India: A Billion Dreams Rise from the Dust A Billion Entrepreneurs. A Billion Dreams 9789390581245

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A BILLION DREAMS RISE FROM THE DUST This book promotes a framework – the 3C framework and through a series of disguised case studies, the book demonstrates the actual use of the framework. It can be used as a text book for teaching innovation & entrepreneurship/intrapreneurship in academic institutions. It can be used by trainers in management field and academics in management schools for conducting management development programs. The 3C framework described in the book can be used by corporate executives to accelerate innovation efforts and build new core competencies to launch high growth new businesses. Key audience of the book: Budding entrepreneurs, intrapreneurs within large corporates, management and engineering students, academic researchers with innovation as key research interest, faculty and corporate trainers in innovation field. Salient Features €€ 21 case studies – 6 real life and 15 disguised €€ Extensive case teaching notes on 15 disguised cases as solution €€ A unique and first-time enumerated framework on innovation – called the 3C framework €€ Explains the concept of COUNTER-INTUITIVE intelligence, which will dominate business thinking post Covid-19 pandemic €€ Demonstrates how to innovate with minimum resources and time and how to get maximum bang for the money spent €€ An integrated innovation framework at three levels – product/business/organization €€ Shows the path to the future – Corporate accelerator models using 5th generation AI technologies on a quantum computing cloud Dr. S. Dasgupta is a Cost Accountant and holds a doctoral degree in strategic management from BITS Pilani. He has 27 years of industry & teaching experience. He has published a number of research papers in international refereed journals. His research interests include Technology-Human Interface, Innovation and Dynamic Capabilities Theory in Strategy. Mr. T. C. Dhoundiyal is a practitioner with more than 20 years of rich corporate experience in companies like Tata group, Airtel and other reputed telecom firms. He founded an ed-tech firm called SKIIL Sertifika, based in Singapore.

978-93-90581-24-5

625/-

A Billion Entrepreneurs. A Billion Dreams

A Billion Entrepreneurs. A Billion Dreams

Dasgupta INDIA: A BILLION DREAMS RISE FROM THE DUST Dhoundiyal

INDIA:

INDIA:

A BILLION DREAMS RISE FROM THE DUST A Billion Entrepreneurs. A Billion Dreams

Dr. S. Dasgupta | T.C. Dhoundiyal

INDIA

A Billion Dreams Rise from the Dust A Billion Entrepreneurs. A Billion Dreams

INDIA

A Billion Dreams Rise from the Dust A Billion Entrepreneurs. A Billion Dreams

Dr. S. Dasgupta T.C. Dhoundiyal

INDIA: A Billion Dreams Rise from the Dust Authors: S. Dasgupta & T.C. Dhoundiyal Published by I.K. International Pvt. Ltd. 4435, 36/7, Ansari Rd, Daryaganj, New Delhi, Delhi 110002 ISBN: 978-93-90581-24-5 EISBN: 978-93-90581-23-8 ©Copyright 2021 I.K. International Pvt. Ltd., New Delhi-110002. This book may not be duplicated in any way without the express written consent of the publisher, except in the form of brief excerpts or quotations for the purposes of review. The information contained herein is for the personal use of the reader and may not be incorporated in any commercial programs, other books, databases, or any kind of software without written consent of the publisher. Making copies of this book or any portion for any purpose other than your own is a violation of copyright laws. Limits of Liability/disclaimer of Warranty: The author and publisher have used their best efforts in preparing this book. The author make no representation or warranties with respect to the accuracy or completeness of the contents of this book, and specifically disclaim any implied warranties of merchantability or fitness of any particular purpose. There are no warranties which extend beyond the descriptions contained in this paragraph. No warranty may be created or extended by sales representatives or written sales materials. The accuracy and completeness of the information provided herein and the opinions stated herein are not guaranteed or warranted to produce any particulars results, and the advice and strategies contained herein may not be suitable for every individual. Neither Dreamtech Press nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. Trademarks: All brand names and product names used in this book are trademarks, registered trademarks, or trade names of their respective holders. Dreamtech Press is not associated with any product or vendor mentioned in this book.

Two per cent of the people think Three per cent of the people think they think Ninety-five perc ent of the people would rather die than think 

—George Bernard Shaw This book is for those who want to reach the top two per cent.

Preface

This book promotes a framework – the 3 - C framework and through a series of disguised case studies (in Parts 5 and 6) the book demonstrates actual use of the framework. In part 7 the book builds a novel concept – COUNTER-INTUITIVE THINKING. This book can be used as a textbook on Innovation & Entrepreneurship. There are a number of books by foreign authors on the subject, but no book in Indian context. This book aims to fill the gap. The book can also be used by management teachers, consultants and trainers to conduct training programmes on the subject. This book is also of immense value to wannabe entrepreneurs and managers with the responsibility of starting a new business in an established company. The book is divided in seven main parts. Part 1 describes six real life and unpublished case studies. Two on Indian companies – Enfield India and Bajaj Auto and one a subsidiary of the US Auto Giant – FORD. These three are cases on intrapreneurship. The next three cases are on three Indian start-ups that are making their mark. Parts 2 and 3 comprises a series of essays in strategic management and innovation, these essays were written from time to time in LinkedIn forum over a period of last 5/6 years capturing the changes in the Indian business environment, the twelve tenets of resilient thinking is derived from these essays. Part 4 derives the 3 - C framework from previous parts. Part 5 comprises fifteen fictitious and

viii Preface

short Indian case studies as exercises in strategic thinking and solving complex management issues. Part 6 provides the teaching note to the cases, guiding the reader to apply the 3 - C framework. Part 7 explains the concept of COUNTERINTUITION. Note: Throughout the book the word: “entrepreneurship” has been used and this word also implies “intrapreneurship”, at times they have been used interchangeably. The gap between the manager and the entrepreneur is vanishing fast and this is one of the key themes of the book. Dr. S. Dasgupta

Acknowledgements

First of all, a sincerest word of thanks to my ex-colleagues at SKILLSertifika: T.C. Dhoundiyal, the co-author of this book, Shivam Dabral and Divyanshu Chaudhary, without whose help and an excellent teamwork this book would have never materialized. Next, I thank the entrepreneurs who contributed to this book—Ashwini Tiwari of Autobot India, Aman Gautam and Jagriti Pande of UX Gorilla, and Sujoy Jha of Hari Bhari Recyclable. Their stories feature in Part 1 of the book as case studies. Next, I thank My Guruji (PhD supervisor) Dr. Debashis Sanyal, my wife Jayanti Dasgupta, my dad Dr. S K Dasgupta, my sisters Juhi Rajpoot & Ranjini, and my student Tapasya Datta—without constant encouragement and support of these people this book would have never materialized. 

Dr. S. Dasgupta

Contents

Prefacevii Acknowledgementsix Introductionxiii Part-1:  Resilience: The Spirit of India

1

1. Royal Enfield Bullet: Rules the Roads Once More! 2. Ford India: A Hindustani Model-T! The Resilience of a MNC in India 3. Hamara Chetak: The Quintessential Indian Scooter! Signifying the Indian Spirit 4. Hari Bhari Recyclable: Disruptive Innovation to Improve the Society 5. UX Gorilla: The Design Thinkers! Building an Innovation Ecosystem 6. Autobot India: The Future is Here! Porterian Wisdom and the Hindustani Spirit

3 11 19 23 27 31

Part-2:  Road to Hell

39



41 45 49

7. The Valley of Death 8. The Nine Devils Every Entrepreneur Must Face 9. The End of a Generation 10. The Value of Deep Thinking: Heart of Entrepreneurship 11. Hope of Deliverance

53 59

xii Contents

Part-3:  Strategy Revisited: From 3S to 3I

63

12. Nature of Competition: Now and Then 67 13. I For India, I For Innovation 73 14. Being Good, Being Original: The Value of First-Hand Research 77 15. Vision — Mission — Core Values. Three Most Misunderstood Words in Management 81 16. Why Innovation Efforts Fail? 85 17. The 1-2-3 of New Product Development Strategy (Observe-Reflect-Introspect) 89 Part-4  Resilient Thinking: Building the 3-C Framework

95

18. Resilient Thinking: Deriving its Basic Tenets 19. The 3 C’s Framework: An Introduction 20. Grounding it in Academics: The Regenerative Dynamic Capabilities Theory 21. Building One’s Own Theory 22. Coordination: Winning Hearts 23. Collaboration: A Team Beyond The Four Walls 24. Co-Evolve: Stretch to Combine the Opposites

99 111 113 131 137 147 165

Part-5:  Short Case Studies

177

Part-6: Case Teaching Notes: Building a New Set of Core Competencies (Translating Theory into Practice)

269

Part-7: The Concept of Counter-Intuition: The Art of Making the Impossible Possible

377

Introduction

India and the Innovation Engine Burning Within Her People I am India! My spirit flows in my rivers: Ganga and the Godavari, Narmada and the Brahmaputra. My spirit has flown through centuries! I am a unique nation like no other. I am epitome of the world and represent unity in diversity. However, that’s not what I want to tell you in this book: I am hope when there is none! I am your laughter in sorrow, I am your light in darkness, I am your sound in silence. I dream when I have nothing to dream about! I dare when no one dares to. I dream of gold in empty pockets, my greatest moments of triumph often come, when no one thinks I can do it (like my victory in 1983 World Cup Cricket, in 2019 World Badminton championship or when my spacecraft Vikram landed in moon!). Yes! I was once the leading light of the world. My kings: - Ashoka and Chandragupta, Vikramaditya and Samudra Gupta ruled the seven seas, my mathematicians gave the world the value of Pie and exponential. I lost my way somewhere down! I became fearful and intolerant; my spirit went into a shell and I was invaded repeatedly across a millennium. Yet here I am! For a millennium I was isolated, robbed of my wealth, I lost my dignity, reduced to an insignificant non entity in 1947 on global stage. My pride reduced to ashes and dust. And yet! From this dust I am once again rising like a phoenix after a millennium in darkness. A billion fireflies will light my

xiv Introduction

sky and on the wings of fire I will soar into the azure blending the old with the new! Yes! That’s me! That’s India! That’s where I stand out. Wisdom says shake the dust of past and embrace the shining new armour. I don’t forsake my traditions; I combine them with modern management and technology. The never say die spirit, the old merging with the new reflects in the stories I will tell you! Bullet, Hamara Bajaj, my entrepreneurs, people who came to do business in India like the Ford motor company: - they all succeeded because they understood me! So! Welcome to my story and read on! Great corporations are built based on great traditions of the society they come from. The Japanese MNCs follow work ethic and culture of their society – respect the elderly & wise, take decision collectively, frugal living and nothing can happen before its time – this reflects in Toyota’s lean philosophy. The great US and European corporations are built on the Protestant work ethic – hard work, initiative, innovative thinking, honesty and integrity. May we ask an uncomfortable and unpleasant question here? What work ethic and philosophy Indian companies follow today? Many Indian firms send their top managers to the Ivy league B-schools thinking that this will make them global corporations Nothing can be further from the truth! India’s cultural diversity is unique and mind boggling. She has been invaded for centuries and for more than two millenniums the invaders have melted into the milieu and added diversity and richness to her culture. We Indians love overloading our washing machines, carry 20 milk cans on a Bajaj Chetak Scooter, ride a Royal Enfield Bullet before marriage (to impress young ladies!) and ride a Bajaj Chetak after marriage to carry a family of four! We fold the back seat of the tiny Maruti 800 and load half our house in that little car to shift! We innovate amidst severe scarcity of resources and

Introduction  xv

Indian auto firms like M&M have launched hit models like the Scorpio using perhaps 1/10th of the funds and manpower available to the Western and Japanese auto giants. How to innovate with empty pockets? Ask us! We Indians will show you! As one of the cases in part 1 – UX Gorilla demonstrates. The question arises here – Is this the famous Indian approach called – JUGAAD? No doubt Jugaad plays a role, however to term the Indian style Innovation as a mere improvisation and Jugaad will be a gross misrepresentation. The key is RESILIENCE. The resilience to withstand onslaughts of poverty, scarcity, a bureaucracy which has been hostile to private enterprise for decades and the numerous delays an entrepreneur has to endure to start a new business. Doing business was considered a sin even 20 years back in most of the Indian middle-class families. Securing a Government or a MNC job was considered a status symbol, which enhanced the boy’s value in marriage market. That was India till the other day! Since last ten years the technology onslaught in form of the internet, smart phone and social media has radically changed the mindsets of the young generation or Gen Z. They want to break free from the past, shatter mindsets and bring the Indian approach to innovation to the forefront – which is a combination of RESILIENCE and a burning urge to contribute to the society in form of social entrepreneurship. So, the Indian approach to Innovation is unique. It comes from our culture, which has evolved over two millenniums. It has three key characteristics – a) The ability to innovate with minimum resources b) the ability to turn around and bounce back in face of adversity c) utilize an asset in ways Westerners can’t even imagine! This book through 21 case studies (six real life and fifteen disguised) captures the spirit of Indian styled innovation. The book goes further – in parts two and three the book captures

xvi Introduction

the changing business environment in face of technology (& COVID to an extent) onslaught. In part 4 the book delves in formal academic theory and builds a framework which is relevant in the Indian context, keeping in mind the three aspects of Indian approach to innovation. It is hoped that the framework, which is well grounded in formal academic theory of strategic management will help managers and students, entrepreneurs and management scholars to build the foundations of an Indian Innovation Engine – which will be the heart of future fortune 500 Indian corporations. From time to time in last 30 years or so many Indian professors have attempted to convey the traditional Indian wisdom of the GEETA and its relevance to modern day management. There are serious shortfalls to this approach. First of all, it is extremely difficult to ground the religious values and wisdom found in any religious text (be it the Geeta, the Quran, the Bible or any other religious text) and link them to modern day strategic management. Hence the previous attempts to define an Indian style approach to management although to be lauded didn’t percolate down to innovation, business policy and strategy. It was confined to spelling out leadership qualities (like Lord Krishna in the Mahabharata war or the leadership qualities as spelled out by ancient Greek philosophers, Lord Jesus in the bible or the Prophet in the Quran). However, leadership alone doesn’t make a great fortune 500 corporation! It needs a systems approach – which will percolate down to the employee at the lowest level. The need of the hour was a GROUNDED APPROACH linked to formal academic theories of strategic management, which blends the three typical characteristics of an average Indian manager, who might have grown up amidst severe scarcity to complete his/her study and excel as a business leader – perhaps Sundar Pichai reflects this spirit.

Introduction  xvii

How this Indian spirit to excel amidst scarcity, displaying resilience and a never say die spirit can be translated in to a formal framework, which is also grounded in the formal academic literature of strategic management? Which will serve as a bedrock for future fortune 500 Indian corporations? THIS WAS THE CHALLENGE THAT THE BOOK TOOK UP! And spelled out a unique framework in part 4. It is hoped that this framework is appreciated by the readers and we shall see many fortune- 500 Indian companies in the coming decade.

Part-1 Resilience : The Spirit of India

1

Royal Enfield Bullet: Rules the Roads Once More!

HISTORY AND LINEAGE The Royal Enfield Bullet is the oldest global motorcycle brand in production since 1901. In 1901 the first Royal Enfield Bullet was made by the Redditch Company. After independence the government of India was looking for a rugged motorcycle to patrol its borders for the border police forces and the army. The Bullet was chosen as the bike for the job and the Redditch Company partnered with Madras Motor Company to form a new company called Enfield India in 1955. In 1994 Madras Motor Company was taken over by Eicher Motors, the current owners of Enfield India.(1) The Bullet went on to become a cultural icon (like the Austin Mini, made famous by the Beatles in 1960s) and every Indian young man dreamt of riding the Bullet, that was one way to impress young ladies (2)!

THE TURNING POINT A quarter of a century later, sale of the Bullet was down to 2000 units a month, against the plant’s installed capacity of 6000. Losses had been accumulating for years. Although the iconic bike had diehard followers, there were numerous and frequent complaints against it, such as engine seizure, snapping of the accelerator and clutch cables, electrical failures and oil leakage. There were other issues like the bike being too heavy, inconvenient positioning of the gear lever and a very difficult kick-start, only men with strong legs could start it in one kick!

4 India: A Billion Dreams Rise from the Dust

The board of directors of Eicher Motors was contemplating to sell off the loss-making bike division. Only one person stood up to the board, Siddartha Lal, a third-generation member of the Delhi based Lal family, owner of Eicher group of companies. Lal was just 26 then, a diehard Bullet fan. He even led his bridegroom procession riding a red colored Bullet, instead of riding the traditional female horse! He made a passionate plea for one chance to revive the legend, the board agreed reluctantly, not because they believed in him, but their choices were limited – either allow Lal a chance, or close the company down. The Bullet still had a large fan following, due to its build quality, the famous sound of the exhaust and a macho appeal. However, introduction of fuel efficient 100-150 cc Japanese bikes in the market since 1985, which offered comparable performance and a high degree of reliability and fuel efficiency, spelled doom for the iconic bike. The Bullet as a brand had to be technologically up-to-date, but the bigger challenge was brand positioning against Japanese competition – therein lay the major task! The bullet fans wanted the bike exactly as it has been in the past, rugged, heavy and the famous sound coming out of the exhaust – which made one recognize the bike from a distance; however, the technology upgradations risked losing the existing Bullet fans, at the expense of gaining new ones. The challenge was: what to retain from the past and what to let go to improve? Retaining the rugged looks of the bike was given proposition, the USP of the iconic bike. However, there were other issues, such as shifting of the clutch pedal from right to left, as in all Japanese bikes, this gave Lal and his team many sleepless nights, as a majority of the current users were opposed to the change. The engine was the biggest issue. The old cast iron engine gave the meaty sound off the exhaust, which made Bullet what it was. But the separate gearbox and oil sump design resulted in frequent oil leaks and engine seizures. A

Royal Enfield Bullet: Rules the Roads Once More!  5

modern aluminium engine, as found in the Japanese bikes would have solved the problems, but the modern engines didn’t produce the vibrations and that famous sound off the exhaust and the beat, which gave rise to numerous Bullet fan clubs across the country, just as Harley fan clubs in USA. Lal and his team proceeded to both alter the position of the gears and design a new engine. “Enfield India retained many of the old engine’s characteristics—the long stroke, the single cylinder, the high capacity with push rod mechanism. But the new engine, unlike the old, had hydraulic tappets, a new engine arrangement, new metal and fewer moving parts. Obviously, it did not produce the vibrations and the beat of the old, but international experts were consulted and sound mapping carried out for over 1000 hours to ensure it produced the maximum rhythmic vibrations possible and a beat, which was 70 per cent of the amplitude of the original. The new engine had 30 per cent fewer parts and produced 30 per cent more power than the old, with better fuel efficiency. Two other problems cropped up, which were virtually unknown in the heydays of 70s – component quality, which came up as an issue if the company were to adapt modern Japanese best practices of manufacturing, the other was the sales and showroom experience. The component quality was solved with supplier development and Japanese manufacturing best practices; the showroom experience was improved with dealer training. Gradually, the complaints dropped from customers on malfunctions and fell to less than 0.1%. In 2008, Royal Enfield ventured in Europe with a 500-cc bike and it was a success. By 2009 the bike had six months waiting period in India.(3)

BRAND POSITIONING Lal admits going against traditional consulting and management wisdom. He says he was simply passionate about

6 India: A Billion Dreams Rise from the Dust

biking and saw the Bullet more than a bike, it was a machine with a personality. He didn’t want Bullet to die! When he took over, he had absolutely no idea about how to turn the company around and he had no idea about the bike business.(4) When Siddartha Lal returned from UK in the year 2000, with a master’s degree in automotive engineering, the senior Lal wanted to close down Royal Enfield India and focus on the tractor business instead. You don’t expect a man in his 20s to be fascinated by tractors! Lal made a passionate plea to revive Enfield and the board agreed to give him two years. 14 years later the company sold 302,592 bikes, the company expects to sell close to a million bikes by 2021, in 2000, when Lal took over the company sold 24,000 bikes. The global motor cycle is largely made up of two segments: the commuter bike segment and the leisure bike segment. In India Royal Enfield successfully created a middle segment between the two extremes with a middle weight machine, which can serve the twin purpose of riding into the office in style, as well as take weekend long rides.(5) Lal had to resolve the paradox, authentic versus modern. More than the loud voices – Lal considered listening to a large group of potential customers, who saw their dads ride a bullet and wanted to buy a modernized machine, without the reliability and quality issues. Bullet hasn’t changed for 80 years and will not change for next 80 years”, claims Lal.(6) It was 2004. Lal was 30 and had just taken over as COO of Eicher group. The group had a diverse spread of about 15 businesses including tractors, trucks, motorcycles, components, footwear and garments, but none was a market leader. Lal undertook an intense portfolio analysis and took a hard call. He decided to divest 13 businesses and put all money and focus behind Royal Enfield and trucks, two businesses where he believed the group had a genuine shot at leadership. “In my mind the basic question was this: do we want to be a mediocre

Royal Enfield Bullet: Rules the Roads Once More!  7

player in 15 small businesses or just be good in one or two businesses,” recalls Lal. That’s why we sold 13 out of the 15 businesses, the big one being tractors to TAFE. We removed the clutter and focused on two promising businesses. Back then, conglomerates viewed businesses as family jewels. It was a cardinal sin to sell anything. But Lal sold almost everything. “Many did think Eicher was going out of business,” recalls Lal. “Motorcycle was the joker in the pack,” says Lal, referring to the portfolio of businesses he inherited. It was also his pet business. Decision made, Lal put his full weight behind Royal Enfield and the trucks business. A decade later, Eicher Motors earns over Rs 8,738 crore in revenues and makes a net profit of Rs 702 crore (FY14). Royal Enfield brings in about 80% of these profits. This is a case of passion leading to profits. Siddhartha Lal is Royal Enfield’s biggest asset,” says RL Ravichandran, who was CEO of Royal Enfield for five years from 2005 and continued on the board of Eicher Motors till December 2014. He focused on Enfield first, leaving trucks for later. Lal engineered and improved Enfield bikes by riding hundreds of kilometres himself. He also initiated a motorcycling culture in the team. Ravichandran says Lal always leads from the front. “He is both passionate and practical and has a deep sense of understanding of what separates the Bullet from other brands. Under Lal, as quality improved, sales grew too. By 2010, the company was selling 50,000 bikes, but on three platforms. That was when Lal decided to build all Enfield bikes on a single platform to maximize economies of scale. The Enfield Classic, launched from this single platform, caught the fancy of customers. Sales shot up six times in half a decade from 50,000 units in 2010 to 300,000 in 2014.(7) Hand crafted and yet mass assembled! It is hard to find a plant where a part of the product is hand crafted. In Bullet workshop, the unique shape of the petrol tank, which adds a

8 India: A Billion Dreams Rise from the Dust

lot to the brand image, steel sheets are hand beaten by wooden mallets to give the unique shape. Amidst the robotic noise of the shop, one man still beats the tank and draws the unique line on the tank by hand. Jay Kumar, the 18-year-old veteran and a master painter paints and provides the famous stripe. Lal took pains to understand what the customer means by saying “the bike is heavy”, it was a parking problem! The problem was solved with an ergonomic stand. “Made like a Gun and Goes Like a Bullet – the Bullet chooses its owner”— the story of the legend continues. (8) Enfield India was the only bike maker without a Japanese collaboration and collaborated with UK based Midlands, who understood the heritage factor, as Bullet was originally a British bike. Also, the engine was designed to produce more low-end torque for off roading purposes – as there were many riders who wanted to take the bike to the heights of Khardungla Pass at 18000 feet on rough mountain roads to Ladakh. The high torque meant a compromise on top speed, which suited Indian riders perfectly, as on crowded Indian roads it is always risky to ride a bike at speeds more than 70 miles an hour.(9) Thus, in many ways the brand and product positioning of the Bullet was unique in its Indianness reflecting in the slogan of the Bullet 350: “The right of road everywhere”. The Bullet is a quintessential Indian bike. The brand at its peak from 1950s to 70s represented the typical Indian spirit – take everything on your stride and keep going and go anywhere with up to four people riding at times! The deep muffled beat was its USP. When technology and modern Japanese bikes sounded death knell for the brand, the major challenge was the identity for Lal. What was to be done? Lal did things in Indian spirit – blended the old with the new. Enfield India has subsequently launched a number of models which bear no resemblance to the classic bike of 1970s and sports more powerful engines. However, even today it’s the Bullet Classic 350, which immediately takes one back to the glory days of the

Royal Enfield Bullet: Rules the Roads Once More!  9

bike in 1970s, when Bollywood heroes rode the bike with smiling heroines at back, that sells! In some states like Punjab and Haryana, where men are of a taller and tougher build than rest of India, the Bullet still carries a waiting period! One sincerely hopes the Bullet remains what it was, what it is and that’s how it will be! Resilience personified!

REFERENCES 1. https://en.wikipedia.org/wiki/Royal_Enfield_(India) 2. https://www.business-standard.com/article/ management/40-years-ago-and-now-royal-enfieldrode-straight-into-a-need-gap-114111201429_1.html 3. https://www.businesstoday.in/magazine/case-study /reviving-royal-enfield-bullet/story/19892.html

4. https://timesofindia.indiatimes.com/business/indiabusiness/My-navet-helped-me-turn-around-RoyalEnfield/articleshow/16792347.cms

5. https://www.livemint.com/Companies/b6TEEyfGCJ YRoFHYId59VO/Royal-Enfield--Revving-up-for-aglobal-ride.html 6. http://www.forbesindia.com/article/super-50companies-2015/eicher-motors-its-all-in-the-drive/40705/1 7. https://economictimes.indiatimes.com/meet-siddharthalal-the-man-who-turned-around-royal-enfield-into-eichermotors-profit-engine/articleshow/46461712.cms 8. https://www.eicher.in/uploads/1408618088_RE_ thumps_up_finally.pdf 9. https://www.nextbigbrand.in/the-surprising-success-ofroyal-enfield/

2

Ford India: A Hindustani Model-T! The Resilience of a MNC in India

BEGINNINGS In 1995, Ford entered the Indian market with a joint venture with Mahindra and Mahindra Limited, one of the largest Indian auto makers to assemble and distribute the Escort, Ford’s first model to be showcased in India. In 1999, Ford bought out the JV stake and renamed the company as Ford India Limited, to operate as a wholly owned subsidiary of Ford Motor Company, USA, as part of Ford Asia Pacific group (FAP). The company had set up its plant near Chennai, south India on a 250-acre plot with a capacity to make a hundred thousand cars per annum.(1) Ford launched several models in India including the sixth generation Escort with an entry level 1.3/1.4 litre engines. It also launched the Ikon with a powerful 1.6 litre engine and the second-generation Mondeo. The Ikon was successful initially but petered out later. The Escort and Mondeo were total failures in Indian market. Escort was perceived as too expensive by Indian customers, while Mondeo couldn’t compete with Asian rivals like Honda’s Accord and Hyundai’s Sonata. Between 1996 and 2010, Ford in India launched Escort (1996-2001), Ikon (1999-2010), Fiesta Classic (2005-2015), Mondeo (2001-2006), Fusion (2004-2010) and Endeavour (2003-till date).(2)

12 India: A Billion Dreams Rise from the Dust

STARING DOWN THE BARREL AND NOT GIVING UP All the models except Endeavour were launched and withdrawn, as they didn’t catch the Indian car buyer’s imagination. Thus, by end of 2010 Ford India after 14 years in India was staring down the barrel of the gun, many pundits and analysts wrote the two American auto makers—Ford and GM off – stating that they don’t have products for Indian market and they don’t understand the Indian consumer. GM left India in 2018, after operating in India for 23 years, leading to loss of thousands of jobs. India’s leading business daily, the Economic Times carried a column on May 7 2016, analyzing why the world’s biggest automakers such as Ford, GM, Toyota, Honda have failed to garner market share in one of the fastest growing automobile markets. As of 2016, Toyota had a 4.7% share, VW 1.4%, GM 1.1%, Renault-Nissan 3.7%, Ford 2.8%, Hyundai 17.4% and about 50% of the market was captured by one company – Maruti-Suzuki India Ltd (MSIL). The reasons – India is a primarily a market for small cars, the reason behind MSIL’s success story. It is wrong to sit in Detroit or Stuttgart and craft a strategy for India and China together, as these two markets are very different. The investment required to develop a small car is same as a big one, but the margins are thin, $ 500-1000 per car, this leads to unwillingness for boards of global automakers to allot funds to develop a small car suited for Indian car buying people.(3) But one company understood what it takes to click in India long back. That was Ford. By 2006/7 Ford was staring down the barrel and knew unless they come up with a small car that captures the imagination of the masses (like VW Beetle or Fiat Panda) they will have to exit the Indian market. They didn’t give up! In 2010, after nearly four to five years of painstaking research into the mindset of the Indian car buyer, the Figo was launched. It was positioned as a premium hatch in the growing B segment.

Ford India: A Hindustani Model-T! The Resilience of a MNC in India 13

Figo is based on the B562 platform of Mark V European Fiesta hatchback, with revised front and rear looks. It was launched in both petrol and diesel versions. The petrol engine was a 1.2 litre of a new generation. The diesel was a 1.4 litre engine with more punch and torque, suiting Indian roads and driving habits and offered a mileage of 19 kilometres per litre of diesel.(4) The car was launched in March 2010 and received a booking for 10,000 units in the very first month. Within first 100 days, Ford received 25,000 bookings. Within three years the Figo crossed the three hundred thousand mark. Before the Figo Ford was considered a niche player at the high end of the market, Ford wasn’t present in the segment where 70% of the sales were happening. Ford was selling 30,000 cars in a year, taking all the existing models together. The Figo took the sales figure to 90,000 units. Ford at last got the elusive combination of features and price right with the Figo. The petrol version was priced at Rs. 3.5 lakh, at that price it was competing with much smaller models of MSIL. But it was the diesel version priced at Rs. 4.48 lakh, which became a smash hit. At that price the Figo was cheaper than the market leader – MSIL-SWIFT (5). Why the Figo clicked and what took Ford nearly 14 years to figure out what will click in Indian market? The Figo had a robust build quality; interiors were more comfortable than competition. The 1.4 diesel engine was brilliant and had no turbo lag, it gave the big car feel and ride quality, brilliant handling and a huge boot space (which suits an Indian joint family) and with 2489 mm wheelbase the Figo was larger and more spacious than the competition.(6)

KEY LESSONS FORD LEARNT FROM THE FIGO STORY The Figo helped Ford treble its market share in three years from 1.5% to 4.5%. Ford committed investments worth $1.7 billion since 2011, after the Figo success story. As of 2012, the

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company employed 10,000 people and this was slated to go up by 50%. Ford’s Indian management argued for a flexible plant setup, which can make both petrol and diesel engines under one roof, something that the company has never done in nearly a century of its existence. It took much persuasion by the local Indian arm for the parent company to agree. The second important lesson was to create an assembly line, which can produce multiple models. The third lesson learnt was – automatic component identification by a process called Kitting, that reduced component assembling and integration time and use of “3 WET High” solid painting technology on cars, a process hitherto used only on trucks. The last important lesson was value engineering – providing a car that packs more features and Value for Money factor for the customer at a price equal or less than competition.(7) Ford was viewed as an alien brand till 2009 by Indians, who only offered expensive cars and the thinking in Detroit was that Indians only like basic entry level products. This was a serious thinking gap that prevented Ford from understanding the emerging needs of Indian car buyer and the company faced serious internal and process issues. The one-Ford programme initiated by the erstwhile CEO, Alan Mullaly changed the company’s fortunes globally and also in India, prior to Mullaly’s arrival Ford globally was divided into regional fiefdoms. Also, in India what has grown rapidly was the growing premium hatch and small sedan segment. Premium hatches are a notch above the entry level small cars, providing more space with a powerful yet fuel-efficient engine – just what large Indian families prefer with parents living with the son, while small sedans provide the space and comfort minus the cost of a bigger car – this is known as the B segment globally and the B segment in India has been growing rapidly and is still growing with another new segment – Urban Sports Utility Vehicles, which are not typical 4x4 rugged off roaders. They

Ford India: A Hindustani Model-T! The Resilience of a MNC in India 15

provide the comforts of a car, with a high ground clearance – well suited for rough roads, with convenience of city commuting and parking in congested places. The urban SUV falls under the C segment category and with the B segment are the two most active segments, where maximum purchases take place. However way back in 2005/6 the B and C segments were just emerging. Maruti Suzuki India Limited (MSIL) sniffed the growing B segment, connected the dots and launched the Swift, with 2006 Football World Cup – conveying a sporty image. Swift was the first premium hatch to be launched in Indian market and was a runaway instant hit. While other car makers were still connecting the dots to understand the emerging pattern of growing of B and C segments. Ford initially also suffered from the absence of a common skeleton platform – to launch multiple models and economize the platform cost – where MSIL enjoyed a huge advantage.

THE ROAD AHEAD The Figo success story couldn’t be repeated with launch of subsequent models, yet Ford continues to bet on India – one of the toughest markets, which GM left India in 2018, with a 2.7% market share. Yet on July 17th, 2018, the president of Ford India, Anurag Malhotra, invited the one millionth customer buying a ford car in India, the model was Freestyle. Today Ford has 465 sales outlets in 267 cities across the country. For the first time since the company entered India in 1995, Ford’s India operations posted a profit, for the year ending 31st March, 2018. Ford is using India as a test bed for its Emerging Market Operating Model, which focuses on reducing costs through alliances, joint ventures, technology outsourcing and platform sharing. The EMOM strategy has helped Ford India to grow its business from $ 2.1 billion in 2016 to 3.4 billion in 2018 and sales scaled $ 1 billion in India in 2017-18. The market leader

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MSIL develops a new model for Rs. 1000 crore, compared to Rs. 3500 Ford had spent to build the Aspire platform. Yet the EMOM strategy has helped to reduce costs by 40% through a sharper focus on localization, outsourcing and platform commonality. Ford Global Chief Executive Jim Hackett and promoter Bill Ford have cleared a single window clearance for India at its Asia Pacific authority at Singapore. This means valuable time will not be wasted on key strategic decisions for getting a nod from Detroit. Ford has gone back to its erstwhile JV partner – Mahindra and Mahindra for Ecosport and two other utility vehicles and an electric vehicle, all to be launched in subsequent years.(8,9,10) Unlike its American counterpart GM, who left India after 23 years and never attempted to understand India, Ford stuck it out and took time and probed deep into the Indian family ways. Ford understood that the upcoming and well-educated Indian manager wants a sturdy and spacious all-purpose hatch, which can take him to office, market, weekend rides with family as well as the occasional long drive. Unlike the US, the era of twin car families never dawned in India and postCOVID-19 unlikely ever to dawn in a work from home and gig economy. The average middle-class Indian could afford only one car and that one had to be an all-purpose one like the Model-T. Figo imbibed the spirit of Model-T and no one understood it better than the author of this book, when he drove 1625 kilometres in his Figo! So as to in a post-COVID era, what kind of strategy Ford will adapt remains to be seen but we hope Ford Motor India Limited doesn’t forget the lessons learnt and the victories scored. However, all in all Ford’s Indian arm displayed a rare kind of resilience and grit – sticking their neck out for years, waiting for success and not giving up in face of failure. Whereas two of its iconic US counterparts – GM and Harley have left India.

Ford India: A Hindustani Model-T! The Resilience of a MNC in India 17

REFERENCES 1. https://www.ibef.org/download/FordIndia.pdf 2. https://en.wikipedia.org/wiki/Ford_India_Private_ Limited 3. https://economictimes.indiatimes.com/why-worldsbiggest-automobile-players-have-failed-to-win-theattention-of-indian-buyers/articleshow/52158687.cms 4. https://en.wikipedia.org/wiki/Ford_Figo 5. https://www.ndtv.com/business/how-the-figo-changedford-indias-fortunes-325611 6. https://www.team-bhp.com/forum/test-drives-initialownership-reports/74219-review-1st-gen-ford-figo2010-a.html 7. https://www.businesstoday.in/magazine/features/ ford-india-transformation/story/22688.html 8. https://www.usatoday.com/story/money/cars/2018 /04/08/ yet-turn-profit-ford-wont-give-up-india/497273002/ 9. https://www.india.ford.com/about-ford/media/ newsroom/2018/ford-india-celebrates-one-millioncustomer-milestone/ 10. https://www.livemint.com/Auto/OZIyEUKiu91VH 2APzOspjK/Ford-posts-a-profit-in-India-20-yearsafter-driving-in.html

3

Hamara Chetak: The Quintessential Indian Scooter! Signifying the Indian Spirit

We Indians do things that are deemed weird and impossible by people in other countries, more so in prosperous West. We carry half the household stuff in a small car, we pack two families in a seven-seater vehicle, three or four of us ride a Bullet! The Bajaj Chetak represented the Indian spirit – get most out of, an asset and use it in ways that can’t be imagined! The Chetak was known as the Doodhwala scooter! The morning milkman in India delivered milk riding a Chetak, carrying up to twenty milk cans at a time! The Chetak was India – Chetak was Hindustan! It represented anything impossible and weird stuff we Indians are capable of doing and it is hard to find a family – rich or poor, who didn’t own a Chetak once! For the author’s generation it was our dad’s first vehicle in 1970s when Chetak had a five-year wait period once! For today’s young generation it was their grandpa’s scooter! And many families still preserve the Chetak as a valued family possession, representing nostalgia, happy memories. Just as young men in 1970s wanted to impress young ladies on a Bullet, the Chetak was an after-marriage vehicle to carry family of four! Wife behind with a kid on her lap and another kid standing in front. Shaadi ke pehle Bullet, Shaadi ke baad Chetak (Bullet before marriage and Chetak after marriage)! This is our nation and these two vehicles represent the never say die Indian spirit like nothing else. So here this book briefly narrates the comeback story of another Indian icon.

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ORIGINS The Chetak was an adaptation of an Italian scooter called Vespa Sprint, but the Bajaj group saw it in a different way from the original idea of a stylish scooter then—an affordable, tough and hassle-free scooter for the masses and that’s how “Hamara Bajaj”—a legend was born. Bajaj Auto obtained a licence to produce the Sprint as it is in 1972. The Chetak was cheaper than bikes of the day, affordable, practical and Bajaj made the build quality tough to withstand rigours of use (such as twenty milk cans) and with simple mechanicals to repair cheaply in case of breakdown. It was just what India’s masses wanted! In 1980s the original Sprint design was replaced by an indigenous design and Chetak went on to become the milkman’s scooter, the grandpa’s first vehicle, the preferred family vehicle to carry husband, wife and two kids and Chetak was the preferred wedding gift!

THE QUINTESSENTIAL HINDUSTANI SCOOTER The Chetak became part of India, it represented India and it became a part of national psyche, like the Bullet. If the Bullet represented machismo and heroism, the Chetak represented the toiling and hard-working family man. It was perhaps one of the last products when technology didn’t take control of our lives and AI powered smart electric vehicles was unimaginable. Anything and everything were done on this scooter and triple riding or a family of four riding a Chetak was a common sight in 70s and 80s. One man carried his newly wed wife from Aligarh in Uttar Pradesh to Hissar in Haryana: a distance of 300 plus kilometres with luggage! He was confident that his Chetak will not let him down. Another student rode his father’s Chetak from Mathura to New Delhi to write his medical entrance examination, a distance of 150 kilometres. There was a bus strike that day and the student was confident that his dad’s Chetak will not let him down on the highway! The

Hamara Chetak: The Quintessential Indian Scooter!... 21

Chetak was made during times in which the service station culture (mainly promoted by the Japanese auto maker Suzuki later in 90s, when Maruti Udyog the joint venture between the GOI and Suzuki launched the Maruti 800 in 1983, which ushered the automobile revolution in India) had not set in and the neighbourhood mechanic could easily repair and service it.

THE END The advent of 100 cc fuel efficient Japanese bikes in mid 80s spelled the end of this legend. Bajaj Auto itself went into the 100-cc bike segment by signing a technical collaboration agreement with Kawasaki to launch KB 100, a sporty 100 cc bike. Three other Japanese bike giants, Suzuki, Honda and Yamaha, too ventured in India. Suzuki was the first to enter the Indian market in two avatars: (a) a joint venture with the government to produce fuel efficient 800 cc cars (b) a technical collaboration with the TVS group, one of the largest automotive groups in Southern part of India to produce Max-100, a 100-cc bike. Honda entered into a JV with the largest bicycle maker of India, the Hero group, to launch Hero-Honda CD 100 and its slogan: “Fill it-Shut it-Forget it” to claim a fuel efficiency of 80+ kilometres on a litre of petrol caught the imagination of the nation like “Hamara Bajaj”. The fourth Japanese maker was Yamaha, who launched the RX 100 with the Escorts group, based in the town of Faridabad in Haryana, the RX 100 was positioned as a sporty100-cc bike, fast and powerful and caught the imagination of the young men once more as a cheaper and more efficient replacement for the Bullet to impress young ladies! The four 100-cc bikes signalled the end of two Indian legends – Bullet and Chetak. The buyer suddenly had a plethora of choices and he was no more interested in a scooter. Hero-Honda CD 100 replaced the Chetak as the milkman’s vehicle, although he could no more carry twenty cans anymore on a sleek and modern 100-cc bike and had to

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undertake a greater number of trips, yet the higher fuel efficiency and low maintenance costs of a modern Japanese bike offset the disadvantages. The CD 100 with its slogan soon caught the imagination of the nation in an era of rising fuel prices and became the office commuter’s choice bike, till the metro arrived in form of Delhi Metro Rail Corporation and in Kolkata and now in all major cities. Even today the CD 100 remains the choice bike for the office commuter to reach the metro station, park it in the parking slot and catch the metro to reach office. DMRC’s efficient parking system has sparked a revolution in commuting in Delhi-NCR. The Chetak was phased out in 2005.

