Case Analysis II: IndiaFirst Life Insurance: Planning Next-level Growth by Corporate Entrepreneurship

Brief Synopsis

IndiaFirst Life Insurance (IFLI) company started in November 2009 as a life insurance company in India with its headquarters in Mumbai. IFLI has created joint ventures with two public sector banks of India—Bank of Baroda (44%) and Andhra Bank (30%)—and Legal & General (LG), a financial and investment company from the United Kingdom (26%). The company aimed to become a top 10 life insurance provider in the next few years in India in terms of the retail premium business. Additionally, IFLI had developed a Vision for 2020 in 2015, which advocated that the company establish itself among the top five insurance companies overall by 2020.

IFLI had originally adopted a siloed approach to innovation by designating a multidisciplinary team to identify and screen new business opportunities. This approach had helped the company in building several initial new product and process innovations. However, keeping in mind the rise of the younger workforce at IFLI India, the company decided to democratise innovation by promoting a culture of corporate entrepreneurship (CE) company-wide. The idea was to create opportunities for IFLI to develop and encourage its employees to think and behave entrepreneurially in every function within the organization. IFLI was hopeful that this new approach to CE was a step in the right direction for achieving its Vision 2020.

Accordingly, the case provides an opportunity for students to examine the organizational structure at IFLI and plan a way to launch and implement a new approach to CE. In doing so, students should take into consideration the data regarding the existing processes of innovation through the more siloed dedicated multidisciplinary team approach that helped the firm in the past to innovate. The students can then begin to make assumptions about analysing the feasibility of launching the democratised version of CE.

Positioning of the Case

This case is suitable to be used as a first case in a postgraduate class on CE. It allows an instructor to introduce the concept of CE by facilitating a discussion about different approaches to incentivizing entrepreneurial behaviour. The instructor can focus the discussion on the challenges faced by an organization as it attempts to implement a company-wide change in the innovation culture. The case can also be used in a management development programme (MDP) on CE and innovation management. Through facilitated discussions, participants can focus on the implementation challenges associated with an attempt to change and modernize an established culture. Thus, the case can be used for covering multiple perspectives on understanding the concept of CE. One such perspective can lead to a discussion of the company’s readiness and commitment to achieving an entrepreneurial culture. For this purpose, an instructor can organize the discussion around the application of the Corporate Entrepreneurship Assessment Instrument (CEAI) framework (Kuratko et al., 2014).

Discussion Questions

Following are some discussion points that an instructor can use to illustrate alternative approaches to achieving an environment conducive for new business development.

Advantages and disadvantages of a siloed approach to CE: A siloed approach to CE has advantages such as a separate and dedicated group for new business development. This dedicated group would have a focused approach to opportunity search and evaluation. This team can be evaluated based on measurable outcomes such as new business opportunities introduced to the market. Moreover, this is a more disciplined approach to CE from the lens of time, resources and outcomes.

At the same time, a siloed approach has disadvantages associated with not harnessing the full potential of the organization’s human capital. When only a few people in the organization are designated as responsible for new business development, the chances are high that promising opportunities may be overlooked. Additionally, a siloed approach can lead to turf wars where ideas generated from outside of the unit may not receive appropriate consideration.

Arguments for and against a democratised approach to CE: A democratised approach to CE has many advantages, such as the opportunity for the organization to cast a wide net in the search for new and promising business ideas. This approach also creates incentives for individuals within the organization to get noticed and grow personally and professionally. Thus, such an approach can serve as a mechanism for attracting and retaining talent within the company.

However, a democratised approach to CE can just as easily lead to scepticism among the employees. Clearly, by encouraging all employees to develop ideas for new business and process opportunities, the company creates expectations that may not be fulfilled. Essentially, ideas are plentiful; however, only a very few can be practically pursued by the company. Thus, when employees pose new ideas that are not supported by the organization, a sense of apathy and distrust can develop. Another challenge with this approach is how IFLI infuses the mechanism of discipline with respect to time, resources and outcomes.

Implementation challenges associated with a democratised approach to CE: The democratised approach to CE has some implementation challenges including the time taken to screen and evaluate the inventory of ideas. For instance, if a high number of ideas emerge from this process, it will be important to devote time to evaluating the ideas and providing feedback to the idea generators. This type of feedback mechanism would be especially important for those who took the time to submit but were not successful. An additional implementation challenge may arise when an idea is accepted, but the individual is needed to support the core business activities of the organization. Thus, from an implementation perspective, tensions may arise between those responsible for core business activities and the demand from those advocating for new business development through entrepreneurial behaviour.

Moreover, under this approach it is not easy to evaluate the measurable outcomes such as new business opportunities. The other challenge with this approach is how IFLI infuses the mechanism of discipline with respect to time, resources and outcomes.

Evaluation of the company’s readiness to implement a democratised approach to CE: The company’s readiness to engage in the new democratised approach to CE depends upon factors such as how fast the company screens the ideas and provides feedback to the employees who have shared the ideas. Management support, especially with respect to resource availability to help grow new projects, is critical. Time is another critical factor. Employees must feel that they can have sufficient time and a place to work on new projects outside of their core business activities and responsibilities. The other lens to evaluate the company’s readiness is how well the innovations have been linked to the key result areas (KRA’s) of the employees at the back end. This will help the company to identify the innovators and reward them accordingly. Clearly reward and measurement systems must be linked to the context of new business development which many times is separate and distinct from the way people are evaluated and rewarded for performance within the context of the core business.

Evaluation of the success prospects of the new approach to CE: The evaluation of the success prospects of the new democratised approach to CE depends upon the outcomes achieved by the company when compared with the siloed approach. This can be quantified in terms of number of ideas received or number of new business ventures executed and/or more profits generated. In addressing this issue through facilitated class discussions, an instructor or facilitator can challenge participants to consider the advantages and disadvantages of both approaches and make appropriate recommendations to senior management.