More and more businesses and industries are facing a tide of unstoppable disruption. Big players can no longer rely on their core business to keep them afloat. Far from being a call to be protective of old ways and processes that worked in the past, disruption is a challenge to lead in new, unexplored landscapes.
Disruption first shook the world of retail, the automotive industry, banking, real estate and, supermarkets. But it is becoming clearer that no industry will be untouched by the need to embrace, for example, digital transformation and constant innovation. Research shows that disruption can, in fact, be predicted. This makes it easier for companies to create spaces and a culture in the organization that is ready to face disruption and rapid change.
In the fourth edition of the Center for Asia Leadership’s book, Rethinking Asia: Why Asia is Hopeful, Jennifer Hurford, Director at the Integrated Strategy Team at VML, a global digital marketing agency, presents several cases of organizations that are meeting disruption head on through radically new ways of business development and incubation.
In the excerpt that follows, she shows how operating like a start-up even if you’re not one could help drive business. Through the case of Robi, the second largest Bangladeshi telecom operator, she outlined how empowering small teams to make quick decisions can shift the power structure of an organization and make employees feel heard. Hurford received graduate degrees from Harvard Business School and the Harvard Kennedy School of Government. She also holds a BA in Economics from Haverford College.
The Case of Robi of Bangladesh: How to Change Your Company’s Culture and Innovate Internally
Summary: Robi is the second largest Bangladeshi telecom operator. It offers pre-paid and post-paid mobile services, as well as value-added products and services such as mobile banking, fixed broadband, and international roaming. While the company dates back to 1997, Robi’s name was born in 2016, when Axiata Group, Malaysia’s largest mobile operator by market value, and Bharti Airtel, India’s largest telecom operator by subscribers, agreed to merge their subsidiaries in Bangladesh.
“Robi” means “sun,” representing the fact that the company aims to align its services with local Bangladeshi heritage and culture. The Bangladeshi telecom sector has experienced high growth and fierce competition among six major players over the last few decades. The merger of Axiata Group and Bharti Airtel to create Robi was designed to strengthen the industry structure and bring greater benefits to customers in terms of network coverage. The executive team we met on the Trek, however, recognized that the series of mergers had taken a toll on the company’s culture and ability to innovate. They needed a new strategy to get themselves back on the map, so they created an in-house innovation arm to crowd-source disruptive idea from the employees closest to the customers.
Professor Christensen says that “over the long term, the greatest innovation risk a company can take is to decide not to create new businesses that decouple the company’s future from that of its current business units. Robi took that risk when it created an employee-only in-house innovation arm called “r-ventures.” In recent years, the company has undergone a tremendous turn-around success story. The cost of doing business as a telecom company in Bangladesh is high, as the government has imposed burdensome taxes on the telecom industry, in contrast with textile companies, which get all the favors.
Robi’s leaders needed to find a way to inject the company with a fresh culture that would inspire employees to turn the company around from the inside. They did so using three valuable rules:
- Operate with startup principles, even if you aren’t one. Create opportunities for corporate intrapreneurship. R-ventures is an in-house incubator, a lean startup training program with over 200 participants.
Ideas are pitched, and 10% are selected to be worked on by diverse teams across the firm. Employees stay on payroll for the year that they work on the venture. Robi then introduces the startups to venture capitalists and bankers, but it maintains the right to get first rights to equity investment.
- When big changes are needed, empower a small team to make decisions quickly. Robi rapidly tested several organizational changes. As part of the company’s transformation, the management team adopted a reward-driven culture: everyone is paid for the quality of their performance, which is measured by universal key performance indicators (KPIs) aligned with the company’s revenue targets. Even an employee who serves coffee and Iftar, the Ramadan dinner, has KPIs that tie back to revenue targets—he needs to make sure that he purchases food at an affordable price to feed all employees. The company’s leaders believe that incentive, performance, and engagement are all linked. They knew that if they wanted to improve the faltering morale of the company they would have to promote engagement, and so they created an open platform for employees to suggest changes. A management team of five read the suggestions and immediately sent out memos outlining the changes they had decided to adopt, making the employees feel heard and valued in a way that hadn’t happened before.
- Culture eats strategy for breakfast. It doesn’t matter how good the corporate strategy is if the company’s culture isn’t strong and supportive. Robi discovered this, and it’s leaders have been able to transform their company as a result. Not only is it back at the top of the telecom industry, it has been voted one of the best companies to work for in Bangladesh. Where once they were struggling to retain talent and market shares, today they are a success story that other corporations strive to emulate. They were able to disrupt themselves—to embrace self-innovation—and thus turn around their business in the face of extreme competition and government push-back.
By Jennifer Hurford