THE REBIRTH The legend has been launched once again! This time in E-avatar or as an electric scooter, bookings opened in January 2020. The e-scooter segment is a new and rising segment of the Indian two-wheeler industry and a number of players are already in the scene. Bajaj hopes to cash on the Chetak nostalgia value! Let’s hope the legend of Chetak is reborn. Chetak in its older avatar was the Indian spirit of Resilience personified. Let’s hope the new e-Chetak revives the spirit.

REFERENCES

1. https://www.outlookindia.com/website/story/ automobiles-riding-down-memory-lane-bajaj-chetak /331879



2. https://en.wikipedia.org/wiki/Bajaj_Chetak



3. https://www.thehindu.com/features/metroplus/ society/Bye-bye-Bajaj/article16853949.ece



4. https://www.autocarindia.com/bike-news/bajaj-chetakfrom-inception-to-rebirth-414930

4

Hari Bhari Recyclable: Disruptive Innovation to Improve the Society

India generates nearly 70 million tonnes of waste annually, of which just about 70% is collected. Only around 20% is processed and treated, the remaining is dumped in landfill sites. A good part of this waste is electronic waste or e-waste. By 2030 India’s annual waste generation will rise to 165 million tonnes and at more than 25% India’s e-waste. India is the second largest mobile market of the world and is the fifth largest creator of e-waste. The journey to waste management is riddled with challenges and amending rules is the easier part, changing habits is not. A 2006 project funded by the UNDP flopped miserably in Chennai. A project in Allahabad in 2010 was started on a PPP basis and failed. In 2015 the project was given to Hari Bhari Recyclable – a waste management company (Source: The Economic Times, September 25, 2016). Sujay Jha is the founder of Hari Bhari Recyclable or HBr. Sujay is one of the major forces in waste management industry. He has worked for more than 40 local bodies and has managed waste for all the major cities in India. He epitomises the late Clayton Christensen’s theory of disruptive innovation – that radical and counter intuitive ideas (taken up in part 5 of the book) are necessary to manage waste and make India clean and green. An alumnus of IIT, Sujay has worked for companies like M&M and Tata Tele Services.

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HBr has set up waste management plants in Allahabad and Moradabad. The company collects waste from residences at a minimum monthly charge and processes the waste to generate up to 6 MW of power in Allahabad. A similar power generation plant is being constructed in Moradabad. Sujay Jha an MBA and LLB by qualification set up HBr five years back to manage and recycle municipal solid waste (MSW) with Amit Parasnath Kumar. HBr’s aim is to become the largest MSW processing company in India with a goal to manage 10 municipalities with a capacity to manage 5000 tonnes/day, which represents around 15% market share. HBr today has a fully integrated plant at Allahabad, which processes waste directly, in Rampur (waste to energy), Bareilly and Moradabad (fully integrated plant) and one in Patiala. A fully integrated plant is a type of plant that can process the waste (of any kind) and produce power. A waste to energy plant can only directly process that kind of waste which can be a direct input for power generation. HBr has been awarded 30 years of concessionaire agreement to serve the city of Allahabad and Moradabad to provide complete waste management solutions. HBr has a large plant on 65 acres of land to process RDF (refuse direct fuel) waste, manufacturing waste to compost, waste to RDF and waste to plastic granules. HBr’s efforts have been recognised by the Government of India and the state Government of Uttar Pradesh. Allahabad is one of the cleanest cities in India today. The main challenge HBr faced was administrative and legal issues in waste handling and getting the environmental clearance and setting up the waste processing system in cities of Uttar Pradesh. Waste has to be collected, processed and lot of technical parameters had to be met to keep the processing environmentally safe. Also, there were big competitors with large capital base. Competitors burnt millions of funds and didn’t succeed as their business model and people management

Hari Bhari Recyclable: Disruptive Innovation to Improve the Society 25

skills were not up to the mark. The main challenge in India is variability of waste unlike in Western countries where the variability is considerably less. HBr’s ideas match the concept of disruptive innovation propounded by Clayton Christensen in Practice. The concept of disruptive innovation states that a new technology at first appears to offer a cheap and inferior solution to an existing technology which is widely in use. Over a period of time this technology grows to become a usable on a mass scale and becomes affordable, offering a superior and affordable solution at a cheaper cost – therefore this new technology goes on to destroy the existing technologies and gives rise to new industries. Over a period of time Professor Chris extended his concept beyond technology to strategy and business model. Approximately at the same time Constantinos Markides of London Business School first propounded his idea of Strategic Innovation in MIT Sloan Management Review in 1998. These two concepts grew on parallel and went on to become powerful theories in innovation field. HBr represents a successful demonstration of the disruptive innovation theory in Indian context, serving the nation. HBr demonstrates the typical Indian spirit, the will to overcome the odds and serve the nation. One hundred HBrs can completely transform India and how this transformation has already commenced in a silent way, the book narrates in concluding part. HBr represents the next generation of entrepreneurs determined to transform India through Resilient thinking.

5

UX Gorilla: The Design Thinkers! Building an Innovation Ecosystem

Aman Gautam and Jagriti Pande started ElpisDesign in 2014. Aman holds a B. Tech Degree in Computer Science and Jagriti holds a B. Tech Degree in electronics. Jagriti is a gold medallist of the National Institute of Fashion Technology and holds a Master’s degree in design research. Before starting ElpisDesign Aman was with Samsung Electronics as an Android engineer and he was part of the team that launched many of the flagship products of Samsung in India and abroad. Aman later joined CodeMyMobile as its first tech hire where he led the whole engineering team. During that time, the company grew from 1 engineer to 25 engineers, raised a million dollars and some big brands like Mercedes Benz, Ford, Prada, Samsung and Huggies became customers. (More here: https://yourstory.com/2014/04/codemymobile). At Elpis, Aman and Jagriti helped clients in design of brands, designs of products, packaging and design of logos. The biggest challenge was to scale up! India wasn’t considered a good place to outsource design by foreign firms for brand designs and brand logos. Clients preferred European countries for outsourcing design work. Plenty of design work was done, but not much work was done that linked design work to strategy and branding of products. For example, packaging of a FMCG brand should reflect a firm’s overall brand positioning (classic 4 Ps of Phillip Kotler) and product strategy. The design should reflect the firm’s 4P (product-price-placement-

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promotion) strategy against competition. This kind of design work can also be called strategic design, as it is connected with the 4 Ps. This kind of work was not done in India, as it involved just not knowledge of design methods, but basic understanding of business model and strategy as well and there was a shortage of designers, who understood how to link design to the 4 Ps. Aman and Jagriti went into a valley of death, in a state of denial! For months they believed that they can’t break the glass ceiling and believed that we Indians are poor at design and latest brand logo designing technologies. But when they started hiring designers and started working seriously and kept experimenting, they realised: THEY CAN SHATTER THE MYTH. This once again was spirit of India coming alive— overcome the valley of death challenge! They realised that there is absolutely no reason for clients to believe that Indians are poor at latest design methodologies linking design to the 4 Ps. Realising this took them quite some time and they finally started chipping away at the glass ceiling bit by bit. They realised a basic trait of entrepreneurship: if you can’t do anything about something, cribbing about it doesn’t help! This is precisely a syndrome many entrepreneurs suffer in the valley of death. They built a community called Design-Delhi (later renamed Design Jungle) and started inviting speakers on various aspects of breakthrough design thinking (the author of this book has been fortunate on two occasions to be invited by them). Elpis did several mistakes in the valley of death, they hired wrong people, took too long to let them go, didn’t pursue good opportunities, invested in wrong projects, went into losses and suffered in isolation for a long time – but true to the spirit of HAMARA BAJAJ, BULLET and FORD-FIGO, they kept going, they didn’t give up! Design Delhi community soon started getting attention over social media. THIS IS CLASSIC OPEN INNOVATION

UX Gorilla: The Design Thinkers! Building an Innovation Ecosystem 29

SYSTEM as described by Henry Chesbrough – the originator of the Open Innovation Concept (the book deals with this concept more in detail in part 5). Elpis started building an INNOVATION ECOSYSTEM as described by Professor Chesbrough and Elpis also focused on the concept of Disruptive Innovation as enumerated by the late Professor Clayton Christensen. Design Delhi is innovation theory crystallized in practice! The Design Delhi Innovation ecosystem started yielding results and Elpis Design started getting work and some very talented designers started emerging from the ecosystem. The beauty and originality of Elpis Design lay in building this larger Innovation Ecosystem, as described by the Innovation gurus, Chesbrough and Christensen. People who became part of the ecosystem started getting jobs, assignments, consulting projects and the community started growing since 2016. In 2018, Aman and Jagriti launched UX Gorilla, which was a brand focused on UX design consultation. In early 2020, UX GORILLA became a well-known brand in design methodologies in the market, but Aman and Jagriti realized that this is how they don’t want to grow further. They downsized the company just before the COVID crisis broke out and divided the company in two parts UX Gorilla focused on design training and APPS Gorilla focused on consultation and development services. Today Elpis Design and their brand UX Gorilla and APPS Gorilla have touched thousands of lives, their content has been read and imbibed by thousands of designers all over the world. Aman and Jagriti feel that they haven’t scratched the surface yet! They still have a long way to go. But kudos to them for building an Innovation ecosystem – they represent the Hamara Bajaj spirit combined with modern technology and breakthrough thinking. The THINKING IS CONTEMPORARY BUT THE HEART REMAINS INDIAN! Try and do weird and

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impossible things! Carry 1/4th of your home on a scooter! Aman and Jagriti faced the valley of death and came out of it with Resilient Thinking. Faced with a glass ceiling they did only what they could do: not giving up in the face of adversity and building up a network of people.

6

Autobot India: The Future is Here! Porterian Wisdom and the Hindustani Spirit

Ashwini Tiwari comes from northern Uttar Pradesh, from the town of Gorakhpur, near Nepal border. Here is his story in his own words: Since the very beginning, I wanted to do something of my own which can offer great value to society but I was truly clueless what to do till my Masters. In search of that purpose, I have taken my academic accordingly and job too so that one day I could find my purpose to start. I began my start-up journey from my master’s education time only to explore the possibility without giving too much thought and got associated with one of start-up Autosports India, a company in Motorsports at engineering college level based in Bhubaneswar as a contributor in marketing (one of my favourite area). That start-up gave me an opportunity to explore the engineering education ecosystem very closely, going beyond my domain, capability, and area of expertise. I have only read in the articles, news about the quality of education and skill gap challenges but for the first time, I was experiencing live from the student’s untold stories which was really full of emotions and struggle for them and the story was same to all the Tier 2 or Tier 3 colleges—lack of hands-on learning or access to platforms. This was truly unfair that students are spending 4 years of their precious life journey and heavy fee for what?? just to get a degree and a good campus life with big buildings, big cultural events or international exchange programme.....but are there

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really making them employable at the end of their 4 years...... majorly I found BIG NO. I think this was the turning point of my life which touched me from inside after understanding the whole mechanism of engineering education ecosystem where no one is ready to take the responsibility, no one is ready to adopt the change ... no one worried about the student’s previous four years of their lives.....no one cares about their financial situations how they or their parents managed the fees and other expenses. This experience was quite different for me... and got stuck into my nerves to bring the change in the ecosystem to help the engineering fraternity for their better future. This feeling was so fresh, important and motivating for me that I have given everything (time, education, job, money) to make this happen. I got associated with the Autosports India more deeply and took the responsibility of PAN India workshops and introduced Passion-To-Build campaign where students will make the complete vehicle from the scratch and get the real-time hands-on learning experience during their summer internship time. I was then into ICE vehicle and within 1-year Passion-ToBuild programme got famous among the engineering students and each summer time students from all corner of India started coming to our facility for a month to be the part of the programme. After spending 2 years at the responsibility, I realised that ICE technology has been there since more than a century now and there are several challenges at many levels which were completely not easy to bring the change at large. One day, I received the call from the Autosports India founder that they will not continue to fund the training and development vertical and wanted me to get focused to Motorsports vertical more as this vertical was getting profitable at the moment. On March 2017, the Passion-To-Build programme was discontinued and I was asked to join the Motorsports management team to take new responsibility. But that platform did not suffice my goal/

Autobot India: The Future is Here!... 33

objective. During the two years time, I trained myself by attending each workshop to gain technical knowledge, as my associates to help to understand the tech parts so that I can understand better. My brother is an engineer by profession, supported me a lot to develop my knowledge and skills required to accelerate the wheel. I think, coming from a management background, got into the blend of engineering for a few months, I found my purpose in 2014 to redefine the traditional education and learning and developmental methodologies in the engineering domain in India. I have always been inspired towards engineering but never got into that academically but somewhere passion was hidden inside. I found my passion during my first start-up journey but that now at the end of the journey, I thought. That time I had no saving, no job, no team, no resources, but I had my courage, purpose and motivation to begin the journey. I joined a job in Delhi for my survival, as I was my own since 2014, also to give myself a break to make a plan to give a self-start. My brother Awanish, who know all this and supported me during my engagement at Autosports, came back to Delhi leaving behind his IAS preparation in Hyderabad in April 2017. His presence boosted my confidence to re-start the journey from scratch. In this journey, I lost two very important things of my life, i.e., me and my father’s dream to hold a master’s degree and become a management professional and my childhood relationship. Because I was not able to focus on both due to lack of time or focus. This made me in grief for several months and emotionally unstable. But my will-power kept me strong not doing anything wrong under that situation. It was very hard time for me to accept all this.

AUTOBOT INDIA: INSPRIRING PEOPLE That grief made me stronger than ever. I was more committed and aggressive to pursue my passion leaving behind all the

34 India: A Billion Dreams Rise from the Dust

comments, prejudices and societal thinking and kept my selfaway from all kind of association. I gave up my social life, travels and friends networking—completely isolated from everyone. My and my brother was in search of how to regain the Passion-To-Build concept again and we planned and though for two months in a 1 BHK flat in Lajpat Nagar. From the saving, we made our own whiteboard to save money so that we can plot our plans on it. THAT BOARD IS STILL WITH US. One day we got an invitation from MSME to visit a start-up Expo in Pragati Maidan from one my connection. We decided to visit the expo. We both went and attended the expo and we found something which we were struggling to connect since last two months. We found Electric Mobility, the future of automotive. We came back and did our R&D over the Internet for a few weeks understanding the technology, market and purpose to align our mission with it. And that was the jackpot...... this was a new technology, a new blue market.......not very active players but huge future potential. And that time I got a feeling, that this is an opportunity shown by god to start our mission to skill up. Since this industry was completely new only Mahinda Electric vehicle was on road with limited numbers in 4 W and Ampere in Scooty. We thought that if we could start our journey with EV then this will be an excellent opportunity to set up our Passon-To-Build from the beginning of the industry and we can keep adding value with the growth of this industry, which was not possible in ICE domain. In June, 2017 we formed a company which became the identity of our purpose, we got a fine and futuristic name Auto + Bot = Autobot India, a company divine by future technology in automotive made for India. We incorporated the company on June 20, 2017 officially but the challenges were still there, investment and right solution as it was quite a new thing for many in India. We became that first company in India to

Autobot India: The Future is Here!... 35

introduce training and development programmes with our practical learning approach (PLA) model (new version of Passion-To-Build). And since 2017, we continued to innovate various models such as Industrial Internship Certification Programme - IICP (for internship), Knowledge Improvement Programme KIP (for industry and professionals), Employability Improvement Programme EIP (for career development). We also introduced our lab model and became the first to launch a dedicated programme known as Electric Vehicle Technology Learning Centre (EVTLC), the first of its kind in India, in collaboration of G.L BAJAJ, Greater Noida in April 2019 offering practical learning platform to engineering students in EV technology. With EVTLC model we are promoting Government of India EV Mission Plan 2030 to establish the infrastructure embedded with our programmes PAN India in association with top ex-bodies like Automotive Skill Development Council (ASDC), Automotive Component Manufacturers Association of India (ACMA), Ministry of Small, Medium Enterprises (MSME) and other Automotive OEMs to enable the facility to deploy our practical learning approach and availability of world-class learning and development infra for the engineers to come. On this 20th June 2020, we will complete 3 years of journey of Autobot India, which has emerged as one of the pioneer companies and as a brand which is known in the EV sector and well recognised by the professionals for its innovative methods, collaborative approach and quality programmes which have helped many to find their passion and purpose to build their career. In three years, we have built our own dedicated EVTLC centres in Pune, Noida and Bangalore trained over 3000+ engineering students and 800+ professionals in the span of 2 years and counting. We have emerged as India largest learning and development platform in EV technology. Still, we stand bootstrapped, to support our business operations and

36 India: A Billion Dreams Rise from the Dust

investments to expand our company presence pan India level. In this journey, I lost one of my key partners who moved on because he believed training and development are not profitable.

INTO THE VALLEY OF DEATH The start-up journey is a very beautiful journey if you are starting from 0 without any external support (investment) because you will learn many things when you are your on to manage everything such as salary, rents, operating expense, marketing, a business expansion where you commit several mistakes and learn from those. We met with an accident in 2018 November while executing one project which has damaged us financially and mentally and heavily impacted on our business operation and due to that it took 10 months to get recover our self from the loss. That time was quite painful and full of a burden to us. In the same period, I got married by my parent concern (for which I was not ready, at least till 2021) till our company get in a stable position but societal pressure made me take another life responsibility which I was already had of my team members on my shoulder. I was in complete fear that how I will commit the time and focus in such a hard time of my venture and my team hope I have given. Many times, we struggled to manage the fund to keep our venture running in early two years’ time. Many times, I have been suggested to give up on this by partners, family or network. Brainstormed and opted minimal marketing budget but maximum exposure strategy to position our brand into the market. We have opted severe strategies to reduce our operating cost. In our initial journey, we invited a few close senior people as to advise us but they as well tried to copy our idea and came with the wrong intention to take control over us considering us young. We were non-operational for 3-3 months sometimes during initial phase due to such unexpected pressure and events.

Autobot India: The Future is Here!... 37

But still, facing all those challenges I continued my journey to pursue the vision of Autobot India making it a global platform and to become one of the finest organisations to be known for change in engineering education in future to come. We have started now.... in future we will completely disrupt the ecosystem by technology. With COVID-19 we faced a very different challenges where we had shut down all our active operations pan India which was truly expected for us... damaging all our plans and strategies again (this was our third big jolt to our journey in three years). Due to our flexible model, we geared up to take our model online. It was not easy as to make a high-end programme, resources are required which could not be managed in the lockdown but we used our available resources at optimal level and team innovative solution to launch the virtual courses and platform within a month of this crisis.

KEY LEARNINGS FROM MY SO FAR JOURNEY • Your initial survival is very crucial but important to learn the market, people and self. • If you are a bootstrap, remain unfunded till you establish your POC to the market. • To survive in the market, your vision should be very clear and have a purpose to pursue it. • Build a reliable network as much as possible. Join events and don’t hesitate to develop communication. • Be good with commitment and transparency. • Be wise and alert. • Close watch to competition and market trends and act upon it strategically. • Being an entrepreneur, passion is required but at the same time patience is also required.

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• If you believe in your product/services, then never give up, you will set success in coming time. • Success has its own time and date. Wait for it but also trust your gut feelings. • Be collaborative and respect others’ hard work, even of your competitors • Make a reliable and scalable solution to offer. • Stay flexible, you don’t know what is going to happen tomorrow.

NEXT 5-YEAR PLAN • To build our EVTLC hubs in all metro cities of India by 2022 to make sure that such facilities are accessible to needy engineers. • To offer a world-class technology learning experience to revolutionise the engineering education ecosystem. • Building the seamless hands-on learning ecosystem with a 360-degree approach—integrating virtual to the physical model. • To go global by 2024. Ashwini’s key learnings reflect the twelve tenets of Resilient Thinking in a big way, as enumerated in Part 4.

Part-2 Road to Hell

40 India: A Billion Dreams Rise from the Dust

And the perverted fear of violence chokes a smile on every face And common sense is ringing out the bells. This ain’t no technological breakdown Oh no, this is the road to hell. This famous rock song by Chris Rea is also the hard reality of entrepreneurship. This reality is universal and repeats across the world. If an entrepreneur is not willing to take the road to hell, he/ she can never build the big dream. No amount of classroom teaching, coaching and mentoring can teach an entrepreneur to traverse the road to hell, neither it can teach corporations. We saw five entrepreneurs and three corporations taking the road to hell in part two. It was difficult to believe for Enfield and Bajaj Auto that the legend of Bullet and Chetak is no more. It was even more difficult for Ford to continue in India year after year without success until one day one inspiration, one model changed everything. No management theory, no textbook teaches how to traverse the road to hell. It’s like you can’t teach a person to how to swim or ride a cycle. There are some things THEORY JUST CAN’T TEACH! This part is the very heart of Resilient Thinking. Whether as an entrepreneur in a start-up or as an intrapreneur in a large corporation – facing the hell is essential part of growing, learning. When in hell, one can only think of going forward and not think of marching back. Either one marches forward or perishes. That’s how many a renowned Fortune 500 firms in the past perished as they refused to mend their ways and march forward. One is short of resources, pockets are empty, people will not answer the calls – one is facing a wall! How to shatter the wall? How long it takes? Road to Hell is the acid test of a company or a start-ups character in facing it and marching forward – one can’t escape it!

7

The Valley of Death

Ravi Venkatesan the ex-CEO of Microsoft India describes the valley of death situation. Every company which enters the Indian market will have to go through the valley of death, when nothing will work out, every initiative will fail, every strategic move will crash, eager sellers will meet stony and indifferent buyers and all product launches fail. This is a VALLEY OF DEATH situation – from which every company who enters the Indian market has to come out. Many don’t come out. General Motors in India didn’t come out, after suffering losses for twenty-three years they left in 2018. While its US counterpart – FORD stuck it out and emerged victorious. Every entrepreneur faces the valley of death situation. Being in the valley of death is a sin qua none of entrepreneurship. No amount of training, knowledge, modelling or funding can prepare the entrepreneur to survive the valley of death. At best seed funding can help the entrepreneur to face and survive the lean times. To emerge victorious from the valley of death is largely a game of mind! The cognitive factors more than anything else play a crucial role here. Failure to harness the cognitive aspects results in failure and exit from business and cognitive failure explains why start-ups the world over as well as in India have 95% failure rate. With a new India and a billion dreams rising from the dust, this is perhaps the best time for start-ups to flourish in India, where the social climate is well in sync with the business

42 India: A Billion Dreams Rise from the Dust

climate and there is a gradual and steady evolution of mindsets. Aspirations of the common man are rising steadily, no more people can be fed and ruled by a propaganda – “it’s good to be poor” and the average India wants a better life, either by way of doing business or educating himself/herself enough to land plush jobs (which are vanishing fast anyway). All of us are in the valley of death today! No one is exempt! Not even the high and mighty!! These are times when GOD perhaps is sparing no one! He is putting everyone on the judgement chair. What to do in such a situation? First realize that in a VALLEY OF DEATH situation YOU CAN ONLY GO FORWARD, NOT BACKWARD. It’s like (god forbid) suffering an irreparable loss in life and you have no choice but to cope with it, learn to accept it and live with it. Trying to restore back your past position and comforts is an exercise in futility Secondly, realize that if you master the strength to beat the odds - you will emerge from the valley of death stronger and better and lead a better life. How to beat the odds then? Here are a few tips: (a) Think the opposite. Think what no one else will and try doing crazy things that you in normal times wouldn’t have even thought of. (b) Don’t suffer from an inferiority complex. That you lack money, resources, position, power, knowledge/skill, contacts to call up - think of the Lion! He is neither the fastest, nor the biggest, nor the strongest - but in courage and determination very few in animal kingdom match him - SO HE IS THE KING! ITS MIND OVER MATTER. (c) It’s normal to be afraid. Fight the fear, control your impulses to go back into the cage, emerge from the cage and try and find a new freedom! (d) Find a purpose. A VERY BIG ONE, ONE THAT EXCEEDS YOUR ABILITIES. Get charged up! Then you will no longer be afraid.

The Valley of Death 43



(e) Work as hard as possible. Forego sleep, food and usual comforts, things which are your right! Keep working, keep doing what you know best.

(f) Skill up. If from tech background then Tech V4.0 technologies. If from management background then innovation, digital marketing, blockchain & so on. Acquire a skill that will find customers, that will have a large audience - you wanted to be a good musician? This is your chance! You wanted to be a writer? This is the chance! You wanted to be a motivational speaker! This is the chance! If you are from a non-commercial background, such as government service and are out of work - try and reach social enterprises. The main thing is the WILL TO FIND A WAY OUT.

(g) Hone your collaboration skills. So what you don’t have influential contacts? The chances are that people whom you know as powerful and influential are out of power! Make new contacts over social media. Write, tell them what YOU CAN OFFER. Don’t quote a price at the very outset - this can be suicidal. First convince the customer OF THE VALUE THAT YOU CAN OFFER.



(h) Study and burn the midnight oil. DO YOUR RESEARCH. There is no substitute for this.

(i) Last but not the least: Remember the late Stephen Hawking’s golden words - “Look up at the stars not at your feet. There is always something you can do”.

REFERENCES (a) Conquering the Chaos: Win in India Win Everywhere Else: Venkatesan Ravi, 2013, Harvard Business School Press. (b) Barber Felix, Whitehead Jo, Bistrova Julia, 2019, “Why Giants Stumble”, California Management Review, Vol. 62, 1, pp. 5-30.

8

The Nine Devils Every Entrepreneur Must Face

This chapter is all about the obstacles and difficulties every entrepreneur or intrapreneur must face, when a new project is taken up. It’s all in the mind! It’s preparing the mind to face the obstacles and emerge victorious. No business school course can teach someone to face these nine obstacles. Knowledge must translate finally into wisdom. Knowledge gets obsolete, wisdom is eternal. Conquering these nine obstacles results in knowledge getting converted into wisdom.

1. Isolation: Networking is an essential part of entrepreneurship, more so in this age of social media. However, networking is far from easy! Sending out invitations and connecting people are not enough! Friends and relatives are not always helpful and there are many people out there to dupe and cheat. There are a number of networks in India today like the Institute of Entrepreneurs (TIE) and the National Entrepreneurship Network (NEN). However, and sadly these institutes have done little to reduce the high start-up failure rates over the years. One useful social media platform is LinkedIn, where one can connect to other start-ups. Once again finding the right person who can connect the newbie to a group of potential customers is very hard to find and today no mechanism exists where a new business offering a new service is able to connect to a group of potential customers. Such platforms not yet

46 India: A Billion Dreams Rise from the Dust

exist. The first one year of a start-up is essentially spent in isolation and facing the four walls of the room in solitude remains part of the game.

2. Anger: Failure to connect and failure to secure business give rise to frustration and anger. If family support goes missing and relatives are constantly asking questions, it further gives rise to anger and frustration. However, things are changing fast and today opposition to doing or starting one’s own business is crumbling fast as jobs vanish.



3. Despair: The third devil creeps up silently in darkness and grips a young man or woman’s mind quickly as failures pile up. It’s easy to despair and even easier to give up in the face of mounting failures. It grips the mind as plans fail, plan A, then Plan B…then Plan C! Calls go unanswered, people cut off or block over WhatsApp, LinkedIn and Facebook connections disconnect, parents, spouses, relatives stop talking…… this is a very difficult situation, very few start-ups can face and survive if proper support is not provided.



4. Depression: Continuous despair can give rise to clinical depression and can lead to suicides.



5. Empty pockets: Lack of funding is very common and not all start-ups receive seed funding or loan from banks as many investors are not convinced by the idea. The result – the start-up is left with empty pockets! But at times the best of the innovative ideas emerge, from empty pockets and a hungry stomach! So, if an entrepreneur is scared of empty pockets – he/she is not fit for a journey in entrepreneurship.



6. Inferiority complex: Often a young person in India received jibes in past for starting a business. The impression – that the boy was not good enough to land himself a job, so he started a business! This book deals

The Nine Devils Every Entrepreneur Must Face 47

with this syndrome in a later chapter in Part 2. The end of the Coder and Shampoo selling generation.

7. Skill deficiency: Another common reason for start-up failures. Failure to read, failure to do enough research, failure to understand the market and failure to develop sufficient skills and knowledge in a particular field contributes to failures. Today’s knowledge intensive business environment no more supports semi-literate people doing business and such businesses are soon driven out of existence by demanding customers.



8. Fear: Probably the first devil that haunts the entrepreneur! The answer is never working alone but as a team.

REFERENCES 1. “Innovation: The Classic Traps” by Moss Kanter Rosabeth. The Harvard Business Review, November 2006. 2. The Future of Management. Hamel Gary & Breen Bill. 2008. HBS Press.

9

The End of a Generation

The COVID-19 pandemic has of course caused destruction and mayhem, loss of jobs and a lot of pain to thousands worldwide. But there is a brighter side to it, at least in India it has brought an end to many anomalies that plagued our society and prevented India from becoming a manufacturing and consequently and economic & military superpower. Here we point a few, there may be many more: (a) Doing engineering, then an MBA and then selling shampoos for MNCs or conjuring up fantastic numbers on an Excel sheet to execute a merger or takeover – jobs in FMCG MNCs and merchant banking was the middleclass dream – to become a Taichi Ohno (father of Lean Manufacturing) was not! (b) Doing engineering and then irrespective of the degree entering an IT firm to nibble away at the keyboard. What was touted as India’s tech revolution was nothing but thousands of engineers doing menial coding jobs and IT firms charging the western clients on an inflated manhour basis. CODING WAS MISTAKEN FOR TECHNOLOGY, making a world class car like TOYOTA/VW/FORD was not. The consequence: - 73 years and despite all the brouhaha about Indian engineering talent, WE HAVE NOT PRODUCED A TOYOTA.

50 India: A Billion Dreams Rise from the Dust



(c) Doing engineering and migrating to USA – COVID has brought this activity to a grinding halt, India needs to thank the US President for this at least!

(d) The abnormal high growth rates of service sector at the expense of manufacturing and agriculture since early ’90s defied basic economics and antiquated labour and land laws, inadequate power and supply chain infrastructure ensured that Indian manufacturing remains substandard and never becoming world class. We are witnessing the consequences now. (e) As COVID’s effects result in vanishing service sector jobs, its end of the MBA era (& for good!) and end of the CODER era as V 4.0 technologies rapidly replace the coders and the man-hour-based business model of Indian IT industry has been dealt with the final blow by the pandemic. So! Not all the pandemic has done is bad! Maybe we shall witness rise of Indian manufacturing in the next generation industries like the EV and E-Mobility, SMART grids. Historically, economic and military superpowers always rose based on three industries – automobiles, aviation, electronics and telecommunication. Just look at Germany & Japan in auto industry, US, France & Russia in Fighter jet technology and Japan again in electronics and you will know what I mean. Service industry can never override manufacturing and be the primary engine of economic growth. This anomaly bogged Indian society for three decades and gave rise to a middle-class dream based on shaky foundations – that foundation now has been dealt with the final blow. The end of the misplaced middle-class dream may also give rise to a new trend – disparaged and discouraged for long as doing an MBA and selling shampoos for an MNC was considered a glorious profession than starting and growing one’s business – Indian middle class dreamt of becoming

The End of a Generation 51

slaves not Steve Jobs! Forgetting the fact that the company Jobs created is one of the most valuable companies in the world today. So, hope to see a Taichi Ohno or Steve Jobs in future, not coders and shampoo sellers! (of course, the government has to do its part). COVID-19 has dealt with the final blow for the coder and shampoo seller generation, coupled with Tech 4.0 technologies. FOR GOOD! Note: Adapted from the first Author’s own published research paper: “The March Towards Infinity: Towards an Impending Era of Deep Thinking”, 2020, Dasgupta S., Sanyal Debashish, Foresight, Vol. 22(1).

10

The Value of Deep Thinking: Heart of Entrepreneurship

How often one has heard from his superiors: Think smart! Work smartly! How often one has heard this phrase from his/ her superior: Think deep, think again and again, I am sure almost never. The night is young! Work whole night! That’s a very common refrain from a senior in any business organization to a young trainee. How about thinking whole night? This lack of deep thought represents the crux of the entire problem that plagues Indian industry. The Brits left 70 years back, but in the 200 years that they ruled us, they destroyed the Indian gurukul system of education – which was high on thinking and produced some of the greatest thinkers in ancient India. The Brits designed an education system to produce clerks, very efficient and obedient clerks high on rote learning, which requires IQ. The Brits never wanted to educate Indian clerks to be high on EQ (emotional quotient), which promotes questioning, thinking and experimentation, grit and perseverance. The Brits realized that unless they destroy the Indian education system, they can’t rule this nation and they systematically destroyed it over two centuries. The same faulty education system continues in undergrad courses right up to the IIMs – where CAT is primarily an IQ test. We worship ready wit! We prefer obedient and intelligent trainees – not the one who questions, we discourage experimentation and questioning in our children – the result? India has not produced a Steve Jobs/Akio Morita in last 70 years – a nation known for

54 India: A Billion Dreams Rise from the Dust

its thinking prowess once upon a time. The Brits left us a nation of slaves, not a nation of scientists and entrepreneurs. The result is that we are a nation of clerks, slaves, not trained to think, not trained to question. A repercussion of this is that three generations of Indians have grown to become opportunists since 1947. We have grown up in a socialist economy of shortages which promoted opportunism, which at times took extreme forms. Is opportunism bad for business? Not at all! It results in a very good first mover advantage and Fortune 500 MNCs are at times ruthless opportunists. Indian companies display opportunism to the full extent. M&M seized the virgin SUV market in 2002/3 with Scorpio, it was a good product then. The Indian SUV market back then had no strong competition. Over a period of time stronger competitors launched better products. In came the Fortuner from Toyota, Endeavour from Ford, BR-V from Honda, Vitara-Brezza from Suzuki and much of the Scorpio’s market was taken away by competition. Tata Motors once again displayed opportunism to the full extent with ACE, the day a deep-thinking competitor launches a better product, they will be out (witness the way Volvo is replacing Tata buses in long distance interstate bus routes). The same opportunism was witnessed in Indian IT sector in 1990s, when the trio of Infosys, TCS and Wipro grabbed the off-shore IT business with low cost-high quality programmers – now they are struggling to evolve into product companies. Opportunism is a required trait of a sharp businessman. It helps to seize fleeting opportunities and capitalize on them. It results from smart thinking and high IQ – traits Indians are known for. In formal academic literature of strategy, opportunism is termed peripheral vision. Hence, opportunism is a recognized strategic trait. On the other hand!!

The Value of Deep Thinking: Heart of Entrepreneurship  55

Opportunism has to be backed by a high degree of EQ: which represents deep thinking, essential in R&D & product development. Developing a world class product requires time, patience, perseverance and grit. Companies known for their innovation hire people with a high degree of EQ, where it is required. The marketer has to have a high degree of IQ, to sense fleeting chances and seize them. Whereas, the product manager should possess, a very high degree of EQ – to develop world class products. The Scorpion surrendered the market to superior and world class SUVs, M&M didn’t persevere hard enough to develop the Scorpion into a world class product – which can stave off competition. On the other hand, just witness one Indian company – with whom MNCs find impossible to compete – AMUL. AMUL has built up a deep reaching distribution network of farmers painstakingly over the years – impossible for any latecomer to penetrate. For that matter, Nestle, which has been in India for a long time comes nowhere near AMUL, when it comes to milk distribution and range of dairy products. What then exactly is Deep Thinking? It comprises three elements. It requires Deliberate Practice and repetitive experiments. In words of McArthur Fellow, award-winning Psychologist Angela Duckworth, deliberate practice differs from routine practice in the sense that one only practises those skills which one lacks. Thus, a musician may practise a skill which he/she thinks impossible, make a million errors and perfect it. A business organization can similarly try to build a product at a cost, with features, which it thinks is impossible – keep trying a million times until it succeeds. This finally gives birth to a legendary product like the Walkman/VW Beetle and don’t stop there but keep perfecting it. Keep persevering at it – kaizen! Now you know what separates a TOYOTA from the rest.

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Deliberate practice is sin qua non for passing five tests of a good strategy. As per Professor Michael Porter (1), the five tests are: • Creating a unique value proposition, which answers the question – why should the customer buy my product? Opportunism helps you to answer this question initially, perseverance and grit will help you to answer this question for next 50 years – Toyota/AMUL. • Tailoring the value chain to deliver the unique value – IKEA, WAL-MART, and Once again AMUL! • Trade-off, clearly deciding what you will do, what are the constraints under which you operate and what YOU WILL NOT DO. Can BMW make cheap cars? That is the constraint they have lived with for 60 years; will S/W airlines offer luxury in-flight services? They have not done that since their inception in 1971. Contrast this with the new age Indian firms – OLA, expanding and scaling up too soon, too quick and laying its hands into all segments, finally laying off 700 employees of the acquired firm—TFS. • FIT, synchronizing and matching the value chain activities to lower the costs to a point, where competition can’t match you: Lee & Fung, Amazon, McDonalds. • Consistency, constantly and repetitively offer the same value and quality for years end and have consistency of vision. The technology may change, the business model may change, but the Customer Value Proposition will never change. Walt Disney – making us laugh for nearly a century now, from the time of B&W movies to modern day’s digitized 3D animations. We still love watching Jerry fooling Tom. The first two leads to the third element of Deep Thinking: Purpose and hope. “Tomorrow will be better”, “We shall make tomorrow better”. The first sentence represents a mere hope, the second a deep resolve and a fervent hope, a deep faith.

The Value of Deep Thinking: Heart of Entrepreneurship  57

Constantly refining and passing the five tests of strategy also leads to an elevated purpose, which transcends monetary motives, and makes way for world class products and great organizations. Music Anywhere Anytime – was a purpose that surpassed all monetary and short-term profit motives and powered Morita and his team to launch the Walkman in 1979, the rest is history. To make people laugh is a purpose that has powered Disney nearly for a century now. To delight the customer and to exceed his expectations is a purpose that has powered Toyota for more than half a century now. Strategy is a combination of opportunism and deep thinking. Unfortunately, we Indians have been prisoners of history and have carried the burden of an inglorious past for 70 years – the legacy of clerical education, which has made us good opportunists but poor deep thinkers. Our poor performance in last Olympics, once again reflects lack of deep thinking. We want Olympic medals, but we want our children to be doctors and engineers – to do a Naukri!! A servant mindset can’t win Olympic medals; neither can he/she create a TOYOTA/ INTEL/GOOGLE. Fortunately, a changing India and a rising India is challenging past mindsets and more and more middle-class families are encouraging their children to be artists, scientists and entrepreneurs. It’s these three kinds of people who take a nation forward, not government officers, shampoo sellers and coders. As the book demonstrates in part 3 and 4.

REFERENCES

1. “The March Towards Infinity: Towards an Impending Era of Deep Thinking”, Dasgupta S., Sanyal Debashish, Foresight, Vol. 22(1), 2020.

2. Understanding Michael Porter by Magretta Joan, 2012 HBS Press. 3. Peripheral Vision. Day George S., Schumacher Harold, 2006 HBS Press.

11

Hope of Deliverance

“Hope of Deliverance…..from the darkness that surrounds us.” These are the initial lines of a famous song by Sir Paul McCartney (of Beatles fame). Millions around the world, living below the poverty line wait every day for deliverance. They live with a hope that someday their lives will improve and they will no longer have to live the life of poverty and misery. Who will transform their lives? Governments around the world, with numerous aid programmes haven’t been able to eliminate hunger completely. Big businesses around the world with charity and CSR programmes may have made a difference, not enough. When industrial revolution began more than 200 years back, it held the promise of transforming lives of millions. More than 200 years later, innovations such as mass production, matrix organizations, coupled with technology have transformed lives of millions. Yet millions remain outside the focus of mainstream business, living on the edge. The prevailing wisdom is that the emerging markets like India and China are transforming from a pyramidal market to a diamond shaped market, where a large middle class forms the bulge. The top 2% of the population is consuming 17% of the total economic consumption of goods and services, this is followed by the middle 37% of the population, who is responsible for 55% of the economic consumption, this is followed by the bottom 61% of the population, who is

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responsible for 28% of the consumption (Courtesy: Global Strategies for Emerging Asia, Edited by Anil K. Gupta, Toshiro Wakayama and Srinivasa Rangan, page 34). We offer a historic perspective here: Since the end of WW II, the focus of global companies has been at the top 10% of the global market, who could pay for the goods and services offered by the Fortune 500 MNCs. The strategies planned were high-margin business strategies. Much later due to rising costs in developed markets, the manufacturing shifted to South-East Asian nations and China – this was in 1980s, when outsourcing became a strategic buzzword. The idea was to outsource from developing markets and sell in developed markets at a high price. When developed markets became saturated by late 2000s, and Eurozone crisis engulfed EU, the attention of global companies shifted to emerging markets – BRIC and CIVETS group of nations and to the bulging middle class. This is where the game now is! If we take even a conservative estimate – 35% of Indian population comprises a market of 420 million – who wants global products and technology at half the price of developed markets and a very high value for money proposition. This is where Indian and MNC firms are now locked into a fierce competitive battle – and the Indian passenger car industry, in which 7 foreign companies and 2 Indian companies battle it out on product development front - represents the best example of the theory. Historically then STRATEGY has shifted from the rich to the middle class! Earlier strategies were crafted for the rich, with high product margins and features – this has now shifted to the middle class – where product development entails bringing down the cost and yet retaining the essential global features. Toyota’s Etios and recent product launches of Ford represent this concept.

