanations.

Corporate Social Responsibility (CSR) should not be a charity act that corporate is doing from the wealth often accumulated through reckless policies. CSR should be broad enough to cover all aspects of corporate activities. Corporates are accountable for the creation of a welfare society and by thus, a developed country.

As responsible citizens, we can make submissions to our government to adopt the GNH or similar measures to gauge development rather than just looking for production figures. GDP is a tool from the 17th century, and time has arrived to review the relevance of it, in the light of modern-day development expectations. We also think about the SLOW model in our businesses to create a more sustainable business.We have tired of junk food, and organic food has become the fashion of the contemporary lifestyle. Can we think about replacing the junk business model of fast growth and adopt an organic model instead?

Asif Theyyampattil

Founder ATBC