Knowing how to optimize business processes and technology only takes companies so far. Success in volatile environments requires learning how to apply data compassionately in response to new opportunities and risks.
Everyone has had encounters with automated telephone response systems and experienced the frustration of having to repeat voice commands multiple times before finally asking to speak to a service representative. Many large companies have become so focused on optimizing their business processes and systems that they have become all too willing to forget about cultivating emotional connections with customers. But in order to detect and respond to shifting customer needs, the authors argue, companies need to show more, not less, empathy with their customers. Some companies have found an approach that optimizes business processes and technology, the ability to foster emotional connections and the ability to use data empathetically. The authors call this approach softscaling.
Successful softscaling is based on three core activities: nurturing emotional connections to achieve commitment and loyalty from employees, customers, suppliers and other business partners; optimizing business processes to achieve low-cost and reliable operational excellence; and combining data (captured by optimized processes and technology) with a deep understanding of local context to make empathic decisions. Being excellent at just one is not enough–it takes all three. These abilities are particularly important to businesses attempting to expand beyond their traditional customer bases and home markets, especially into volatile environments. Although the research was conducted in India, the authors maintain that the core tenets are equally applicable to companies in other emerging economies, as well as in sectors in developed markets that are experiencing rapid change.
The authors examined five companies–Hero MotoCorp, Bharti Airtel, Tata Motors, Housing Development Finance Corp. and Max Healthcare–all of which integrate optimization and emotion, using evidence-based empathy that is grounded in data analytics. This strategy has enabled the companies to exploit opportunities to become market leaders in highly unstable, resource-constrained settings.