Hope of Deliverance  61

THE CHALLENGE Take it one step down to the bottom 61% of the population in next 10 years. Mind you! We are not talking of CSR or Professor Porter and Kramer’s SHARED VALUE concept here – where social welfare is fused with business objectives. Historically speaking, these two goals have always been at loggerheads and in last 200 years, business has always found it tough to fuse the two goals. Although big business has never fallen short of their social duties – the challenge was always to fuse the two – even today it remains a challenge for most of the companies. What we are talking here is something very different – design models and frameworks of strategy that help companies to launch products and services for the bottom 61% of the population – already we are witnessing some significant efforts here – Project SHAKTI of HUL or TIGER brand of biscuits by Britannia or IN-DIYA solar lamps by Schneider Electric or SBI’s mobile account scheme under the precept of inclusive banking. It’s only when business seriously starts thinking of doing BUSINESS with the bottom 61% of the population – their lives will change. Strategies in INDIAN CONTEXT should focus on the bottom 61% of the population. This remains a major challenge as majority of the big businesses don’t have a product/service for this segment. THIS IS THE HOPE OF DELIVERANCE and will transform lives of millions of poor.

REFERENCES

1. “Creating Shared Value” by Porter Michael E., Kramer Mark R., The Harvard Business Review, Jan-Feb 2011.

2. Fortune at the Bottom of the Pyramid, by Prahalad C.K., 2004, Wharton School Publishing.

Part-3 Strategy Revisited: From 3 S to 3 I

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A fundamental shift in consumer behaviour is taking place since the beginning of this century. The consumer is becoming more demanding, aggressive and better informed. For example: twenty years back one visited a car showroom and went by what the salesman said. Today a plethora of websites provide customer reviews and expert reviews of each model of each company with city-wise price breakups, schemes offered by dealers. So today the potential car buyer arrives in the showroom armed with every possible information and straightaway buys the model. A similar story is repeating in other sectors as well, more prominently in retail sector, where the consumer just brushes away the salesman in the supermarket and buys what he/she wants to. Henry Ford’s Model-T ushered a new industrial age in 1908. The age of mass production. What was earlier available at a price beyond the consumer’s reach was made available at less than half the price. For example, a car used to cost $ 3000 upwards before the launch of the Model-T. Ford brought it down to $ 800 first and further with workers improving their learning curve the Model-T was selling for $ 250 by early 1920s. The mass production paradigm was perfected by Toyota with quality movement in 1980s. However, by the end of last century consumer behaviour with exposure to the Internet and social media started changing. No more cheap and standardized products were in demand. Increasing customization and sophistication in variety were demanded in every product. And “Push-Marketing” that is push it down the customer’s neck through advertising and distribution for him to buy ceased working effectively. Instead, customers started searching for information on products over the Internet and “Pull-Marketing” which much later evolved into digital marketing became the norm and changed rules of the marketing game very fast. This, of course, had an effect on a company’s business model and strategy. The cornerstone of 20th century strategic thinking was the 3 Ss: - Scale-Size-Standardization. From the 3 Ss it shifted to the I space – Inspiration-Imagination-Innovation (or whichever way you see it). The series of essays in this part captures the shift briefly.

Strategy Revisited: From 3 S to 3 I 65

Understanding the shift and conditioning the mind to go forward with new learnings and new practices is the essence of Resilient thinking. Part 2 focused on facing the hell. This part focuses on the unlearning-learning process – the very essence of going forward in a changing business environment. Resilient thinking is just not the willingness to face hell. It is also the willingness to burn the midnight oil, read, learn and equip oneself with new knowledge. The process of reskilling involves just not mastering new technologies – tech V 4.0/5.0 (we talk on tech V 5.0 more in detail in concluding part), it is also embracing new management practices, just as a host of new management innovations changed the business landscape in 1920s. HISTORY IS REPEATING ITSELF

REFERENCES

1. Zuboff Shoshana & Maxmin James, 2002, The Support Economy, Penguin, NY.



2. Zuboff Shoshana, 2019, The Age of Surveillance Capitalism, Profile Books, London.



3. Beinhocker Eric D., Origin of Wealth, 2006, HBS Press.



4. Heimans Jeremy & Timms Henry, “Understanding New Power” The Harvard Business Review, December, 2014.



5. Hagel John III, Brown John Seely & Davison Lang, “Shaping Strategy in a World of Constant Disruption”, The Harvard Business Review, Vol 86, October 2008.



6. Hagel John III, Brown John Seely & Davison Lang, “The Big Shift: Measuring Forces of Change”, The Harvard Business Review, June 2009.

12

Nature of Competition: Now and Then

This chapter is written from a historical perspective. THOSE WHO FORGET HISTORY ARE CONDEMNED TO REPEAT IT. Thousands of companies paid the price in past and are paying the price today because they ignored lessons from business history. This article also addresses an important question: If the jobs are vanishing why they are vanishing? A host of reasons have been provided by experts, renowned leftist intellects who oppose the current government’s ideology, economists – all of them are right and provide partial answers. BUT ALL OF THEM (well almost!) MISS THE HISTORICAL PERSPECTIVE, because most of the companies are ignorant of history. Technology never cause jobs to vanish. New technologies create new jobs and industries. Reskilling is required to work on new jobs demanding new skills, as Ginny Rometty of IBM remarked recently, “The age of Degrees is over, the age of Skills is on us”. Economic slowdowns happened in past and will keep happening, new political ideologies will come and go, Hitler had to go too. We delve into strategy, economics, politics, technology, but the HISTORICAL ANGLE IS IGNORED AND NEVER APPRECIATED. The fact that Business History plays a deeper and significant role in times of churning is always missed.

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THE BASIC AND HARD TRUTH IS: JOBS ARE VANISHING BECAUSE COMPANIES ARE VANISHING AND/OR ARE RUNNING OUT OF BUSINESS. Why so? In this article we provide the historical perspective. Competition a hundred years back: size, scale and cost. That’s when the mass production technologies triggered by the Ford Model-T’s success made hitherto expensive consumer goods available to the masses cheaply and abundantly. So, the car, which used to cost $ 3000 + was available to the masses at less than $ 500 by mid, ’20s. This triggered a consumer boom after WW II. The intervening period of 1920-1939 was marked by depression, increasing nationalism, raising of tariff barriers by European nations in retaliation to US trade tariffs (do you see similarities today?) followed by six years of war. But this was also the period when the greatest of the management innovations of industrial capitalism were born. Such as brand management, management accounting and multi-divisional organizations. Competition was all about embracing mass production technologies and size, scale and cost. Competition in 1990s: Size, scale, cost combined with quality and outsourcing, go global and think local, go to the bottom of the pyramid With laying down of undersea cables, the cost of communication fell rapidly and this triggered the outsourcing wave in late ’80s and early ’90s, cost of communication fell further after mid ’90s with the advent of the mobile phone. The discovery of Toyota’s lean practices triggered the quality movement and zero defect (six sigma) paradigm. The rapidly falling cost of communication and the rise of the Internet allowed companies to go global and this gave rise to a new breed of companies. whom Professor Sumantra Ghoshal termed—Transnational firms or TNCs. A TNC was different from an MNC in terms of strategic thinking. In an MNC the process of strategy formulation was heavily centralized in the

Nature of Competition: Now and Then  69

company HQ. In a TNC it was localized. Professor C K Prahalad’s book, published in 2005 triggered a new wave of thought – how to discover the fortune at the lowest income strata of the society and this gave rise to the term – Bottom of the Pyramid. However, and essentially the nature of competition didn’t change much from the Henry Ford’s Model-T days. It was still about scale, cost, quality and cheaper Me-Too Products. Competition today: THE AGE OF ME-TOOs ARE OVER! COMETH THE ERA OF DEEP THINKING. From time to time, products have appeared in the course of business history in two centuries, that has left a permanent, deep and long-lasting impact on society and on our daily lives. It started with the steam engine, rail road and telegraph. The lift came in 1860s, without which multi-storied buildings would have been impossible. Edison’s electric bulb came in 1890s and changed our lives forever, later came the aeroplane and the Model-T and once again human lives were changed forever. Even later came the Penicillin, the matrix organization, the Austin Mini (first small car of the world), the Sony Transistor, the Visa Credit card, the low-cost flying business model of S/W Airlines and the Sony Walkman. Each left a DEEP, PERMANENT AND LONG-LASTING IMPACT on human lives. However, appearance of such products was infrequent in past and sporadic. MY KEY HYPOTHESIS: The age of such products have arrived, combined with advent of exponential technologies and automation of human labour. Which allows a manager to focus MORE ON THINKING AND LESS ON ROUTINE TASKS. This coupled with an increasing, well informed and aggressive customer base (which necessitates design thinking) are compelling companies to launch products which will deeply (if not permanently) impact his/her daily life.

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Hence the age of “ME-TOOs” is over and companies still trying to compete with 20th century mindset of scale-costquality will vanish AND ARE VANISHING, SO THE JOBS ARE VANISHING. No government in the world is competent to deal with this. Politicians will react with increasing tariff barriers and nationalism (as in 1930s) and this will further deepen the economic crisis at a global scale leading to conflicts. HISTORY REPEATING ITSELF. And those who ignore lessons of history are doomed. The era of DEEP THINKING is on us as explained in last chapter. The strategic implications on companies: • “Me-Too” is gone forever. • Increasing focus on human behaviour and cognitive science – leading to design thinking. • Changing organization practices and culture – leading to agile thinking and servant leadership. • Not one single and good strategy • Often thinking counterintuitively – THE OPPOSITE MAY BE TRUE!

REFERENCES

1. Cohen Wesley M., Levinthal Daniel A., Feb, 1994, “Fortune Favours the Prepared Firm”, Management Science, Vol. 40(2), 227-251.



2. Cyert R.M., J.G. March, 1963/1992, A Behavioural Theory of the Firm, 2nd Ed, Prentice Hall, USA.



3. Doz Yves, Kosonen Miko, 2008, “The Dynamics of Strategic Agility: Nokia’s Roller Coaster Experience”, California Management Review, Vol. 59(3), pp. 95-118.



4. Nelson Richard S., & Winter Sydney G., 1990, An Evolutionary Theory of Economic Change, HUP.

Nature of Competition: Now and Then  71

5. Nelson Richard S., & Winter Sydney G., 2002, “Evolutionary Theorizing in Economics”, The Journal of Economic Perspectives, Vol. 16(2), pp. 23-46.

6. Riffkin Jeremy, 2011, The Third Industrial Revolution, Palgrave McMillan, India.



7. Tuff Geoff & Goldbach Steven, 2018, Detonate: Why-And How-Corporations Must Blow Up Best Practices, John Wiley & Sons.

13

I For India, I For Innovation

There are four levels of innovation: (a) process, (b) product, (c) strategic, and (d) management. Process innovation is what Indian companies are very good at and quite a few of them have become globally the lowest cost producers using process innovation. Companies like Tata Steel and Bharat Forge are known for their process innovation. The second level is product innovation and here we have seen some of the Indian automobile companies like M&M coming out with world class products at affordable prices with their Scorpio brand of SUVs and there are many more examples, which can fill up this article. But the current situation calls for an innovation of a higher order, which is either strategic in nature or organizational in nature. Strategic innovation includes surprising the competitors with a novel business strategy, which results in a business model not witnessed before. S/W Airline’s low-cost point to point flying in 1971 was such a business model innovation or Dell’s online ordering was another such business model innovation. Project SHAKTI of HUL fits the description of a business model innovation to a very good extent, with which HUL penetrated rural India and have established a presence, which competitors will find very hard to imitate. But an innovation of even a higher level is organizational or management innovation. Management innovation can be defined as an innovation which results in a new management

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practice or a new organizational form giving the company a long-lasting competitive advantage. Toyota’s lean production system is a combination of human and machines, which has given the company a competitive advantage lasting more than four decades now since 1980s, when Toyota entered the Western markets. Why the British ruled India for nearly two centuries and what made the British army win battles against powerful Indian kings? Is it that the British has superior weapons systems, not at all! Some of the Indian kings like Tipu Sultan had better weapons, did treachery play a role? May be to an extent! But neither weapons, nor treachery played a decisive factor behind the victories of the British army on Indian soil starting with the battle of Plassey in 1757. It was the organization of the British army that gave it a decisive advantage in battles. The ranks and hierarchies that we see today in Indian army come from the British and are more than two centuries old. When the senior officer died or got wounded, the next in command took charge and ensured that the troops don’t run away from battle, unlike the armies of Indian kings, which ran away when the king died (similar to checkmate in chess, the concept of checkmate in chess comes from this old tradition of killing the king first to ensure victory in battles). This management innovation ensured that sun never used to set in the British Empire. Management innovations like mass production, management accounting and brand management gave American firms a decisive competitive edge in 1920s. On the organizational front the multidimensional organizational forms that are witnessed in many technology firms today like HP and IBM give them a decisive competitive edge, explaining the multidimensional form will require a separate article. Briefly: multidimensional organizations are organized along dimensions, not hierarchies or geographies or business divisions like the conventional matrix organizations.

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The need of the hour today in India is intensive collaboration between management scholars and industry managers and consultants to come up with new business models, which will incorporate social objectives and promote inclusive growth and new organizational forms and governance mechanisms which will eliminate corruption and institutional deficiencies. Indian companies and MNCs operating in India alike will have to look beyond process or product innovation to probe deeper into the concepts of strategic or management innovation. A new organizational innovation can make Indian Railways the most profitable, efficient and the largest railway in the world, serving social as well as business purposes without bullet trains! India is a diverse country and diversity and plurality of culture and multiple (at times rather colourful). These colourful expressions make our country unique and also mind boggling to Westerners. At the same time this diversity, when coupled with social media and rising aspirations; poses a challenge to managers operating in India with no historical parallels. The need of the hour is strategic and management innovation, which will spawn new frameworks, models and practices relevant in Indian context and only an intensive and collaborative effort between management scholars, industry managers and consultants can power Ashoka’s Bharat and Akbar’s Hindustan become the mighty nation that she was once.

REFERENCES

1. “The Future of Management”, Gary Hamel, 2007, Harvard Business Review.



2. “The Why What & How of Management Innovation” Gary Hamel, Harvard Business Review, February 2006, Vol. 84, issue 2.

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3. J. Strikwerda, J.W., Stoelhorst. “The Emergence and Evolution of the Multidimensional Organization”, California Management Review, Vol. 51(4) Summer 2009.



4. Johnson Mark W., Christensen Clayton M., Kagermann Henning, “Reinventing Your Business Model”, The Harvard Business Review, December, 2008.



5. Govindarajan Vijay, Trimble Chris, “Organizational DNA for Strategic Innovation”, California Management Review, Spring 2005, Vol. 47(3), 47-76.



6. Markides Constantinos, 1998, “Strategic Innovation in Established Companies” Sloan Management Review, Vol. 39(3).



7. Schlegelmilch Bodo B., Diamantopoulos Adamantios, Kruez Peter, 2003, “Strategic Innovation: The Construct, Its Drivers and Its Strategic Outcomes”, Journal of Strategic Marketing, Vol. 11, 117-132.



8. Christensen Clayton, 1998, The Innovator’s Dilemma. HBS Press.

14

Being Good, Being Original: The Value of First-Hand Research

Everybody can be good. But being ORIGINAL IS VERY HARD. However, entrepreneurship is all about being original. Save a few top-notch B-schools like IIM-A/B/C or XLRI, the management academic community by and large has failed to publish good and thought provoking and original research papers on any management subject in the last 50 years. We share a few thoughts here, on what we think research is all about: (relevant for business leaders, entrepreneurs and academicians as well). First of all, research is RE-Search! This means one searches again and again! Just like Edison tried 9999 times and failed to design the electric bulb. Had he not tried the 10,000th time, modern civilization without the electric bulb would have looked very different today. The bulb, the lift, the aeroplane, the automobile, the radio and the hydraulic press – together these fundamental innovations define the modern 21st century civilization. Today we take their presence for granted and can’t imagine life without a lift in our flats, an affordable and reliable car to drive around (first made possible by Model-T in 1912), bulbs lighting up our homes in evenings, travelling across continents in jets and a plethora of household goods made cheap by mass production and chat for hours on social media. How was life without these conveniences a hundred years back?

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Who made them possible? Have we delved into their failures? Do we know how many times Mr. Ford failed and experimented with mass production techniques, before the legendary Model-T revolutionized and gave birth to modern mass production industry (which incidentally the Japanese perfected in later half of 20th century)? Do we know how many times the Wright Brothers failed to get their first aircraft off the ground? The starting point of RESEARCH then is trying and try again till one hits an eureka moment. This implies reading and RE-READING the prevalent literature on the topic may be a hundred times, till one gets that IDEA that may result in an original research paper. There are no shortcuts to this painful process – may take months or even years. We Indians have a tendency to short change this process and look for quick gains to score a few brownie points – which results in substandard research papers, not getting accepted in international refereed journals. The same applies to products in industry as well. Work and work upon an idea for years, till one gets a perfect product – with potential to become another – Sony Walkman. What the international refereed journals look for, especially the best ones like Strategic Management Journal, American Journal of Marketing, or MIT Sloan Review? They are not looking at your research methods, the rigour of your hypothesis, and the soundness of your SPSS results or how many hundred samples you collected. These are of course essential, BUT SECONDARY. The primary factor is: AN ORIGINAL IDEA – which either severely turns extant wisdom upside down or extends it brilliantly. Neither these journals necessarily look for quantitative rigor. Quantitative rigour may be essential in select fields like mathematical economics, finance, psychology, operations research, statistics or market research – where papers are necessarily quantitative and there are journals in these fields

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who only publish quantitative papers. But by and large, majority of the top journals don’t insist on quants. There exists a misconception in my field, among many academics that the best papers on strategy are quantitative – the opposite is true! Some of the best papers on strategy are purely conceptual papers like that of “Dynamic Capabilities” first published in Strategic Management Journal in 1997 by three authors: - Teece, Pisano and Shuen and subsequently by Eisenhardt and Martin once again in SMJ in 2000. Both were conceptual papers! Some of the best-known landmark papers in marketing as well are purely conceptual papers. These conceptual papers do only one thing – DESCRIBE AN ORIGINAL THOUGHT. If one delves into history, one will find that some of the awardwinning research articles are purely conceptual. Well! The idea is then as simple as it gets: research is not hypothesis building in SPSS with a few hundred samples, neither it is sophisticated statistical modelling; neither is it drawing up weird frameworks. Research is RE-SEARCH! RE-Search again and again till you hit upon an original idea. The rest, like using SPSS or collecting samples are only tools to reinforce the IDEA. To prove your idea, you may use quantitative methods or qualitative methods – which are secondary. The primary thing IS THE IDEA ITSELF!! This is where we Indians lose out – we do research, not – RE-SEARCH. We hastily finish a paper in three months to reach the required number of points and save our jobs (that is of course essential, but the long-term view goes missing). The same disease afflicts Indian industry – visible in hastily launched and badly engineered products, that may sell for some time but eventually loses out when a TOYOTA creeps into the market like a camel for five to seven years and launches a blockbuster product like INNOVA. It takes months and years to build ORIGINAL THEORY, or an original blockbuster product. Whether in academics, or in

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real world of business, the process remains pretty the same: painful, frustrating, facing a thousand failures. If one attempts to short-change this process, as we Indians do, we shall never publish papers in Harvard Business Review/Journal of Finance or build world class corporations.

REFERENCES

1. Munshi Porus, 2009, Making Breakthrough Innovation Happen: How 11 Indians Pulled off the Impossible, Harper & Collins, India.



2. Grant Adam, 2016, Originals: How Non-Conformists Move the World. Viking.



3. Robbert Sutton I., “Weird Ideas That Spark Innovation”, MIT Sloan Management Review, 2002, 43, 2.



4. Daniel Kahneman, “Thinking Fast and Slow”, 2011, Random House, UK.



5. Duckworth Angela, Grit: The Power of Passion and Perseverance, Scribner, 2016.

15

Vision – Mission – Core Values: Three Most Misunderstood Words in Management

Our vision: To be the industry leader and to serve the society Our mission: To carry out our business with utmost honesty, integrity and be of value to our customers. Core values: Open work culture, 360-degree performance reviews, never cheat the customer, serve the stakeholders with integrity……X…Y…Z… The above is an unfortunate real-life example; we don’t wish to name the company in a public forum. We saw this in the company reception year’s back, at that time this company was one of the best names in that industry, today the company is in deep losses, the last we know about them—talks were on for a takeover. Why the company is in loss and why it has become a takeover target is obvious. What business you are in? We asked the question to one of their senior managers, when he replied, we asked him another question: why your business doesn’t reflect anywhere in the vision-mission-core values statement? He had no answer! We asked him another simple (but very tough to answer) question: why should the customer buy or keep buying your product? He had no answer again! It is obvious that the company has become a takeover target. They don’t know their business!! It is just not this firm; I have seen many reputed MNC subsidiaries flooding their VMCV statement with verbose and

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useless stuff, about which no one cares and neither anyone in the firm understands why the statements are there in the first place. This disease is rampant, especially among Indian firms. On the other hand, check the VMCV statement of a GOOGLE or TOYOTA; you will know what we mean. In this chapter, we explain what a VMCV statement is and how they are clearly linked to a company’s business strategy. Vision is what the company wants to become, in terms of products and market share in say next three to five years. Vision statements keep (and should) changing, to be in tune with changing market and industry dynamics. Vision statements of hi-tech firms can change once in three years, that of auto firms can change once in five years. A good clear vision statement: 20% market share in next five years. Very clear in its intent, vision is the STARTING POINT OF STRATEGIC PLANNING. Strategy starts with vision. A vision statement is a clear and concise view of where the business will be after say 3/5/7/10 years – understood by every employee. Many good firms keep their vision statements a secret and never display on websites. Mission IS YOUR BUSINESS. What you do! Maruti-Suzuki makes cars; they may extend their mission as follows: be present in every segment of auto industry, from cars to trucks to tractors to two wheelers. Although there is no leading auto firm present in every segment of auto industry, it shows lack of focus. For example: Toyota is only present in passenger vehicles. Volvo in buses and trucks and high-end cars, Honda in two wheelers and passenger cars & so on. But suddenly Maruti can’t decide to start making chocolates and tooth brushes!! Can they? Their mission is to be an excellent automobile firm (I guess). One of the best ever mission statements I have ever seen over the years is that of Walt Disney: “TO MAKE PEOPLE LAUGH”. Yes! Who is not there among us, who didn’t laugh to pieces seeing Jerry’s antiques

Vision – Mission – Core Values: Three Most Misunderstood Words... 83

on Tom in childhood? For nearly a hundred years now, DISNEY is in the business of making us laugh, consistently and sincerely for nearly a century. The clear focus in the mission statement of Disney explains why they are one of the best media and entertainment firms in the world. Core values is what the company will do and more important: WHAT IT WILL NEVER DO. Core values clearly define a company’s STRATEGY and delineate what Professor Michael Porter terms TRADE-OFFS. Trade-offs are HARD CHOICES that a company makes on its WAY OF DOING BUSINESS. One of the best trade-offs is that of Southwest Airlines: they never serve the customer demanding luxury in-flight service, when they receive customer complaints about lack of luxury services, they send a polite word of apology saying: We are not in that business”! S/W consistently over the years has focused on the point-to-point customer since their inception in 1971, who only wants to board a flight and get down with minimum of fuss and expenses. Another brilliant trade-off is visible in BMW’s cars. THEY MAKE THE ULTIMATE DRIVING MACHINE. And they have been making the ultimate driving machine for more than 60 years now – will they ever make a common man’s car? They have not and I guess they never will! Therefore, core values have nothing to do with integrity, or honesty or serving the society. Core values are EVERYTHING TO DO WITH YOUR BUSINESS STRATEGY – what will you do, how will you do and whom will you serve and WHOM YOU WILL NOT SERVE. IKEA’s trade-off is very clear: they make ready to assemble “do-it-yourself” furniture and that’s what they have been doing consistently. Core values bring that LASER LIKE FOCUS, essential to achieve a deep and hard to imitate excellence in product or service, which competition can’t imitate, why? To copy then competition has to incorporate the trade-offs! Which may not be possible, that’s how EVERY BUSINESS SUCCESS STORY IS UNIQUE AND CAN’T BE COPIED.

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A clear VMCV statement defines a company’s strategy and helps it to stay afloat for years. Unclear VMCV statements are the key cause of a company’s demise. Let us get this clear: A COMPANY’S FIRST AND FOREMOST DUTY IS TO STAY HEALTHY AND MAKE PROFITS. Next comes the issue of green practices and doing business in a sustainable way, third: share the profits responsibly (CSR/CSV). Everything else is pure blah…blah. The successful warrior is an average man with a laser-like focus. —Bruce Lee Note: This essay was largely written from the two Author’s own first-hand experiences; however, it will be wrong on our part to not to acknowledge the living legend of strategy: Understanding Michael Porter by Magretta Joan, 2012, HBS Press. This essay is inspired by his ideas.

16

Why Innovation Efforts Fail?

In this chapter, we have attempted to explain why a majority of the innovation efforts end up in failure, even in established MNCs known to launch innovative products on a continuous basis. There are companies who can be called one-product wonders, like one match wonders in sports or one-film wonders in movies. For example, years back in 80s there used to be an electronics company in our school days called BUSH. Their 2-in-1s and radios were immensely popular. After 1991, with the arrival of MNCs BUSH vanished from the scene. WESTON met with a similar fate in television, Kelvinator in refrigeration. On the other hand, some companies known for their innovative products for decades started fading away. SONY, the company that gave us legendary blockbusters like the transistor, the WALKMAN, TRINITON series of televisions and great audio systems, game stations is now facing the heat of competition from Koreans, from compatriot Panasonic and the innovation engine in SONY has slowed down over the years. The billion-dollar question is, why innovation efforts fail? Why some companies end up being one-product wonders and vanish or why the innovation engine slows down in iconic firms? It took me years of reading to arrive at a partially correct answer and I confess I am still searching for the complete answer. I share whatever little I learned so far. The first mistake is a reactive innovation programme in response to competition. Almost every company makes this

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mistake, coming under financial pressure to perform and to keep the stock price up. Such pressures compel a company to launch reactive innovation programmes, by allocating budgets randomly and hiring R&D personnel randomly. Such programmes are doomed for failure from day 1, driven as they are by the stock market. The second mistake is to get carried away by the success of a runaway blockbuster, many companies don’t develop capabilities to repeat the success story or try to replicate the success story with same set of metrics. This is very common in automobile or electronics industries which are capital and technology intensive, and consumer preferences shift quickly. This results in one-product wonders. The third and the most serious mistake, which slows down the innovation engine even in successful companies is the mismatch between innovation objectives, firm strategies, firm capabilities and firm’s practices and a mismatch with external business environment, which is changing all the time. If we are to see it as a train: Innovation Engine-Strategy-CapabilityPractices will resemble a train with engine, bogies, railway personnel managing the train, such as guard, conductor, ticket examiners and finally the passengers. If one focuses only on the engine, ignoring the train, the train is bound to stop, as the engine driver has lost coordination with the passenger coaches, and railway personnel in charge of managing the train. Accidents may happen! Over a period of time coordination errors result in misalignment of the innovation engine with strategy, strategy with company’s CORE capabilities and core capabilities with Management practices, cultures prevailing within the company. To re-examine the train—practices (or organizational routines in academic language of evolutionary economics)— are a set of organizational beliefs at various levels, which gets ossified into best practices and the “WAY” culture sets in,

Why Innovation Efforts Fail? 87

typically one often hears the expression: “This is the Toyota Way” “This is the 3M/IBM way”. With changing environment, the “WAY” culture binds the company to past and prevents the company from building the next set of NEW CORE CAPABILITIES - which will decide the STRATEGY, which in turn will drive the innovation engine. Hence, before a company decides to sink its profits into a large innovation programme, its managers will have to start with: • The company’s culture or practices: how old are they? how relevant are they today. • Examine the current SET OF CORE CAPABILITIES in various areas like marketing, production & so on. • Link the set of CORE CAPABILITIES or a set of NEW CORE CAPABILITIES to its STRATEGY. • Finally link strategy to innovation. Anywhere the link is broken the engine of innovation breaks down! Hence, the most common mistake companies make is to view the innovation and R&D in isolation, without examining the complex intra-organizational linkages.

REFERENCES

1. Scott D. Anthony, The Little Black Book of Innovation: How It Works How to Do It, 2017, HBR Press.



2. Bogers Marcel, Chesbrough Henry, Heaton Sohvi, Teece David J., “Strategic Management of Open Innovation: A Dynamic Capabilities Perspective”, California Management Review, 2019, Vol. 62(1).



3. Tuff Geoff & Goldbach Steven, Detonate: Why-And How-Corporations Must Blow Up Best Practices, 2018, John Wiley & Sons. NY.



4. Hamel Gary, 2002, Leading the Revolution, Penguin USA.

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5. Hamel Gary, “The Why, What, and How of Management Innovation”, The Harvard Business Review, February, 2006.



6. Hamel Gary, The Future of Management, 2008, HBS Press.

7. Hamel Gary, “Moonshots for Management”, The Harvard Business Review, February, 2009.

8. Utterback James M., 2005, “Disruptive Technologies: An Expanded View”, International Journal of Innovation Management, Vol. 9(1), pp. 1-17.

17

The 1-2-3 of New Product Development Strategy (Observe-Reflect-Introspect)

Every company wants that its every product of should be a star. But stars degenerate into cash cows and eventually become dogs. It’s indeed a utopian dream to see all products launched become stars, resulting in high profit margins and market shares, thus bringing good salaries and perks and above all happiness to all employees and to their families. The mystery lies in converting the question marks into stars and when stars become cash cows (and on their way to become dogs), have a process in place, which helps to generate a fresh set of question marks and convert the question marks into stars again. This process should be continuous, so that at any point of time approximately 33% of a company’s product portfolio should comprise question marks, another 33% stars and the rest cash cow. Of course, this mix will vary from company to company and from industry to industry. We are suggesting a broad thumb rule here. The billion-dollar question is: how to have an ideal mix of stars and question marks in your product portfolio all the time and have a process in place to CONSISTENTLY convert the question marks into stars through the sands of time? Very few companies have accomplished this feat in last hundred years. Probably GE is one of them, 3M another, TOYOTA another, Walt Disney another, but we can still count such super achievers on our fingers, we don’t need an Excel sheet here sadly. So, reframing the billion-dollar question in more simple

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terms: how to sustain the magic? Like eleven generations of Toyota Corolla since 1966, the bestselling car in the world? We offer a framework here using the Theory of Dynamic Capabilities as an academic base (first published in the Strategic Management Journal in 1997, the no 1 academic journal of Strategy). Briefly: this theory talks about a continuous process of building new core competences and reconfiguring the old ones – so as to enable a company to launch products that go on to become blockbusters, continuously and retain competitive advantage over a long period of time. There are five clear steps to this process. The starting point is the right mindset. A correct mindset gets the ball rolling in right direction; a wrong mindset rolls the ball in wrong direction. No framework can help a company, if the mindset is not right. We present the elements of a correct mindset to get the framework rolling, briefly in bullet points: • Research tells us that 70% of big business failures happened in last 50 years because companies became Prisoners of Past Success. We call it POPS syndrome. Refer my previous article on this: - “GM and Tata Motors: Prisoners of History”. It is very difficult to break past mindsets, as this may involve loss of top jobs and leaders at top prevent change to hold on to their castles (often built in thin air). • Build your own success formula. One can never copy another company’s success formula and make money. This simple truth eludes most of the companies. No automobile company till date has successfully imbibed Toyota’s lean philosophy to the extent of 100%. • Detect the inaction in action and action in inaction. The latent promise unexplored and the wasteful current activities, which adds up to nothing and doesn’t build a tomorrow.

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• Overcome personal likes and dislikes, fears and pleasures, loss and gain, victory and defeat, unshackle the mind from present – free the mind from the binary spiral that it gets into. This will result in a clear focus. A concentrated mind is like a laser beam. It can foresee the future to a good extent. • The working senses are superior to the dull matter, the mind is higher than senses and controls them, intelligence is still higher than the mind and the soul is even higher than the intelligence. The idea here is continuous upliftment of one’s thoughts with reading and meditation and realize one’s true potential, which will result in the organization realizing its potential. The second step is to identify thought leaders in organization. Indian mythology (Source: Business Sutra by Dr. Devdutt Pattanaik) tells us that at any point of time the king had three kinds of thinkers in his court: (a) The Vasudev, the sharp opportunist and the one who can see what others can’t, the Vasudev is a man of practical intelligence and runs the operations. (b) The Chakraborty: the unifier, the man with years of wisdom and tremendous experience. The Chakraborty is the king’s right-hand man or often the king himself with a deep and unifying vision – which binds his kingdom together. (c) The Teerthankar: the man with vision, with power to foresee and foretell the future. The Teerthankar is the highest and the most powerful thinker in the king’s court and takes the kingdom forward. In modern business the Vasudev is the frontline man – who detects changing consumer trends, the Chakraborty is the General Manager with years of experience, who binds the organization together and the Teerthankar is the thinker (usually, a CEO with vision), who foresees strategic inflection points.

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The third step is OBSERVE: The Vasudev plays the role of observer here and champions the process. The idea is to observe the customer, understand his/her pain points, and empathize with the customer. These are initial steps of design thinking. But we take the art of observation one step beyond design thinking by suggesting a series of seven steps, which comprises the art of observation. The design thinking process can succeed observation. The seven steps are: (a) Sense changes and detect trends – customer, technology, competition. (b) A sense of alertness: keep asking what the USER is experiencing? (c) Question the default. (d) Generate at least a thousand ideas. (e) Connect the dots to see what others don’t. (f) Highlight the pitfalls of a new product launched. (g) Creative procrastination, allow sufficient time for creativity to flourish. The fourth step is REFLECT: This step is championed by the Chakraborty. The seven steps comprising reflection are: (a) Devise a process of unlearning the past – prevent being prisoners of history. (b) Accumulate knowledge and experience by codifying. (c) Build stretch targets – think of doing the impossible, like an electric car with a battery to run 1000 km without recharge. (d) Identify product champions, who will nurture the product. (e) Build a sense of history to unshackle the organization from it. Those who forget history are condemned to repeat it. (f) Ensure team work and continuity – the key to success of Corolla and eleven generations of it.

(g) Leadership support and emotional commitment.

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The last step is INTROSPECT: This step is championed by the Teerthankar. The four steps comprising introspection are: (a) Build a higher sense of purpose. Build a product, that improves people’s lives. (b) Build a sense of hope for the tomorrow. Motivate the employees with one-liners across the organization. (c) Foster dissent and find out devil’s advocates. Don’t throw them out of the organization. (d) Ask a set of thought provoking and uncomfortable questions to a think tank comprising the three types of thinkers. Search for problems, the solutions will arrive. The entire 18 step process is to foster strategic thinking to visualize question marks, build them into stars, and find a fresh set of question marks time and again. However, the starting point is the most difficult, that’s where most companies falter.

REFERENCES

1. Teece David J., Pisano Gary and Shuen Amy, “Dynamic Capabilities and Strategic Management,” Strategic Management Journal, Vol. 18(7), 1997, pp. 509-533.



2. Teece David J., “Explicating Dynamic Capabilities: The Nature and Micro Foundations of (Sustainable) Enterprise Performance”, Strategic Management Journal, Vol. 28(13), 2007, pp. 1319-1350.

3. Teece David J., Leih Sohvi, 2016, “Uncertainty, Innovation and Dynamic Capabilities: An Introduction”, California Management Review, Vol. 58(4), pp. 5-12.

4. Danneels, E., 2002, “The dynamics of product innovation and firm competences”, Strategic Management Journal, Vol. 23, pp. 1095–1121.

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5. Sebastian P.L., Fourne, Justin J.P, Jansen, Tom J.M. Mom, “Strategic Agility in MNEs: Managing Tensions to Capture Opportunities Across Emerging and Established Markets”, The California Management Review, Spring 2014, 56, 3.



6. M. Tripsas, Giovanni Gavetti, “Capabilities, cognition, and inertia: evidence from digital imaging.” Strategic Management Journal, 2000, 21, 10/11: 1147–1161.



7. E. Daneels, “Trying to become a different type of company: dynamic capability at Smith Corona”, Strategic Management Journal, 2011. 32/1: 1-31.

Part-4 Resilient Thinking: Building the 3-C Framework

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In this part, the book first derives the basic tenets of resilient thinking from parts 1, 2 & 3. Next the concept of resilient thinking is grounded in formal academic theory. The 3-C framework is enumerated next: - Coordination-Collaboration-Co-Evolution. In this part the book also raises a fundamental question: Why India hasn’t produced a Toyota in 73 years of independence? Indian musicians and artists are known for innovation and creativity, Indian chefs are known for their unique dishes, Indian poetry and literature is highly sought after worldwide, Indian scientific talent now is making its presence felt in space technology, Indian managerial talent is holding significant positions in large MNCs. Then why innovation has gone missing in Indian business and there is not a single world class Indian company in any line of business that comes in the top 10 internationally? Let us discount the PSU oil company positions in Fortune 500 list, as they are monopolies, so is SBI in a way in banking. There are, of course, several reasons for this. First the economic system skewed towards public sector discouraged entrepreneurship, the society enslaved with the job mindset after being slaves for two centuries looked down on entrepreneurs, Indian middle-class glorified slavery, the bureaucrats enforced it. The best of the scientific and technical talent left the shores, the second-tier talent ended up doing MBA from IIMs and sell shampoos, the third-tier talent ended up being coders in IT industry. So! Who will now bell the cat? There is another typically Indian trait that blocks innovation: we excelled as individuals and the field of international sports in recent times shows the trend. Indian shooters, boxers, wrestlers, badminton players have put up sterling performances in last ten years winning medals in Olympics and other global events, however in team games India lags far behind. In soccer India doesn’t even come in the list of 100 nations, in hockey Indians excelled with stick work once, but as hockey became a physically more demanding and a team game Indian hockey lagged behind and the last world cup hockey title won

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by India was in 1975! Not counting successes in cricket here as cricket is not a global sport and today only three or four nations have good cricket teams, the rest has withered away. So, innovation in Indian companies in the past was mainly inhibited by two factors: lack of talent and lack of team work. The first issue is being addressed now in a strange way as COVID-19 has put an end to migration and the US economy in coming years may not be able to support foreign students, the funding will stop. Tech 4.0 has ended the shampoo selling and coding generation. So perhaps providence or fate will now redirect the best of the technical and managerial talent towards entrepreneurship/intrapreneurship. That leaves the issue of team work! And this is the issue the book attempts to address in part 4 through the 3-C framework and the twelve tenets of Resilient Thinking. Having said so much about why there is no world class Indian company, the question may arise in the reader’s mind: what is the benchmark for being world class? This book sets a simple benchmark – to be among the top ten most valuable companies in its line of business globally. Recently, Tesla has overtaken Toyota as the most valuable auto firm in the world and Apple is the most valuable firm in its chosen line of business. That’s power of innovation! The Fortune 500 listing can be misleading, as its main benchmark is revenue and India has quite a few PSU monopolies as part of the list, they are certainly not world class.

