May 20, 2014 by Alex Counts
Grameen Foundation and Citi Foundation co-hosted a two-day workshop in Mumbai India, to discuss how practitioners could apply user centered design in developing financial tools for the world’s poor. The event, which was held May 7-8, 2014, was sponsored by MasterCard and CGAP, with ThinkPlace Foundation and CGAP serving as content partners. The following are highlights from the closing remarks presented by Grameen Foundation president and CEO, Alex Counts. The full text of his closing remarks is available here. The final post-event report is here.
During our recent workshop on designing products for adoption and scale in Mumbai, I heard many memorable ideas, concepts, examples and analogies. One that has stuck in my mind is Ujjivan’s Samit Ghosh likening the shift we are trying to make to moving from catching rabbits to catching elephants. The comparison is apt, and even a bit daunting. But with dynamic leaders like Samit to guide us on this journey, and with the stakes being serving the poor better, I think we can do it.
As we contemplate scaling this mountain called “user-centricity,” I think we need to reflect on how far we have already come in the microfinance and financial inclusion journeys. We started with a “proof of concept” largely focused on delivering credit to the poor, and even to the poorest. Once we saw that such loans could be repaid, and that they could invigorate microbusinesses and aid in consumption smoothing and reducing the stress that the poor feel, we adjusted the goalposts to show that this could be done on a break-even or even profitable basis. That was our first wave of innovation and we’ve had several since then.
It is easy to diminish the importance of the earlier waves, and to focus on the centrality of whatever the current one is. But I believe that to a large extent, the potential and opportunities of each successive wave are made possible only by the successes of the previous ones.
Those innovation waves and the poignant talk at the Mumbai workshop about “ecosystems of partnerships” and sharing failures and learnings underscore an important reality: Institutions working towards poverty alleviation through financial inclusion can no longer afford the luxury of “going it alone” and spurning partnerships that can add value to the client experience. In the past, we had the luxury of being guided by our grandiose notions of what we can do on our own, overemphasizing the importance of philosophical differences, and, frankly, indulging our individual and organizational egos.
Today, technology, regulations, client needs and competition all demand partnerships as never before. In that vein, Grameen Foundation is working on some alliances with partners that may surprise you, and I am sure we are not alone. To a large extent, I believe that the microfinance organization that decides to go it alone in today’s world will be increasingly irrelevant.
In this sense, I see sharing learnings and failures as a way of treating this entire industry, this entire movement, as our partner. My own view is that any organization that accepts philanthropic or subsidized capital to any significant degree has an ethical obligation to broadly share knowledge that in a purely commercial context might be considered a proprietary asset that should be kept secret. This is a small cost to pay for inexpensive if not outright free capital to finance R&D as well as growth.
As I have been reminded by Grameen Foundation’s immediate past Chairman, Paul Maritz, the semiconductor industry (one of the most competitive in the world) has, for example, decided that sharing information with competitors can have the effect of benefitting the entire industry – growing the pie rather than simply slicing it up differently. So, even those involved in financial inclusion for purely commercial reasons may also find that sharing information helps their own bottom lines, as well as the industry at large.
The temptation to look for technology-driven quick-fixes to age-old problems related to product development and delivery, and related business models, is strong. In reality, the messy world of human beings and human networks usually needs to be engaged in order to make things actually travel meaningfully across the last mile and create value for poor people. In Mumbai, Priya Jaisinghani of USAID generously gave us the example of sending messages on HIV treatment by SMS to an entire population of people who did not have mobile phones! There have been many other, less flagrant examples where flawed, technology-driven approaches have stunted impact.
Let me share another insight.
En route to Mumbai, I attended another conference where one of the keynote speakers talked about the difference between “artificial intelligence” and “augmented human intelligence.” He described the historic moment when IBM’s Deep Blue computer first defeated the best chess player in the world. The expectation then was that computers, as they gained speed and power, would gradually replace human beings in such areas of research, problem-solving, and governance. But it did not turn out that way.
He gave another example using weather forecasts that showed that forecasts made by meteorologists who have modified computer predictions, where his or her judgment dictated, have been about 15% more accurate than what the computer alone predicted. In this and other fields, technology has the ability to augment human judgment and intuition, but it cannot effectively replace it. Human beings with the right training and ethics have an ability to know when technology provides a logical solution, and when it does not.
Let’s apply this to the work of microfinance and financial inclusion, and especially to the idea of customer-centricity. I imagine there will be times when people will argue that simply feeding a bunch of data about clients into a super-computer that will figure out the best suite of financial products for people, and then deliver those products through the mobile phone. My sense is that such approaches will periodically lead to sub-optimal outcomes, and at times even harmful and unethical ones. Augmenting such strategies with human beings who can use their judgment and intuition to both design and deliver products to marginalized populations seems like a much more promising approach, even though it is likely to be more costly, messy and complex in most cases.
So what are the lessons from Mumbai?
- Reward Failure. Yes, I did write that! In Mumbai, people talked about the importance of admitting and sharing failures. But I think we should take it a step further. When people take a risk and try something new, sometimes their hypotheses don’t turn out to be correct. So they fail. But they often emerge from that failure much wiser. When I look at my own career, those moments when I set out to do something based on certain assumptions and failed, I learned a lot about my assumptions and about my capabilities, and emerged a better professional. But if we only reward success, and merely “admit” failure, we may be missing opportunities to incentivize risk-taking and new thinking, and miss opportunities to leverage the growth that often comes with failure.
- Cross-Industry Learnings. As we have heard over the two days, there are many opportunities to gain insights from applications of “client-centricity” in other industries. But we have only scratched the surface. Be on the lookout for tactics and strategies that could accelerate our progress, and take the time to share those insights widely.
- Academia and Government. Don’t forget to engage researchers and policy-makers, as they can be key allies. In fact, if we repeat this workshop in the future, I’d like to see more representatives from these two communities.
- Context Matters. As I mentioned (in a sadly prescient way) in my debate with Vikram Akula at the outset of the India microfinance crisis, what we do happens in a socio-political context. Even when we are doing good, if the society at large – including the media and public officials – do not understand the benefits of our work, they can become our adversaries. We ignore them at our peril.
- Two Things to Avoid. Be wary of short-cuts, particularly ones that are solely reliant on technology, and avoid complacency at all costs. Even if you get “client-centricity” right at a certain point in time, client needs evolve and you are likely to be left behind if you are not rigorous in reapplying these principles continuously.
- Client Protection, and Common Sense. Even as we roll out new and hopefully better products, let us do it in a context of client protection and advancement, bearing in mind the principles of the Smart Campaign but realizing that in this fast-changing world, these principles may not always keep pace with practice. (In other words, client protection principles may be written to guide current and contemplated products and delivery mechanisms, and may not be easy to apply to new, unanticipated approaches that evolve quickly.) So that is why it is important to always apply common sense and ethics to your work at every turn.
- Not just what, but how. Lastly, let’s remember to have fun with our work, and to do it with joy. Certainly there are difficult moments, and sometimes it feels like a long slog. But by bringing in playfulness and celebration, as we did in Mumbai to some extent, we can help to continually reenergize ourselves and to attract talent at the same time.