One of the best experiences I had during my time at the Johns Hopkins Carey Business School was the Innovation for Humanity program (I4H) where MBA students were assigned to tackle business problems faced by companies in emerging countries. I was paired up with my classmates Doug Ferreira, Nina Wu, Varun Kommalapati, and Chris Young over 6 months. The goal of our project was to come up with a pricing model for a Rwanda-based solar energy company, Great Lakes Energy (GLE) that provided energy services for healthcare providers in the country. The first phase of the I4H was to be executed throughout the school term in the U.S. as we worked with GLE remotely. In the second phase, we would spend three weeks in Kigali, Rwanda to implement the project.
First, determine the key objectives and deliverables to accomplish.
Those included coming up with a pricing model and marketing materials that they could use for the upcoming launch of a new service called Solar Energy for Healthcare Services (SESH). Healthcare providers in Rwanda had received many solar energy panel system donations from Non-Government Organizations over the years. However, these systems often failed after a few years because there was a lack of understanding on how to efficiently manage and maintain them. Hence, GLE came up with a service that allowed the remote monitoring of solar energy systems in order to provide early warning alerts to their clients if they detected any anomalies in the usage of the system, such as batteries depleting below a certain threshold. Over the long run, SESH was expected to deliver savings to the healthcare providers and prevent costly replacement of the solar panels and batteries.
The key challenge was: how do you price such a service when healthcare providers are already running on a tight budget?
Second, determine how to quantify the tangible and intangible benefits, implementation costs, and the value proposition.
This was a more complicated set of issues as we had to plan and conduct interviews with healthcare officials, patients, and engineers. As we were tasked to develop a pricing model for SESH, a question we had to grapple with was: how does one quantify the value of being able to save more lives or treat more patients because we had stable and regular access to electricity?
We visited the Nyange Health Centre in Ruli District and conducted interviews with the Head of the Centre to understand the issues that the Health Centre was experiencing due to the lack of stable and reliable power, and its impact to operations. We discovered that the Health Centre was not able to operate in the evening because there was not enough power to turn on the lights, medical equipment failed frequently because of power surges, and significant amount of money was used to buy kerosene to operate the back-up generators and vaccine refrigerators. In other words, having stable and reliable power was directly linked to the quality of healthcare delivery and the ability to save lives.
Third, design the pricing model based on your research and analysis of the market.
This entailed coming up with a comprehensive list of inputs and assumptions that was flexible and scalable for the business. Furthermore, we had to test the model to see that it provided reasonable outputs (i.e. a price that was within the means of potential customers).
We measured our success based on our ability to provide the deliverables to the satisfaction of the firm and the extent to which the pricing model would be used in the business. The project was a success as we managed to deliver on all our deliverables and provided the firm with a working pricing model that they could use to develop their business strategy and model.