2014: Year of Tranformation for India

I am Happy that year 2014 has arrived. It has come with lots of promise and hopes. This year can be a trend setter for India as we can expect the U shaped recovery to start happening and that’s one of the reasons we can give a big welcome. Though the macro economic signals are yet to be seen but the stage seems to be set for the transformation to happen. 

Trend Setter 

I would like to thank people of New Delhi and they probably are the ones who have set the process of transformation.  This could have been the first time in my life I see people encountering tough choice of choosing between the Good and the good for governance. One party promising good governance which they have show cased in states they rule and the new party promising a  real inclusive and participatory governance. The choice must have been really tough and people might have not been well prepared and thus the split verdict.

A verdict to either of the party would have been welcome but then the larger message is, this country is ready for transformation and there will be effect to the same at national level in a short period from now. This is the most positive thing that can happen for the country to get back to terms of growth and prosperity.

Indo-Japan Ties

Secondly, the Indo-Japan grand alliance will be a major step forward and this can give the desired shift in scale which the country is longing for the last few years. The combination of Japan’s technological prowess and India’s vast natural resources and skilled manpower, was always viewed as a tempting prospect. Japan is a capital-rich, technology superpower while India has teeming supplies of human capital and the world’s largest labor pool. Japan has the world’s most advanced infrastructure while India’s own requirements for modern transport and urban networks exceed in scale those of any other country. Year 2014 will be critical as the wheel of this alliance will start rolling which is crucial for the countries prospects.

Digital Revolution

Thirdly, the country could become the world’s first truly mobile digital society. But grasping the opportunity requires unprecedented cooperation between the private and public sectors. India has the potential to make a mobile-internet revolution and McKinsey research forecasts that the total number of Internet users will increase more than fivefold, to 450 million, by 2015. Total digital-content consumption will double, to as much as $9.5 billion. Including access charges, revenues from total digital consumption could rise fourfold, to $20 billion— twice the expected growth rate of China.

Youthful India

Lastly, half of India’s population is under 25 and two-thirds is under 36 years of age, and the country’s average age will actually drop over the next three decades. It is just an anomaly that we have lost few years of growth from a long term perspective. With such a huge consumer power it is just a matter of belief and collective efforts from the people of India and we too can achieve what China has done in the last two decades.

We are poised for growth and what we need from the people of the country are

Self Belief and belief on the countries potential

Responsibility to set a right governance model

Embracement of technology for faster growth

Ofcourse one major factor for every individual is to Deliver Value to People and Society and that will breed prosperity to one and all in the country.

Once again A Very happy and Prosperous Year 2014

T  Margabandhu

M/s Marggo India

Firms being Leap Frogs or Boil Frogs matters with Attitude

We happened to read one of the BCG’s recent article on “Turning around the Successful Company” and found to be so thoughtful. Though the relevance is predominantly for large organizations, we still see the connect for Small and Medium Enterprises as they are also increasingly subjected to the dynamics of change happening across the world. 

Many companies are reactive to the problems and thus they take the painful process of transformation which becomes expensive in terms of time, energy and resources. Sometimes the dynamics of the problem are such, the delayed process of corrective action fail to get the desired results leaving the firm to have its natural death. 

When it comes to Small and medium entities their natural disadvantage of being less professional, adds up to the injury.  We see that many companies are often hampered by internal complexity making them lack adaptability, which makes change difficult. 

The factors which make these enterprises struggle are:

·         Lack of Bi-focal goals: Too much focus on near term revenues makes entities vulnerable to changes. Organizations fail to have parallel strategies for both near term and long term sustainability and thus suffer or succumb. 

·         Boiling Frog Trap: Be led by individuals who are stronger at executing within existing models than at building new ones. Wait too long—until evidence of the necessity for change becomes definitive—to act

·         Internal Complexity: Want to change but find that it is trapped by ongoing structures, processes, and initiatives that are complex and difficult to alter

As BCG rightly points out: Waiting until performance is already declining, however, not only increases the magnitude of the required adjustment and the organizational difficulty of realizing it but also puts companies in a reactive  position, causing them to miss opportunities for preemption, experience building, leadership, and, ultimately, competitive advantage.

Then what differentiates the Outperformers?

 

·         Firms which focuses more on delivering Value to Customer outperforms than those who focus on revenues thus creating long term sustainability

·         Firms which creates culture within, to adapt to changes, often finds themselves seamless in being competitive in any dynamic environment

·         Anticipation and Preemptive strategies makes companies less prone to economic shocks and thus enable them to acclimatize to any kind of disruptions. 

 

Though outperformers fall in to two critical categories namely “Reactive and Preemptive – It is the preemptive organization which achieves successful transformation without much of pain 

Small and medium entities should not ignore these factors. The complex business environment will not differentiate the size and thus SME’s are also exposed to the dynamics of change. Increasingly these enterprises will be subjected to bigger challenges and competitiveness will be tested. 

The owners have to become proactive in their approach towards business, customer, competition and people and continuous adaptability should become the survival mantra. 

Exponential growth can happen even in disruptive environment if the entities adopt shakers and movers approach which can change the way the game is played. 

For the SME’s, practicing small units of change, at the least, matters a lot for their survival and sustainability

T Margabandhu

M/s Marggo India

Co-Creation : Producer Consumer Convergence locus for Value Creation

 

Neither value nor innovation can any longer be successfully and sustainably generated through a company-centric, product-and-service-focused prism.

The meaning of value and the process of value creation are rapidly shifting from a product- and firm-centric view to personalized consumer experiences. Informed, networked, empowered, and active consumers are increasingly co-creating value with the firm. The interaction between the firm and the consumer is becoming the locus of value creation and value extrac-tion

                                                                                C. K. Prahalad and Venkatram Ramaswamy

What was conceptualized a decade back still carries huge relevance as we see this yet to catch up fully in the business structure. While organizations embracing such a model of collaborative innovations through active participation from the customers have moved up the pyramid, the gap still exists at the bottom.

The traditional method of value creation keeps the customers outside the perspective. With advent of technology and digitization and its cheap access to customers, it becomes extremely challenging to develop products and succeed as consumers are more informed due to better knowledge and connectivity to information’s. 

It will be inevitable that the rest of the firms join the best, on shifting the model to co creation. Firms which keep the markets away from the value creation process will be subjected to sustainability risk since customers may ignore them out of choices. 

Enabling the consumers to converge with the production process will make the product carry competitive advantage in the market place thereby achieving sustainability. 

But co-creation demands that both managers and consumers make the necessary adjustments. For example, both must recognize that the interaction between the two—the locus of value creation—must be built on critical building blocks. It must start from access and transparency

The problems can be on transparency. Small and medium term enterprises face major challenge on embracing transparency.  There is a collective responsibility on the part of the Owners of Business and the Change Management Consultants to achieve the culture change. 

This will be a key factor for future sustainability and I would seek an active participation on the part of the change agents in providing their views on how to make culture change happen at the bottom of the pyramid

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T Margabandhu

M/s Marggo India