18

Resilient Thinking: Deriving its Basic Tenets

Ancient India was high on innovative thinking. The gurukul system encouraged innovation and entrepreneurship. Indian traders crossed the seven seas to trade with the world. They were known as Vaniks, much later Vaniks came to be known as Baniyas. Indian middle-class society looked down on entrepreneurs. The notion, a student who is unfit to get a government or an MNC job became an entrepreneur, became entrenched! The Indian economic and political system as well discouraged entrepreneurship. The entire economic system was designed around public enterprises and an iron clad bureaucracy discouraged entrepreneurship and innovation with the notorious licensing system. Times have changed! Today the fourth-generation technologies, the Internet and social media make it easier for entrepreneurs to showcase their ideas on a global basis. The Government is doing its bit by encouraging the development of the MSMEs (micro-small and medium enterprises) sector with loan and training schemes. The very basis of entrepreneurship has undergone a sea change and has become knowledge intensive. Just not technology, an entrepreneur today has to master the art of strategic thinking, business model design and read intensively. The student who is a poor reader is simply unfit to become an entrepreneur, as he/she has to study and develop deep expertise in a chosen field to excel as an entrepreneur. We witnessed this in the three case

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studies narrated in part 2. In each case the four people read and trained themselves intensively. Aman developed an innovation ecosystem with Design Delhi initiative and Ashwini trained himself intensively in E-Vehicle technologies. Success to them came only when they burnt the midnight oil, reading and equipping themselves with the necessary knowledge. Even in the case of three intrapreneurship cases involving Bullet, Chetak and FIGO, the three brands made an impact in their comebacks after the managers involved with the projects burned the midnight oil to build up the brand. In this part, the book develops a concept of innovative thinking termed Resilient Thinking drawing from contemporary strategy literature found in top academic journals of the day. Innovation in a corporate setup or as an entrepreneur can no more be looked upon as a piecemeal effort or just as R&D. R&D and technology has to be combined with customer insights, business model and organizational practices. Thinking is often ignored and misunderstood. The manager engrossed in routine tasks has little time to devote to thinking and reading. However, the complexities of today’s business environment have made thinking a necessary and sin qua non for progress. But thinking has to be structured, what the late C K Prahalad termed as disciplined imagination. Structured and innovative thinking is a difficult and often a paradoxical process, involving creativity on one hand and yet stay grounded with a systemic framework. There are three levels of thinking. The first involves rearranging of routine tasks and scheduling and carrying out the daily chores efficiently. The second is to understand and perceive people’s reactions from their behaviour and facial expressions and manage it. Cognitive science terms the first two levels of thinking as deductive reasoning. What can be deducted and concluded upon by direct observation. The third is improving mental capabilities by studying and absorbing

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new knowledge, blending with the older concepts. Cognitive science terms this inductive reasoning – used mainly in scientific research, by detectives and by psychologists – the ability to infer with incomplete data. Inductive reasoning is used in business thinking to develop a company’s strategy, where complete data about the future is not available. However, in future the third type of reasoning will become increasingly commonplace. The celebrated Nobel Prize winning psychologist Daniel Kahneman terms it as simultaneously thinking fast and slow – a very difficult and not a normal process. We are transitioning to an experience economy as per Soshana Zuboff. In her latest book she describes how the Internet giants such as Facebook and Google are controlling our data and influencing our lives. In this age of smartphones, our lives are dictated by the applications or Apps as they are known today. At any point of time a person may have 40 to 50 Apps installed in his/her smartphone and these Apps literally dictate our lives today. Also, as products graduate into platforms by combining mechanical properties with the Internet, increasing automation using robotics and artificial intelligence is changing the way business was done, reducing manual labour for a manager and the smartphone has made the customer increasingly demanding and aggressive, as all information about a product is at his/her fingertips. In this context, abductive reasoning or the ability to connect the dots with little or no data at hand becomes imperative requiring a higher level of thinking – where intuitive reflexes are often challenged, forcing the individual to think fast and slow simultaneously. The human body comprises four levels: the body, the senses, the mind and the soul. It’s the soul which is said to connect with God and provide wisdom. Wisdom is beyond knowledge. Knowledge can become obsolete, wisdom is timeless. Knowledge may divide, but wisdom binds. Obsolete

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knowledge leads to ego and blocks progress, wisdom removes barriers to progress. As George Barnard Shaw once said: “the reasonable man adjusts himself to the world, the unreasonable man tries to make the world to adjust to him, therefore all the progress depends on the unreasonable man”. The entrepreneur is an unreasonable man at heart, attempting to do something never done before. Deriving the tenets of resilient thinking from parts 1, 2 & 3 In section 1, the three cases of intrapreneurship displayed by three companies and the four entrepreneurs display the traits of resilient thinking. Enfield exactly portrays the spirit of a modern India. It combined the old with the new and adapted a unique brand positioning, not trying to compete with the Japanese to relaunch the Bullet in its new avatar, while maintaining the iconic sound and looks. “The Bullet rules the roads and chooses its owner” was the slogan of Enfield. Bajaj hopes to recreate the legend of Chetak, while Ford rediscovered the Model-T in a new guise with modern technology, yet the Figo was a very Indian car at heart! No one knows it better than one of the authors of this book, who drove 1625 km in it across India in 2013. The Figo combined the sturdiness and reliability. Ford cars are known for fuel efficiency and low cost of ownership – exactly what the Indian car buying public loved about it. So, the first trait of resilient thinking can be: blend traditions with modernity. The four entrepreneurs portray a new and rising India. HBr is directly involved in nation building, trying to make India clean and green. UX Gorilla takes India beyond its borders, conveying the message that we are as good as anyone else or even better. While Autobot peers into the future, attempting to make India the next technology leader of automobile industry. The common trait that binds the three start-ups here is: a great sense of purpose, which fired them up and they never gave up in face of adversity. Hence, here comes the second trait of

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resilient thinking: find a great purpose to fire you up and never give up your mission in face of adversity. The third principle of resilient thinking comes from the first essay of Part 2: “Valley of death”. The first tip that was given: think of doing something out of the way, crazy things that one will never think of doing in a normal situation. In his famous book: “David & Goliath”, Malcom Gladwell states that underdogs and misfits will often try doing things that no one else will think of doing. Years back in 1980s, an underdog shook a giant to its core. Nirma, an unknown detergent manufacturer almost swept the detergent king Hindustan Unilever out of the Gujarat market by adapting an unusual strategy: door-to-door selling of a homemade soap powder, which being unbranded didn’t attract excise duty and other indirect taxes and Nirma makers sold their soap at less than half the price of the leading Unilever brand of the day, Surf. The maker of Nirma, Karson Bhai, Patel sold his homemade mix door to door riding a bicycle and Nirma grew at an electric pace. Hence, here comes the third tenet of resilient thinking: don’t suffer from inferiority complex because you don’t have enough resources at hand, being an underdog is not necessarily a disadvantage. Enfield and Ford India also attempted to do something unusual: they attempted to combine the opposite ends. Modernity with traditions, a world class car at an Indian price. The Bullet fan club just wanted the bike as it was before with the famous thumping sound, yet a new generation demanded the efficiency and reliability of the Japanese bikes. Combining the opposites was a tough task here, but Enfield was determined to pull it off and they managed to retain at least 70% of the old sound. After years of careful study Ford understood what exactly the Indian consumer wants, it understood the gap in current offerings of its Japanese and Korean competitors and combined the opposite ends to try and do something impossible, a world class car at an affordable price with features better than competition. Hence, the fourth tenet of

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resilient thinking can be derived as: combine the opposites, combine insanity with logic! Think paradoxically, every advantage has a corresponding disadvantage and vice versa. The three stories of entrepreneurship, as well as the comeback story of Bullet tells us: listen to your inner voice, don’t give up! This is also expressed in the essays: “Valley of Death” and the “Nine Devils”. This is the fifth tenet of resilient thinking. From the second essay of Part 2 the nine devils, a common thread binds all the nine: - learning to live in adversity knowing that the it teaches a lot many lessons. Particularly, isolation and empty pockets. These two devils may be the most severe and can lead to other seven. While the other seven are different states of mind and deficiencies, these two are external to the entrepreneur, something he/she cannot help. As Aman says in his story – if something is beyond you, there is no point in cribbing about it but try and do something about it! He went on to launch an innovation ecosystem that changed perceptions about Indian designers. So here comes the sixth tenet of resilient thinking: isolation and empty pockets are part of the story, do something about it instead of cribbing! The next essay of Part 2 talks about end of a generation. This essay highlights what the four entrepreneurs wanted to do or the absence of it: shampoo selling or coding doesn’t lead to a meaningful activity or doesn’t lead to professional development, with which one can contribute to nation building. It’s once again finding that great purpose and asking yourself that billion-dollar question: what you want to do with your life? The next essay underlines the value of deep thinking: deliberate practice to overcome a weakness and repetitive experiments to perfect it. Just having a resolve and a great sense of purpose is not enough, to make the dream a reality. Deliberate and purposeful practice and repetitive failures to perfect one’s craft is the key to a great original product or

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success. Great sportsmen and musicians adapt this method to leave their mark on their chosen field. Hence the seventh tenet of resilient thinking: practice what you dislike and practice it again and again, make your tomorrow better. The next and last essay of Part 2 talks of doing business with the bottom 60% of the global population largely left untouched by modern business and strategic planning literature. No one is sure, neither any one has a clear vision, neither the business nor the governments. Firms are putting individual efforts, attempting to do well while doing good. But there is lack of a clear and coherent academic framework guiding governments and firms on how to remove poverty by doing business. This remains one of the most vexing and unresolved issues for last two centuries and two industrial revolutions based on fossil fuels have come and gone. India alone has a 700 million plus population, just living at the edge of the poverty line and leading fragile lives. The migrant labour crisis which broke out in India after a nationwide lockdown was announced by the government with media showing pitiful sights of people walking hundreds of kilometres to reach home proves that our economy has a fragile edge and it’s a big one. The answer lies in a new MSME (micro-small-medium enterprises) policy and social entrepreneurship. The simple principle: look beyond profits and look forward to improve lives with training or products/services that help people to improve their lives. Hence goes the eighth tenet of resilient thinking: look forward to leave an impact on people’s lives. The first essay of Part 3 highlights the historical shift. If we are to go by the concept of “experience economy” that has dawned on us, combined with the fact that products are now graduating to platforms, then we may witness a large variety of customized products in near future and this is already happening. For example, Apple Watch or Tesla cars – both the products allow a high degree of customization. On a more

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mundane level, today everyone customizes his/her smart phone with applications he/she likes, so a teenager’s phone may look very different and function differently from that of a senior corporate executive’s phone, while the model, the make and the technical features of both the phones may be exactly the same. This degree of customization marks the shift from doing business based on 3 “S”s: Scale–Size–Standardization to doing business based on 3 “I”s: Inspiration–Imagination– Innovation. In essence innovation and innovative thinking will rule the day and future competition (or absence of it) will be based on the ability to innovate. A manager’s sole task will be to innovate and integrate innovation at three levels: product, business, corporate. This calls for thinking differently. Not just out of the box, but Counter-Intuitively, thinking opposite of what everyone else is doing. The famed Israeli intelligence agency Mossad has a 10th man principle. The 10th man has the power or authority to challenge what the entire team is thinking and advocates about a probable terrorist attack or a situation of national security. Hence goes the ninth tenet of resilient thinking: think like the 10th man and think the CONs while everyone is gung-ho about the PROs – every advantage has a corresponding disadvantage. The next article in Part 3: “I for India.” talks about a collaborative effort which will focus on developing two higher levels of innovation in Indian context: strategic and management innovation. While Indian companies have focused their energies on product/process innovation, the next two levels of innovation remain largely ignored or not understood properly and these two levels of innovation are neither talked about much in MBA classrooms across the country. This requires an intense collaborative effort and building collective resilience within the organization. Thomas H Lee and Angela Duckworth talked about organizational grit or organizational resilience in their HBR article (Lee & Duckworth: “Organizational Grit”, Harvard Business Review,

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September-October 2018). Organizational grit is collective resilience an organization displays in form of teams, working for a common cause together. Organizational grit is rare in practice. Toyota company with its culture of life long employment and continuous improvement displays this characteristic in ample measure, which has resulted in eleven successful generations of its bestselling model – the Corolla since 1966 till today. Here from generation-to-generation leaders have passed the baton to the next leader, passing on values as well. The values or beliefs keep changing with changing times, necessitating changes. The first generation of the Corolla was guided by the belief: “let us make the most wanted car by the market”. The next generation was launched in 1970 guided by the belief: “A Corolla with even greater competence”. The fourth generation was launched in 1979, guided by the belief: “Its not a car if its not beautiful”, (source: company website). Thus, generations of Toyota managers have been guided by changing beliefs from time to time and these changing beliefs represent: Collective Resilience. Hence, we draw the tenth tenet of resilient thinking: collective resilience fired by a sense of purpose is hard to beat. The next essay of Part 3 talks about original research. Building an original theory or an idea, a product or a service takes years and this is where many Indian companies fall short, as well as academic research. The entire system is focused on short termism, that is, delivering financial results to keep the stock prices high or just publishing papers in obscure/ unknown journals to show publications and secure a tenured track teaching position. Publishing in A grade academic journal is an activity that may span years of research and the current academic system demands output from a faculty which is yearly or even half yearly, resulting in substandard research that leaves no impact on industry. Publishing a good research paper in any respected and refereed academic journal of a reputed publisher like Emerald, Springer, Taylor & Francis

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or Wiley may span a sustained effort going beyond a year. A similar approach is required to build a world class car or any other product. Going back to the case study of FORD, they came in 1996 and waited for years to understand how to reproduce the magic of Model-T in Indian context before launching the FIGO that changed its fortunes. So comes the eleventh tenet of resilient thinking: - short termism never pays and never expect quick results, a little effort on a sustained basis everyday spanning over the years produces that magic. But to reach that one moment of magic takes years and many sacrifices. The next article in part 3 enumerates timeless and classic strategic wisdom (as laid out by Joan Magretta in her book: “Understanding Michael Porter”, 2012 HBS Press), misunderstood by numerous companies, Indian and MNCs alike. The company which is not clear about its business and vision, not clear about what it will do and what it will not doesn’t last long and this is one of the reasons of shortening corporate life spans. Hence, comes the twelfth tenet of resilient thinking: just not having a big purpose, clarity of purpose is necessary with a laser like focus (& focus is the starting point of building an innovation system). To build the tenets of Resilient thinking the following research was referred:

1. Zuboff Shoshana, 2019, The Age of Surveillance Capitalism, Profile Books, London.



2. Eisenhardt Kathleen M. & Sull Donald N., “Strategy as Simple Rule” The Harvard Business Review, January 2001.



3. C C. Miller, R D Ireland “Intuition in strategic decision making: friend or foe in the fast-paced 21st century?” Academy of Management Perspectives, 2005, 19/1: 19–30.



4. Giovanni Gavetti, “Toward a behavioural theory of strategy” Organization Science, 2012, 23/1: 267–285.



5. Robert A. Baron, “Opportunity Recognition as Pattern Recognition: How Entrepreneurs Connect the Dots to

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Identify New Business Opportunities”, Academy of Management Perspectives, 2006, 20(1), 104-119. Summarizing the twelve tenets of resilient thinking as drawn up from parts 1-2-3:

1. Indian products should reflect traditions with modern technology and practices – this is the essence of Indian spirit.



2. Find a great purpose to fire yourself up and never give up in face of adversity.



3. Don’t suffer from an inferiority complex because you don’t have enough resources at hand and being an underdog is not necessarily a disadvantage.



4. Combine the opposites: insanity with logic, think paradoxically, think what everyone else considers crazy.



5. Listen to your inner voice: don’t give up.



6. Isolation and empty pockets are part of the story, do something about it instead of cribbing.



7. Practise what you dislike and practise it again and again, don’t wait for tomorrow to be better, make it BETTER.



8. Look forward to leave an impact on people’s lives.



9. Think like the 10th man and think the CONs while everyone is gung-ho about the PROs, every advantage has a corresponding disadvantage.



10. Collective resilience fired by a common sense of purpose is hard to beat.

11. Short termism never pays and never expect quick results, a little effort on a sustained basis every day produces that moment of magic, but to produce that one moment of magic takes years and many sacrifices. 12. Just having a big purpose is not enough, clarity of purpose is necessary, the successful person is an average person with a LASER-like focus.

19

The 3 C’s Framework: An Introduction

The 3 C’s stand for Coordination, Collaboration, Co-evolution. The 3 C’s are based on the twelve tenets of resilient thinking derived in the previous chapter. Coordination is based on tenets of design thinking, but why design thinking efforts fail in most of the cases? The first C – coordination, explains that and emphasizes that there is a belief system and a culture that must precede design thinking and there is a series of concrete steps (1-2-3 of product development as told in Part 3) to follow to avoid failure. Just learning the design thinking methodology as enumerated by Stanford University – Empathize, Design, Ideate, Prototype, Test or learning the 3 I framework of the leading design thinking firm IDEO: Inspiration, Ideation, Implementation is not enough. In fact, they tell you very little about the human, managerial, administrative and cognitive challenges a designer or designing team faces. The methodology of coordination as enumerated by this book in a subsequent chapter doesn’t guarantee success, resulting in a block buster product/service, but it does show a clear path and will considerably reduce chances of failure of design thinking efforts. The next C – Collaboration, focuses on an even more difficult and lesser understood aspect: designing a business model. Innovation in business model is also known as strategic innovation in literature and the topic of strategic innovation has been written upon for nearly a quarter of a century now in

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premier strategy journals. Yet instances of strategic or business model innovation is still not common in practice and in Indian context, harder to find. Most of the new generation e-commerce companies have copied business models from West. OLA’s business model is an adaptation of UBER and OYO Room’s business model is more or less an adaptation of Air BnB. Big Bazaar was slightly more original in this respect, in the sense that its backend supply chain management mirrors Wal-Mart, but the front has undergone Indianization. Even the largest airline company of India – INDIGO and other successful low-cost carriers like Spice Jet and Go Air adapted the original low cost no frills and point to point flying of South West airlines first attempted by the company in 1971. Hence, original thinking in business model innovation and business model design which follows and withstands the five tests of Porterian wisdom (as enumerated in the essay on “Deep Thinking”) in Indian context is hard to come by and the second C lays out the methodology of accomplishing this difficult task in Indian context. The third C explores one of the least understood and least written upon aspects of strategy – management innovation. Management innovation comprises management tools (such as the Balanced Scorecard) or a management process (such as Six Sigma or Lean Manufacturing) or a set of beliefs (culture) that guides managerial decision making and day-to-day practices. These beliefs are embedded in organizational routines (taken up in next chapter) or organizational practices and is the starting point of organizational transformation. Outdated and archaic beliefs kill organizations and many a big name has bitten the dust because of outmoded beliefs. The third C – Co-evolution, lays down a methodology to co-evolve and embrace global and local practices together – in line with the first tenet of resilient thinking: blending old with the new and keep morphing and changing continuously, making transformation and renewal a continuous process.

20

Grounding it in Academics: The Regenerative Dynamic Capabilities Theory

Can academic theories solve complex business issues? Good question! I am aware of the fact that among the managerial community there is a strong disregard for theories. They don’t work! They don’t match the reality! The classroom teaching is inadequate! We have to train the rookies again! Young MBAs lack the necessary skill set to handle complex business issues! These are some of the common refrains we hear from HR managers, when they visit campuses. Where the fault lies? The fault doesn’t lie with the theories themselves; the fault lies in the fact that no textbook explains the underlying theory behind a framework: whether it is the five forces model of strategy or 4p framework of marketing or something else. MBA education is largely framework oriented or model oriented – nothing wrong with that per se, until the manager faces a situation where these frameworks don’t work anymore! How will he cope with such a situation? The process of a theory becoming a best practice: When a new theory is advanced in a top-notch academic journal (like The Strategic Management Journal, Journal of Finance, or The Journal of Marketing) it is just a hypothesis. Over a period of time this hypothesis is tested repeatedly by other researchers and then the theory starts taking shape and appears for the first time in a premier practitioner journal like the Harvard Business Review or MIT Sloan Management Review with real-life examples reinforcing the theory. The practitioner journals

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reach out to a wide managerial audience, scholarly journals don’t. Finally, after some more time, the consulting firms start building frameworks and models out of the theory and these frameworks then get into the textbooks for classroom teaching. The time gap between a theory appearing in an academic journal for the first time and getting into the textbook as a framework for classroom teaching used to be large: 20 to 30 years, but is shortening now. Hence, every day and every moment we all are using the ideas of a dead theorist in our day-today work without realizing it. What is happening today? Especially so in India? In India the business environment is being shaped by three forces: (a) increasing digitization, (b) rising aspirations of Indian people, and (c) the pandemic and border tensions. These three forces combined, have created a very intricate and increasingly interconnected business environment, with short reaction times. Managers both in Indian and foreign companies are trying to cope up with this complexity with no clear frameworks to guide them. The absence of appropriate frameworks gives rise to the common refrains listed at the beginning of this article. Doing business in India is not easy; succeeding in Indian market is very difficult and requires a lot of patience. The root cause lies somewhere else! The managerial issues are the symptoms of the disease, the disease itself is different: ABSENCE OF THEORIES EXPLAINING THE INDIAN SITUATION. The need of the hour The need of the hour is to go back to the root cause: Absence of appropriate theories. Today the complex Indian business environment requires a fresh set of theories in strategy/ marketing and other managerial disciplines, more so in STRATEGY, which is the starting point of any business venturing into the future. Absence of theories is giving rise to the common refrains heard in campuses.

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Managers in India, both in Indian companies and MNCs alike are facing the business environment with theories going back to 1980s or even earlier, that spawned all the popular models and frameworks found in MBA textbooks. For example: the well-known Five Forces framework of Professor Porter traces its roots to the Industrial Organization (I/O) theory of 1950s, and the FF framework itself is now 36 years old, which first appeared in HBR in 1979. Who will bell the cat? Good question! Who will design the frameworks, relevant for Indian business environment? The answer can be: consultants of course! But then if one follows my brief explanation of how a theory becomes a best practice, then it’s not the consultants who can do anything in such a situation – because they need a set of appropriate theories to design a fresh set of frameworks/ models. The question now is raised once again: who then will spin such a set of theories? The answer is the academicians! The management scholars! We the academicians and management scholars are the real culprits – we have been slow to react to the fast-changing business situation in India and have not made adequate efforts to understand it and build theories. The power of a good theory lies in its ability to predict a situation that may arise in next five/ten years – which can help a company management to formulate its strategy. We don’t have a fresh set of theories today that can predict the changes in Indian business environment with even 50% accuracy (which is good enough). The solution Both sides (the academicians and managers) should overcome their natural cynicism for each other and work closely to build a set of fresh theories, relevant for the Indian business environment that can be published in top-notch academic journals – the process is long and painful of course. It takes anything from two to five years, before a new theory is finally

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accepted by the blind referee and the paper is published. But then there are no shortcuts. The next step is to work closely with consulting firms to build appropriate frameworks and models from such theories that can be used by managers in India. In this part, more in this essay we examine the Dynamic Capabilities Theory. Does practice develop from theory or does theory develop from practice. It’s both ways. Theory provides FORESIGHT, practice provides INSIGHT. A great organization always combines the two. There is a tendency among b-schools/engineering colleges to invite the so called “industry experts”. Who are these industry experts? They have spent may be anything from fifteen to twenty-five years working in various industries. What they possess are valuable insights, gained from years of experience, but the other side of the story goes missing: Foresight. A great theory and the subsequent framework are built by combining the two. Here we briefly outline the progression of STRATEGIC THOUGHT over last eight decades since 1940s to drive home the point that every living practitioner is a prisoner of ideas of a dead theorist and today the need of the hour is a new framework that shows the way. The doctors know the disease but the medicine is missing. Progression of strategic thought through last eight decades.

THE RATIONAL SCHOOL OF THOUGHT Early developments in strategic management field came from this school. Also known as the neoclassical school of thought. The first period of economics since 1776, was known as the classical school of thought. Contributions to this school of thought came from Adam Smith, David Ricardo and other economists in 19th century. Towards the end of 19th century economists like Alfred Marshall, Stanley Jevons and others developed the theory of demand and supply and the field of

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microeconomics started building up. However, the entrepreneur and the topic of innovation never featured in the neoclassical school of thought. The neoclassical school emphasized on mathematical rigour of modelling and they were inspired by the physicists of 19th century – the Newtonian school of thought in Physics. But Physics itself went away from the Newtonian school to Einsteinian school of thinking and went deep into the subject of quantum mechanics and relativity, while economics remained caught in the 19th century paradigm, and increasingly started looking like a vintage car. But the neoclassical school did make significant contributions to the field of economic theory, international trade and policy making at the Government level. In 1950s the proponents of theory of Industrial Organization or I/O theory started making significant contributions to the business policy field. The Learned-Christian-Andrews-Gooth framework or the LCAG framework constructed the all-popular SWOT analysis based on I/O theory premises, which is the first framework MBA students read even today. In 1960s, based on Raymond Vernon’s product life cycle theory the Boston Consulting Group built the BCG matrix, comprising stars, cash cows, dogs and question marks. This is the second framework MBA students learn today. Based on I/O theory and the Bain-Mason paradigm of structure-conduct-performance, that is, the industry structure determines the competitive forces and behaviour of incumbents of the industry and determines the outcome, Michael Porter built his now famous Five Forces framework, the third framework MBA students read today. In 1980s and 90s, two scholars; Jay Barney and Birger Warnerfelt enumerated that a firm’s competitive advantage came from ownership of valuable, rare, inimitable and non-substitutable assets such as a rare technology (Boeing and Airbus in large commercial jets) – which developed into the all popular VRIN framework – the fourth framework MBA students read in strategic management course the world over.

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Thus, the most popular frameworks of today, used widely by managers has deep roots going back may be by hundred years of economic theory development.

The Behavioural School of Thought What went missing in the neoclassical school of thought are three fundamental questions concerning strategic management: (a) why firms differ in their behaviour, (b) why some vanish and yet others survive, and (c) why some firms continue to outwit competition and remain leaders for a long time. Neoclassical economics didn’t focus at the firm level and its assumptions didn’t help managers taking critical investment decisions. The academic and managerial discontent with this field kept growing till it became a loud voice in 1990s. What was missing was a new theory of firm, which incorporated behavioural aspects. A sociologist and management scholar in 1930s, Mary Parker Follet, wrote a series of papers on entrepreneurship, trust, the leader as a coach, collectively known as the papers of Mary Parker Follet. These papers were perhaps the very foundation of innovation and entrepreneurship. But management scholars of the day and economists ignored her contribution largely and as war clouds started gathering over Europe with Hitler and Mussolini’s sabre rattling, everyone forgot about her. Austrian economist Joseph Schumpeter laid down the foundations of entrepreneurship with his theory of creative destruction in 1934. The essence of the theory is that the old has to be destroyed in order to make way for the new and an entrepreneur brings new ideas and concepts, which pave the way for newer industries and firms, destroying the old. The Carnegie Mellon school of thought comprising scholars like Herbert Simon in 1940s, Richard Cyert and James G March laid down the foundations of a new theory of firm. Simon propounded his now famous theory of bounded rationality

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(which states that we human beings are neither fully rational and devoid of emotions, nor fully irrational and illogical. This theory is at the heart of Design Thinking to be taken up later in this part), which explains the behavioural and cognitive biases that creeps into managerial decision making. Cyert & March’s theory of firm in 1963 and Edith Penrose’s theory of firm in 1959 laid down the foundations of a new theory of firm. They explained that firms vary in their behaviour, based on cognitive biases of their managers and this attempted to answer one of the most vexing questions of strategy. However, these explanations still remained outside the mainstream academic thought concerning strategy, which continued to be dominated by neoclassical tenets. Towards the end of 1990s managers and scholars increasingly became dissatisfied with strategic management frameworks, which were largely static in nature starting from SWOT to Five Forces to VRIN and didn’t explain the nature of dynamic change and technological turbulence business was experiencing, especially in semiconductor industries, disk drive industries and also in automobiles and information technology software. In 1982, nearly two decades after Penrose published her seminal work on behavioural theory of firm, Richard Nelson and Sydney Winter published their now famous Evolutionary Theory of firm. The roots of the evolutionary theory can be traced to Herbert Simon’s writings (1955), March & Cyert (1963). Evolutionary ideas also surfaced in a series of papers in late 1940s and early 50s, involving Carnegie Mellon academics. Based on ideas of Penrose, Simon, Cyert & March, Nelson & Winter developed their theory of evolutionary economics. The theory states that firms or companies comprise organizational routines. Routines can be explained as a set of processes and systems that allow a firm to develop new competencies, which in turn, builds into a new business. The problems begin when a firm stops developing new competencies – which is essentially

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continuous learning. Companies like Toyota, Tesla, Intel stay ahead of the pack with continuous learning. The problems start when learning stops! In 1997, drawing upon nearly five decades of behavioural thinking, three scholars: David Teece, Gary Pisano and Amy Schuen published the most discussed upon theory of strategic management of the day: Theory of Dynamic Capabilities. Later on, scholars like Kathleen Eisenhardt, Jeffrey Martin, Katherine Wang, Ilidio Barreto & Oliver Schilke further developed and enriched the idea. There are four categories of competencies, just as we human beings have four levels in us or there can be four categories of thinking. The first is the basic core competency, which allows a firm to earn a living. The second is an incremental competency, which in times of stable business environment allows a firm to launch new products or diversify in relevant lines of business without much changes in the business model. The third is the competency which allows a firm to build new core competencies, new core lines of business (such as Nokia venturing into the telecom space in early 90s or Apple’s launch of first-generation smartphones with the IOS operating system). This third level is commonly known as Dynamic Capabilities in literature. However, in times, when everything is up in the air and existing knowledge and competencies are not useful in generating a living, certain meta capabilities are required to build new DCs. This is Collis’s fourth order capability – Regenerative DC. So, what is a Dynamic Capability all about? In simplest of terms it’s the capability of a corporation or a firm to build new business competencies, such as electric vehicles by automobile firms, the next generation computing chips by Intel, the next generation operating systems by Google or Microsoft or hybrid vehicles by Toyota. The firm that continuously keeps learning and building new competencies, that builds new businesses

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keeps ahead of the pack and this is what the theory explains how by three basic mechanisms:

(a) The ability to sense opportunities



(b) The ability to seize opportunities



(c) The ability to transform the firm’s knowledge base and upgrade continuously

The ability to sense opportunities will entail understanding the changing customer behaviours, technology and industry trends and changing competitive intensities. Some firms are very good at sensing opportunities ahead of others. BEERA brand of beers by B9 beverages sensed that there is a growing segment of a young age group in India, who are mostly college going and they drink in get togethers for fun. This segment is growing very fast and they don’t like the traditional bitter taste of a beer. Accordingly, B9 launched a wheat-based beer, which is not bitter and they captured the segment, BEERA became very popular with young Indian women, who wanted a sweeter taste and less alcohol percentage. The last mile transportation, where big trucks can’t go was a perennial problem in India in narrow lanes and bylanes in cities to deliver groceries, supplies to Mom & Pop stores and other essential goods. Delivery was done by three wheelers or rickshaws, both being unsafe and unreliable and also the carrying capacity was limited. Tata Motors sensed the problem and launched Tata Ace: a small truck which can carry up to two tonnes, with a small diesel engine. Speed was not the criteria here and hence a powerful diesel engine was not necessary, what was important was the ability to manoeuvre in narrow lanes, also to deliver essentials in remote villages, with poor road connectivity. Ace became an instant hit with truck operators. MTR, a Bengaluru based company, sensed much ahead of others that there is a growing popularity all over India for South Indian breakfast items, such as Idli, Dosa or Upma due to the fact that they are healthy with a low-calorie

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content and give a filling breakfast to start the day. They captured the market at national level with their South Indian breakfast offerings, attractively packaged with instructions and affordably priced. Ability to seize opportunities will require team unity and competency to design new business models quickly. In early 2000s the water purifier market in India was a large and untapped market, more so in rural India, where tap water supply was almost non-existent and power supply was erratic. The need of the hour was a water purifier with a storage mechanism, which can purify water without power. Hindustan Unilever (HUL), the detergent giant was buffeted by competition in its traditional FMCG business of detergents, shampoos and other products. HUL was looking to build new businesses with higher margins. They ventured into the rural water purifier market with PUREIT brand of purifiers at a very affordable price. PUREIT met the gold standards of London Institute of Hygiene and didn’t require tap water and electricity. To scale up the business HUL needed a new business model, the traditional FMCG distribution system was not suitable for the new business. HUL recruited and trained thousands of doctors and water specialists to do direct-to-home (DTH) marketing, educating the villager about benefits of drinking pure water. PUREIT became the leader in rural water purifier market. The key to success was constitution of a dedicated water team that worked on the product design and business model with a single-minded focus. Ability to transform is a more difficult and complex task. National Thermal Power Corporation, the Government owned Indian power generation giant, has launched on an ambitious transformation programme to make itself a renewable energy and e-mobility giant. But this transformation may take years, in the meanwhile the French MNC – ENGIE is already making inroads in rural India with their solar powered devices. Indian

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IT giants like INFOSYS, TCS AND WIPRO who powered the Indian IT success story in 1990s today face a major transformation challenge to switch over to the fourthgeneration technologies such as artificial intelligence, cloud, robotics and new generation programming languages such as Python and Gorilla. The man hour-based business model (refer an earlier essay: The End of a Generation) which was the basis for success story of these companies is under a cloud today. The automobile firms the world over are attempting to switch over to e-vehicles and face multiple challenges on the technology and management front. It is just not technology alone, production, marketing and servicing of e-vehicles require an altogether new business model which is still evolving. Established retailers are struggling to transform to the e-commerce business model in India and so far, the big ones like Big Bazaar or Easy Day has not been very successful against start-ups like Big Basket, Grofers or Milk Basket who are making rapid inroads in urban India. Established restaurant chains are still figuring it out to balance between home delivery menus (as home deliveries are increasingly becoming the preferred mode of eating) and in-house menus. Of course, the current COVID-19 crisis has dealt a death blow to the restaurant business, it remains to be seen how the food services industry recovers from this crisis, once the virus infection rates slow down. In essence, building a set of dynamic capabilities will involve a set of organizational routines (going by the language of evolutionary economics) or procedures or processes to senseseize-transform on a continual basis to survive the changing business environment and in a post-COVID world application of this theory assumes prime importance. So, what exactly are these processes and how can firms measure the progress? As the old saying by management sage Peter Drucker goes: “What gets measured gets managed”.

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There are two major problems that many Indian or MNCs will face, who never attempted to build a set of dynamic capabilities and is doing it for the first time. The first issue is the belief system, also known as a set of regenerative dynamic capabilities. Beliefs are bedrock of organizational cultures and guides a firm in turbulent times and enables it to seize opportunities and transform. At times the old set of beliefs itself becomes outmoded and there are seven bad practices that a firm must junk, confine to the bin and let go. They are: (a) strategic planning schedules, (b) relying too much on experts (the COVID crisis has driven the nail in the coffin for many an expertise anyway), (c) relying too much on customer surveys, (d) structured opportunity management systems, (e) celebrating failures, (f) financial forecasts, and (g) embracing impermanence and stop believing that your company has a permanent life. Many Japanese corporations have very strong belief systems such as Fuji Film and Toyota, which has enabled them to survive crises time and again and these belief systems keep changing. One of the best examples of a changing belief system belongs to that of GE. This American manufacturing giant transformed itself from an old school manufacturer of turbines and electrical equipment, including engines to a comprehensive service provider. The transition was from product to platforms by adapting the “Internet of things” approach and old beliefs were merged with new ones. Fuji survived and thrived in the digital transformation of the camera industry, Kodak didn’t as Kodak management refused to change their beliefs. Toyota has believed in a changing belief system for years and the best known Toyota car, Corolla, is now in its 12th generation since 1966. Many Indian companies today still function with the outmoded belief systems of the License Raj era of pre-1991, many have vanished, some are clinging to the old beliefs.

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Re-examining the belief systems by using three principles: (a) focus on what is the need of the hour, (b) elevate the thought process of teams to the fourth level, and (c) stretch the goals is the way Indian companies can blend traditional values with a modern belief system to prosper in a post-COVID world. The concept of Focus-Elevate-Stretch is elaborated in subsequent three chapters. The second major issue is focusing on building on emotional quotient or EQ. The basic values of grit, trust and perseverance are the very essence of entrepreneurship and innovation. EQ is sorely missing from the Indian education system, heavily skewed towards IQ right from school. In Japan, children are first taught human values for some time and there are no exams up to certain grade. Japanese children grow with embedded human values and this reflects in success of Japanese corporations. The same system is there in Scandinavian nations of Norway, Denmark, Sweden and Finland. Finnish corporations, sportsmen (especially in Grand Prix racing) and scientists have made their mark on the international arena. And these nations have excelled in global sports arena for a long time now, including World Cup Soccer and European football. Indian children follow a rote-system of education installed by the British to produce clerks. Well! The Brits have left 73 years back and there is no point in blaming them now! What have the Indian education planners done for last seven decades? Why this nation once known as a thought leader of the world hasn’t got a single university in the top 50 list or a single world class corporation in the Fortune 100 list? Why this nation has failed to produce an Apple, Toyota or a Tesla in seven decades despite claims of its media on Indian managerial and technical talent? Why Indian managers excel away from home to head Fortune 100 companies? the misplaced emphasis on service sector (as explained in the essay: The End

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of a Generation) has done a lot of damage. Manufacturing and research took a back seat and shampoo selling and programme coding held sway in B-school and engineering college campuses. The Indian education system prior arrival of the British placed a lot of emphasis on EQ building, which was destroyed by its Colonial masters. Well! Once again there is no point in blaming the Brits now. We can’t reverse history, we can make a new beginning! The 3 C’s: Coordination corresponds to sensing of the dynamic capabilities’ theory; Collaboration corresponds to seizing and Co-evolution corresponds to transforming. Thus, the 3C framework is an adaptation and improvisation of the theory in Indian context, incorporating EQ and suggesting a new belief system and contributes to theory building by going deeper into the regenerative aspects of dynamic capabilities.

REFERENCES

1. Ambrosini Veronique and Bowman Cliff, “What are Dynamic Capabilities and Are They a Useful Construct in Strategic Management?” International Journal of Management Reviews, Vol. 11(1), 2009, pp. 29-49.



2. Ambrosini Veronique, Bowman Cliff & Collier Nardine, “Dynamic Capabilities: An Exploration of How Firms Renew Their Resource Base”, British Journal of Management, Vol. 20, pp. S9-S24, 2009.



3. Augier Mie and Teece David J., 2009, “Dynamic Capabilities and the Role of Managers in Business Strategy and Economic Performance”, Organization Science, Vol. 20(2), pp. 410-421.

4. Barney J., 1991, “Firm Resources and Sustained Competitive Advantage.” Journal of Management, Vol. 17(1), pp. 99-120.

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5. Barreto Ilidio, “Dynamic Capabilities: A Review of Past Research and An Agenda for the Future”, Journal of Management, Vol. 36(1), 2010, pp. 256-280.



6. Byrne Fallon Lucy & Harney Brian, 2017, “Micro foundations for Dynamic Capabilities for Innovation: A Review and Research Agenda”, Irish Journal of Management, Vol. 36(1), pp. 21-31.



7. Collis D.J., 1994, “Research Note: How Valuable are Organizational Capabilities?” Strategic Management Journal, Vol. 15, 143-152.



8. Christensen Clayton, 1998, The Innovator’s Dilemma. HBS Press.



9. Eisenhardt Kathleen M., & Martin Jeffrey A., “Dynamic Capabilities: What Are They?”, Strategic Management Journal, Oct-Nov 2000, Vol. 21, 10-11, pp. 1105-1121.

10. Gebauer Heiko, Worch Hagen, Bernhard Truffer, 2012, “Absorptive Capacity, Learning Processes and Combinative Capabilities as Determinants of Strategic Innovation”, European Management Journal, Vol. 30, pp. 57-73. 11. Ghoshal Sumantra and Bartlett Christopher, 1997, The Individualized Corporation, Random House UK. 12. Grove S. Andrew, 1996, Only the Paranoid Survive, Double Day Business Publishing.

13. Heimans Jeremy & Timms Henry, 2014 “Understanding New Power” The Harvard Business Review, Vol. 92(12), pp. 49-56.

14. Hodgkinson Gerard P. & Healy Mark P., 2011, “Psychological Foundations of Dynamic Capabilities: Reflexion and Reflection in Strategic Management”, Strategic Management Journal, Vol. 32(1), pp. 1500-1516.

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15. Markides Constantinos, 1998, “Strategic Innovation in Established Companies” Sloan Management Review, Vol. 39(3). 16. Nayak Ajit, Chia Robert, Canales G. Ignacio, “Non-Cognitive Micro foundations: Understanding Dynamic Capabilities as Idiosyncratically Refined Sensitivities and Predispositions”, The Academy of Management Review, Vol. 45(2), 2020, pp. 280-303.

17. Nonaka, I., 1994. “A Dynamic Theory of Organizational Knowledge Creation”. Organization Science, 5(1), pp. 14–37.

18. Nonaka Ikujiro, Hirose Ayano, Takeda Yusaku, 2016, “‘Meso’-Foundations of Dynamic Capabilities”, Global Strategy Journal, Vol. 6, pp. 168-182. 19. Pavlou Paul A., Sawy El Omar A., “Understanding the Elusive Black Box of Dynamic Capabilities”, Decision Sciences, Vol. 42(1), Feb-2011, pp. 239-273. 20. Penrose Edith, T., 1959/1995, The Theory of the Growth of the Firm, 3rd Ed. OUP, UK. 21. Schilke Oliver, 2014, “On the Contingent Value of Dynamic Capabilities for Competitive Advantage: The Non-Linear Moderating Effect of Environmental Dynamism”, Strategic Management Journal, Vol. 35, pp. 179-203. 22. Schilke Oliver, 2014a, “Second Order Dynamic Capabilities: How Do they Matter?”, The Academy of Management Perspectives, Vol. 28, 4, pp. 368-380. 23. Schilke Oliver, Hu Songcui, Herlfat Constance E., 2018, “Quo Vadis Dynamic Capabilities?”, Academy of Management Annals, Vol. 12(1), pp. 390-439.

24. Schumpeter, J.A., 1934, The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle, Harvard University Press.

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25. Teece David J., Pisano Gary and Shuen Amy, “Dynamic Capabilities and Strategic Management,” Strategic Management Journal, Vol. 18(7), 1997, pp. 509-533. 26. Teece David J., “Explicating Dynamic Capabilities: The Nature and Micro foundations of (Sustainable) Enterprise Performance”, Strategic Management Journal, Vol. 28(13), 2007, pp. 1319-1350. 27. Teece David J., Leih Sohvi, 2016, “Uncertainty, Innovation and Dynamic Capabilities: An Introduction”, California Management Review, Vol. 58(4), pp. 5-12. 28. Volberda Henk W., Foss Nicolai J., Lyles Marjorie A., 2010, “Absorbing the Concept of Absorptive Capacity”, Organization Science, Vol. 21(4), pp. 931-951. 29. Wang Catherine L., Senaratne Chaminda, Rafiq Mohammed, 2015, “Success Traps, Dynamic Capabilities and Firm Performance”, British Journal of Management, Vol. 26, pp. 26-44. 30. Wang Catherine L. & Ahmed Parvaiz K., 2007, “Dynamic Capabilities: A Review and Research Agenda”, International Journal of Management Reviews, Vol. 9(1), pp. 31-51. 31. Winter Sydney G., 2003, “Understanding Dynamic Capabilities”, Strategic Management Journal, Vol. 24, pp. 991-995. 32. Wilden Ralf, Devinney Timothy M., Dowling Grahame R., 2016, “The Architecture of Dynamic Capability Research”, The Academy of Management Annals, Vol. 10(1), pp. 997-1076. 33. Williamson Peter J., 2016, “Building and Leveraging Dynamic Capabilities: Insights from Accelerated Innovation in China”, “Global Strategy Journal, 6, pp. 197-210.

