One of the tasks we at the Mahindra Group have set ourselves is to aspire to be recognized as the most customer-centric organization in
In order to walk the talk, every time I'm asked to speak at a conference, I have made it a default option to ask what the audience--my customers--might expect of me.
And so I found myself wondering what this conclave of IT wizards expects from a predominantly right-brained character like myself. You certainly haven't called me here to deliver a sermon on . And I wouldn't even risk doing that with Nandan (Nilekani) and Kiran (Karnik) sharing the dais!
Of , I might have been able to do that by getting one of my IT colleagues to write this speech, but then it would have been comprehensible to you, but incomprehensible to me!
And although the title of this session is 'Building a Knowledge Economy for Growth', I believe that a) All of you out there have helped build the foundations of a knowledge economy, so again, you don't need me to pontificate to you about that and b) I think there are some urgent pressures and imperatives the industry has to deal with at this point.
So, I'm going to talk about something completely different: I will talk about the Trimurti.
Most of the Indians in this audience will know the Trimurti – the trinity in Indian mythology of Brahma the creator, Vishnu the sustainer and Shiva the destroyer. There is a wonderful depiction of this in stone, just ten kilometers across the bay, at Elephanta. Both as a businessman, and as someone who tends to see life in visual images, the Trimurti of
You people have gone through a stage, where like Brahma, you created something out of nothing. You created a new and global industry. You created a service sector that is today, a major pillar of our GDP. But most importantly, you created a perception of a new
CK Prahalad once told me that in universities in
But creation is only the first phase. You then have to move on to the next phase of sustaining that creation - to the realm of Vishnu the preserver. Creation is a one-time affair. Sustaining that creation is obviously a longer haul, subject to many attacks and crises. Perhaps that is why Vishnu comes not in one, but in ten incarnations.
Every time there is a new danger, he changes his to a form best suited to meet that danger. At various times he has come as a fish, as a tortoise, as a dwarf. But his most interesting avatar came when he had to fight the demon Hiranyakashyap. Hiranyakashyap was a bad guy, who had obtained an amazing boon from the gods. Neither man nor beast could kill him; he could not be killed by daylight or at nighttime, within his home or outside it, on the ground or in the sky. All this made him pretty invincible – he went on a rampage, and only Vishnu could tackle him.
The IT industry today faces challenges every bit as complex as those Hiranyakashyap posed for Vishnu. It is hit by a macroeconomic tsunami of adverse currency changes, rapidly escalating costs in both salaries and and inadequate talent pools below the tier 1 and 2 institutions.
At the Company level, firms are begin to feel the penalties of poor differentiation and lack of focus (trying to be all things to all people); and an over-emphasis on high volumes and price competition.
Suddenly, the industry seems to have fallen off its pedestal; You are facing your very own Hiranyakashyap.
It's interesting to see how Vishnu dealt with him. How do you destroy someone who can't be killed by man or beast, inside or outside, by day or night etc etc. The demon pretty much had all bases covered. So Vishnu took on the Narasimha to bypass the boon. Narasimha was a hybrid creature, half man half lion, and therefore neither man nor beast.
He killed Hiranyakashyap at twilight, which is neither day nor night. He killed him in the courtyard, which is neither inside a house nor outside it. And he killed the demon by placing him across his knee and tearing him apart, thus circumventing the terms of the boon that he could not be killed either on the ground or in the sky. Now that's what I call an innovative algorithm!
So what are the lessons for the IT industry in this story? Well, the first thing Vishnu did was to reinvent himself. It was not the gentle and contemplative Vishnu who fought Hiranyakashyap – it was the fearsome Narasimha avatar. Vishnu reinvented himself to suit the circumstances. The circumstances have changed drastically. Reinvent yourselves.
Do I have all the answers on the modes of re-invention? No, obviously not, otherwise I'd be out there filing patents, although I can suggest two broad approaches.
First, why don't we design business models that challenge traditional industry approaches and then transform our organizations, people and processes to execute. If we simply keep knocking on the doors of clients with our traditional offshoring options, we'll meet the fate of hearing aid salespersons: our best customers won't hear the doobell!
