Narratives are the most powerful tools of our age. Each week, I deconstruct the dominant ones behind the success or failure of businesses, leaders and governments

Good Morning Dear Reader,

Pulitzer-winning American journalist, English professor, and author of several books on writing Donald M. Murray famously said and reiterated one thing throughout his professional life.

“All my writing—and yours—is autobiographical.”

The point he was trying to make was that every person has a different experience of life, a different perception of the world, and each tells their story in their own way. In essence, all storytelling is autobiographical.

Two people could apply the same narrative thinking skills to fashion a story, but while one may connect with people and appear trustworthy, the other may not. This week's Inciting Incident is all about the many people involved in a company, the stories they tell (or want to tell), and the crucial role they play in a firm’s fortunes.

Take PolicyBazaar, which has debuted on the stock market and now needs to hire an army of insurance agents to grow its business. Or fashion e-tailer Myntra and ride-sharing, food delivery, and electric vehicle brand Ola, both of which have lost senior executives and are in the market to hire leaders.

On one side are the narratives that these three companies have built around their businesses. On the other are the stories of the individuals they hire. And how these two kinds of narratives work (or not work) with each other is becoming increasingly important.

Let’s dive in.

PolicyBazaar needs agents of trust

In mid-2018, after raising over $200 million in a funding round led by SoftBank, PolicyBazaar’s co-founder and group chief executive officer (CEO) Yashish Dahiya had a conversation with The Ken. The vast majority of insurers and customers, he explained, are dependent on agents to buy and sell policies. This is the reason why only about 1% of insurance policies are bought online by users directly in India.

Agents, he said, are essentially the storytellers who convince people to buy a policy that they may need in case of death, disease, or a disaster. It is not an easy story to tell.

The agents build trust, connect with, and sometimes even confuse customers to get them to buy a product that has no immediate use, or even a definite return in the foreseeable future. This is a system that has created problems on both sides of the table.

The relationship between insurers and agents is a curious one, part symbiotic, part parasitic. The industry uses agents to mis-sell investment products masquerading as insurance to customers. But the same agents also mis-sell customers to insurers, masking their true risk profiles in order to make a sale. It’s a dodgy proposition for both customers and insurers.

PolicyBazaar.com wants to take insurance back to its roots, The Ken

However PolicyBazaar, which had relied on a call centre staffed with agents to sell insurance, has recently realised that it needs a stronger presence in the real world to grow. The IPO last week was one way to establish this, and Dahiya seems to have earned the trust of investors, at least, with his narrative. But now, it needs to spread its wings offline. And for that, it needs to sell its story to the other people who matter to its business—the agents it wants to onboard, and potential customers whose trust it needs to gain.

Digant Haria, co-founder, GreenEdge Wealth, put it in perspective in The Economic Times:

Policybazaar employs more than 6,000 people. If it is a fintech company, we do not expect such a large employee base where employee expenses are roughly Rs 500 crore, maybe slightly more than the insurance premiums that they collect. Insurance remains a people-heavy business. They have introduced a tech platform but it will remain a people-heavy business… My base assessment is that we should not think of this as a purely online or a fintech company. The company may be 75-80% offline and 20% online or maybe 70-80% is people business and 20% is tech business.

However, potential insurance customers famously don’t trust agents. A 2014 survey by consulting firm Ernst & Young found that globally, consumers trust the insurance industry less than supermarkets, banks, and car manufacturers. But agents and insurance seem inextricably linked.

To combat that high customer turnover, independent agents “need to up the level of engagement and communicate more consistently and more clearly and simplify their messages,” says Kaenan Hertz, U.S. insurance customer leader at EY. “It’s still very clear that when products are more complex, having that human interaction is still critical to provide guidance,” Hertz says. “Agents do a great job in moments of truth and are very strong in education, research and maintenance functions.”

Like PolicyBazaar, several new and old insurers have realised that their business cannot be sustained by digital insurance sales alone. These firms have begun to sharply expand their offline agents networks.