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34. Wilhelm Hendrik, Schlomer Maren, Maurer Indre, 2015, “How Dynamic Capabilities Affect the Effectiveness and Efficiency of Operating Routines Under High and Low Levels of Environmental Dynamism”, British Journal of Management, Vol. 26, pp. 327-345. 35. Zahra Shaker A., & George Gerrard, 2002, “Absorptive Capacity: A Review, Reconceptualization and Extension, The Academy of Management Review, Vol. 27 (2), pp. 185-203. 36. Zolo Maurizio and Winter Sydney G., “Deliberate Learning and the Evolution of Dynamic Capabilities”, Organization Science, Vol. 13(3), May-June 2002, pp. 339-351.

21

Building One’s Own Theory

Outstanding corporations build their own theories. Firms fail or eventually vanish because they fail to build their own theory or renew it when time demands. Unless a business builds its own theory, it will be buffeted by competition or technology or changes in customer behaviour sooner or later. Borrowing models and frameworks from the Harvard Business School is only the starting point. Sending executives to learn advanced management theories is part of the process, but unless a firm makes a serious attempt to build its own theory it can’t survive and prosper in the long run and this is where many Indian firms lose out – failure to build own theory. For example, as pointed out earlier OLA’s business model is more or less an adaptation of UBER, Big Bazaar’s business model is more or less an adaptation of Wal-Mart and INDIGO’s business model is more or less an adaptation of the South West Airline model. Imitation is the best form of flattery and the most fatal instrument of demise. This chapter outlines – how to build one’s own theory, and this theory can’t be built overnight, neither by adapting Michael Porter’s frameworks, nor by sending managers to Harvard for six months. Toyota did adapt Henry Ford’s principles of mass production and Edward Deming’s concepts of quality control; however, the famous lean system of Toyota is just not an amalgamation of Ford or Deming’s concepts. It is much beyond that, the lean system imbibes the Japanese culture and philosophy of

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respecting elders, collective wisdom and patience and frugal living. This coupled with constant experimentation had built up the practice of Kaizen – continuous improvement and that gave rise to all the well-known terms of lean manufacturing, which Google search engine throws up when one types the term. That’s the way Toyota built its own theory over five decades and became a global leader in automobiles, which it sustains even today. Apple built its own theory centred around products that exceeds the customer’s expectations by building a unique business model around the iPOD, which combined the Internet services to provide the iTUNES store, allowing the customer to build his/her own mix of music. In that way the iPOD was one of the first ever platform-based products we witnessed which has become commonplace after nearly two decades. Apple continues to bet on its theory and offered Apple Watch in 2017, which again is more than just a timekeeping device and was a platform, combining a plethora of services involving multiple channel and knowledge partners. In food services McDonald’s theory centres around fast deliveries and instant burgers with driveways to drive in and pick up the brown packet and drive out within five minutes. Mc-D focused on its theory and built its business in more than 100 countries. Whereas In-N-Out specializes in slow burgers, where the wait period may extend to 45 minutes and one sits down to have a meal of freshly baked buns with customized patties and homemade ice cream. These two theories are very different, but in each case the company distinguished itself from competition by adapting a theory and sticking to it steadfastly. Similarly, an airline company nearly half a century back built its own theory of no-frills low-cost flights, where it envisaged that the passenger just wants to board the flight and get down. No in-cabin service and time is the major factor. The

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passenger has an important meeting to attend in another city and he/she wants to just board and get down to attend the meeting and the South West Airlines went on to redefine the aviation industry. On similar lines the Spanish bullet train company Alta Velocidad built its theory around the fact that there are many people who want to avoid the hassle of security checks and arriving in the airport hours before (its three hours in India today due to heavy security checks and long queues for luggage check-ins and these three hours are a sheer waste of time). Instead if they get an affordable and superfast service between one city and another in Spain, where a train clocks speeds of 200 kilometres plus and reaches the destination in less than three hours’ time, people will love it. Combine that with eco-friendly angle of electric trains and you have an irresistible customer value proposition. Alta Velocidad is a big success story. Here comes the importance of understanding the real values of the three most abused and misunderstood words of strategy – vision, mission, core values. As explained in an earlier essay lack of clarity in these three words results in a wrong or improper theory of business and that’s how companies or start-ups vanish. The starting point of building a good theory of one’s own business is re-examining these three words and go by classic Porterian Wisdom (not easy to follow his wisdom in practice!) as pointed out by Joan Magretta in her 2012 book. Next there are five steps to build one’s own theory and this may take months. There are no shortcuts here and as pointed out in one of the twelve tenets of resilient thinking (no 11), one has to build one’s theory one small step at a time and this process goes on, until one day that magic moment arrives. Short changing the process may produce quick results and media attention and stock market adulation, but all the hell will break loose when things start going wrong. For example, let’s just look at Indian IT industry. They started off in 1990s

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with an off-shoring model, based on cost and cheap manpower and charged the client on the basis of man hours spent. That’s how the coder generation was born (as pointed out in an earlier essay – “The End of a Generation”) and irrespective of his/her degree in the branch of engineering a young man or woman gnawed away at the keyboard. Tech V 4.0 and COVID 19 has ended the generation and the manhour-based business model based on cost was no theory at all! Indian IT industry failed to build its own theory in quarter of a century and is struggling to relive its glory days of high stock prices and media adulation. The dynamic capabilities theory suggests building one’s own theory by building the belief system first, which is also known as regenerative dynamic capabilities or fourth order dynamic capabilities (corresponding to fourth level of thinking). Regenerative dynamic capabilities are something similar to charging oneself up, picking up the broken pieces after a fall and get going again! When regular dynamic capabilities are absent to build launch a new business and a concrete theory about one’s own business is missing, a set of regenerative fourth order dynamic capabilities is necessary to kickstart the process. In the case study of Bullet, we saw Siddarth Lal’s leadership providing the impetus for revival and building up a new company from scratch. To build one’s own theory it is necessary to build up the mental strength or EQ or organizational grit to negotiate crisis or times of turbulent change. As pointed out in previous chapter, Indian firms and MNCs alike, who have to commence the process the building up a set of dynamic capabilities will face two major issues: (a) building up a set of beliefs which acts as regenerative dynamic capabilities and (b) building up sufficient EQ. The set of twelve regenerative dynamic capabilities, which the book terms as resilient thinking serves the twin purpose here of providing a back drop for a start as well as building up

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sufficient EQ or organizational grit. Resilient thinking will provide the backdrop to build the 3 - C framework. Inculcation of a resilient mindset is then the starting point and first step to build one’s own theory of doing business. And the book examines more in detail in next three chapters, which of the twelve types are suitable for what kind of activity. The second step as per dynamic capabilities theory is to build up the organizational routines, also known as organizational practices (as suggested by Nelson & Winter in their seminal work on Evolutionary Economics). Beliefs should make way for practices. Each organization has to build up its own set of unique practices, which enables competency building. There are two kinds of practices. One is to oversee day-to-day functions and these may not differ much from other industry incumbents, such as luggage check-in procedures in airline industry or after-sales service procedures in automobile industry. There are other practices which may significantly differ, on functions such as new product development, product launch, branding and marketing. These are practices that relate to dynamic capabilities and relate to strategic questions of business growth and building new competencies. The third step in building one’s theory is to build up a set of competencies, which are actual dynamic capabilities that build a new business and stars of the BCG matrix, fetching high margins and cash. Capabilities to launch new products, to absorb new technology, to build new business models, to effect mergers and acquisitions, to venture into new foreign markets and succeed, all these are dynamic capabilities renewed on a continuous basis by a set of practices, which themselves keep changing, guided by a set of beliefs or regenerative capabilities. The fourth and fifth steps to build one’s own theory is to formulate strategy, financial forecasts and venture into the market.

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The academic framework used in building one’s own theory corresponds more or less to what A G Lafley and Roger Martin suggested in their book: Playing to Win where they enumerate a framework of Practices-Capabilities-Strategy-Markets. What is missing in their framework is the starting point: a set of regenerative dynamic capabilities, which this book contributes in form of twelve thoughts building resilience.

22

Coordination: Winning Hearts

Having laid down the theory of building one’s business, in this and two subsequent chapters the book builds up the 3 - C framework. As emphasized earlier, coordination is a framework that aims to reduce failures of design thinking efforts. There are five steps to build one’s own theory and in these three chapters the book will touch upon the first two beliefs and practices. The aim is to build the 3 - C framework with a set of twelve beliefs and a number to practices to guide organizations, which will enable them to build a set of competencies or dynamic capabilities to build new businesses and explore markets with strategies that competitors can’t imitate. This chapter first briefly enumerates the design thinking methodology. Most of the design thinking courses explain the methodology to students and managers with numerous examples, but doesn’t specify the beliefs and practices that must go with design thinking efforts. The design thinking methodology as laid out by Stanford University is a combination of five steps: Empathize-DesignIdeate-Prototype-Test. Empathize with the customer, understand his problems, design the product, conduct trials, ideate and make improvements and get the final design crystallized, build prototypes and finally test. The design thinking methodology has a lot of merits if practised properly and its pitfalls understood. The method was popularized by the design thinking firm IDEO in late 90s

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and IDEO lays down a three-step framework: InspirationIdeation-Implementation. Inspiration is the starting point – connecting the dots. The ability to connect the dots and see the big picture that no one else is seeing. Going by cognitive science one can connect the dots by using abductive reasoning – which corresponds to the fourth level of thinking. There are seven different ways one can connect the dots:

1. Anomalies: Spot the red fish amidst a sea of blue, spot that odd behaviour among a thousand. That odd behaviour may be a one-off thing but may point towards a growing trend. BEERA spotted a growing trend of preferring a lighter and less bitter brew among teenagers in colleges of metro cities before anyone else did.



2. Orthodoxies: Shattering orthodoxies is one way to connect the dots. Till the advent of the Austin MINI, no one thought small cars are feasible and can be popular. Cars were meant to be big! MINI changed all that and wrote the history.



3. Confluence: NOKIA saw what no one else did: a confluence of airwave service providers, easing of government regulations allowing private players and increasing power of airwaves provided by more and more satellites being put up in space by various countries can lead to a mass market mobile telephony. This possible confluence was not visualized by two other telecom giants then: Motorola and Ericsson, who still saw the mobile phone as an expensive and a limited use instrument for specific purposes by government officials, security agencies and paramedic teams visiting accident sites. Nokia went on to become the market leader.



4. Extremities: Probably best exemplified by Indians! Such as carrying twenty milk cans on a scooter or half

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the home in a little car. Extreme customers are rare, but provide unusual insights.

5. Analogies: Usage in one industry provides insights for product development in another. At times analogies can represent fantasies and is often used in advertising. The energy drink RED BULL sports a can design that resembles a bird’s wings, representing energy that one may get after drinking a can of it.



6. Frustrations: Customer frustrations are often the gateway for a new product and it was customer’s frustrations at the airport that led to success of Alta Velocidad – the Spanish bullet train service.



7. Voyages and immersions: Often unusual insights emerge when one undertakes a voyage to experience the living conditions of customers. The voyages that the HUL water purifier team undertook in villages led them to understand the parameters of a new business model and product design.

IDEATION The process of ideation is funnelling of ideas and identifying the false positive ideas and false negative ideas. False positive ideas are ideas that appear very promising but actually have no market or customer will never accept them. The customer should see value in the product and the product should not challenge his/her cognitive biases. If a product challenges a customer’s cognitive biases and forces the customer to switch to a new system or a new habit and if the cost of switching is high, the product is likely to be rejected. Star products or superhit products are usually those, where the cost of switching is low, both financially and behaviourally and the benefits of a new product are very high. This is the usual story of eager sellers and stony buyers. False positive products usually fall in the category of high cost of switching or entail foregoing

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something even more held dear. For example: Segway was hailed as the next big blockbuster by none other than Steve Jobs as a personal transporter that may change habits of commuting short distances. But the cost of foregoing good health by walking short distances was a cost held dear by customers and Segway never took off. False positives are the most common cause of failure of design thinking efforts. On the other hand, false negatives are ideas usually rejected by peers and colleagues. The list of false negatives in history of entertainment is high. No one thought Lion King will be a blockbuster, as Disney management was loath to making films not based on folk tales. The makers of Lion King visited Africa and went through a process of immersion in Masai Land. That’s how Simba the character came up and “Hakuna Matata” became a global expression. However, Lion King was almost killed, as the studio was burnt by a fire just before launch of the movie. J K Rowling came to the point of suicide, as no publisher was willing to accept the idea of a child being a magician – Harry Potter would have never materialized. The idea of an ugly insect becoming a children’s hero was a loathsome to many and had it just not been for that one last tries by Stan Lee to put the drawing on the last issue of a magazine that was to be closed, we would have never seen Spiderman’s stunts! When an idea is strange and new, it is likely to meet with rejection, laughter and ridicule. To make it acceptable one has to go through a step by step familiarization process of making the product/idea more acceptable. This can be a long and iterative process and often painful. Implementation or prototyping: this has only one simple principle – fail cheap fail quick. One arrives at a working prototype through a series of quick failures. Feedback from first time users can be useful here in case of large and complex products like cars.

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Thus, it can be seen that the entire process of design thinking is a path strewn with thorns! Design thinking is all about designing human centred products by developing a deep understanding of the customer’s habits, behaviours and preferences and this can take a long time and long hours of research. Organizations used to the old 3 S way of working as described in Part 4 can find design thinking methodologies extremely frustrating and slow moving. At Samsung, which made its mark internationally in consumer products a team of designers work full time and when the design thinking methodology was introduced, the designers faced tough internal challenges from a culture that was focused on efficiency and cost savings rather than understanding the customer. The company’s top management solved the problem by installing a system where the team can reach any department any time to solve problems and work closely together. To overcome failures in the design thinking a firm needs to understand what will precede design thinking efforts and what are a set of specific practices that will help the firm to override most of the failures if not all and streamline the process. What precedes design thinking efforts: a set of four Resilience beliefs: (a) Indian products should respect Indian traditions and allow us to do things that are typically crazy in Indian ways! For example, a two-door car will never be accepted by Indian families, as most of the families have their old parents living with them and it’s never just a married and childless couple. Even allowing for just one child, an average Indian family always has four to five members, that’s husband, wife, child and one or either of the parents of husband living with their son. In a family of five, a spacious and four door hatchback is what is required. McDonald understood the Indian

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traditions of vegetarianism and separated the utensils to cook vegetarian burgers from that of non-vegetarian ones. Chetak was hugely successful, so was the Maruti800, as both the vehicles were tough and reliable and inexpensive to maintain and allowed people to do crazy stuff that’s typically Indian! (b) Find a great purpose to fire up the team and never give up: Shantha Biotech’s founder had a vision. Hepatitis-B vaccine at 1/5th the price of prevailing MNC vaccines. Hep-B was a dreaded disease that killed more than a hundred thousand people every year in India and vaccines floated by MNCs were selling at Rs. 2250 three injections. Varaprasad Reddy brought the cost of Vaccine down to Rs. 450 and faced stiff resistance from the MNC lobby in many ways. But he persisted and today India stands free of the disease. (c) Look forward to leave an impact on people’s lives: Hindustan Unilever’s project is a project that enables rural women to eke out a respectable living by buying HUL’s products with micro loans and selling them in form of Re. 1 sachets. Of course, HUL penetrated the rural Indian market with Project Shakti and that was a larger business objective (nothing wrong in that per se!), but the project did create an impact on lives of rural women folk in India. Arvind eye-care hospital performs cataract surgeries at a minimal cost with its eye-care centres and Narayana Hrudalaya performs heart surgeries at a minimal cost. However apart from healthcare and FMCG sectors a service that created a huge impact on lives of people in Delhi’s national capital region was rendered by a public sector unit: The Delhi Metro Rail Corporation (DMRC). DMRC on a daily basis carries more than a million office commuters across the four satellite towns of Faridabad, Ghaziabad,

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Noida and Gurgaon. From the eastern city of Noida to the western city of Gurgaon across Delhi its around 50 to 60 kilometres and for someone to commute that distance by car on a Monday morning across Delhi can be a nightmarish experience! It may consume anything from 2 to 4 hours. Thanks to DMRC one can travel across the distance in less than 90 minutes at an affordable price, safe and secure as the DMRC is protected by the Central Industrial Security Force or CISF, a paramilitary force, well trained to handle incidents of terror. Of course, DMRC didn’t create any impact on the milk can train, the 7.20 Doodhwala local! The legendary train continues to ply with its milkmen even today full of cans! (d) Clarity of purpose: The three case studies of entrepreneurship in Part 1 amply display this trait. Apart from the fact that HBr served the society and created a great impact by making Allahabad a clean city, it also generated power from the waste, thereby providing additional power. UX Gorilla had a clear purpose, to produce world class designs and make Indian strategic design talent a force to reckon with in foreign markets, Auotbot had a clear purpose: develop knowledge of the EV technology and build an EV ecosystem. These four regenerative beliefs can be the starting point of a design thinking effort in Indian context and they will improve coordination with the customer and the internal coordination. Next any firm can follow a series of 18 steps comprising Observation-Reflection-Introspection. Observation will strengthen the process of Inspiration (the first of the 3 “I”s suggested by IDEO) and seven ways to connect the dots. The seven steps of observation are:

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(a) Sense changes and detect trends – customer, technology, competition.

(b) A sense of alertness - keep asking what the user is experiencing?

(c) Question the default – why it has to be the way it is?

(d) Generate at least a thousand observations or samples for sufficient analysis.

(e) Connect the dots one step at a time in all seven ways to connect.



(f) Highlight the possible pitfalls.

(g) Creative procrastination – allow sufficient time for creativity to flourish – something companies with embedded 3 S philosophy don’t allow their employees to do. The second step is to reflect during the ideation process:

(a) Devise a process of unlearning the past – prevent being prisoner of history.



(b) Accumulate knowledge and experience by codifying.

(c) Build stretch targets – think of doing the impossible, like an electric car with a battery to run 1000 km without recharge. (d) Identify product champions, who will nurture the product. (e) Build a sense of history to unshackle the organization from it – those who forget history are condemned to repeat it.

(f) Ensure team work and continuity – the key to success of Corolla and eleven generations of it.



(g) Leadership support and emotional commitment.

The third step is to introspect during the implementation process:

(a) build a product, that provides great value and doesn’t entail major behavioural changes.

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(b) Build a sense of hope for the tomorrow – motivate the employees with one-liners across the organization. (c) Foster dissent and find out devil’s advocates – don’t throw them out of the organization. (d) Ask a set of thought provoking and uncomfortable questions to a design team think tank. Search for problems – the solutions will arrive. OBSERVE – TO BE INSPIRED REFLECT – TO ELIMINATE THE FALSE IDEA INTROSPECT – TO ARRIVE AT THE FUTURE BLOCK BUSTER

REFERENCES

1. Liedtka Jeanne, “Why Design Thinking Works”, The Harvard Business Review, Sept-Oct 2018.



2. Gourville John T., “Eager Sellers & Stony Buyers”, The Harvard Business Review, June 2006.

3. Gallino Santiago, Rooderkerk Robert, 2020, “New Product Development in an Omnichannel World”, California Management Review, Vol. 63(1), pp. 81-98.

4. Yoo Youngjin & Kim Kyung Mook, “How Samsung Became a Design Powerhouse”, The Harvard Business Review, September 2015.

23

Collaboration: A Team Beyond the Four Walls

There are two ways to launch a product. A product that the market wants and others are selling it, there’s room for “me-too”s. Secondly a product for which the market doesn’t exist – one creates it. The first is an easier task and one may make some easy money before it becomes a red ocean. Professor Porter’s five forces will exert themselves with full force on a company’s profitability. Tata Ace addressed the problem of last mile transportation, which was done mainly by three wheelers and rickshaws in narrow lanes and bylanes of India’s crowded metro cities (done by Hamara Bajaj in past!) and today the Ace faces stiff competition from M&M Supro and Maruti Suzuki’s Super Carry, its market share has eroded considerably. In the past Tata Motors launched models in an unexplored segment, saw some success until it petered out. The SUMO launched by Tata was a superhit personnel carrier in late 90s and early 2000s. until the M&M SCORPIO arrived, then the Toyota QUALIS and the SUMO had to say a goodbye. The Tata SAFARI met the same fate, when the Toyota FORTUNER arrived, despite being a lot more expensive vehicle the Fortuner outsold the Safari by several notches. The Scorpio itself suffered a similar fate after a long run of success since its launch in 2002, when a new class of vehicles termed urban SUVs arrived. The DUSTER launched by Renault—Nissan was the first of the successful USUVs, subsequently, the ECOSPORT launched by

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Ford, the BREZZA launched by Suzuki and CRETA launched by Hyundai took away the sheen off the Scorpio. Later on, M&M did launch its own USUV, TUV-300, but it didn’t make much of an impact. The look of the USUV and people carrier vehicles like the INNOVA by Toyota and ERTIGA by Suzuki pushed the Scorpio in the category of a pure off roader – for which the market in India is growing fast and M&M’s own product – the THAR is present in the segment, yet both the vehicles have not been best sellers in recent times, what sells for M&M today is the BOLERO – a tough people carrier with a strong diesel engine to run on village roads and mountainous terrain with heavy loads. This may last till competition arrives, as the Bolero enjoys a price advantage and brand recall, hard to match. The Indian automobile industry is the best example of what was emphasized in the beginning of Part 4: “Lack of Innovation”, which makes competition irrelevant. Indian companies have been good opportunists to spot a market gap and enter it, but the resilience required when competition arrives has gone missing and the ability to create or redefine the market has been non-existent. So, there are two aspects. The first is to enter a market, where either a need exists or the market is growing and there is enough room for growth of multiple players for a time period of 3-5 years – scope for quick cash flows. This strategy peters out when a strong competitor arrives high on innovation or a new disruptive competitor turns the market upside down, just as S/W airlines did to the aviation industry in 1970s or UBER did to taxi industry in the last ten years. The Bullet in its reborn avatar, is perhaps the only and one of the best examples of creating a new market segment, which is neither fully utility, nor fully a cruiser, but a middle one. One can ride the Bullet to office or take it to Ladakh.

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The ability to create a new market or redefine the existing one by altering the rules of the game is known as strategic innovation. Innovation is spoken about at product levels, rarely in the last century anyone talked about innovation at SBU or corporate level. As the century drew towards its end a series of articles appeared in the MIT Sloan Review in 1997-98, bringing out the concept of strategic innovation. Quarter of a century down, the rules of strategic innovation are being turned upside down again with appearance of platforms. One did create a market, but that was not done very often and once a company redefined a market, it didn’t make another attempt. Till date there is no example where a company went on to redefine the market time and again periodically. However, appearance of platforms and new rules of collaboration may make this possible in near future. Therefore, what the book presents here are two perspectives: the old and the new rules of strategic innovation. The old: Strategic innovation has three fundamental elements: (a) Reconceptualization of Business – the who-what-how of customer value proposition and redefining the way you did business. (b) Reconceptualization of markets or creation of new markets.

(c) Dramatic value improvements for customers.

Reconceptualization of business is also known as business model innovation. A business model has four basic elements: (a) the customer and what will you serve the customer and how, (b) the business activities, (c) the key resources such as knowledge, people, brand, proprietary technology and (d) other fixed/current assets at your disposal and the revenue stream. Business model innovation in practitioner strategy literature is often confused with strategic innovation. However, the two are not exactly the same. When business model innovation results in reshaping of markets and dramatic value

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improvements, it becomes strategic innovation. Business model innovation need not always result in reshaping of or creation of new markets. Big Bazaar’s business model innovation lay in tweaking the front end, the display racks and creation of a Bazaar like atmosphere with congestion and frequent announcements – resembling the noisy and congested Indian vegetable markets. Indian housewives are used to making them believe that oh! This really looks like a bazaar and must be a cheap place. But this innovation didn’t alter the retail segment. Maruti Suzuki invented the concept of showroom financing – where dealers tied up with banks for loans up to 90% for five to seven years and dealers were trained to persuade a customer to buy, so that a casual showroom visit turns into a purchase with parting of a marginal sum. This was a business model innovation which sold more than a million cars for the company – but this didn’t alter the automobile industry – it just became an industry practice to instruct dealers to tie up with banks for showroom finance. On the other hand, the new generation electric vehicles (EV) – how they will be sold can drastically alter industry practices as EVs are not just vehicles but platforms. Why new product launches often fail? This has been one of the most vexing questions for marketing pandits and managers alike. The answer lies in understanding how a product is linked to business model. If a new product, that does not in any way resemble an older one has to be marketed, it will require new methods of marketing and distribution – which may require an altogether new business model in a separate division. Hindustan Unilever realised this when they launched their PUREIT brand of water purifiers. The water purifier is a consumer durable and was a very different product from HUL’s existing product family of FMCG business. Therefore, it required a very different marketing method and a different business model than that of the FMCG line.

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Also, as time goes by, a business model ossifies as connecting nodes between activities get more crystallized and it becomes harder to change a running business model with so many connecting nodes and processes and systems. There are three types of innovation that happen in the birth and journey of a business model: (a) when it was conceived when the company began, (b) innovations to sustain it, and (c) innovations to make it more cost efficient, lean and short time schedules. As more and more innovations make the model efficient and effective, the harder it becomes to change it, when turbulent times arrive. This is all the reason why many new product launches fail, as they don’t fit an existing business model. A leading tractor maker in India launched a utility vehicle, selling a tractor to farmers and selling a utility vehicle to taxi operators are two very different things and require fundamentally different business models. The tractor maker didn’t realize this and the results were obvious. Of course! There can be a number of other reasons why a new product launch fails, but the product not being in sync with the running business model is one of the major reasons. The new wisdom: graduating from business model innovation to strategic innovation. To be world class and to reach the point, where an Indian firm features in the top ten most valuable companies in its chosen line of business, Indian companies need to overhaul their management systems, just adapting technology is one side of the story, if a modern 21st century fifth generation technology is mated to a management system dating back to 1950s, it is akin to mating a BMW engine to an Ambassador chassis, the results will be obvious! This is precisely what is happening now. Many Indian firms are embracing 21st century digital technologies without overhauling their management systems, which date back to 50s. The democracy, transparency and empowerment needed to middle and junior management

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is missing, strategic decision making is still left to the CEO/ owner and his few key trusted aides. The first step to overhaul the management system is to build an ecosystem. We are already into an ecosystem economy and a silent third economic revolution is already on. Everyone talks about the fourth industrial revolution, whereas the fifth industrial revolution based on artificial intelligence may be on us soon. But by just referring to the technology alone one misses the bigger picture - the third economic revolution. Economic revolutions occur when technology combines with new enterprise structures and changing customer behaviours. Three forces are changing forever the way the world of business will function and the world may look a very different place by 2030. The first is, of course, the technology, which is already in its fourth avatar since steam, oil and the Internet and inexorably marching into the renewable era. The second is the changing consumer behaviour – today the customer with the power of the Internet in his smartphone is an informed and aggressive customer. Twenty years back we went to a car showroom and listened to the dealer’s salesman to make a decision to buy a car. Today we refer websites such as carwale.com or cardekho. com and we arrive at the showroom with a clear mind about which car with what features to buy. Similarly, decisions to buy a mobile or laptop is taken after seeing offers in Amazon, where every information about the configuration is listed. Even mundane purchases such as a lipstick or a shampoo is made online after comparing brands, features and prices and purchases are made mostly online instead of visiting the supermarket. The world has invaded our homes! The third force that is gradually taking roots is the renewable energy technologies, which will result in e-mobility, SMART energy grids and SMART cities. The government plans to build 100 SMART cities by 2030 and a complete switch to e-vehicles by 2030.

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The Outcome of interplay of the Three Forces - A New Enterprise Logic. Economic revolutions arise from interplay of three forces. A new pattern of consumption, new (and exponential) technologies aiding the consumption and most significantly a new enterprise logic linking people, technologies and markets in a new way. The mass production revolution triggered by the Model-T provided the average person access to what was only available to a rich man earlier – the car. The mass production techniques eventually gave rise to a new form of capitalism, which can be termed managerial capitalism. The enterprise logic of the mass production era was characterized by a high degree of standardization, cost efficiency and economies of scale, value creation within the four walls of the organization and pushing the product down the value chain to the end consumer, assuming he will buy it to satisfy his needs. Advertising, product promotions, 4Ps of marketing, sales and distribution channels were designed to exhort the customer to buy the company’s product(s). Towards the end of the last century, the individual increasingly became more and more demanding and exacting. Asserting his voice in companies, protests against corrupt politicians and erring MNCs and expressing an increasing degree of dissatisfaction against standardized products. Social media and digital platforms only accelerated the dissatisfaction, leaving organizations confused about what the individual really wants. The gap between theory and practice was widening at an alarming rate, leaving companies confused. A new enterprise logic is gradually emerging where a product will not be delivered but an experience, backed by deep support over digital networks. An experience or a technology platform can’t be delivered by a single company alone, but a federation of companies or a network of companies. The value will reside in individuals, not within the four walls

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of the organization, this represents a fundamental shift from the “O” or organization space to the “I” or individual space. Transaction cost economics will be replaced by relationship economics, wealth creation will depend on the depth of relationship with the customer created by deep support and a federation of intercompany networks will be infinitely configurable. This book terms it Infinite Capitalism. The era of infinite capitalism will be earmarked by an infinite and abundant source of energy and communication – making the phenomenon of individuation more pronounced. The infinite power of exponential technologies will facilitate intense intercompany collaborations, convergence of industries and ever decreasing life span of industries and birth of several new industries. The old enterprise logic had 3 Ms as its pillars: (a) mass production and standardized consumption, (b) multi-divisional structure, (c) firms run by professional managers. The new enterprise logic will not completely do away with the 3Ms, but will impose 3 Is on the Ms: (a) individuation, (b) innovation, and (c) inter-company collaborations. The value creation logic will shift beyond the four walls of the organization in to the intercompany space and individual space. The iPod, the SmartPhone, the Tesla Car and the Apple Watch represents commencement of the era of Infinite Capitalism. Digital products like “Sweet Support” and “Golden Apple” or the Google play store apps for Android or apps downloadable in iTunes store to customize one’s smartphone are examples of federated networks and deep support. The iPod is the earliest example of an experience delivered by a federation of companies combining hardware and software in form of the iTunes store and instead of buying a CD with twenty songs, to listen to that one song that one liked, one could now customize one’s music mix downloading from the store. The various food delivery apps, where one can customize

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a dish to one’s taste and get it delivered at one’s door step are further examples of a deepening federated support network and shift of value from O space to I space. All the strategic planning frameworks, used by managers and taught in MBA classrooms, excepting the balanced scorecard are nearly half a century old and were born out of the old 3M logic. The era of infinite capitalism requires a set of new frameworks to capture value, build networks and serve the customer and build long-term customer relationships. The old logic created value within the four walls of the organization, in the new logic the value has gone beyond the four walls. The old logic had a fixed organization and industry structure, the new logic dictates constant reconfiguration of organizations, destruction and birth of new industries at a much faster rate. The old logic created one or two products with minor variations within one division, the new logic demands a high degree of innovation and customization of a product, to be delivered as an experience. The era of Infinite Capitalism will be marked by ecosystems. An ecosystem is an orchestrated network spanning multiple sectors. The concept by itself is nothing new. The desktop PC introduced by IBM in 1980s was the first ecosystem product, where multiple manufacturers contributed to the product, which included hardware, software, the motherboard, the monitor and the keyboard. One company never made a single product. IBM only assembled the final product. The ecosystem concept rapidly spread to the automobile sector in 80s and 90s and by end of the last century a car was made perhaps by more than a hundred different manufacturers contributing to the complex circuitry and electronics that went into a single car, the OEM company like Ford only assembles the final car and designed a new one. A large global network of vendors put the final product together.

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However, with introduction of the iPod by Apple at the beginning of this century the entire concept of a production ecosystem underwent a radical change. iPod bundled the hardware with iTunes store and legal downloadable music. iPod represented a quantum jump in value creation in terms of the classic old CVP. Earlier a customer was forced to buy a CD just to listen that one particular song he/she likes say of a movie or of a rockstar. The music companies released an album of the rockstar (say, Brian Adams). One song became a superhit and every one was buying the album to just to listen that one superhit song say “Summer of 69”. iPod allowed the customer to customize! Download one superhit song of one rockstar with another superhit song of another and build his/her own mix. This represented a quantum jump in value creation and iPod spelled the death knell for SONY’s WALKMAN, which required a cassette or CD to be played. iPod combined services with a product and a consortium of manufacturers and service providers delivered an “Experience” to the customer. So! We are into the experience economy and marching towards an era of infinite capitalism. In an experience economy the good old tenets of business model design will still hold good, but products are graduating into platforms. There are four ways a company can build a platform: (a) give access to your product to third parties, so that they can use the product/ website/technology platform to connect to their customers and you charge a fee for it. Intuit is a leading maker of tax and accounting software and its platform is used by stock brokers, audit and taxation professionals, (b) your company sells a product that is used by two distinct customer segments and these two segments interact with each other outside the purview of your network, let us say you are a medical equipment maker and doctors and hospitals use your equipment. You can build a website to bring the doctors and

Collaboration: A Team Beyond the Four Walls 157

hospitals together on a common platform and interact with each other. Back to section 2, the case study section – Aman and Jagriti had built an ecosystem called Design Delhi (later Design Jungle), where hundreds of designers were interacting with each other on a platform and exchanging ideas, and (c) connecting products to connect customers: you have two products and two distinct customer bases and they interact with each other outside your offerings – you can connect your product so that these two segments interact through your offerings as a platform and you capture part of the value. 4) In the fourth scenario you create a platform where you are interacting with the customer’s customers – this is a rare one and difficult to detect in practice. For example, an infotainment maker is supplying a seven-inch infotainment screen loaded with 50 different Apps to a car company. The car company allows the infotainment company to customize the screen as per customer’s preferences. This kind of scenario is still a theory but may become a reality in near future. As products rapidly graduate into platforms, even old and classic industrial products are becoming platforms with “Internet of things” embedded. For example, GE is embedding sensors in its engines and connecting every engine to a central database. Where engine usage in a passenger jet of an aviation company is captured by the central server and real-time engine usage data is transmitted. Railway locomotives usage data is captured today by all railway companies real-time including the Indian Railways, the modern WAP series electric locomotives (made with ABB technology at Chittaranjan loco works of IR) are fitted with sensors that transmit data real time. All the modern fighter jets, passenger jets are fitted with sensors transmitting data real time. The platform concept enables strategic innovation. A strategic innovation comprises three things: (a) a new business model, (b) dramatic value improvement, and (c) creation of a new market or reshaping of an existing one.

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In pre Internet age only three things were possible, that at times resulted in a new market (like S/W reshaped the aviation industry) and at times it didn’t. Today the platform concept is changing the rules of the game dramatically and unless the family run Indian enterprises change their management style – they will not survive the platform revolution gathering momentum fast. Just as in coordination, the book suggests four different forms of resilient thinking as a starting point to collaborate, orchestrate the knowledge flows and build platforms: (a) Listen to your inner voice - don’t give up: Building a platform for a company used to function as an independent entity can be an unnerving experience, more so for family run businesses, used to function the old way – with a few key trusted aides. The trust has to be taken beyond the four walls and interaction mechanisms will have to be worked out to build up new rules of orchestration and value creation as a platform and offer a 10 × value proposition to customers by bundling products with services. However, going back to the old ways is no choice at all, the writing on the wall is clear – adapt or perish and many firms, MNC or India who refuse to adapt new ways of managing in the experience economy will perish. (b) Isolation and shortage of resources are part of the story, do something instead of complaining: If a firm faces a situation where it is incurring losses, erosion of brand, high employee turnover and its top management gets the feeling of “staring down the barrel”, there is nothing abnormal or unusual about it. Enfield faced it, Ford faced it, all the three entrepreneurs featured in the case study section faced it, this is where new skills of collaboration beyond the four walls of the company need to be built to bring in new business and knowledge

Collaboration: A Team Beyond the Four Walls 159

partners. More resources often don’t help, history is witness to billions sunk on projects that never took off. The idea is to deliver with minimum or no resources at disposal and go alone, expecting others to join the cause as time goes by.

(c) Think like the 10th man: Alright, you have assembled a great team of engineers, technology experts, brand builders, investors. Everyone is on an upbeat mood about a project, a future Walkman, Beatle or iPod and everyone is talking about how the product/service bundling will produce a hard-to-beat blockbuster combination and rake billions. This is where it’s time to listen your inner voice – the silent whispers and think what can go terribly wrong. There are as many chances of a collaboration going wrong as there are chances of it going right. One should apply the theory of emergence here: that the entire process of collaboration and alliance is an emergent process, it matures and crystallizes as time goes by, the rules of engagement becoming clearer over a period of time and knowledge exchanges becoming sharper and to the point. Here thinking out the cons at early stages can be very helpful.

(d) Collective resilience fired by a sense of a big purpose is hard to beat: Ford displayed this in ample measures. The company’s India team displayed collective resilience over a period of fourteen years, till the golden moment arrived when Figo went on to become a runway superhit, the purpose was a big one: rediscover the Model-T in Indian context. The Bullet team under leadership of Siddharth Lal displayed this in ample measures. They were fired by a big sense of purpose – revive the legend, let the famous beat be heard once more from a distance! Let young men once more ride the Bullet to impress young ladies! Let the spirit of

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adventure prevail and let the Bullet fans take the bike to 18,000 feet at Khardung-La, the highest mountain road in the world! The purpose was overwhelmingly powerful and the Bullet team worked together to bring the legend back to life. The old linear business model of input-process-outputrevenue stream as suggested by the late Professor Christensen may not be relevant in this age of platform based networks. The value proposition should be replaced by experience – platforms combining product with service aim to deliver that– a total experience, just not a product. Key resources should reside mainly outside the four walls: networks, key processes should be configured to deliver the experience, lastly cash flows should be replaced by revenue sharing among network partners. Significantly, the business model should represent a circular flow, not a linear flow and is presented as below: The Circular Business Model – fostering strategic innovation with three-step Collaboration Process: ASSIMILATE New knowledge: from inter-company collaborations and collaborations with knowledge partners and build a new resource base of intangible assets. The better your quality of intangible assets the more is the competitive advantage. ABSORB New knowledge and blend new knowledge into the processes of your business model. TRANSFORM Customer experiences and keep winning new customers.

Collaboration: A Team Beyond the Four Walls 161 Customer experience Proposition : TRANSFORMATIVE experience

Processes: Products as Platforms ABSORB NEW KNOWLEDGE

Resources: ASSIMILATE NEW KNOWLEDGE

Revenue sharing

REFERENCES Note: The academic literature on Absorptive Capacity, which is a strand of literature in the organizational learning and dynamic capability field has been extensively referred along with recent practitioner literature on Digital Platforms:

1. Christensen Clayton M., Bartman Thomas, Bever Derek Van, “The Hard Truth About Business Model Innovation”, MIT Sloan Management Review, Vol. 58(1), Fall 2016.



2. Cohen Wesley M., Levinthal Daniel A., “Absorptive Capacity: A New Perspective on Learning and Innovation”, Administrative Science Quarterly, Vol. 35(1), 128-52, March 1990.

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3. Cohen Wesley M., Levinthal Daniel A., Feb, 1994, “Fortune Favors the Prepared Firm”, Management Science, Vol. 40(2), 227-251.

4. Hagiu Andrei & Altman Elizabeth J., “Finding the Platform in your product”, The Harvard Business Review, July-August 2017.



5. Iansiti Marco, Lakhani Karim R., “Digital Ubiquity: How Connections, Sensors and Data Are Revolutionizing Business”, The Harvard Business Review, November 2014.



6. Jansen Justin J.P., Vanden Bosch Frans A.J., Volberda Henk W, 2005, “Managing Potential and Absorptive Capacity, How Do Organizational Antecedents Matter, Academy of Management Journal, Vol. 48(6), 999-1015.



7. Khoja Faiza, 2010, “How Do Firms Nurture Absorptive Capacity?”, Journal of Managerial Issues, Vol. 22(2), 262-278.

8. Lichtenthaler Ulrich, 2009, “Absorptive Capacity, Environmental Turbulence and The Complementarity of Organizational Learning Processes”, Academy of Management Journal, Vol. 52(4), 822-846.

9. McDonald Rory M., Eisenhardt Kathleen M., 2020, “Parallel Play: Start-ups, Nascent Markets and Effective Business Model Design”, Administrative Science Quarterly, Vol. 65(2), pp. 482-523.

10. Marshall W. Van Alstyne, Parker Geoffre G., Chaudqry Sangeet Paul, “Pipelines, Platforms and the New Rules of Strategy”, The Harvard Business Review, April 2016. 11. Porter Michael E. & Heppelman James E., “How Smart Connected Products Are Transforming Competition”, The Harvard Business Review, November, 2014.

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12. Song Yue, Gnyawali Devi R., Srivastava Manish K., Asgari Elham, 2018, “In Search of Precision in Absorptive Capacity Research”, Journal of Management, Vol. 44(6), 2343-2374. 13. Volberda Henk W., Foss Nicolai J., Lyles Marjorie A., 2010, “Absorbing the Concept of Absorptive Capacity”, Organization Science, Vol. 21(4), 931-951.

