Vol 26, No 3; Article by Sourav Mukherji
In Conversation with Ramesh Ramanathan, Chairman, Janalakshmi Social Services and Janaadhar
Professor C K Prahalad's hypothesis in his 2005 book that there was a "fortune at the bottom of the pyramid (BoP)" if organizations addressed the needs of the economically weaker sections of the world, was a challenge to organizations to innovate and reinvent their business models.
Low cost housing is one such BoP opportunity in India, going by the estimated housing gap reported in the 11thFive Year Plan. However, despite the potential, there are few real estate players in this segment. In this conversation with Ramesh Ramanathan, founder of Janaadhar, a not-for-profit enterprise which aims to provide good quality houses at low prices to the underserved population, we discuss the challenges in this space and how his organization is meeting them. The challenges include undersupply and high cost of residential land in urban India and the time taken for requisite clearances, difficulty in getting bank loans, and in acquiring the right customers.
Ramesh Ramanathan speaks of his journey in building Janaadhar, which provides several pointers on social entrepreneurship. The learnings include the need to overturn conventional wisdom and be perennially in a learning mode -- to be ready to "bite the bullet and figure out how to deliver". Mr Ramanathan acknowledges the "mistakes" made but puts them down to the "tuition fees" for learning. Affordable housing, he points out, tends to be focussed on cost of construction, but the real challenges lie in knowing the customer, and addressing issues related to customer acquisition and customer servicing. The process has involved a balance between "head and heart", a constant negotiation of the tradeoff between financial viability and positive social impact, which has reflected in Janaadhar's selection of partners, operational choices, the specific organization form they adopted, and their human resource policy. In conclusion, Mr Ramanathan emphasizes the role of the government and policy enablers, and the importance of commitment and leadership in creating a purpose-driven organization.