For example, software-on-demand and open source models changed the rules of the . Can we not try to change the rules of the game this time around? Why didn't we invent Zoom or Virtualisation? Thus far,
A few weeks ago, an Indian car company made a game-changing move. Maybe the Nano will ultimately not retail for a hundred thousand rupees. Maybe it won't have great margins, or replace as many motorcycles as it would like to, but it was a game changing move; it fired a shot that was heard around the world. Can the IT world make any such claim?
There was an old saying, apparently adopted by the IT industry that the secret of success is to jump every time opportunity knocks. And how do you know when opportunity knocks? You don't, you just keep jumping!
So when are we going to stop simply jumping every time a client seems to sneeze, and actually create products and IP that become their own opportunities?
Let's look at new areas where
Why aren't IT companies using the massive potential of India's soft power, the film and TV business to exploit technological dominance of what Telco's call the 'last mile' but is actually the 'first mile' in the brave new world?
Secondly, why don't we try to focus on a vertical industry (e.g., telecom) or horizontal (e.g., supply chain management) selecting the key dimensions of competitive differentiation – product vs. service, breadth vs. depth, speed of delivery, customer service responsiveness, fixed or outcome-based pricing, proprietary technology or intellectual property, and so on.
And let's be prepared to make hard decisions along the way – change people who don't fit, walk away from businesses that doesn't fit.
It's essential, while attempting this, however, to recognize that focus, differentiation and brand building require time and investment. Selling value or doing business differently than the norm tends to elongate sales cycles, which tends to put pressure on cash flow and we need to resist the temptation to broaden our offerings or slash prices just to win the business and keep people busy.
Along with re-invention, during the course of reinventing himself, Vishnu figured out the loopholes in the boon, and regrouped his physical and mental aspects to take advantage of these loopholes. That's something the IT industry can do as well. It’s often been pointed out that in the Chinese word for crisis is also the Chinese word for opportunity I love that mindset. I truly believe that the adverse rate of the dollar can be viewed as the glass half empty or the glass half full. Sure it affects margins. But it's also a chance to take advantage of the loophole and buy yourselves what you don't have, so that you can regroup your structure to meet the challenge.
To me the fact that our currency is more valuable and our price earnings ratios are still higher than average, means that we can acquire the front-ends and the large IT businesses that we never thought we could before. And the bigger the better. If people are egging us on to leapfrog, then they should also cheer as you bid for companies that seem bigger fish than you. It's happening all the time today in the manufacturing sector—Tata Corus being the stellar example—and we at Mahindra, while starting from scratch, have inorganically compiled together a portfolio of acquisitions that make us the fourth largest steel forging company in the world today.
This is not without historical precedent. If you look at Japan and South Korea, both of them went through a phase of enduring the worlds' skepticism, then painstakingly building strong and competent domestic businesses, and then on the back of global liquidity support and strong price earnings ratios, compressing time by acquiring global firms and their customer credibility.
In effect, by acquiring the strengths and skill sets you need, you will regroup your profile and create a new entity, which can vanquish your challenges as effectively as Vishnu vanquished Hiranyakashyap.
And finally, while reinventing yourselves, you will have to bring in some of the aspects of the third element of the Trimurti – that of Shiva the destroyer.
Destroy for example the premise that cost arbitrage is the way to go. Recognize that the low cost, high volume offshore battle has already been fought and won. Often, when strategic frames grow rigid, companies, like countries, tend to keep fighting the LAST war. If you are not already on the winners list, you need to think of other ways to compete on value and differentiation, rather than price and scale.
Destroy the premise that success comes only from size, and desist from comparisons with other Indian companies. There are still many IT companies in
And lastly, perhaps the time has come to destroy the notion that the world may be your oyster but
So, in conclusion, perhaps there really isn't that much distance between avatars in the mythological sense and avatars in the technology sense. Perhaps they are both symbolic expressions of the same reality. In their different ways, they both underline the same message – that it is necessary in any situation to reinvent, regroup and re-think our way out of whatever challenges confront us.
I'd like to close with one of my favourite quotes—such a favourite, that I can't even remember where I first read it:
My father thought the world would be same;
My children, however, wake up EVERY day thinking the world will be different.
Let's begin emulating our children. Time to wake up and make the world different.
(Anand Mahindra's speech at Nasscom Leadership Summit on February 13 th , 2008)