14. Wilson James H., Daugherty Paul R., 2018, “Collaborative Intelligence: Humans and AI are Joining Forces”, The Harvard Business Review, July-August 2018.

15. Zhu Feng & Nathan Furr, “Products to Platforms: Making the Leap”, The Harvard Business Review, April 2016. 16. Zobel Ann-Christin, 2017, “Benefitting from Open Innovation: A Multi-Dimensional Model of Absorptive Capacity”, Journal of Product Innovation Management, Vol. 34(3), 269-288.

24

Co-Evolve: Stretch to Combine the Opposites

In Mahabharata, Arjun was an ambidextrous warrior, he could shoot with both the hands and the Sanskrit word for ambidexterity is Sabyasachi. Neuroscience tells us that our brain has two lobes. The right lobe is for creativity, out-ofthe-box thinking whereas the left lobe is for systemic thinking. Outstanding musicians, especially guitarists combine ambidexterity – creativity and melody with grammar of music. One can’t violate the grammar – the basics, musical scales, rhythm beats and chords – and this is done by the left hand holding the fretboard playing chords and switching between notes correctly and timely, whereas all the creativity comes with the right hand – bringing the melody and creativity in creating the famous tunes that we hum (it will be the opposite in case of a left hander). It is said that left-handed people are more creative. Some of the finest footballers this world has ever seen were better with their left foot than the right and some of the greatest world cup football goals were shot with the left foot at impossible angles, fooling the goal keeper completely and leaving him speechless! Even in cricket, the left-handed batsmen are more artistic and pleasant to watch and we have witnessed cricketers who are ambidextrous – they used to bat one sided and bowl with the other side. Ambidexterity is common in sports and music, not so much in corporate world and that’s the tragedy! It’s hard to find companies who are efficient and innovative together. Managing the opposing tensions is an extremely difficult task,

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more so when cognitive biases creep in, one has to think fast and slow simultaneously (in Kahneman’s words) and that’s something that doesn’t come to human beings naturally. Co-evolution implies combining the opposites. The concept builds on more than four decades of strategy and organization behaviour literature but the high failure rate and rarity of truly ambidextrous organizations in business world suggests the literature hasn’t succeeded in building a correct framework to prescribe for managers to follow, despite the diversity and richness of four decades of academic research. In today’s digitally interconnected world co-evolution will imply the following:

(a) Adapt global practices in local context and diffuse local practices worldwide: Panasonic does this by incorporating local modifications made in various countries globally in its washing machines, so does Samsung. For example, Indian housewives have a tendency to overload the washing machines with sarees, bedsheets, bedcovers as well as clothes! Samsung has come out with a heavy-duty motor to take the load as well as give the customer the option of heating the water to disinfect clothes or opt for a quick wash when the load is light with auto/manual options. The washing is usually lighter on weekdays and heavier on weekends, when bed linens, sarees get inside! The local-global co-evolution is common in automobile industry as well. In case of the Figo, Ford adapted a range of local practices to save costs, which became a common practice company wide. Toyota launched a typically Indian car, Etios, with a large boot and a powerful petrol engine, however the car didn’t appeal the Indian customers, the Hamara Bajaj spirit was missing. Honda attempted something similar with its Brio, didn’t succeed, later on Honda launched its Amaze series, suited for Indian families in both diesel and petrol engines, the car had its

Co-Evolve: Stretch to Combine the Opposites 167

run. In all these cars the engine was tropicalised to withstand the Indian summer heat going up to 50 degrees, belt out more horses per litre, as Indians want power and efficiency together and the suspension was made stiffer to take higher loads, as invariably a standard four-seater car always carried up to six and at times more! However, these localizations found their way in models sold in other countries, particularly so in Latin American and African nations – the other emerging markets. (b) Combining customization with standardization: Network resources and alliances do allow a firm to customize, at the same time cost and efficiency can’t be foregone. Apple watches signify this paradigm – using an AI powered algorithm apple watches allow a significant degree of customization, allowing the watch to suit the customer’s lifestyle, yet basic parameters of efficiency and component quality is never compromised, iPhone started this trend way back in 2003/4 and today Tesla cars allow a significant degree of customization, while never compromising on cost and quality parameters. In future, combining these two opposing traits will certainly become a common practice. In digital SLR camera industry Nikon and Cannon allow a significant degree of customization by offering the photographer a wide variety of lenses, which can be fitted into one camera body, the focal length of the lenses can vary from as wide as 12 mm to as far as 400 mm, the basic camera body will not change, the lens usage does, depending on the occasion and the object of photography. A 12 mm lens may be more useful for taking family pictures on special occasions, which has a wide angle and captures more light, whereas a 300 mm zoom lens may be more useful in wildlife photography, where the object is at a considerable distance away, one

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can’t get close to a tiger or a lion for a closeup! Even birds fly away when one gets closer.

(c) Combining business goals with social goals: Professor Michael Porter terms it as “shared value” and there are many corporations who have successfully combined social objectives with business goals like Unilever, Novartis, Britannia and Arvind Eyecare in India. The concept was first mooted by the late C K Prahalad as fortune at the bottom of the pyramid, later on Porter and Kramer refined the concept as shared value. Although the concept remains academically challenged and critics argue that it is impractical and impossible to combine social goals with business goals and fused them, but the concept has met with some success in practice, which includes the inclusive banking schemes of SBI – India’s largest bank. Worldwide fusing social goals with that of business has not been made mandatory, in near future we may witness legislation coming up where governments’ mandate that every business has a social responsibility and every business has to actively promote social entrepreneurship.

These three conflicting dimensions may become standard practices in coming years as digital collaborations crystallize, however the first one – the fusion of global-local dimensions may become most common place, as many start-ups today commence business as born global companies. The 3S era focused on size-scale-standardization, the 3I era is already on us and we may see a new round of management innovations as in 1920s. Two management innovations - management accounting and brand management powered the 20th century industrial engine; it remains to be seen what new management innovations the digital era spawns. This book has already taken a step in that direction - by proposing a set of twelve beliefs collectively known as Resilient Thinking. Here the book presents the last four of the resilient beliefs:

Co-Evolve: Stretch to Combine the Opposites 169

(a) Don’t suffer from an inferiority complex, being an underdog is not a disadvantage: Two relatively unknown detergent and cosmetics makers shook the giant Hindustan Unilever. The first was NIRMA in 1980s: where the owner mixed the detergent powder at his backyard and sold the washing soap at less than 1/3rd the nearest HUL brand, he attracted no taxes, no duties, he didn’t have the overheads and marketing expenses. He neither advertised, nor spent millions in distribution. Karson Bhai Patel sold his soap on a cycle and nearly swept HUL out of the Gujarat market. The second company was CavinKare in Southern India: they sold shampoos and detergent in Re 1 pouch. The poor in India can’t afford to buy large quantities of shampoo or soaps, neither they need it. A 1 rupee 5-gram pouch suffices their need. CavinKare understood this very well. Much later HUL went on to adapt a similar strategy with project SHAKTI. When Coke came to India, Parle Agro had a strong brand in soft drinks segment – Thums Up. Instead of competing with Coke the owner Ramesh Chauhan simply sold the brand to Coke and went into an unexplored segment – bottled water and launched Bisleri, which went onto become a legendary brand on its own. By the time Coke realized how Parle smartly bypassed their marketing muscle and went into a greenfield, it was too late. A similar underdog strategy was adapted by Enfield for positioning the Bullet as a midrange bike, Enfield bypassed Japanese competition and the cruiser segment dominated by Harley Davidson. Being an underdog is not necessarily a disadvantage and underdogs and misfits (as Malcolm Gladwell says in his book: David & Goliath) will often do things others will not even think of. But as Gladwell says, underdog strategies are hard and not easy to play and repeat success stories with underdog strategies may not be possible.

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(b) Combine the opposites - insanity with logic: This is how disruptive competitors come up and great movies are made. The idea of a child magician (Harry Potter), the idea of an ugly insect being a children’s hero (Spiderman), the idea that people will love small cars (Austin Mini, small cars were unthinkable in 1950s), the idea that one can listen to music anywhere and anytime (Walkman), the idea that the Indian middle-class man will pay his loan instalments on time (thus was born the HDFC bank – India’s largest housing loan bank) – all these ideas sounded crazy and insane at one time. The key is to combine insanity with logic – to make breakthroughs.

(c) Practice what one dislikes! Practice again and again: The idea is as Angela Duckworth says in her celebrated book: GRIT, deliberate and purposeful practice to overcome specific weaknesses. Just don’t marvel at a beautiful prototype, but think how the prototype will be put to all kinds of crazy uses (20 milk cans on a scooter) and whether it can withstand the rigours of usage by Indian customers who love doing crazy things. This is how makemytrip.com, one of the most popular travel sites has evolved over the years – they took into account all possibilities and provided every feature. Indianized pizzas with Indian flavours? May sound crazy and unthinkable! The pizza is a quintessential Italian dish! But the two pizza chains – Dominoes and Pizza Hut did precisely that, they went onto launch a series of Indian flavours, so did Subway – the sandwich brand, who launched a series of typically Indianized sandwiches. The best example of this belief is perhaps the Delhi Metro Rail Corporation or DMRC. Right from the beginning DMRC made it standard practice to condition the travelling public with common courtesies– such as leaving the seat to an elderly or a to a woman

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carrying a child, not to jostle while boarding and deboarding, not play music in the coach, not to spit – which had a stiff fine and DMRC doesn’t allow any kind of eating or drinking or smoking inside its coaches– thus keeping the coaches sparklingly clean. One should board the 7.20 milkman’s train from Mathura to Delhi and travel a few stations, then board the DMRC coaches – one will immediately know the difference. One train represents Indian spirit at its original best, the other train represents modern practices, the same person who may smoke standing at the edge of the door in the 7.20 train will not even think of doing it in DMRC coaches – there lies the difference! DMRC took upon itself the unpleasant and difficult task of conditioning the commuters and it entirely succeeded. (d) Short termism never pays and never expect quick results, a little effort on a sustained basis every day produces that moment of magic, but to produce that one moment of magic takes years and many sacrifices. This is the very essence of co-evolution and there aren’t any Indian examples of this belief, however in future we may witness many practical examples of this belief, as a new generation of Indian entrepreneurs take hold, to an extent the three entrepreneurs who featured in this book display this belief. The concept of coordination aims to improve customer interactions and reduce incidences of failure in product design efforts, the concept of collaboration aims to improve the knowledge flows, but the first two Cs will never materialize if the organization is seized with an outdated mindset and practices. The book has suggested twelve forms of resilient thinking, which are actually regenerative dynamic capabilities to shatter mindsets. Change of mindsets should enable any firm to do away with outdated practices, which mainly assisted the 3 S style of strategy as discussed earlier.

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This raises the question: what are these practices and why they persist? We talked about building one’s own theory of business in an earlier chapter, the theory building commences with a set of organizational practices, which builds new competencies, eventually these new competencies aid strategy formulation and reaching the market. These organizational practices over a period of time become ossified and sink in to the managerial mindset. In a recent book the Deloitte consultants Tuff and Goldbach argue that the ossification of practices becomes the biggest enemy of the firm and unless new practices are introduced, the firm may cease to exist. This book summarizes the essence of the findings of these authors as six outdated practices from the 3 S era that not only impede innovation, but also may impede collaboration and coordination:

1. Obsession with numbers and business plans, forecasts to raise the stock prices only to see stocks crash later when numbers don’t materialize.



2. Obsession with past expertise that may have no relevance in times of turbulent change in a VUCA environment.



3. Obsession of the notion that the customer is always right – the customer often can’t tell you what he/she wants. The customer may express something and buy something else – capturing the unspoken customer behaviour is at the heart of design thinking methodology.



4. Obsession with long-term survival, permanency of jobs and permanency of the firm – the firm may last, but it has to keep morphing and changing with new knowledge flows.



5. Obsession with risk management systems – to quantify the risk and put it on the Excel sheet – can be a suicidal in times of high uncertainty. Dealing with uncertainty is a different ball game than dealing with risk which can be controlled.

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6. Obsession with acceptance – ask the question: “has someone done this before?” This question has killed billions of innovative ideas in past half a century.

The concept of co-evolution aims to do away with these six obsessions with three suggested practices incorporating conflicting goals with an “either-and” proposition: CO-EVOLVE GLOBALLY & LOCALLY COMBINE CUSTOMIZATION WITH STANDARDIZATION FUSE BUSINESS GOALS WITH SOCIAL GOALS

REFERENCES For this chapter the literature on Management Innovation, Ambidexterity and Global Strategy was referred.

1. Birkinshaw Julian, Hamel Gary, 2008, “Management Innovation”, Academy of Management Review, Vol. 33(4), pp. 825-845.



2. Barton Dorothy Leonard, 1992, “Core Capabilities and Core Rigidities: A Paradox in Managing New Product Development”, Strategic Management Journal, Vol. 13, sp. Issue, pp. 111-125.



3. C C. Miller, R D Ireland, “Intuition in strategic decision making: friend or foe in the fast-paced 21st century?” Academy of Management Perspectives, 2005, 19/1: 19–30.



4. Fracesca Jino and Bradely Staats, “Why Organizations Don’t Learn”, The Harvard Business Review, 2015, 93/10: 1-10.



5. Giovanni Gavetti, “Toward a behavioural theory of strategy” Organization Science, 2012, 23/1: 267–285.



6. Gibson Christina B., Birkinshaw Julian, 2004, “The Antecedents, Consequences and Mediating Role of Organizational Ambidexterity”, Academy of Management Journal, Vol. 47(2), pp. 209-226.

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7. Geoff Tuff & Steven Goldbach, Detonate: Why-And How-Corporations Must Blow Up Best Practices, 2018, John Wiley & Sons. NY.



8. Ghoshal Sumantra, 1997, The Individualized Corporation, Random House UK.



9. Ghoshal Sumantra, Piramal Geeta, Budhiraja Sudeep, 2001, “World Class in India: A Casebook of Companies in Transformation”, Penguin India Paperbacks.

10. Gupta Anil K., Wakayama Toshiro, Rangan Srinivasa U., Global Strategies for Emerging Asia, Jossey Bas, 2012.

11. Ghemawat Pankaj, “Managing Differences: The Central Challenge of Global Strategy”, The Harvard Business Review, March 2007.

12. Kazem Chaharbaghi, “The Problematic of Strategy: A Way of Seeing is Also a Way of Not Seeing”, Management Decision, 2007, 45/3: 327-339. 13. Jerker Denrell, “Vicarious Learning, Under sampling of Failure and the Myths of Management”, Organization Science, 2003, 14/3: 227-243. 14. Lewis Marian W., 2000, “Exploring Paradox: Towards A More Comprehensive Guide”, The Academy of Management Review, Vol. 25(4), pp. 760-776. 15. Lewis Marian W., Constantine Andriopoulos, Wendy K. Smith, “Paradoxical Leadership to Enable Strategic Agility”, California Management Review, Spring 2014, 56(3), pp. 58-77. 16. Simon Herbert A., “Strategy and Organizational Evolution”, Strategic Management Journal, Winter 1993, pp. 131-142. 17. Volberda Henk W., Bosch F.A.J.V.D., Heu C.V., 2013, “Management Innovation: Management as Fertile Ground for Innovation” European Management Review, Vol. 10, pp. 1-15.

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18. Wilhelm Hendrik, Schlomer Maren, Maurer Indre, 2015, “How Dynamic Capabilities Affect the Effectiveness and Efficiency of Operating Routines Under High and Low Levels of Environmental Dynamism”, British Journal of Management, Vol. 26, pp. 327-345. THE 3 - C FRAMEWORK AS A MODEL TO AID MANAGERS – Innovation in Indian Context. Coordination

Co-evolution

Collaboration Resilient thinking

1. Build Indian products for Indian people 2. Find a great purpose and never give up 3. Look forward to leave a deep impact 4.  Clarity of purpose

1. Listen to your inner voice – slow thinking 2. Isolation and resource shortages are part of the story 3. Think like the 10th man 4. Collective resilience is hard to beat

1. Being an underdog is not a disadvantage 2. Combine insanity with logic 3. Practice what you dislike 4. A little sustained effort every day produces that moment of magic

The Next Gen Organization Practices 1. Observe the customer 2. Reflect your findings 3. Introspect to imagine the next blockbuster

4. Assimilate new knowledge 5. Absorb and blend with the old 6. Transform the knowledge base

7. Co-evolve globally & locally 8. Combine customization with standardization 9. Fuse business goals with social goals

Part-5 Short Case Studies

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The 3-C framework was built in the previous four parts, with due references, grounding it in Regenerative Dynamic Capabilities Theory and the framework was built with twelve tenets of Resilient Thinking – which is a variation of regenerative dynamic capabilities in Indian context. These case studies are real-life adaptations of various business situations that the authors came across. All the cases are real-life cases in disguised form. Quite a few cases belong to the ex-students of the authors and some others belong to real-life business situations that the authors came across in various companies. These cases have been disguised to hide the real names and the main theme of the case has been borrowed from the pages of the HBR. The main theme has then been set against Indian context with the disguised case study. The key objective of writing these cases was to give the reader (& we thank the reader for his/her patience so far!) a good empirical grounding into the 3-C framework by applying it onto the cases. Parts 1-4 built the framework exhaustively with real-life case studies of intrapreneurship/entrepreneurship, a series of short essays and an in-depth academic discussion. This was necessary to ground the 3-C framework with necessary academic rigour, so as not be questioned academically in future (at times readers not used to academic styled discussions may have found the discussion in Part 4 difficult to comprehend). From Part 5 onwards the book switches track and focuses on application of the 3-C framework. Part 5 is devoted to a series of short cases describing a managerial and strategic issue – a challenge which is complex and multi-dimensional in nature. Such complex and multi-dimensional problems arise in course of everyday business. The cases demonstrate how the problem arose in the first place. Case questions and teaching notes are not provided at the end of the case, Part 6 deals with that.

CASE

1

Is the sweet shop following a wrong strategy?

Reference case: “Second Thoughts About A Strategy Shift” by Elie Ofek – Jill Avery, HBR, December 2014. The main theme & issue are similar to the original case; however, names, characters, place and business context have been changed to Indianize and give a twist to the case. Case description: Aggarwal Sweet Shop in Rohini, West Delhi is selling sweets for the last seventy years. It was started by Sanjay Agarwal’s grandfather – Sambit Agarwal in 1970s, who migrated from Pakistan in 1947 and first settled down in Bikaner. There Sambit picked up the art of making sweets and opened a sweet shop in Rohini in 50s. Now the third generation is handling the sweet shop – Sanjay being in charge. There are hundreds of Bikaneri style sweet shops dotting the Delhi landscape. The most famous name in this line of business being Haldiram and Bikaner Wala is a second. Haldiram has now expanded all over India starting from its humble origins in Bikaner and has even expanded to USA and Canada, targeting the large NRI population there, who prefer vegetarian food. Bikaner Wala comes a distant second, in the sense that they have not expanded their footprint even on a national scale, largely remaining confined to Northern and North-Western part of India, but Bikaner Wala has established a reputation for itself with novel ideas and food. Most significantly they have expanded well on the edges of the national highway network, which is getting better every

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year with express ways and 4/6 lane well tarred smooth roads, promoting tourism and long drives. Many families still prefer vegetarian food while on the wheels and Bikaner Wala has captured this segment of the market by expanding its highway network. For example, its outlet in Gajraula on national highway 24, which sees traffic round the year going to Uttarakhand hill stations is open till 1 am night and reopens at 7 am morning – doing good business with travellers, by providing simple north and south Indian food and a clean toilet facility – very important while on the move for a bunch of weary travellers wanting to relieve themselves. Aggarwal Sweets, Rohini is now facing a major challenge – declining sales. Sales have been declining consistently for the last three years. Till 2017, the shop never experienced a decline in sales. Sales persistently clocked around Rs. 100 lakh a month, allowing the shop to post large profits after paying all expenses, fixed and variable. The healthy bank balance has sustained the shop so far. The shop started incurring losses and started experiencing unsold inventory from 2017 – a trend that grew into a monster by 2019. Before the outbreak of the COVID-19 pandemic, the shop was experiencing unsold inventory of sweets and savouries for three to six days. Sweets made of Kheer (thickened milk) can sustain for three days, after that they need to be thrown out. Savouries can sustain for six to seven days, after that their shelf life gets over. But sweets made of Paneer – Indian cottage cheese can be kept only for 24 hours, after which if unsold it has to be thrown out. Footfalls to the shop has been persistently decreasing. Sanjay – a third generation Agarwal from the family is a trained Chartered Accountant and holds an MBA degree from IIM Ahmedabad in addition. A brilliant student, Sanjay worked for a foreign bank for nearly fifteen years. Before switching to handle the family-business urged by his aging father. His father – Sudeep is now is in his 70s, himself a CA. The patriarch

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– Sambit passed away long back. The father & son is having a major difference in opinion. Sanjay wants to revamp the store. Pump a few crores to spruce up, using his savings earned from fifteen years of service. Sanjay is very impressed by the look and décor of Bikaner Wala outlets. He wants to change the logo, spruce up the showroom, and bring in a team of trained cooks from Bikaner, Rajasthan to introduce a novel range of sweets and he wants to hire a hotel management institute trained Chef and hire one of the celebrity chefs like Kunal Kapoor or Ranveer Brar, Ajay Chopra, Pankaj Bhadoria as a consultant for a month. These chefs keep appearing in the ZEE ZEST and NDTV GOOD TIMES TV channels and are very familiar faces to Indian families. The whole thing will cost around Rs. 5 crore. Sanjay proposes to invest 50%, the rest by an angel investor from his banking network of fifteen years, who has agreed to pump the money for a 25% stake in profits. Later on, like Bikaner Wala, Sanjay plans to expand to the highway network – he has identified the NH 11 – Agra to Bikaner, a six-lane highway that sees heavy tourist traffic between Agra to Jaipur round the year and to Sawai Madhopur – which sees a diversion from Dausa on NH 11 onto the Ranthambhore national park near Sawai Madhopur to see tigers. The NH 11 from Agra also passes over Fatehpur Sikri – a historic site and the famous Dargah of Khawaja Salim Chishti – where the emperor Akbar visited once to seek blessings for a son and this Dargah attracts devotees from all religions and economic segments round the year. Sanjay wants to open another outlet Bikaner Wala style somewhere between Agra & Jaipur, near Fatehpur. This will require an additional investment of Rs. 3 to 3.5 crore. The total plan is Rs. 8 crore. Sanjay is proposing a 50-50 joint venture with his investor friend. Sudeep has other ideas. Sudeep is favouring the highway outlet and is asking his son to pump 5 crores there straightaway

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to build a catchy and snazzy outlet with vegetarian and as well as serving non-veg food – especially Mughlai cuisine to attract foreigners, who visit Fatehpur in large numbers in winter months. Sudeep is asking his son to hire a trained chef to employ there and get it endorsed by one of the celebrity chefs like Ranveer Brar (well known for his non-veg Mughlai dishes and he is from Lucknow – the Mecca of Mughlai non-veg cuisine in North India). The outlet will not be named after Agarwal and will have no resemblance to Bikaner Wala or Haldiram and will serve both Mughlai and north Indian vegetarian cuisine. Sudeep is against any investment in the existing Agarwal shop in Rohini. He is proposing two options – sell the shop, especially the land and it has a value. The shop sits on a 160 sq. yard plot and will fetch a tidy sum on sale. Use the sale proceeds to invest on the Fatehpur project. Option 2: change the décor, advertise the shop’s products. Offer discounts on higher purchases, introduce a new range of sweets by hiring two sweet makers from Bikaner – invest a crore in total and wait and watch, while pump money on the Fatehpur project. Sanjay has a large network of his IIM-A friends. One of them head a major market research company. He requested his friend to do some research on the feasibility of the Fatehpur project. The survey results gave another picture. The area around Fatehpur, the 30 km stretch between Agra and Fatehpur is dotted with boutique resorts offering exotic cuisines and stay. Some of them are doing roaring business while some others are incurring losses. A better prospect is to have a vegetarian outlet – Bikaner Wala Style on the Dausa – Sawai Madhopur road: NH 12, which also sees large traffic to see tigers. The land price will be less, investment will be less (around 2 crores only including land) and it will run well. A greenfield is better than a red ocean dotted with competition. Also, his marketing

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friend told him that even if he invests a crore in Rohini to revamp the 70-year-old shop and heavily spends on advertising – footfalls are unlikely to increase even with introduction of new sweets, as consumers are becoming health conscious and spending less on eating sweets. Also, the name Aggarwal sweets dots Delhi landscape like onions and potatoes in vegetable market and this goes against the shop. Sudeep is dead against changing the name of the shop. Another issue is that the shop is located in a downtown area of Rohini. The neighbourhood is lower middle class. Sanjay now has following options:

(a) Invest a crore in Rohini, and two crores on the DausaSawai Madhopur road.

(b) Take a risk and invest all the eight crores and go ahead with his plan.

(c) Just invest a crore in Rohini and play safe.

(d) Close the shop and invest eight crores on two highway projects. (e) Close the shop and open something completely new there.

CASE

2

Can you mix up B2B & B2C businesses together?

Note Reference case: “Can One Business Unit Have Two Revenue Models?” by Marco Bertini & Nader Tavassoli. HBR March 2015 The main theme & issue are similar to the original case; however, names, characters, place and business context have been changed to Indianize and give a twist to the case. Case description: Jaspinder Singh Narula owns two businesses: One is a component machining business, the other is the auto repairing business. An IIT-Delhi engineering graduate and a native of Ludhiana, Jaspinder utilized the thriving industrial landscape of Ludhiana after passing out of the IIT and instead of taking up the campus placement, he returned to his old family business of car repairing in Ludhiana, which was started by his father. Ludhiana is one of the most industrialized and prosperous towns in the state of Punjab, India. Its landscape is dotted with small and medium enterprises, machining auto components, printing and stationery items like stapler and pencils and most importantly Ludhiana has a thriving woollen wear industry. It’s known as India’s Manchester in woollen wear. Ludhiana also has a thriving sports goods industry, alongside Jalandhar – another large town of Punjab. Both the towns are situated on the national highway NO 1, earlier known as the Grand Trunk Road, connecting Delhi to Amritsar. The highway is of strategic

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importance to the Indian Army for moving troops to the Pakistan border and both the towns are also well connected on the network of Indian Railways, with a number of superfast trains plying between Delhi and Amritsar and many trains like the Punjab Mail, Golden Temple Mail (the famous Frontier Mail during the time of British Raj) and Paschim Express connects Amritsar to Mumbai and they pass over both the towns. The national highway bifurcates after Jalandhar, one branch going to Amritsar, another going to Pathankot and Jammu Tawi, there onto the Kashmir Valley. Therefore, both the roads witness heavy convoy movement of the army and trucks ply on the NH 1 24 × 7. Jaspinder being an IIT pass out understands the value of professional management. He modernized the old car repair shop and diversified into component machining business for OEM customers like Maruti & Honda in Gurgaon and Hyundai, Ford in south near Chennai. He also employed two of his IIT-D classmates – Harvinder Singh Sandhu and Amarinder Singh Sekhon on a 50-25-25 venture. They renamed the company as JHA enterprises – taking initials of the three friends. JHA enterprises had two main businesses. The first was the old car repair business – here JHA now mainly catered to the taxi operators’ fleet. There were a number of fleet operators in Chandigarh, Amritsar, Jalandhar, Ludhiana and Ambala – a town on Haryana-Punjab border on NH 1. These fleet operators plied between Delhi and these towns and they also went up to J&K, especially with pilgrims to the Vaishno Devi shrine near Jammu in Katra. The operators also plied taxis to hill stations in Himachal like Dalhousie and Mcleodgunj, as a road from Pathankot snaked its way into the hills of Himachal. JHA enterprises also machined engine components for Maruti, Hyundai, Ford, Honda, Renault-Nissan and Toyota. Both for diesel and petrol engines. One of the friends –

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Harvinder had a keen interest in car engines and was a keen student as well. The reason he qualified for the prestigious IIT Delhi and joined B. Tech in mechanical engineering. Harvinder went onto become an engine specialist and handled the engine component manufacturing unit. While Amarinder handled the taxi fleet repairing business. Both the business had some common features: they were utilizing the same factory shed both for car repair and component making. Often a car came into the engine shop for extensive engine repairs. The taxi operators mainly operated Maruti cars like the Swift Dzire, and the diesel MUVs like the Toyota Innova or Mahindra Scorpio. As JHA made components for the Swift, often the car repair business utilized the facilities of engine component business and engine repairs became increasingly common. A point reached when as many as 40-50 cars in a day marched into the engine shop, waiting for engine parts replacements, this was mainly happening for Swift Dzire– the diesel version. The model was very popular with fleet operators and almost 90% of their fleet were utilized for intercity runs, thus on an average a vehicle ended up clocking 250-500 km in a day. This resulted in more frequent wear & tear of the engine and more components needed replacement. The engine shop often ended up utilizing the worker time for engine repairing. Then the engine shop was short of expert machine operators who could produce components – so the car repair business was eating into the capacity of engine component business. Jaspinder was a worried man and called up one of his good friends in the Boston Consulting Group – Mumbai, who was his classmate in IIT-D and later on did his MBA from IIM Ahmedabad. He invited his friend to visit his premises and offered his family a picnic in Mcleodgunj. His friend pointed out the following:

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• Improper utilization of the premises and capacity – thereby improper charging of services for engine repair – lower costs were charged for fleet operators. In fact, the costs were ridiculously low – only material costs were charged and the labour component ignored. The low repair rates combined with excellent engine testing facilities attracted more and more fleet operators every day. • A bad mix up of labour and overhead costs – the costs of the engine component business is not apportioned onto the engine repairing business – which has become a major business now – with cash flowing in instantly, thus giving JHA the vital working capital, whereas the engine component business had a 60-day payment cycle from auto OEMs. • The fleet operators kept the telephones busy whole day, this often resulted in delays in communication with large OEM customers – a point a purchase manager of Maruti expressed more than once. • Another cost was often ignored – Tooling costs. Tools used for machining components were often used in engine repairs – this resulted in improper tool usage and cost allocation. • Since the repair business provided ready cash – the repair personnel often interfered with the functions of engine component manufacturing, such as machine stoppages, resulting in delayed production and delivery of OEM component batches – and this has not yet become a point of major issue with the OEMs, but can flare up in future. Jaspinder’s friend from BCG suggested separation of the two businesses and segregation of space, with separate offices, personnel and communication channels. But there were practical hurdles as Jaspinder found out when he sat down with his two friends:

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• It can result in higher repair rates – and customers of the repair business may walk away, the low repair rates combined with ready cash flow was the USP of JHA enterprises. • It can also affect the quality of repairs and the effective engine repairing – which is only possible under the combined factory shed – this can again result in fleet operators walking away to competition. • As of consequence, JHA will cease to be a cash rich company – which it is now, the cash from engine repair business will stop flowing in six figures every day. This kept the engine business running smoothly, as it had a 60-day cash cycle from big auto OEMS. • The auto OEMs are already making threatening noises to bring down component prices – if this happens in future then the engine component making business which actually was highly profitable, but with low cash flows can undergo a radical change. • There was another threat looming large in future – E-vehicle technology. As the Government of India is pressurizing the auto OEMs to bring in e-vehicles faster, the internal combustion engine may cease to exist altogether in near future – thus the engine component manufacturing may have to be shut down or altered to make e-vehicle components – a technology that JHA knew absolutely nothing about. Whereas at least petrolpowered cars will ply, on the roads for at least ten more years on inter-city routes, till batteries of e-vehicles become good enough for 500+ km runs and e-charging stations come up on the highway one in every petrol pump today. That scenario is ten years away and the engine repair business will continue. Jaspinder mulled his options and called up some of his professors in IIT D. They gave the following suggestions:

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Stop the component manufacturing business, as it is likely to become less profitable very soon and the large auto OEMS may start sourcing lesser and lesser petrol/diesel engine components and convert the entire business in to a B2C model. However, one professor warned: the engine component business may still fetch cash and profits for next three years at least. It may be unwise to wind up the B2B business right away.

CASE

3

How can express meat shop bring back customers?

Note Original case: “Can You Win Back Online Shoppers?” By Thales S Teixeira and Sunil Gupta. HBR September 2015. The main theme and issue are similar to the original case; however, names, characters, place and business context have been changed to Indianize and give a twist to the case. Case facts: Rajesh and Ravish Aurora started Express Meat Shop in Noida, a satellite town on the eastern fringes of the national capital and part of the National Capital region in Uttar Pradesh. The brothers started a meat shop in sector 50 central market in 1995. They started with home delivery of chicken and meat in the neighbourhood. Over the years, Noida expanded into a prosperous town beyond sector 50/51, and eventually by 2015, Noida had as many as 150 sectors, well connected by the Delhi Metro Blue Line network, cutting across the heart of the town and the Magenta line was added later. The neighbouring sectors around 50 didn’t have a proper and hygienic meat shop, cleanly displayed on the racks, plus a variety of ready-made meat and chicken preparations to choose from like kebabs, sausages, tikka, etc., plus a team of expert butchers who could cut meat to the customer’s liking. The result? Sales kept increasing and by 2015, there were queues outside the shop, especially on weekends, with customers waiting to buy mutton, chicken and other non-vegetarian preparations. By Sunday evening the racks were virtually empty and Monday was spent on replenishing

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the supplies. Monday and Tuesday were slack days. No one came over on a Monday evening, tired after a day’s work in office and Tuesday is normally observed a no non-veg day all over North India, the day Lord Hanuman is worshipped. But as Noida started attracting a large non-North Indian population from 2015 onwards, who came from all parts of India to work in companies like HCL, Samsung and LG, the shop started seeing crowds on a Tuesday too. Many other people who came to Delhi-NCR from other parts of the country and worked in other parts of NCR, due to expansion of the metro network started living in Noida, which had better living conditions than other NCR satellite towns. Many came from eastern parts of India, from states like West Bengal and Bihar and also many came from the five southern states, a majority of them were non-vegetarians. Many of them started living in sectors 70-78, as rents in these sectors were low, there was a slump in real estate prices in Noida due to oversupply and non-completion of flats by spurious builders and all these factors added to the fortunes of the shop. There were no good meat shops around and presence of a large and well stocked liquor shop just opposite Empire Meat Shop only added to increase in sales. People just visited the two shops together on weekends to enjoy a bout of non-veg food and liquor and have parties. Nothing bad lasts forever, similarly nothing too good lasts forever. Empire Meat Shop experienced a 300% rise in sales between 2015-18 for three years. Things started changing from 2018. One day the younger brother Rajesh noticed absence of the usual queue on a Saturday afternoon. The liquor shop opposite was full! But people were not coming out of the liquor shop and walk into his shop. He dismissed it as an odd phenomenon. But the story repeated on subsequent weekends– the queues were missing, customers were coming all right on weekends, sales were still happening, but the queue on weekend has stopped.

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Rajesh decided to investigate. He went around asking people and found out the real culprit – online shopping! There were companies like Licious and ZapFresh, who were delivering a wide range of non-veg items at similar prices to his shop and people who stayed within walking distance of the shop in sectors 50/51 and 41 opposite were still walking into his store. But people from distant sectors of 70 to 78, the migrant non-north Indian population, who came from other parts of the country and were professionals working in various big firms – it is this segment who made the queues on a week end and it is these customers who are rapidly switching to online instead of queuing up. No one likes queues and when ordering non-veg online is a good and reasonable option, no one will queue up! The liquor shop is still experiencing a crowd on weekends, as the law prohibits advertising of liquor, hence online buying of liquor is still not an option in India at least. What the shop is left with is a group of loyal customers, who will not order online and who prefer to drive 5/6 km to visit the shop or simply walk to the shop. Rajesh in particular enjoys a strong personal relation, with a large group, who is buying from his shop for the last ten years. He is even invited in their family festivals and ceremonies and has become their family friend. Many of them buy from him on credit and pay later. But this group, although large is not growing and will not give him increasing sales. The stark realization dawned on Rajesh, on a cold day of 2019, that what took 25 years to build is now reaching a stalemate and can come unstuck by technology in next one year. Then came the COVID crisis in 2020 and customers vanished altogether. The crisis began to wane by September end and in October the state government allowed reopening of liquor and non-veg shops. Once again Rajesh saw the liquor shop opposite with large queues! But his shop was empty on a Sunday morning. The racks full. Rajesh came to the following conclusions: • The pandemic has left customers conscious of social distancing, which is not possible within the restricted

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•

•

•

•

confines of his shop. Meat takes time to cut and customers are not going to queue up any more. The online companies are delivering a very wide range of items – he has to match them or offer wider and customized range of non-veg delicacies like crisp chicken pakodas, which can be microwaved or fried, meatballs, which can be quickly curried into a dish for dinner. He has to offer online services, probably introduce an AI based chat bot to talk with customers and customize their orders to their likings. He has to train his butchers and stuff to deliver in sync with the AI tool – a tall task, as many of his staff didn’t know English and he has to keep a fresh computer engineer to run and maintain the chat bot – but then computer engineers are not interested in working for a meat shop! Customization, online orders and building and running the software will cost him nearly Rs. 50 lakh – already the shop has incurred losses during the pandemic wave and he is now operating at 50% of the 2018 strength and investing 50 lakh is a tall order for his shop. Even after investing 50 lakh, there is no guarantee that the sales will pick up and bring him back to the 2018 peak. Those conditions are missing, as people now prefer online buying and many of his migrant customers, who stayed in sectors 70-78 lost their jobs and went back home. That figure Rajesh found out was staggering! He had mobile numbers of about 2000 customers – all were non locals coming from Eastern and Southern India, mostly software engineers and engineers working on shopfloors of Samsung, LG and Honda Motors – all gone! He has lost 2000 customers who queued up on weekends. He is left with a group of loyal customers numbering around 1000 – this will keep his shop running. It will not fetch prosperity and growth. The golden days of express meat shop are over. Covid and technology together finished it!

CASE

4

Should a great free service be charged?

Note Original case: “Is A Start-Up’s Strength Becoming It’s Weakness” by Ramana Nanda and Liz Kind, HBR November 2015. The main theme and issue are similar to the original case; however, names, characters, place and business context have been changed to Indianize and give a twist to the case. Case facts: Aditya was a lover of Rock music right from his childhood. He grew up listening Ventures, Eagles, Chuck Berry, Beatles and Elvis. He himself wanted to be a guitarist, but his family lived 40 km away from the nearest big city – Hyderabad, the capital of erstwhile Andhra Pradesh and now the capital of the Telengana state. This was early 80s – the decade considered today as the golden age of rock. Legendary rock bands such as Metallica, A/c-D/c, Guns & Roses, Iron Maiden, Dire Straits, Black Sabbath and legendary guitarists such as Slash (G&R), Mark Knopfler (Dire Straits), Steven Van Zandt (Lead guitarist with Bruce Springsteen & the E-street band), David Gilmour (Pink Floyd) and Keith Douglas Scott (lead guitarist with Brian Adams) came up during this period. Aditya saw some of his class mates rocking the stage with electric guitar, playing and drawing hoots from pretty girls! He wished he was on stage! This was mid-80s. His dream remained a dream and he grew up a young man wishing he was a rock guitarist. His family, especially his father was an

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avid listener of Hindustani classical music and his mother was a trained Thumri singer, she learned classical singing from Thiagraja Music College of Hyderabad and was an avid listener of Thumri renditions of the legendary Bade Ghulam Ali Khan. So! Rock was considered devil’s music at his home and guitaring remained a distant dream. In 1986, when Aditya was a 19-year old boy, a father’s friend gave Aditya a hand-medown American made Gibson. The guitar belonged to his son and they were leaving India. They were Koreans. Aditya’s father worked in an international agri-research institute in Hyderabad as a scientist called ICRISAT. Aditya tinkled with the guitar, in absence of encouragement gave it up. The Gibson went up the rack in his almirah and started rotting. Soon, vicissitudes of life caught up with Aditya and he went on to pass the tough course of Cost Accountancy from the Institute of Cost & Works Accountants of India (now Institute of Cost & Management Accountants of India) with an all India rank and started working as a financial analyst with a prestigious stock broking firm in Hyderabad. Got married. One day his wife was cleaning up his almirah – and she discovered the rotting Gibson. This was 1996. The guitar was up the rack for ten years now! Ants and termites had eaten up half of it. What a tragedy! She remarked. Finally, in 2004, Aditya decided to pursue his childhood dream once more and went on to purchase a guitar. By now Aditya was a lecturer in a college, teaching finance and came home by evening. The pressures of a finance manager, working late hours in preparing financial reports were absent. Aditya had time in his hands to pursue his childhood dream. He tinkered with the guitar for a few months, made no progress and when he joined the PhD programme of Birla Institute of Technology and Sciences – Pilani in 2005, this guitar too met with a similar fate, it went up the rack in store room! The pressures of late-night study for doctoral thesis took over.

