Aravind Eye Hospitals Aravind Case

Aravind Eye Hospitals

Aravind case study

Venkataswamy is a Level 5 leader. Discuss. See Jim Collins' publications on Level 5 leadership for move information.

Level 5 leaders combine personal will with intense personal humility. Level 5 leadership is not about ego, it is about accomplishing goals, as set by the leader. The leader may or may not be personally charismatic, but he or she is able to inspire people to work hard because of his or her ability to convince them of the necessity of the success of his or her mission. Suffering from arthritis, the respected ophthalmologist Dr. Venkataswamy sought assistance from a guru and resolved to achieve the ambitious goal of curing blindness in India. Then he figured out how to accomplish this goal.

The necessity of the mission is clear. India has one of the highest rates of blindness in the world due to the prevalence of cataracts. However, a simple operation can change a person's life. Poor people are predominantly affected by cataracts, because of a lack of knowledge of healthcare resources and lack of access. Blindness can destroy the life and livelihood of a poor person. However, Dr. V was able to see what few other people saw: that helping the poor could be a good business opportunity because of the demand. According to Collins: "good-to-great leaders confront the most brutal facts of their current reality, yet simultaneously maintained absolute faith that they will prevail in the end" (Level 5 leadership, 2005: 10). Dr. V dislikes calling his patients 'poor,' and says that he did not adopt a specific business model or strategy in his work. His concept and the services he provides are simple -- Dr. V says he was inspired by McDonald's homogeneity and efficiency of surface. But according to Collins, it is the hedgehog that ultimately wins the race to become a Level 5 leader (Level 5 leadership, 2005: 12).

Q2. According to management guru, C.K. Prahalad, who has studied Aravind's operations over the years, Aravind, which generated a 200% return on the capital employed, was a market-driving, rather than a market-driven entity. Discuss.

Poor people in India are often not aware of the ease of cataract surgery. They simply accept the fact of blindness as a part of life. By going into poorer communities and actively soliciting patients and informing them of the service, Aravind was able to fuel his business. Aravind actively solicits patients, identifies those who can benefit during weekend 'camps' and sets them up with appointments.

The business is structured on a tiered system which is aimed at preserving people's sight more than extracting money from each and every single patient. Yet the business manages to stay afloat, regardless. Patients who can pay are charged $130, while those in extreme poverty received a subsidized rate of $12. However, if the patient cannot receive that, they are given the surgery for free. No one is turned away based upon their income. This is a unique business model. The centers are also mobile and actively go into communities, rather than wait for patients to come to them. Before the existence of Aravind, there was no articulated demand for the surgery. Blindness in some areas was accepted as a fact of life, but now that is no longer the case.

Aravind has also expanded the service-based aspects of its organization to include the manufacture of intraocular lenses. The provision of these lenses by an India-based company enabled the organization to reduce its costs, given the premium prices of imported lenses. Then, it became a source of revenue for Aravind itself.

Q3. How is the case of the Aravind Eye Hospitals a case in social entrepreneurship?

Often, doing good and making money are seen as mutually incompatible goals. However, Aravind Eye Hospitals shows that this is not the case. By finding an unmet need amongst an economically-challenged population, Aravind was able to generate revenue. Dr. V uses many of the principles of assembly-line manufacturing at his hospital, including how the patient is wheeled in and out from the different surgical areas and the fact that every doctor specializes in a certain type of surgery. Over 40 surgeries a day can be performed, using the application of sound business principles. Administrative duties and pre- and post-operative prep are handled by staff members, so the doctors can focus on what they do best. No appointments are kept, instead patients start arriving as early as 4am and procedures begin around 5am.