And these agents can play an important role, argues this piece from the Financial Express on the life insurance market: “Better engagement is required to convey the message of life insurance. That cannot happen only through digital channels. Insurance agents can play a critical role in positioning life insurance properly in the financial market. For that, a new brand of agents may have to be developed.”

[Source: The Ken]

And how each insurer and agent tells their stories is crucial, because it is an all-important factor in building long term trust among customers.

A piece from industry publication Insurance Thought Leadership lays out the possible ways forward, and moving from confusing legalese to clear communication may be part of the solution:

This is where explanatory vignettes can be used to great effect. Serving as a complement to traditional disclosure language, these are short “stories” that depict a common customer episode and more vividly illustrate how the legal terms translate into real life impacts.

Pointers like these will help. But how well these stories are told and received, of course, depends on each insurer, agent, and customer.

The attrition problem with top-down narratives

On Sunday, fashion marketplace Myntra’s CEO Amar Nagaram announced in an internal memo that its chief financial officer (CFO) Ramesh Bafna and chief marketing officer (CMO) Harish Narayanan have quit. These two exits come just weeks after Nagaram’s own resignation.

Two stories on Myntra, one published in 2019 and another last week, have explored the question of attrition at the e-commerce platform. One common thread stands out in both: the story that Myntra’s parent company Walmart wants to build was at odds with what the outgoing executives wanted.

The first story from the Times of India talks about how top-level changes in 2019 (when Walmart had acquired Myntra-owner Flipkart) came with a spike in Myntra’s annual attrition rate—which rose from 20% to over 30% in just two months.

“Leadership changes aside, decision-making is also going through changes. Earlier, a business decision of say Rs 10-15 crore would be cleared by a senior director or an executive of a similar rank. Now, such decisions are largely centralised and need the final nod of senior leadership,” a source told TOI.

How Myntra is changing under Walmart’s control, TOI

The more recent story in Outlook indicates that the current churn can still be attributed to the centralised culture of operations.

In short, there seems to be less space for personalised narratives and more company-tailored narratives.

There’s a similar story in Ola, which has seen its CFO, COO, and its General Counsel all quit this week. Earlier this year, my colleague Praveen had argued in The Nutgraf that the reason Ola thrived despite senior-level exits was due to its CEO Bhavish Agarwal. It is his personal narrative that has kept the company going.

Overall though, high attrition is a common concern for startups. A search for ‘attrition’ on The Ken throws up a few articles every month. In this overarching story, my colleague Olina wrote that the world is on the cusp of a “Great Resignation”. If you want to retain employees, the key seems to be building their trust in the company’s story, and in the leader who is telling it.

“This is an especially hard process to crack on the go. It’s not just about figuring out new performance benchmarks for employees, but also injecting a lot more trust in the organisational DNA.”

The ‘new CEO’, as The Economist wrote in its profile last week, faces a new cocktail of challenges from increasingly demanding employees and investors.

The demands on chief executives make for an increasingly strange mixture. Be more talented than others in the firm, but don't tell them what to do. Crush the competition while exuding empathy. Listen charismatically. Be likeably aggressive. CEOs have always been abnormal. The trick now is not to show it.

What we are reading

What got you here won’t get you there by Marshall Goldsmith, corporate America’s preeminent executive coach. Goldsmith summarises pointers that can help corporate leaders tell a personal narrative and listen to others’ stories, too.

Share this edition

That’s it for this week. Please let me know what you think about this edition. What did you like? What did I miss? What would you like to read about? Write to me at [email protected], and I’ll be back in your inbox at 7 am India time next Friday.

If you’d like to share this issue, here’s a link. You can also just hit the easy-share buttons below.

https://the-ken.com/incitingincident/policybazaar-needs-agents-of-trust/

Take care.

Yours,
Ruhi

Narratives are the most powerful tools of our age. Each week, I deconstruct the dominant ones behind the success or failure of businesses, leaders and governments

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PolicyBazaar needs agents of trust