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On a late September evening in 2008, September 9 to be precise, which was his birthday, his wife proposed an outing. By now Aditya had left Hyderabad and was living in Faridabad, a satellite town in Haryana and part of Delhi-NCR. He was teaching finance in a business school as a lecturer and was in his third year of doctoral studies from BITS-Pilani. In his car, with his wife and 9-year old daughter Aditya went for a dinner at Nirula’s in Connaught Place, Delhi. They finished their dinner early at 9 pm. The roads were empty and soon they reached Faridabad. The movie “Rock-On!” was released recently. It was 10 pm. There was a movie hall near his home, running the movie. His wife asked – do you want to go? No money! I have the money! Said his wife, who was a school teacher of mathematics and was in her second year of MSc Maths – distance programme of Osmania University, Hyderabad. They found the last 3 seats! Aditya watched the movie spellbound. It was another Aditya in the film – played by the famous Bollywood actor – Farhan Akhtar and Aditya of the film and Aditya in real life – the story stuck a chord with him, it was strikingly familiar! His two guitars went up the rack, Magik – the rock band in the film broke up, when they were on the verge of success. Aditya came out with his eyes blazing. His wife noticed it. “Do you want to pick up the guitar again?” She remarked. By now Aditya being a PhD scholar was much more knowledgeable about research methods. In between classes in the college, he started hunting the Internet – which was a huge source of information and this was missing in 80s. He gathered basic knowledge and grammar of music. The scales, the chords, the guitar fretboard, the rhythm patterns and how to play and improve one’s timing of the instrument. All this took him two years. On and off he went back to music theory and wrote and memorized the scales and the basic concepts. 2010, April 21. It was a red-letter day for him. He couriered his thesis to BITS Pilani that day and completed his thesis

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submission process. From the courier’s office as he came out, he took a strange decision. He checked his credit card limit over phone, stood thinking for a few minutes in front of his car and instead of going back home he reached for the highway! Onto Delhi, Daryagunj – to Bhargava’s, the no.1 music shop in the national capital. Aditya returned home with an electric guitar and an amplifier. His wife and daughter were stunned beyond words! What? You still mean it? You still dream of drawing hoots from pretty girls and rock the stage? She joked. And she made him make a promise – this time the guitar is not going up the rack! By 2019 Aditya went on to become an accomplished guitarist, mastering the nuances of timing, scales, chords, played on and off with rock bands – mostly with his students and learned guitar from an accomplished music teacher, went on to pass the grade 5 guitar exam of Trinity College of Rock. He was now a trained and certified guitarist! It took him 35 years since he saw his college friends rock the stage in 80s. He didn’t give up his dream. He was now known and appreciated for his guitaring skills. Aditya noticed a glaring gap in aspiring guitarists in You Tube in 2019 – firstly they were not trained in catching the timing of a song. For example – a superhit rock or Bollywood song, what is the time signature? On which scale the song is played? What are the guitar chords? Aditya learnt it the hard way with self-study and from his teacher later. He mastered the fine art of identifying a song’s key signature and time pattern by listening it 2/3 times. He noticed that even those who are teaching guitaring over the YouTube and claimed to be expert teachers, made glaring mistakes in fundamentals. The YouTube is full of wrong teachers! And the good ones, who know are not coming forward! He concluded. He started a forum in YouTube – fundamentals of music. In which he painstakingly explained the basics of music over a

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white board and recorded his short 5-7-minute talks as videos. He started a forum as a website – where he explained the basics of music. Particularly on the timing aspect and the rhythm patterns and demonstrated how to catch the rhythm pattern of popular songs and play them correctly as a guitarist. He posted slides with audio clippings and videos explaining the rhythm and scale patterns. The website was graded as exam board. Grade 1 was basics – the scales, the chords, the guitar fretboard. Grade 2 was the time signatures – 1-1/2-1/4 – 1/8 – 1/16 notes and how 1/4 or 1/8-1/16 notes combined to produce many popular and well-known rhythms and guitar melodies, both in Bollywood and rock music. Grade was playing some popular and easy songs. Grade 4 and 5 were more difficult songs. The lessons were linked with Noida School of Rock – and trained guitarists from the school started answering queries and giving free lessons. A step by step process was explained to pass the Trinity College of Rock guitar exams from grade 1 to 5. 5 is considered as a rock band grade. There are 8 grades in the Trinity Rock guitar course. Soon the forum started attracting hundreds of aspiring guitarists and his videos crossed a million hits in YouTube. He was flooded daily with questions, queries, appreciation mails from many people all over India and even from other countries. The volume by 2020 middle became so big that Aditya was unable to handle all queries, mails and send a thank you note to everyone for appreciation! 1000s literally flooded his site. They have not seen anything like this before. No teacher over the Internet explained the fundamentals of music with so much clarity. Aditya knew, from where that clarity came! It came from two guitars going up the rack and the movie “Rock On!” which inspired him to take up the guitar again in 2010. An investor approached Aditya – who was by now working in a company as a strategy consultant. Aditya went on to complete his doctoral studies in 2010 and worked for one of

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the Indian Institutes of Management and today he was a visiting faculty in the prestigious Indian Institute of Foreign Trade in New Delhi. The investor proposed monetization of the site – he saw that the site was worth more than a million dollars! Thousands are flooding the site every day and downloading all of Aditya’s notes, lectures and videos for free. The investor proposed that he charges a nominal sum of 2/3 dollars for downloading all material. Even that nominal sum can earn the site $ 2500 average per day! 75k in a month and perhaps a million dollars in a year! With proper monetization of the services, the site can earn up to ten million dollars a year. It needs some work though and Aditya being a trained finance and strategy professional is well qualified to handle the task. Aditya recalled the two guitars going up the rack in 1986 and in 2004. He how he longed to climb the stage with electric guitar once, when he was a young man to get the hoots from pretty girls! He is past that stage today. But today he is an accomplished guitarist and he never thought of making money from music! That always remained a passion for him – to climb the stage and rock it with great solos! But the idea of earning money from music – WAS TOTALLY ALIEN TO HIM. He made decent money as a consultant and from his lectures on strategy in IIFT and other places. He established a reputation for himself as an academic in strategy field. Making money from music? The first reaction was a big NO. However, the investor persisted. Think of many poor people, think of many people who can’t afford basic medicines and food for their children. This money can be passed on. A good part of the dollars earned can be passed on to NGOs working with the lowest strata of the society. I will earn my return on investment and go away – this site remains with you and will continue to give you more than a million dollars a year – which you can pass on. This put Aditya into a deep thought.

CASE

5

What to do when there is a fire in the factory?

Note Reference case: “When Tragedy Strikes the Supply Chain” by Ram Subramanian, HBR January-February 2016. The main theme and issue are similar to the original case; however, names, characters, place and business context have been changed to Indianize and give a twist to the case. Case facts: TCIL is a compressor manufacturing major, making compressors for refrigerators and air conditioners. The company has plants all over the world and is one of the oldest compressor makers globally. Its global competitors are Matshusita and Hitachi – two Japanese majors. In India TCIL took up the erstwhile refrigeration plant of Kelvinator near Faridabad in Haryana, who went sick and refurbished the plant with modern machines. There were six shops in the factory spanning 2 square km, 2 km long and a km wide. There were 900 workers in the factory working in three shifts. The first two shifts were of 8.5 hours each and the night shift was of 7 hours. The factory had six production shops. The machine shop, electric motor winding shop, copper wire drawing shop, metal press shop, rotor shop and the final assembly. There were also supporting departments like the tool design shop – which was considered one of the finest in India in the years between 2000-2010, industrial engineering department, quality control, maintenance and product design department. The factory had

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66 personnel in the managerial cadre including the MD and about a 100, supporting staff in various departments who oversaw production and dispatch of final compressors. The major customers of compressors of the Faridabad plant were three OEM refrigerator makers: Whirlpool, Samsung and LG. TCIL was a B2B heavy engineering firm and the culture was similar to that of heavy electrical and mechanical engineering firms like ABB, Siemens, Crompton & Greaves, L&T and automobile OEMS – in the sense the mass production technologies and the Japanese lean techniques were adapted from auto companies like Maruti-Suzuki, Honda or Toyota. The company had an excellent work culture and encouraged its workers and managers to retire from the company. The company also had an excellent management practice – that of a night shift in-charge. The 66 managers including the MD took turns to be the night shift in-charge round the year. Production never stopped on any day except on national holidays like 26th January and 15th August. Plant stoppages on religious festivals were never encouraged, in January – when no refrigerators were sold, the plant was stopped for a month for annual maintenance and repair of machines – the plant had over 1000 sophisticated CNC machines. All in all, the plant stopped 35 days in a year, the rest 330 were working. Which implied the 66 managerial staff had to be the night shift in-charge 5 times in a year. No exemption was made for non-technical personnel like those in finance department, personnel or human resources. Every manager had to do the night shift duty 5 times in a year! This was considered an excellent management practice and many plants in Delhi-NCR who came to know about it adapted it. The machines in wire drawing shop and motor winding shop were devilishly sophisticated. The wire drawing shop had four German-made wire drawing computerized machines, each 500 meters long and drew out copper wire of various

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gauges starting from 3 mm thick to 0.25 mm thickness. The basic raw material was 8 mm copper wire, supplied by Hindustan Copper, Birla Copper. The wire then next went to the electric motor winding shop, where robots wound the wire around the stamped metal and assembled the electric motors, generating a range of motors from 330 watts (small compressors) to 1000 watts for large compressors used to cool display racks in sweets and confectionery shops, meat shops and water coolers. The temperature in wire drawing machines reached 700 degrees Celsius and a fire in any machine could be disastrous, causing an explosion and death. Another hazardous shop was the rotor shop – where rotors were moulded out of molten aluminium at 600 degrees Celsius. If any worker fell into the liquid aluminium pot – he would simply evaporate! The rotors were positioned within the electric motor to produce the reciprocating motion with crankshaft and piston to compress and cool gas and circulate the gas within the cooling circuit of a fridge. The motors were rated between 2500-5000 rpm, depending on the motor size. All in all, a fire in any of these six shops was hazardous and could cause death. On the eve of a holiday and plant closure on 14th August, 2001, a fire occurred in the motor shop! It was the night shift and the night shift in-charge that day was from accounts department. He was in-charge of implementing the lean system and cost control techniques on the shopfloor and he was fortunately very familiar with all machines, as he used to spend 10 hours on average in front of the machines. The entire shopfloor of six shops and 1000 machines and the layout was at his fingertips. He acted very fast. Shouted across the factory by blaring the fire siren, alerted the maintenance night shift in-charge and within minutes an entire fire fighting team was dousing out the fire, caused by a short circuit in one of the robots. The MD was alerted and the maintenance and production heads rushed in at 12 pm night.

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A meeting was held. The head of personnel too was alerted. The company had four vice presidents in finance, production, marketing and personnel. The finance head sat in the Hyderabad plant (taken over from erstwhile Shriram Refrigeration) and made compressors for air conditioners. The rest of the heads sat in Faridabad. All three reached the plant. The damage was assessed and the production head had a special word of praise for the night shift in-charge, whose knowledge of the shopfloor averted a major disaster, as he knew all the production personnel by their names and knew the location of each machine in the factory. However, there were strategic issues to be tackled! Three major issues came up by 1 am: • Alerting the three customers in the morning • Finding an alternative to produce motors • Assessing the damage and the costs and the time to get the motor shop back on rails By next day the picture looked bleak. The motor shop is going to be out of reckoning for seven working days at least as the robotics technology in India in the year 2001 was not common and the machines came from Germany. Electrical robotics machine makers around the world at that time could be counted in hand and the supplier of machines informed that their personnel can land up only after two weeks! TCIL purchase and maintenance team looked around the eastern part of the world in Hongkong, China, Thailand, Vietnam, Taiwan and Japan for expertise in robotics and found one company in Taiwan who knew about robotics technology. The company was more than willing to help and promised that their team of three experts will fly the next day. Even then it was estimated that it will take seven days to get the machine robots back on rails. The loss is 5000 compressors/day = 35000 units and the batch was to be shipped to one of the OEM refrigerator makers

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and this was the peak season till festivities stretching up to Deepavali in November. The OEM customer’s purchase dept was livid – they were not willing to accept loss of 35000 refrigerators to be shipped to the market. They simply didn’t accept the delay and asked TCIL to work out alternatives. Three alternatives emerged and the costs were worked out by the cost accountant who witnessed and controlled the fire as night shift in-charge. (a) Wait for seven days and buy readymade compressors from one of the two Indian refrigerator makers, who made their own compressors – but of inferior quality and technology. The OEM customer was willing to accept this and demanded replacement free of cost as warranty on the batch with clear markings that they were outsourced, in case the compressors malfunctioned. The cost was 200% of that in-house.

(b) There was a motor winding unit in Faridabad itself and a subsidiary of General Electric. But they didn’t make smaller motors to fit refrigerators – they had to alter their production line to make the 330-watt small motors, 35000 in total. They promised delivery of the motors in 3 days. It can be assembled in the assembly shop and compressors shipped in next seven days @ 5000/day – a total of 3 days delay for the OEM refrigerator maker – which they accepted. But the quality of motors remained unknown and risky – chances of failure were high, invoking warranty costs and repairs and the company’s reputation can be at stake, as the compressors finally had the TCIL label, not outsourced. The cost was 200% of that in-house plus the risk of reputation loss.

(c) One of the OEM makers also outsourced from Matshusita – Japanese compressors from Malaysia. And this OEM plant was situated in Delhi-NCR. But they had compressors of 350 watts – more powerful

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motors, resulted in better cooling and slightly higher power consumption. Fitting 35000 fridges with 350-watt motors instead of the 330-watt motors was strategically a risky option. The Matsushita compressors incorporated the latest Japanese technology and quality control standards in Malaysia and gave superior performance to that of TCIL units. The customers who purchased the 35000 units will love it and demand similar performance later on. The purchase manager of the OEM said – TCIL will have to upgrade to the superior 350-watt motors later on and modify its technology! This had long term and strategic consequences and large capital investments. The cost of 35000 units were similar to that of in-house, but with long-term strategic and technological implications.

CASE

6

From regional to a national level brand

Note Reference case: “From Niche to Mainstream” by Elie Ofek. HBR July-August 2018. The main theme and issue are similar to the original case; however, names, characters, place and business context have been changed to Indianize and give a twist to the case. Case facts: Hyderabadi Biriyani is known for its aroma and flavour. There is a saying: - taste it once and you come back to Hyderabad again! The city of Hyderabad is dotted with a particular type of hotels known as Irani restaurants. These restaurants like Azizia, Parvaaz, Bawarchi, Lucky, Paradise, Shadab & Imroze dot the city’s landscape. They serve mainly two things – the famous Irani Tea – consumed in more than a million cups everyday by people all over the city and is known to have a stimulating effect and the biriyani. These two food items do business worth millions every day all over the city. Some of these hotels are quite old, doing business for more than half a century. The most famous of them and known all over India is Paradise. Originally started with one hotel at a busy intersection near Secunderabad. Hyderabad-Secunderabad are known as twin cities. Secunderabad mainly took off as a cantonment area for the British Army before independence and later the Indian Army and today Secunderabad houses the EME core of the army – known for its engineering feats during 65 and 71 Indo-Pak conflicts and the Kargil conflict of 1999, a large part of Secunderabad city is under the army cantonment area.

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The city also has the main rail link to other metros like Mumbai, Delhi, Kolkata and Bengaluru. It’s the main junction and headquarters of a major division of the railway – the South-Central railway and houses the WAP series of locomotives hauling superfast trains like the Rajdhani. The Paradise restaurant is located at a busy intersection near the railway station and has been extremely popular with locals and tourists alike. The restaurant also featured in a number of food shows on television. Later as Hyderabad city extended westwards on the national highway 9 going towards Mumbai as the Hi-Tech city, which today houses a number of Indian and MNC IT giants, these food chains opened new branches in the Hi-Tech city, catering to the employees of IT firms and their families. A few attempts were made by innovative entrepreneurs to corporatize the biriyani. One such attempt was the Hyderabad Biriyani House. Started as a private company, the firm offered a range of Hyderabadi dishes and just not the famous biriyani. Here comes a catch! There are two major schools of Mughlai cuisine in India. The North Indian Lucknowi cuisine is better known to the world, due the fact that foreigners who visit the Delhi-Agra-Jaipur circuit in winter taste it and carry the praise back, telling others. What is lesser known and equally rich in range is the southern counterpart of Lucknow – Hyderabad. Due to lack of patronage and offerings, many of the famous Hyderabadi dishes are not known to the general public except the biriyani. Notable of them is the famous chicken dish known as Badami Murgh – made with a paste of cashew and almonds and Imli Ka Gosht – an unusual mutton dish made with tamarind leaves. There are other dishes like the Mutton Samosa, known all over the city as Lukmi, Mirch Ka Salaan – a dish made with green chillies and goes as accompaniment to the biriyani and Haleem – a version of the original Haris – that came with Turkish invaders in 12th century, Haleem is made of mutton pieces and wheat husk and is sold in large numbers during the Ramadan – the holy month of Islam. Millions buy

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the Haleem in evening and lakhs of devout Muslims break their Ramzan fast with Haleem and Sheermal – a bread. Another dish is the Hyderabadi equivalent of the famous Lucknowi Shammi Kabab – known as Seekhampuri Kabab, which is a mutton kabab stuffed with hung curd and fried, the curd breaks out when eaten. These dishes are offered by 2/3 famous restaurants in the city. One such well-known restaurant is Jewel of Nizam – which won several awards offering a wide range of exclusive Hyderabadi cuisine, the other is Rubayat – in Hi-Tech city, known for its range of Hyderabadi dishes. The Hyderabad House was the first attempt by two entrepreneurs to form a company and sell a range of Hyderabadi dishes in welldesigned outlets all over the city. The firm offered a range of over 50 dishes to start with, in form of readymade food items displayed in racks with heating arrangements and was received well by the locals. However, as the company expanded it experienced a problem most common in food industry – a high turnover of the chefs and the company ran into quality and supply chain issues. Dishes displayed on the menu often went missing and patrons started complaining about the food quality. Eventually, Hyderabad House closed down. There are well known restaurant chains like Sha-Ghouse, Paradise, Rubayat and Bawarchi – offering a wide range of Hyderabadi dishes. But these chains never ventured beyond Hyderabad, even into South India. Two enterprising software engineers, who made their money in USA and grew up eating biriyani in lanes and bylanes of Hyderabad in 80s in non-descript small Irani hotels, who are not known beyond the area, but offered a fabulous experience in terms of taste at a reasonable price. The duo decided to tap the expertise found in these small and unknown hotels, who had biriyani chefs coming from lanes and bylanes of the old city beyond the famous historic Charminar monument. They returned from USA to start a company called, Shaan-E-Hyderabad (SEH). The glory of Hyderabad! They

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visited the lanes and bylanes of the old city beyond Charminar and picked up a team of ten young but talented biriyani cooks aged between 18 to 25, who has seen biriyani made in their house as a child and knew instinctively what makes a great biriyani dish. Very interestingly, within Hyderabad the biriyani has a number of variants. One such variant is known as “Safeda Biriyani” or the white biriyani. The tale goes that the Safeda version was eaten by the Nizam when he was not well! The Safeda version is less spicy and less known and doesn’t sport the usual colourful look in white, red and yellow, but when cooked properly with just 2/3 main ingredients gives off a beautiful and delicate aroma. SEH decided to focus on the Safeda version and just offer the biriyani in four variants – mutton, chicken, veg and egg. One of the duo, also had an MBA from Wharton and knew about previous failure stories to corporatize the famous cuisine. They decided to stick to three basic keystones of good management: • Back the staff well, treat them as partners of the growth story, prevent turnovers. • Train them in modern cooking methods, codify the knowledge into cooking manuals and prepare a book of standard operating procedures – just like McDonald’s. • Stick to a fewer range of foods – just the four varieties of the biriyani. The ambition was to make the Hyderabadi biriyani a national level dish. SEH opened six outlets at six key places and used digital marketing extensively to advertise. SEH’s USP was clean and hygienic and well packed biriyani at the same price as found in Irani hotels, but which can be carried home or ordered online. The biriyani pack arrived at the doorstep within an hour of ordering from anywhere in the city. The Hi-Tech city IT crowd simply loved it – as the hassle of visiting a joint was done away with and the food was not spicy – the Safeda version, tasted fabulous and was affordable. SEH rapidly expanded into 15

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branches all over the city and into the nearby metro – Bengaluru, which also housed a large IT crowd and very soon within a year of starting SEH was clocking a turnover of 4 crores in a month. By 2019, SEH was a 50-crore enterprise with more than 100 employees, a distribution agency which delivered the packs and a team of 50 dedicated chefs, well trained by some famous chefs coming from ITC group hotel: - Grand Kakatiya in Hyderabad. An investor saw the success story and proposed to invest another 50 crores and offered SEH extensive management support to expand beyond the two southern metros of Hyderabad and Bengaluru into 4 other metro cities first and into tier II cities like Nagpur, Pune, Coimbatore, Lucknow, Jaipur, Ahmedabad next. He proposed that SEH commences operations in Delhi-NCR region, where familiarity with Hyderabadi biriyani is very high and there are already a number of companies like the Biriyani Blues, Biriyani By Kilo offering the Hyderabadi variety – which was not really Hyderabadi! Their offerings in no way matched the aroma found in lanes and by lanes of Hyderabad and the offerings were just variations of the Lucknowi variety. There is a huge market in Delhi-NCR for Hyderabadi biriyani, especially people will love the Safeda version – the investor argued. The following challenges were envisaged by SEH: • Supply chain management issues – which can be managed, especially carrying some typical ingredients from Hyderabad – the spices like dried stone flower, which is the main ingredient of the famous aroma of the Hyderabadi variety, Shahi Jeera and Kabab Chini – these ingredients are not found locally all over India, except again in Delhi. The dried stone flower, known as “Patthar Ke Phool” is not found anywhere in India – which is crushed into a powder and mixed with mutton or chicken to give that peculiar and unique aroma.

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• In Delhi, Kolkata and Mumbai – a biriyani eating culture prevailed. Each city had its own version, known as Kolkatia Biriyani or Mumbaiya Biriyani and so on. However, beyond these three large metros and Lucknow, the company found the market potential is not large. Some cities like Pune, which again houses a large IT crowd may receive the offerings of SEH well. But in cities like Ahmedabad, Jaipur and in other large southern cities there is no biriyani culture. And the biriyani culture is virtually non-existent in North-Eastern part of India. Hence, all in all the company didn’t envisage the explosive growth projected by the investor from 50 crore turnover to 500 crores and beyond. The company feared that the investment of 50 crores will not yield even a 20% return. As of today, the company was enjoying a 40% return on its investment and was highly profitable with strong cash flows. • The third and major problem was finding cooks or carrying a team of cooks from Hyderabad – this gave rise to family issues. Hyderabad and Bengaluru are just 600 km apart, reachable over night by several Volvo bus operators and connected by an excellent six lane highway and three trains including the Bengaluru Rajdhani, which travelled overnight to Secunderabad, halted for engine change to the WAP series and ran at speeds exceeding 120 kmph from Secunderabad to Delhi. So, it was feasible to have a team of cooks in Bengaluru, who lived without their families there and travelled to Hyderabad with scheduled breaks. Carrying a team of cooks to the three big metros was a very challenging assignment and nobody was willing to leave Hyderabad! The alternative was to train a team of cooks locally in the Safeda variety, who were already cooking biriyani in these three metros – but spill over of knowledge by poaching and imitation threat loomed large.

CASE

7

Just fire the wrong people or innovate new management practices as well

Note Reference case: “Can You Fix A Toxic Culture Without Firing People?” by Francesca Gino, HBR November-December 2018 The main theme and issue are similar to the original case; however, names, characters, place and business context have been changed to Indianize and give a twist to the case. Case facts: Patel Group of Industries is a large Hyderabad based conglomerate. The main and the largest business is manufacturing of railway sleepers, which are laid down on a bed of ballast. Heavier concrete sleepers started replacing the older steel sleepers on the tracks of Indian Railways since late 1990s. IR wanted to speed up both the express and goods trains. Most of the IR tracks suffered from poor sleeper support, not allowing trains to exceed 90 kmph. Whereas the coaches made by the Integral Coach Factory, especially the LinkHoffman-Bosch coaches made with German technology could attain speeds of 160 kmph. The WAP series electric locos made in Chittaranjan Locomotive Works with collaboration from ABB could touch speeds up to 200 kmph. The bottleneck were the tracks! IR started a massive track upgradation programme in mid-1990s. The first two routes to be upgraded were the Howrah-Delhi line, this was first upgraded to 140 kmph with steel sleepers in 70s, when IR started the first Rajdhani Express, now with concrete sleepers IR wanted to upgrade the speed

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quotient to 180 kmph on the Delhi-Howrah and the DelhiMumbai route. The new Konkan Railway line running from Mumbai to Thiruvanthapuram all along India’s west coast and all the 1700 km of it were to be laid down with concrete sleepers supporting 180 kmph speeds. The Patel Group had a sleeper manufacturing division at Madgaon, which is a station on the Konkan railway route and the group bagged large orders for concrete sleepers for next ten years starting from 1997 from IR. Of course, the contract had to be renewed every year, but given the excellent relations the group enjoyed with IR officials, this was not a problem. The Group’s other company was a firm called – SHC. Satvik Health Care. SHC was started in 1995 to manufacture syringes and intravenous sets used in hospitals. This was a recessionproof business! Hospitals, dispensaries, clinics and doctors were always demanding syringes and IV sets and demand perennially exceeded supply in 1995 (it does even today). But the rates were fixed by the government for supplying to certain segments, such as government run healthcare units and tight cost control was necessary and cost audits were mandatory. However, even with price restrictions, the plant could make enough profits with professional management in place and modern automatic CNC machines. SHC was a classic case of toxic culture! Started in 1995, the owner of Patil Group – who was progressive enough and was well read made the mistake of personal supervision and kept spies all around the factory – this promoted a culture of mistrust, disbelief, frequent shouts, low employee morale, high turnover, faulty production, rejections by hospitals, poor capacity utilization and the final result was heavy losses. Mr. Patel realized his mistake and he being from Bengaluru knew a few IIM B professors. He consulted them. They suggested to appoint a professional CEO and give him a complete free hand without interference, till the plant starts

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posting profits. He should only call the CEO once in a week and get the progress report. They also advised firing of the spies – who never really worked or contributed, their sole and whole occupation was to snoop around and report! He was advised to throw them out or transfer them to the profitable sleeper division in Madgaon with no significant responsibilities. Some of these spies were direct family members of Mr. Patel and the last thing he ever wanted was to see them jobless. He knew if they are fired, they will never find another job anywhere else, as they were not sufficiently qualified. Mr. Patel was looking around for a professional CEO, experienced in the healthcare sector and he found a Korean gentleman – Kim Jung Park, who worked for the US giant – Becton Dickinson earlier and was well experienced. KJP as he was referred later on demanded to meet the Cost Accountant, who used to supervise the shopfloor and keep cost records to know the real condition of the plant. After getting a detailed report KJP decided to transfer the spies, and fire the production head and the stores head – who was found stealing material by the accountant. The material input and output never matched at the end of the day. SHC used two basic raw materials – polypropylene plastic and polyvinyl chloride plastic, PP and PVC respectively. PP was used to make the plastic parts, PVC the pipe section of the IV set which transfers the medicine to the patient through the needle. SHC made all the three parts of the IV set – the plastic part, the needle and the pipe. The complication was that PP was recycled three times and PVC was recycled once – due to chorine being an abrasive chemical, which reacts in heat. The CNC controlled injection moulding machines produced a lot of scrap – 60% in case of PP and 55% in case of PVC. The scrap was fed into the machines again. Finally, the scrap was sold after three feeds for PP and once for PVC. It took some time for the accountant to understand the material input-output ratio and calculate. Once he understood he modelled it in an Excel

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sheet and found that a few kilos always went missing! The input-output ratio after morning weighs and after 24 hours of production never matched. Few kilos always went missing! It took some time for him to understand that there is a pattern in the mismatches! Material is not going missing at random. He reported this to Mr. Patel. He ordered the Chief Accountant in the office to investigate and the culprits were found! Material was being stolen – the scrap and a number of people were involved in it. KJP ordered dismissal of the production head and a few engineers involved in the stealing process. He transferred the loyal employees of Mr. Patel to the profitable sleeper division. The culprits are out! Thought he! However, even after the culprits were out, the plant continued to make losses. A productivity comparison study done by the Cost Accountant showed that SHC was suffering from improper plant load factor and below par productivity. The machines were not giving the desired output – they were operating at 80% of the rated capacity, the rejection rate was higher than usual – especially so in case of needles – which suffered a rejection rate of 20%! Simply unacceptable in an era of lean manufacturing and total quality management systems. Also, the throughput time – the time taken for the material to load in the machine and the time for dispatch was 25% above the desired levels. Clearly there was a serious and hidden ghost dogging the plant! KJP ordered a productivity study by an external agency, commissioned from the Administrative Staff College, Hyderabad and he summoned experts from the National Productivity Council. The reports shook the top management after two weeks. The consultants reported the following reasons: • Low morale – a sense of fear and a sense of disengagement. People really don’t want to work here.

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• An atmosphere of distrust, information hoarding culture and silence – people prefer to not to speak up. • Low skill level of machine operators and they want to leave. • A culture of one-upmanship, people want to pull each other down. • Zero coordination between shops – the plant had four shops. The needle shop, the PP shop, the PVC shop and the final assembly. All in all, 700 workers and engineers worked in the plant and level of coordination, trust and transparency was absolute zero! Resulting in poor material movement and plant. Mr. Patel was devastated! SHC was his dream project. He wanted to become an industrialist in the healthcare sector, he had dreams of building another Reliance Industries – the largest private sector manufacturing company in India. He didn’t want to remain a concrete sleeper supplying contractor for Indian Railways. He went into a self-blame mode; I am only responsible for this! He mused. I should have run the unit professionally from beginning! Thought he. KJP had other opinion. He encouraged Mr. Patil. The plant can be salvaged. We should not fire any more people and we require a cultural re-engineering. We need a good production head, a good maintenance head, an industrial engineering expert who will work with the Cost Accountant on the shopfloor and a good and real seasoned IR head – who can handle industrial relations and spruce up the morale of the workers. Mr. Patel gave KJP a free hand – “do whatever you think is right!” said he. I have money, but no brains! You are my brain and go ahead.

CASE

8

Expand rapidly or one outlet at a time?

Note Reference case: “Did We Expand Too Quickly?” By Simon Greathead, HBR November-December 2019. The main theme and issue are similar to the original case; however, names, characters, place and business context have been changed to Indianize and give a twist to the case. Case facts: Black-Choc is a shop situated in no. 4 market of CR Park, New Delhi, opposite the famous Kalibari of CR Park. The shop was situated right next to Annapoorna – the most famous Bengali sweet shop in CR Park, known for their exclusive and high-quality Bengali sweets. Among the Bengali families of CR Park numbering to more than a lakh, families spread over 20 odd blocks, a visit to Annaporna for a festive occasion is a must. Large orders from the shop are placed on special occasions such as marriage, or anniversary or birthdays. Black-Choc took full advantage of the fact that being situated right next to Annapoorna will increase footfalls. There is hardly anyone who doesn’t like a chocolate bite! Black-Choc came up with a novel concept: handmade chocolates with different flavours, as many as 20 to start with, like whisky flavour, rum flavour, strawberry flavour, orange, marzipan, mint, vanilla, butterscotch, dark chocolate, almond and cashew and so on. This was way back in 2000, when the only reputed brand in the market was that of Cadbury’s. and Cadbury didn’t market these flavours. Cadbury had a limited range: mainly plain milk chocolate, a 2/3 varieties with nuts and dark

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chocolate. So, there was a huge untapped market for a wide range of varieties as available in western countries and BlackChoc encashed on it. Black-Choc started with 20 varieties; small bite sized packs wrapped in attractive and colourful paper, priced at Rs. 5 each. In 2000, 5 Rs /piece was not an expensive amount, neither too less, just right. The maker of Chocolates came with chocolate making experience in West. He learned the techniques of making the basic chocolate from cocoa, and in different versions such as dark and bitter bars, plain bars, mixed with coffee or other ingredients. The basic chocolate bars were then melted and given a filling of flavour, shaped and cooled in to round sized balls, wrapped and sold. Two factors helped the shop experience success right from day one. The first was the high footfalls in Annapoorna sweets, people came to buy sweets, saw the chocolate shop and explored it. The second was a wide range of chocolate – 20 varieties, all the Rs. 5 per piece and attractive packing options were given to wrap 20/30 or more number of pieces nicely as gift pack and present to someone on a special occasion such as a birthday or anniversary or carry a gift box to someone’s house, when invited for a lunch or dinner. The chocolates represented a very good alternative to the usual sweets and cakes or a bottle of expensive whisky – which is the standard culture in Delhi for a long time, when one friend invites another for lunch or dinner on a weekend and both are drinkers. Carrying a gift box of chocolates for the family – especially if the friend had children was an excellent proposition alongside the whisky bottle. Delhiites, Bengali and non-Bengali alike knew about Annapoorna sweets and visited the shop. They started visiting Black-Choc as well and soon the chocolate shop was flooded. People were visiting the chocolate shop first now and Annapoorna next. Annapoorna experienced a 100% rise in sales because of Black-Choc and obviously they were loving it!

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Over a period of time by 2001, Black-Choc was a hotspot! Right from morning 10 am till evening 10 pm, people were visiting the shop to buy chocolates. Black-Choc’s founder was a trained and professional baker with extensive baking experience abroad. He introduced a wider range of confectioneries by 2001. Just not chocolates. He started selling a wide variety of non-cream cakes. At that time in Delhi, all the bakeries mostly sold cakes with heavy cream toppings, such as the standard Black Forest cake. Non-cream varieties were not available, the notion being that cakes had to be sold with cream toppings. Whereas consumers were becoming more calorie conscious and aware of cake varieties with increasing exposure to the Internet. There was a large untapped demand for non-cream cake varieties, such as the carrot cake, plain English pound cake, which is consumed with tea in UK in large amounts, the dark chocolate cake with walnut, orange and honey cake, and the famous rum soaked cake with fruits – a must in West on Christmas. Black-Choc’s owner understood this and introduced a range of ten non-cream cakes, sold in half kilogram and one kilogram at a reasonable price ranging from Rs. 100 to 500. The cakes were a hit as well! Soon the issue came up – which happens with every success story, to expand or not? To which locality of Delhi? By 2010, the founder passed on the management to the next generation. His son was also a Institute of Hotel Management (under ministry of tourism, Government of India and IHM has 20 institutes all over the country, the most famous IHM being that of Mumbai, Kolkata and Delhi and these three IHMs have produced a number of outstanding chefs, who won a Michelin star) trained graduate and did an MBA after that. The son wanted to diversify and expand the Black-Choc brand by opening a restaurant and offering a wide range of deserts. The idea of such a shop was already viable by 2010. As restaurant specializing only in deserts were common in Kolkata, Mumbai, Pune and Bangalore. Delhi was just seeing

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desert style niche restaurants coming up in high end locations such as the GK 1 and GK 2 market. One restaurant specialized in Spanish, Italian and French deserts and was doing roaring business in GK 2 market. But there were problems. The Black-Choc brand was well known to people in south Delhi, who often visited the shop. The south Delhi’s population is more cosmopolitan compared to other parts of Delhi. Delhi has a population widely varying by location. South Delhi has a large immigrant population, especially Bengalis and well to do corporate professionals and affluent businessmen. These people were willing to spend a few thousand rupees on deserts on weekends, after a meal in one of the high-end Chinese or Continental joints found in GK 1 and GK 2 markets. West Delhi’s population is largely comprised of Punjabis, whose grandparents migrated to India in 1947 and settled down all over West Delhi, beginning their lives by selling Chole-Bathure and Tandoori Chicken – the two well known and popular Punjabi dishes. It is not that the Punjabis didn’t like chocolates! They too flocked the shop. However, the idea of a desert style restaurant was not a viable idea in any other part of Delhi. North and East Delhi housed a large immigrant population coming from neighbouring state of UP. West Delhi had a large immigrant Jat population as well, who came from Haryana. All in all, the idea of a desert style restaurant was not viable in any other part of Delhi. It was viable only in Gurgaon – which housed a large and professional crowd working for automobile factories and in IT firms and in South Delhi. The real estate prices were prohibitively high in both places and the investment may not pay off so soon. What was a viable idea was to open a series of small outlets at strategic locations near metro stations. By 2010 the Delhi Metro network expanded all over Delhi and it was a good idea to open a small outlet just opposite a metro station. People will come out of the station and notice the chocolate shop. Chocolate

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was a universal sweet and loved by all and at a price of Rs. 10 piece it was a viable idea to sell chocolates and non-cream cakes. Choice of location was critical. The instant success BlackChoc experienced was due to the presence of Annapoorna sweets in the market and the fact that people who visited the sweet shop were real sweet lovers. So, it was imperative that the shop is located next to a popular sweet shop or snack joint selling Chole-Bathure and South Indian snacks. Typically, locating the shop next to a Haldiram or Bikanerwalla outlet was a good idea – as these two were strong brands and witnessed a large footfall every day. People visited these two outlets for a dish of Rajasthani snacks, Chole-Bathure, South Indian snacks such as the Dosa or Idli and to buy the wide range of Bikaneri sweets these two outlets offered. Black-Choc scouted for such locations and started three outlets, two in West Delhi and one near the Red Fort in the market situated on Chandni Chowk – which saw a large number of tourists visiting the historic monuments every year. By 2011 the three branches were success stories with large sales coming from 30 different varieties of chocolates and non-cream cakes. Now came up 2 key strategic issues: (a) Keep opening only chocolate outlets, one at a time or expand rapidly now to other locations, especially in the four satellite towns of Noida, Ghaziabad, Faridabad and Gurgaon? (b) Diversify into a wider range of western desserts and start with one outlet in Gurgaon – in the Udyog Vihar location of the city which housed a huge number of IT firms. The Udyog Vihar location was a well-planned area with designated slots for markets, malls and eateries. The dessert style joint will need an initial investment of Rs. 5 crore.

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The owners had nearly 10 crores in the bank – a healthy bank balance earned over 11 years of selling chocolates. Investing half that amount was a viable idea. The son’s dream was to open a dessert restaurant – offering French, Spanish, Italian, British and American desserts. The father was suggesting to invest the amount to open a series of 7/8 small outlets all over the national capital region in busy market locations, such as the sector 10 market of Faridabad, sector 50 central market of Noida & so on. These locations required and investment of 70-80 lakhs each and this seemed a more viable idea than opening a high-end dessert speciality restaurant in one location. The son was arguing in favour of up-skilling and diversifying deeper. The father was in favour of playing it safe and stick to the CORE COMPETENCE well refined over 11 years in chocolates. However, the father was unaware of a competitive threat – emergence of more chocolate makers like Black-Choc. They were not yet in Delhi, but boutique and speciality chocolate joints were fast becoming common in large metros like Kolkata, Mumbai, Hyderabad and Bengaluru. Especially the two southern cities housed a large IT crowd, who visited USA and was aware of such chocolates. Chocolate joints like Black-Choc was spreading fast in Hyderabad and Bengaluru. Soon they may be in Delhi too! Kolkata already had famous bakers like Nahom and Flouries – for ages making homemade chocolates and non-cream cakes. Nahom in Kolkata was more than 50 years in the New Market. The father was unaware of this future competitive threat, the son was – being from IHM Kolkata and so he wanted to diversify into desserts, anticipating that the boutique chocolate market may soon be commoditized and become a red ocean. An investor came up with an idea – seeing the success of Black-Choc. He proposed to pump in Rs. 5 crore into a high-end dessert style joint and 3 crores into 5 chocolate outlets in five locations in Delhi-NCR.

CASE

9

How viable is the big idea?

Note Reference case: “Bet on One Big Idea or Diversify?” by Toby Stuart. HBR November 2013. The main theme and issue are similar to the original case; however, names, characters, place and business context have been changed to Indianize and give a twist to the case. Case facts: Sanyog Institute of Management (SIM) was situated behind Apollo Hospital on the Kalindi Kunj – Noida road. There are four approaches to Noida from Delhi and the oldest bridge was the Kalindi Kunj bridge over the Yamuna. It was a two-lane bridge and as the traffic between Noida and Delhi increased due to more and more people started living in Noida and commuting between Noida and Delhi, the bridge was made into a four-lane bridge. The second approach to Noida is over the DND flyover and the third one via the Nizamuddin bridge and Over the Akshardham temple. SIM was strategically situated over the main road and in between two metro stations of the violet line and magenta line. The institute’s glass building was visible from a distance. The locality around the institute was good with a wide range of paying guest accommodations available for students, a number of eating joints offering good food at a reasonable price, with a major mall nearby for shopping. All in all, a good location for students.

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SIM was a mid-range business school. Not counted in the elite league. The business of business school expanded rapidly since late 1990s, as the banking and FMCG industry demanded trained MBAs for selling banking products and FMCG products. These two were the largest recruiters for second and third tier MBAs. In late 90s there were seven Indian Institutes of Management, commonly known as IIMs. The oldest was that of Kolkata, opened in 1960 and Ahmedabad, opened in 1961. The third IIM was opened by the Government in 1973 in the city of Bengaluru and the fourth one was opened in Lucknow in 1984. The fifth one was opened in Indore, the sixth in Kozhikode in Kerala and the seventh in Shillong in the state of Meghalaya. Over and above the seven IIMs, there were department of management in IITs. Indian Institutes of Technology. IIT Delhi, Kharagpur, Kanpur, Roorkee and Mumbai had management department. They were known as schools of management. The best-known today is the Sailesh J Mehta Schools of Management or SJMSOM – IIT Bombay. The department of management studies IIT Delhi or the DMS IIT D is also well known, as is the Vinod K Gupta School of Management, Kharagpur. Over and above these ten national level B-schools, there are some private schools or quasi-private business schools, which are counted in the top league. The first of them is XLRI Jamshedpur, rated on par with the three oldest IIMs – A/B/C. Established in 1949 as Xavier’s Labour Relations Institute of XLRI, the school made a name for its course in Personnel management and Industrial Relations, the school also enjoyed backing of the Tata Group – two of its large plants situated in Jamshedpur, of that of Tata Steel and Tata Motors (erstwhile TECLO). Half of Jamshedpur is known as the steel town, the other half is motor town. The railway station that links Jamshedpur is Tata Nagar, situated on the arterial Howrah Mumbai main line and is 251 km from Howrah, well connected by a number of superfast trains going towards Mumbai via

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Nagpur. The rail line also connects a number of steel plants, notable of them being the Rourkela plant of SAIL, Steel Authority of India, the public sector steel giant. No doubt over the years XLRI prospered as one of the top business schools in India and attracted eminent corporate personalities and talented faculty. Some of the other top private business schools in India include the Jamnalal Bajaj Institute of Management studies under the Bombay University. Situated right next to the Hindustan Uni Lever corporate office, the saying goes that students enter the JSIMS building and enter the HUL office after two years. To an extent this is true and JSIMS has been the happy hunting grounds for HUL for years now to recruit and groom brand managers – HUL’s core competence and the Anglo-Dutch FMCG giant is known in India for a number of top brands, including one of the oldest surviving brands in India – Lifebuoy soap. The other top private b-school is the Management Development Institute – situated in Gurgaon. Started in 70s by three public sector banking giants, over the years as Gurgaon evolved into an automobile and IT hub, MDI gained prominence as a top b-school attracting good faculty and students alike and is rated in the top ten consistently over the years. Over and above these top 10 schools, there is a clutch of b-schools counted as good schools. These included two schools from Delhi and Ghaziabad. Institute of Management Technology Ghaziabad and International Management Institute, Delhi. IMT has grown over the years as a good business school. IMI is owned by one of India’s large corporate houses and this school too grew into a good b-school. Over and above IMT and IMI, Delhi also has FORE School of management, rated as a good b-school. There are other b-schools situated in Mumbai such as the Narsee Monji Institute of Management Studies – NMIMS and SP Jain Institute of Management, Goa Institute of Management in Goa, Bharathidasan Institute of

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Management in Tiruchirapalli – backed by the PSU giant – BHEL, who has a large plant in the town. Chennai houses the Great Lakes Institute of Management, rated as one of the good b-schools and Xavier Institute of Management, Bhubaneshwar also falls in this category. All in all, there are about 10/12 second level b-schools, rated as good and attracted campus visits from top companies, especially banks and IT /FMCG firms – the largest recruiter of MBAs. Apart from these b-schools there exists a large number of other schools all over the country in major metros. These schools catered mainly to those who didn’t get high enough common admission test or CAT scores to qualify for the top 25 schools including the 7 IIMs, 3 IIT schools, MDI/JSIMS/XLRI or the other good schools. To join the top ten, one had to get a 98 or 99 percentile CAT score – that is to be among the top 2% of the candidates in the relative grading system. To join the second-level b-schools one had to at least get a 90-percentile score. There were a number of MBA aspirants who scored below the 90 mark and they wanted to do an MBA too! Many schools catered to this crowd. Among the companies there were a number of them who didn’t want to hire at a high price for routine selling jobs of banking products, FMCG products or selling of IT related service and the BPO/KPO companies – who made money by outsourcing the back-office operations of large western MNCs. The BPO/KPO companies needed a large pool of trained personnel at low costs and couldn’t afford hiring from the top 25 schools. So, these schools catered to this corporate segment. The average salary package in this third level schools ranged from Rs. 2 lakh to 8 lakh. SIM’s placements were quite good due to locational advantage and the largest recruiters over the years were the banks – chiefly ICICI and HDFC bank. the school had 120 seats, due to a high degree of banking placements, many students took finance as major and these two banks picked up more than half of the students at an average salary package of Rs. 4-6 lakh, employed them in selling bank loans.

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The demand for banking personnel kept increasing over the years 2000-2010. The institute commenced its business in late 90s and by 2008 was attracting a fair amount of level III talent. It was receiving 7000-8000 applications for its 120 seats. The owner was aware of the fact that the school is rated as a tier III school and had ambitions of taking the school to top league on par with MDI/XLRI! He had a big idea and one day summoned his faculty team and the director to discuss over a long meeting, on a Saturday when classes were not held. The institute observed a five-day week, students came on Saturday to the campus for other activities, mainly extracurricular such as organizing seminars and shows or just to sit and read in the well-equipped library. The owner mooted his idea: To convert the school into a research-oriented institution. Tie up with either Indira Gandhi Open University or Jamia Milia Islamia university for PhD. The owner had good links in both the places, both are central universities. The JMI’s commerce department was more than willing to collaborate and offer a PhD in commerce and banking. This went well with the institute’s identity as a happy hunting ground for banks. The big idea – convert AIM into a specialized banking institute and at a later stage tie up with the State Bank of India’s banking institute, which imparts training to new recruits into the banking system. Convert the PG Diploma into a specialized banking course and offer a PhD from JMI in commerce to students who want to study further. These students will be guided by AIM’s faculty and publish papers in finance and banking related journals. Any b-school is rated on two parameters: (a) the number of research papers its faculty is publishing in refereed academic journals, and (b) the average salary package of students and quality of companies coming to the campus. The owner was aware of the fact that SIM is already attracting top tier private banks. The salary package was much

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below than that of students recruited by the same banks from tier II or I schools. The salary package offered by banks in tier II schools exceeded Rs. 12 lakh and in tier I 20 lakh. In AIM the salary package was 6 on average – below par. The owner wanted to come out of this vicious cycle. He wanted the school to admit best talent available in banking and finance and suggested the faculty members to design a separate numeric aptitude test to filter and admit students who can excel later on in finance subjects and do PhD – it is the PhD which will significantly raise the salary and the PhD scholars will contribute to publications. The idea didn’t meet with universal approval and support from the 30 odd faculty members. Over and above banking, they argued that a number of good companies are coming to recruit for marketing too like Nestle and ITC’s Sunfeast division, the UB group, Gillet, and the automobile companies like Hyundai, Ford, Maruti and Honda. Hence it is wrong to say that AIM is on its way to become a specialized banking institute. PhD can be offered for marketing as well. To this the owner replied that the PhD offer came from the commerce faculty of JMI and it was only for banking and finance, not marketing. To this the faculty suggested the following: (a) Expand the number of seats from 120 to 300 and the approval from AICTE was already there for 360 seats. (b) Offer three more MBA streams – (a) banking, (b) marketing, and (c) international business over and above MBA general – which is the original 120. (c) Tie up with JMI for the specialized banking course of 60 seats – to offer PhD in commerce and banking. (d) This will also improve the salary quotient. (e) Paper publishing should not be just restricted to the finance area and PhD scholars should not just remain in the finance stream – wider range of papers must be published in all fields.

CASE

10

David versus Goliath: What the store should do?

Note Reference case: “Competing with A Goliath” by Jill Avery. HBR October 2016. The main theme and issue are similar to the original case; however, names, characters, place and business context have been changed to Indianize and give a twist to the case. Case facts: Roshan Store (RS) started business in 1995, in a downtown area of Faridabad, Sector 8. The town of Faridabad in 80s was a blue-eyed town of the then Haryana Chief Minister, Bhajan Lal and he started industrializing the state by bringing in the Maruti Factory in 1981. In 1983 the first ever Maruti-800 rolled out of the Gurgaon factory and thus the auto revolution of India started. Modern Japanese bikes with 100 cc engines were already there in the market. Suzuki was to first company to venture in the Indian market with its Max-100, a 100-cc fuel efficient bike. Hero-Honda with its famous slogan – “Fill It-Shut It-Forget it” came in 1985. Prior to Honda another Japanese giant – Yamaha was in the market with Yamaha-350, a superfast and powerful bike that caught the imagination of the youth and the superhit RX-100 was launched later by Escorts. Faridabad in 1980s started industrializing. A number of factories came up. There was Escorts company who made the Rajdoot brand of 175 cc bikes. Later Escorts tied up with two MNCs – Yamaha to make the RD-350 and RX-100 and with

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JCB to make earth moving equipment. Escorts in 80s and 90s had four factories making bikes, earth movers, bull dozers, tractors and cranes and employed 20,000 workers. The refrigeration giant – Whirlpool had a factory, employing 2000 workers. Eicher Motors came in 80s making mini trucks in collaboration with Mitsubishi and they employed a large workforce. Over and above these large employers, there were a number of auto ancillary companies, like Sanden Vikas – making car a/c compressors, Havells making electrical equipment and lamps. The national highway 1, better known as the Mathura road which started from the Badarpur border in Delhi cuts across the town of Faridabad all the way up to Agra and then onto Kanpur and beyond. This is the original Grand Trunk Road, which before 1947 ran from Dhaka to Peshawar and after independence Kolkata to Amritsar via Delhi. On both sides of the highway right up to Ballabgarh – a station on the super busy Delhi-Mathura rail route factories of various shapes and sizes dotted the Faridabad landscape for nearly 40 km. Faridabad by mid-1990s was a premier industrial town with a number of heavy industries. It had around 50 sectors and was divided in two parts – old and new Faridabad. There were also two railway stations bearing the same names. New Faridabad started after sector 16 – which houses the Old Faridabad railway station on the Delhi-Agra route and all EMU trains and a few express trains like the Taj Express stop there. The funny part of Faridabad is that the numbering of the sectors. Sectors with higher numbers were near the Delhi border. For example, right after the Badarpur border was sector 37. This reverse order went right up to Ballabgarh, so the sectors 1,2,3,4 up to 8 are situated near Ballabgarh. Sector 8 was a downtown area, housing people belonging to just middle class or lower middle class. Most of them worked in various factories around Ballabgarh. RS was started by two

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brothers: Rajan and Roshan who grew up in one of the lanes of sector 8 neighbourhood and in the main sector 8 market complex they opened the shop. Business was brisk and quick, however most of the residents preferred to pay on 1st of every month when they received their salaries. So, the whole month practically RS did business on credit for groceries. However, the brothers were well behaved and cooperative and became popular with the residents. The store from 1995-2005 virtually had a monopoly in the locality. First hint of competition came in 2005, when the sector 8 market complex was revamped by the then government with provisions for large stores. On a 500 square yard plot came up a supermarket – MORE by the AV Birla group. RS had competition! That too a strong one – from an industrial conglomerate. But the brothers were unfazed. They knew one thing – they had a large clutch of customers who bought on a monthly credit and this group is not going to go away. MORE will not give them the credit. RS has to match them on the price front and in varieties. Of course, there are limits to the varieties, RS can offer, situated as it was on a 160 sq. yard plot and maintaining a large inventory was a problem. To increase a wider range of offerings, the brothers took up another plot of 160 sq. yards in the market as a warehouse to stock goods. Any one who demanded a particular type of sauce or jam or juice, it could be fetched in minutes. Thus, RS matched the giant in pricing and variety and its consumers loyal over the years stayed away from MORE. MORE didn’t experience increasing footfalls and the management concluded that RS had a dedicated clientele with strong personal relations and they can’t break that bond so easily. After incurring losses for 3 months MORE went away! It was a major cause of jubilation in the family! The brothers celebrated departure of MORE Supermarkets that day. Little they knew about what lay in store for them! A year down

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frenetic activity was witnessed in sector 8 market. Three 160-yard shopping plots were joined with the plot vacated by MORE. Rumours were rife – a big player is coming. When the brothers asked the workers, they replied in negative. They didn’t know who was coming! In next one month a huge building with centralized air conditioning system was constructed on the 1000-yard plot. By now RS knew who was coming – BIG BAZAAR!! The Goliath of Indian retail is finally here! Competing with MORE was a different proposition, competing with BIG BAZAAR is an altogether different proposition! Just the brand name alone is good enough to witness large footfalls from day 1. It is virtually impossible to match them on prices and the wide range of offerings. By 2006, the landscape of sector 8 had considerably changed over the years. The middle-class blue-collar working crowd, who worked on the shopfloor had given way to a more professional and qualified crowd of engineers and IT professionals. The connectivity between Faridabad and Gurgaon improved with a wide four lane highway directly connecting the two cities cutting across the Aravalli forests in between and due to high real estate prices in Gurgaon many IT engineers started living in downtown areas of Faridabad, where rents were considerably lower and started commuting to workplace by pooling cars or their companies arranged taxies to carry 5/6/7 people at a time. This changed the sector 8 landscape. Suddenly, the place was brimming with people speaking fluent English and demanding and complaining about lack of good eating joints, bars and supermarkets. In response a number of sophisticated eateries came up in the sector 8 market, including a few bars – the whole place rapidly changed with young people laughing around the bars till late night. The older working class residents started complaining and many sold their houses to the younger crowd – who had money and was willing to buy houses. A few enterprising builders purchased houses, demolished them and

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erected three/four story flats. The whole sector 8 with a better road, a thriving market, a big hospital, flats looked a very different place by 2007 – than it was when brothers opened Roshan Store in 1995. The Delhi Metro Rail Corporation started erecting pillars to connect Faridabad to Delhi via the Violet line and the four-lane highway was widened to six till Ballabgarh. The working-class factory worker oriented industrial town of 80s started sporting a different look by 2007 with flats, malls, bars, markets more looking like its Haryana counterpart on the west – Gurgaon. Another disturbing trend was noticed by the brothers: the older working-class people were selling off their houses. Two large factories in Faridabad closed down by 2007. The first was Escorts. Escorts couldn’t offer a four-stroke model in the market to compete with Hero-Honda CD 100 and started incurring losses. JCB came out of the joint venture with Escorts for earth moving equipment and Escorts crane and tractor division too started incurring losses due to stiff competition from Sonalika tractors and Mahindra Tractors. All four factories of the company closed down; 20,000 jobs were gone. Eicher closed down its truck factory and another 5000 jobs were lost. The industrial town’s landscape was changing fast, large factories were gone. Whirlpool relocated to Pune and many other factories were shifting out of Faridabad due to worker militancy and aggressive trade-unionism. The working classes were gone and so were their houses – being sold to builders to build flats. The IT crowd was replacing the bluecollar working-class crowd fast. All this had an effect on RS. The store’s sales were down by 60% by 2008. Its clientele gone; the young crowd was flocking to Big Bazaar. RS adapted the home delivery system and invested in a delivery team of 15 people and started taking orders over phone. This to an extent mitigated the situation and sales went up by 20% once again as many of the younger generation preferred home deliveries.

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Someone suggested that RS ties up with Grofers and Big Basket or starts an online version of its own. This was 2010 and the Internet services were powerful enough to support an online delivery system. This required an investment to the tune of one crore. RS had the reserves. Should they go online?

CASE

11

How to handle commoditization?

Note Reference cases: “The Upstart’s Assault” By Merco Bertini & Nirmalya Kumar, HBR July-August 2010 & “Preserve the Luxury or Extend the Brand” by Daniela Beyersdorfer & Vincent Dessain HBR Jan-Feb 2011. The main theme and issue are similar to the original case; however, names, characters, place and business context have been changed to Indianize and give a twist to the case. Case facts: Real China (RC) was a chain of Chinese restaurants opened by a chef, who took specialized training in preparing authentic Chinese food in Australia. He returned to India to open his first outlet in Kolkata. Kolkata’s Chinese food loving crowd appreciated the authentic flavour and aroma of the dishes and soon RC extended beyond Kolkata to other Metros. By 2015, RC was operating as many as 15 outlets in six major metros of India. In India Chinese food has evolved gradually over the years and is a peculiar blend of Indian palette and Chinese flavours. As the celebrity Chef Sanjeev Kapoor terms, it: It is IndoChinese cuisine, that has evolved in India, not the pure Chinese. Chinese food in its purest form is not palatable to Indians – as many ingredients are half cooked or not cooked at all. Indo-Chinese cuisine is a curious mix of sharper sauces, giving a tangier flavour, stir fried noodles and rice and incorporating the famous art of chopping from original Chinese cuisine.

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Here it will not be out of place to differentiate the cuisines of two ancient nations: India and China, neighbours for centuries. Indian cuisine has a heavier use of spices grown in the country. Indian cuisine is all about the perfect balance and mix of spices, resulting in the famous curry. The basic curry has evolved into more than 5000 varieties over the years in different regions in the form of vegetarian and non-vegetarian dishes and hundreds of variations in spice mixes and blends. Indian cooking emphasizes on slow cooking – over dimmed heat and cooking for hours to develop the richness. Spice mix and blends vary from region to region and even from house to house, depending on individual tastes. For example, the famous Biriyani – both the Lucknowi and Hyderabadi varieties use more than 50 different spices powdered together and mixed with chicken or mutton, marinated overnight and then cooked with Basmati rice. The rice itself is boiled with 20 different spices to impart the famous flavour. The biriyani has two basic versions and there are another 20 different versions found in various parts of India, including Kolkata, Kerala, Mumbai, Coorg region of Karnataka, Coastal Andhra and Tamil Nadu, Kashmir & in royal households of Madhya Pradesh and Rajasthan. The Hyderabadi variety itself has more than 10 variants found in the city and not all are known today to the public, as not offered by the Irani joints which dot the city’s landscape. The basic mutton curry may have more than 500 variations today, and there are 1000s of varieties of curries cooked with vegetables, lentil and other ingredients. Not to forget the vast range of sweets and deserts, which vary from state to state. Chinese cuisine fundamentally differs from its Indian counterpart in two ways: (a) the way ingredients are cut using a variety of knives, and (b) the way the final dish is cooked. Unlike Indian cuisine, Chinese cuisine emphasizes on undercooking, or just cooking enough to preserve the freshness and original aroma and flavour of the ingredients. For example, a

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dish which has chicken, duck, pork or vegetables, the main ingredient: chicken is fried lightly with an egg and cornflour coating, the vegetables are chopped fine and in shapes. Then the mix is stir-fried in high heat with a basic sauce and seasonings such as Sichuan Peppercorns or rice wine. This is the basic Chinese method. There are variations, of course, where the ingredients are slow cooked like Indian curry. But the chop and fry method are fundamental to the cuisine and therefore outstanding Chinese cooks train themselves for years in the art of chopping with a variety of knives and the creativity in Chinese cuisine comes in chopping and frying with the correct and delicate mix of sauces and seasonings. Not an easy art to master! As a result, Chinese food is less spicy than its Indian counterpart and is more inclined towards preserving the native flavour and freshness of the ingredients, achieving a very delicate balance between the ingredient’s flavours and sauces and seasonings. This is indeed a difficult art to master and that makes mastering Chinese cuisine so much difficult. Chinese cuisine in India has evolved in a funny way! On one hand there are thousands of roadside Chinese joints, which dot the cities, big and small alike and they sell the standard noodles, fried rice, 2/3 vegetable dishes and 2/3 chicken dishes. Most of the joints do roaring business during lunch and dinner hours. The roadside Chinese is spicier, involving a heavy use of soy sauce, chilli sauce and tomato sauce – thus imparting a hot and tangy flavour, liked by the man on the street. The average Indian likes his food spicy and hot – the degree varies from region to region. So, the evolution of Indo-Chinese cuisine in India has followed a funny pattern, evolving in two ways: (a) the street variety, the most famous street variety being found in China Town – Kolkata, and (b) professional variety – prepared by trained chefs. 90% of the Chinese joints prepare the first one at a cheaper price. The second one is an exclusive domain of

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high-end joints, favoured by the upper class of Indian society who likes authentic Chinese cuisine. RC positioned itself in the second category with a team of trained Chinese Chefs and adapted premium pricing and claimed to serve the authentic food of mainland China – adapted to suit the Indian pallet. It maintained restaurants with exclusive décor, providing an ambience found in premier Chinese joints in China’s big towns with Chinese lanterns and miniature bamboo trees and even the plates on which food was served had Chinese art. It served a variety of dishes, which had a close resemblance to authentic Chinese food. RC became the occasion for visits on birthdays and anniversaries for many Indian families in the six metros, who loved Chinese food. With 15 outlets RC was doing roaring business and all looked well until one day! One morning one of the RC’s waiters noticed an advertisement in the newspaper in Delhi – a Chinese joint opened in a not so expensive location of the capital – Rajauri Garden in west Delhi, in one of the malls in Rajauri Garden, which housed Big Bazaar and residents around the location visited Big Bazaar in thousands for weekly purchase of groceries. This joint was calling itself Oh! China or OC. OC was offering a menu range which looked alarmingly similar to the RC’s menu, but at half the RC prices! There lay the catch! But, of course, they were not mentioning themselves as competitor to RC. The situation warranted investigation and the RC management in Kolkata decided to investigate. Three top managers flew down to Delhi. It was found that OC was founded by a team of three trained Chinese chefs. They learned the ropes of Chinese cooking from China Town, Kolkata and they were pass outs of the Institute of Hotel Management’s (under Ministry of Tourism, GOI) famed Taratola Catering college – as it is known to local residents. The Taratola college was known to produce some of the best chefs India has ever

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seen, many of them have won the coveted Michelin Star. These three chefs came from this college and mastered the art of Chinese cuisine in China Town! OC sported a simple workman like décor with wooden chairs and tables. Served on simple plastic plates and the dishes were alarmingly similar to that of RC and they did represent the flavours of China Town, Kolkata! So, OC cannot be dismissed as Street Chinese stuff! Soon the restaurant was drawing crowds. RC had a branch in Connaught Place, another in Greater Kailash and another in Paschim Vihar, west Delhi. The west Delhi branch soon started making losses with decreasing footfalls. Six months down OC opened up all over the national capital with 10 small branches in busy locations, near metro stations. RC’s Delhi unit started incurring losses, with 75% decrease in foot falls. Innovation and cost management appeared as two major hallmarks behind OC’s success story. Innovation lay in preparation of the dishes, using local ingredients and imparting a flavour very close to that of RC’s dishes. Small outlets, selfservice and less expensive décor led to the reduction of overheads and this allowed OC to serve at half the RC prices. Fortunately, an innovative competitor like OC was confined to Delhi only for the time being. RC mulled a takeover of OC and starting a separate chain at lower prices – made an offer to the three OC owners. They declined! Further investigations revealed that OC like competitors have started surfacing in Mumbai – which houses another famous IHM catering college and in south, Bengaluru, which houses a large IT crowd. Hence the OC threat now can multiply in all six major metros. The RC management mulled lowering their prices by 25% and offer multiple schemes at lower prices on special days. This didn’t work. RC’s management realized that just lowering of prices is not going to work. They have to innovate on the food front! Conduct deeper research and come out with a

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range of innovative new dishes. This may entail a visit to Hongkong, Singapore, Bangkok, Shanghai and Beijing – where best of the Chinese Chefs and restaurants are found. RC had three choices:

(a) Diversify itself with a cheaper range and a new range of stripped-down joints – rather takeaway joints offering online deliveries – offer the same RC dishes at less than half the prices in these outlets – this will not require a major investment, excepting hiring of staff and getting some more trained chefs, especially from China Town.

(b) Innovate and offer a new range of dishes in RC outlets not offered by OC.

(c) Revamp the RC outlets and reduce RC’s overheads and offer the same RC experience at half the prices.

CASE

12

Did we end up being a one-hit wonder?

Note Reference case: “In Search of a Second Act” By Elie Ofek & Jill Avery. HBR April 2013. The main theme and issue are similar to the original case; however, names, characters, place and business context have been changed to Indianize and give a twist to the case. Case facts: Ending up being a one-product wonder is common in business and sports. In sports in international football, cricket, tennis we often see a sportsman making a big initial splash before fading away quickly. It happens very often with actors and musicians. After one hit film or a hit song we don’t hear about the actor or the band anymore. A band often makes a big splash with a superhit rock song, only to fade away, never to be heard again. A batsman after scoring a big hundred in test cricket fades away, a footballer after scoring a few goals fades away in European club football. Inability to sustain, inability to innovate and inability to keep an even temperament in face of an initial flush of success is the real cause. Same goes for business. Very common in automobile industry. A superhit model is followed by a series of failed launches – and this happens to all the big auto giants. In FMCG industry a superhit launch is followed by a series of failed launches and big FMCG giants like Hindustan Unilever or P&G have more failure stories to hide than flaunt success stories. What follows is a story of an electric vehicle maker in Delhi-NCR.

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E-Mobility or EM was a company launched by a team of six IIT pass outs. Three of them sported an MBA from IIMs. The idea was to launch an e-rickshaw first and sell it to rickshaw pullers by arranging a bank loan. In lanes and bylanes of Delhi, the last mile connectivity is an issue and many metro commuters went up to the nearest metro station on their bikes. Parking was always a hassle and fees had to be paid to DMRC for parking. An e-rickshaw powered by battery can accommodate four people and is a good alternative to biking to the station. Also, the lady at home often had to visit the supermarket, which is situated at not a walkable distance. If she is capable of riding a scooter – ok! If not, the problem arises there. Here e-rickshaws present a viable alternative. e-rickshaws are fast becoming popular on the last mile connectivity segment and in many towns of India, big and small. Large educational campuses are actively promoting e-rickshaws as green alternatives for inside movements and they now dot the lanes and by lanes of all cities – big and small as last mile connectivity. They are powered by batteries – which can be charged at home and one charge gives 150-200 km of run and an average rickshaw can carry four people. There are numerous e-rickshaw makers and established two wheeler makers like Bajaj Auto are also in the business of making e-rickshaws and Bajaj is trying now to bring out e-autos. EM Ltd incorporated as a private limited company started with a funding of Rs. 10 crore obtained from a VC fund to manufacture and sell e-rickshaws to e-rickshaw pullers through a loan scheme from SBI – India’s largest bank. The cost of the rickshaw is recovered by the bank over five years and the e-rickshaw puller is given a rickshaw without any down payment – so that he can start earning right away. Of the six EML engineers, one was an electrical engineer, one was an electronic engineer, two were mechanical engineers,

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one was a graduate of computer science and the last one had a MTech in auto design. They took help of their IIT D classmates and designed a prototype that can accommodate six people and had a larger battery. They worked extensively on the battery to incorporate a new design. The aim was to increase the range to 200 km and above for a small four-seater. e-rickshaws are made by many manufacturers in India, big, small and unknown. The big player is Mahindra Electric with its Treo band of rickshaws and Trishul is offering auto. The prices vary widely from Rs. 50,000 to 200,000 with various seating capacities – 4/6/8 seaters and the average battery range is 100-150 km. EML wanted to offer a product at a price range of 75,000, a four-seater and a battery range of 100+. All the battery makers use lithium ion battery. The EML team worked extensively on the battery for months to increase the range to 150 km at least and incorporated a glass front design with comfortable seats for four people. They finally succeeded and the EML brand of rickshaws were soon out in the Delhi market with a tested battery range of 160 km at speed of 20 kmph and a load of four people. EML sold it through the network of India Mart and other e-retailers and with a SBI loan for Rs. 80,000, payable over five years. EML extensively educated the rickshaw operators on the extended range and how to get the maximum range out of the rickshaw. The product was an instant hit and soon EML faced the happy situation of demand exceeding supply. The EML’s manufacturing was outsourced – made in the premises of another e-rickshaw maker. The plant needed an additional investment of Rs. 25-30 crore and EML approached SBI itself for a long-term loan of 10 years. The loan was obtained and soon EML was selling more than 100 units in a month in Delhi NCR market. The product with its good design, glass front, extended battery range and a good-looking instrument panel was an instant hit.

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But competition never sleeps! Soon competitors found out about EML’s success formula and many of them worked on the battery range to improve it to 150 km at least. Sales in the year 2018 was high. In 2019-20 EML faced stiff competition and sold 800 units – 50% down from the 1200 units of 2018-19. The plant which could produce 1500 units in a year was now working at 50% capacity. Once purchased, an e-rickshaw puller is unlikely to come back for a repeat purchase for next three years at least. EML contemplated switching to B2B mode and sell e-rickshaws to educational campuses all over the country. Soon to their dismay they found out that majority of the educational campuses like BHU in Varanasi, or large private universities like Amity in Noida, Jindal in Sonipat, LPU in towns of Punjab or BITS Pilani in Rajasthan – which has a huge campus and houses thousands of students are already choke a block full with e-rickshaw pullers – the B2B market is already a red ocean (refer Blue Ocean Strategy by Kim & Mauborgne in the pages of Harvard Business Review). EML next explored the railway and bust stations – large railway junctions, from where e-rickshaw pullers can carry people to city. These junctions had powerful unions and selling rickshaws there needed negotiations with these unions. An uphill task requiring expert negotiators and large funds. The only way out was to come out with a better product. EML started working on an e-auto project and a variant of e-rickshaw which can be used for cargo. In India a vehicle called Jugaad is widely used by small cargo pullers – up to loads of 100 kg. This contraption is powered by a 150 cc scooter engine – mostly prized out of old Bajaj Chetak scooters, fitted on a cycle chassis and attached with a wooden rack behind. The engine often breaks down and requires repairs. A cargo rickshaw can be a viable and modern alternative to the Jugaad. EML decided to work on a cargo alternative – they designed a rickshaw which has a glass cabin shielding the diver from

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heat, dust and rain and the parcel tray behind was designed with fibre glass – which is better than steel and is rustproof. But the payload was designed for 50 kg – to give the battery a range of 120 km without recharge. The product was priced at Rs. 100,000 and placed for sale in e-retailer sites. The e-cargo rickshaw didn’t take off at all. The main reason? Overloading! The rickshaw failed to pull loads beyond 50-60 kg and this was not at all acceptable to the rickshaw pullers, who often wanted to carry loads up to 100 kg. Just as the passenger version, the Jugaad was a cheap, but unreliable and dangerous option, widely used for last mile transportation of cargo, including groceries to numerous mom & pop stores in lanes and bylanes of India from the wholesaler depots and carry small loads of steel, iron, cement, steel rods, electrical equipment, electrical parts from a small shop to a main factory. The old Bajaj scooter engine was unreliable, but easily repairable and sturdy and enabled the operator to carry high loads. EML’s e-cargo rickshaw was first priced high. A Jugaad can be made up for as little as 30,000 and provided value for investment. EML’s e-cargo rickshaw was not meeting the operator’s expectations. EML’s other product – the E-auto was under development and will take time to come to the showrooms. There were already numerous E-auto makers and Delhi was flooded with illegal e-rickshaws. A recent report in the Economic Times stated that barely 4500 of the 100,000-odd e-rickshaws that plied on the streets of Delhi were registered and the Delhi Government is mulling steps to ban illegal rickshaws and autos. So legal hassles for e-rickshaw operators are looming large on the horizon. E-cargo vehicles are coming up in the scene now. Mahindra electric’s Treo cargo puller is priced around Rs. 3 lakh, which looks like a mini truck, resembling the popular ACE by Tata Motors. The EML team understood that the e-rickshaw

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business has already hit a number of legal, competitive and environmental roadblocks and doesn’t represent a viable business unless a new kind of battery technology comes into play giving a range of 300/500 km on a single recharge – such technology today exists but is very expensive and the rickshaw will be priced out of the market. The second option for EML is to work on a e-cargo product – just not the e-auto rickshaw which can seat 3 people and resembles a CNG auto, but a cargo truck which can replace the ubiquitous Jugaad. ACE finished the 3 wheeled tempo 10 years back – offering a better payload, safety and better return on the higher investment made by the operator. The 3-wheeler was always an unsafe and unreliable option – ACE addressed these issues. EML had to do something similar – to target the Jugaad and this required an investment of 10 crores for R&D at least for next one year – one VC was willing to back the EML team to develop a Jugaad alternative – that can carry a payload of 100 kg and a batter range of 150 km, priced at 50,000 the product will be a viable alternative to the Jugaad. One of the EML team members also suggested a formula – link the cargo vehicle to a server with a computer chip, that will monitor the usage of the vehicle. Make the vehicle a live digital platform – interactive and install a number of APPs on the vehicle that provides real-time assistance to the driver on payload, usage, range and nearest charging station. Platform based products that are connected to IOT – “Internet Of Things” are becoming very common and today every consumer product is coming out with Internet connectivity. The high end represents TESLA cars – that can repair itself using software. What should the EML team do?

CASE

13

Are we chasing a false positive idea?

Note Reference case: “Good Money After Bad” By John W. Mullins. HBR March 2007. The main theme and issue are similar to the original case; however, names, characters, place and business context have been changed to Indianize and give a twist to the case. Case facts: Animated cartoons have entertained us for nearly a century now. Characters like Tom & Jerry, Micky & Donald, Garfield the Cat, Spiderman went on to become superhit animation characters. Tom & Jerry being the most popular pair of characters. For more than a century now Joseph Hanna and William Barbera’s tale of the cat chasing the rat and rat always fooling the cat had us in splits in childhood. Aniket and Abrar are two friends and both graduated together from IIT Kharagpur as computer science engineers. They had a passion for animated films and went on to join the Film & Television Institute – FTII in Pune to learn animation techniques. After passing out of FTII they mulled upon a number of ideas. One was to make animation out of popular Indian mythology characters: Lord Hanuman, Ravan, Krishna and so on. By 2018 the concept of 3 D animation had kicked in. Technology made it possible to make animated characters look like real humans and Pixar Studios already had a number of superhits to its credit. Pixar’s Wall-E, Ratatouille and Jungle Book were

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superhit characters. Jungle Book was written by Rudyard Kipling on an imaginary human child – Mowgli who was brought up by a wolf mother and was protected by a black panther – Baghira and Bhalu – the fun-loving bear. Mowgli’s biggest enemy was Sher Khan – the tiger who wanted to kill him as Sher Khan hated humans. The entire story revolves around how Mowgli uses superior intelligence to beat Sher Khan at the end. However, some of the best-known Hollywood actors had lent their voices behind the animated characters and this was a major key success factor, apart from brilliant cinematography and visuals. The 2019 saw launch of Lion King in 3 D version and Simba and the Masai expression: “Hakuna Matata” went on to become household expressions among children all over the world. There were practical difficulties in launching the 3 D version. And the friends realized that as at 2019 the older 2 D animation films are not going to be welcomed by the audience, it has to be 3 D only with voices behind. Do we hire Mr. Amitabh Bachhan? Mulled Aniket! He is beyond our budget! Can we rope in some of the best Bollywood actors, known for their power of dialogue delivery? Like Manoj Bajpayee, Nawazuddin Siddiqui, Nasiruddin Shah, Amir Khan, Anupam Kher? Can we get an investor to sponsor the film? Eventually, they decided that launching a 3 D animated film with a huge investment, which will be mainly on paying the fees of these famous actors is not a viable idea. Instead they visited the NSD – the national school of drama, also situated in Pune and they knew some faculty members there. They scouted for some young and unknown actors, who are willing to experiment. The idea was simple: make a 3 D animated film on Lord Hanuman – one of the most popular and well-loved Hindu gods, and show his exploits. There will be two main characters here: the protagonist – Hanuman and the antagonist – Ravan,

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the third main character is Ravan’s son – Meghnaad. The entire film will revolve around these three characters. To provide music, the friends reached out to a young and aspiring music composer from the FTII itself. They were set for production when brakes were applied! A film starring the famous Lord Hanuman was launched with some of the Bollywood biggies like Amitabh Bachhan lending his voice and ShankarEhsaan-Loy – the famous music trio providing the background music in a rock style. Launching another film featuring the Lord was ruled out. The friends mulled other options. One was on Ganesha, the elephant God. The other was the depiction of the Kurukshetra war, which raged for 18 days as per the Indian epic – Mahabharat, this of course, would require a lot of research into depiction of visuals. The third was depicting Shivaji Maharaj, how he outwitted the Mughal emperor Aurangzeb, the fourth was on King Porus – the famous battle between him and Alexander and the fifth was Chanakya and Chandragupta, how they went on to build an empire, the last was depicting stories of King Vikramaditya and the ghost – Betal. However, after doing some initial research and opinion poll the friends realized that none of the ideas will work and result in a superhit. The attitude of Indian children and the parents as well is changing rapidly. Harry Potter has been a superhit in the halls and every film of the Harry Potter series has been watched houseful. So, has been Spiderman. And every Pixar film launched has been well received by the Indian audience, children and parents alike. The reason is of course superb graphics, screen play and brilliant acting or voice lending. Harry Potter was a hybrid film with real life and animated characters. But many of the key actors were trained stage actors and their portrayals were simply superb. Hence, the appeal of an Indian story or Indian mythology will not work anymore. Deeper research is required to bring out an original theme and it has to be brilliantly portrayed.

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At this stage, one of the friends hit upon an idea – to portray Jim Corbett. The famous hunter’s tales were read by all school children and even many adults. There is a sizeable Indian middle-class population who has read and loves reading the thrilling tales of Corbett’s hunting of the man-eating tigers. his best-known books being Man Eaters of Kumayun and The Man-Eating Leopard of Rudraprayag – a leopard that killed over 150 people over 8 years. Corbett chased him for a year, before finally killing the leopard with a single rifle shot. Making an animation on the famous hunter appeared to be a good prospect. Six months were spent into the production. Not much voice lending was required here, except that of Corbett’s. Also, this was a theme that didn’t require much dialogue delivery. The key selling point of the film had to be brilliant visuals. The story of the man-eating leopard was made and released first in You Tube as a short animation film to test the grounds. The benchmark is a million hits on YouTube. Over a period of a month – the film didn’t see even 10,000 hits. The friends had spent a tidy sum on digital marketing – it didn’t work. The film was a big flop. The next idea was to depict the famous lady boxer – Mary Kom and how she went on to win an Olympic medal. Six more months were spent on producing the film. Again, the film didn’t even register 10k hits in YouTube. After two flops the two friends sat one day scratching their heads. Then they came across the famous book written by the award-winning Columbia University psychologist – Adam Grant: Originals. Grant lucidly explained in his book the concept of False Positive and Negative ideas. An idea may appear very promising and is supported by all – but that idea eventually may crash in the box office or a product may be a super flop. Grant gave example of how none other than Steve Jobs himself became a victim of this syndrome, when he backed

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Segway – the personal transporter idea. Segway was supposed to be a small personal transporter, battery operated and meant to carry the housewife for short distances to the supermarket and come back with groceries. The product was not at all well received, simple reason being customers prefer to walk short distances and carry back groceries in hands! People were becoming more health conscious and the idea of a small personal transporter for short distances spanning say a mile or a km didn’t appeal to them at all. Segway was a big flop. A false negative idea is an idea that actually is very promising, but due to the idea being novel and strange is rejected by all. The best example is Lion King – Disney management almost killed it, as the culture in the company was to only produce folk tale related films. The two friends realized that there is a host of hidden factors that they are not aware of or they didn’t do research on – so both the ventures flopped, despite the idea being good. They decided to do some research on this. They showed the Jim Corbett film to a group of hundred people directly on a projector and asked them to provide a frank opinion. None of these hundred were film makers. 50% of the audience was children in the age range of 8-12 and the rest were their parents! Some of the comments startled the duo. “Oh! The leopard is so boring! He doesn’t look like a man eater at all!” “Jim looks tired and disinterested, not at all the deadly hunter”. “The location doesn’t look like Rudraprayag! Where is the Alaknanda River? It played a major role in the story! The leopard used to cross the bridge and Jim sat on the bridge for hundreds of nights!” “Where are the other characters? Where is Colonel Ibbotson? He was always by Jim’s side in the story! They hunted the leopard together till last day!” The two friends were stunned by the volley of comments. They realized that they haven’t done enough research and their prospective audience knows each and every word of the

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thrilling tale. They are not dealing with a half-informed audience wanting to see mythology tales! They are dealing with an audience who knows every micro detail of the story! There was an upside to this sorry tale of failures. That a well done and well researched animation movie, even if it is inferior on visuals and technology, but gives a vivid portrayal of the ordeal and struggle that Jim Corbett underwent to hunt the man eaters, can be well received by a well-informed audience. For example, when Jim was hunting the Talladesh man eating tigress, which hunted and killed more than 150 people over 8 years, Jim’s left ear previously damaged due to close discharge of a heavy rifle developed infection and pus formation was happening. By the time Jim reached Talladesh his left eye, shoulder was stiff full of pus. After five days of chasing the tigress, his condition went from bad to worse, with his left neck, eye and shoulder immobilized. He chased the tigress on 5th night with one eye open! That night he climbed a tree to take rest and the abscess burst through at midnight. Wrote Jim: “no joy is greater than experiencing a sudden cessation of pain”. He shot the tigress on 6th day morning. The friends realized that if they can portray the struggle, the pain, the motivation…and the sheer courage and bravery of the great hunter – then they have a superhit blockbuster in their hands. They decided to animate the story of the Talladesh man eating tigress. A series of questions now came up. • Visit to the location. • Asking people about the story – such stories are carried down the ages. • Decide how to mix real life locations with animation. • Decide to animate to what extent? An actor can be hired to portray Jim. The tigress can be animated. • Or should they entirely animate the film? These issues needed to be addressed, so that this time the idea doesn’t turn out to be a false positive idea and result in a flop film.

CASE

14

Do we stand up for a cause or junk the cause for profits?

Note Reference case: “Play It Safe or Take A Stand?” By Jay Barney. HBR November 2010. The main theme and issue are similar to the original case; however, names, characters, place and business context have been changed to Indianize and give a twist to the case. Case facts: Skill-Cert was an ed-tech firm formed by three entrepreneurs in 2018 – Tarun, Shriman and Shobhan. Two of the friends were IIT Delhi pass outs and worked for long years in the telecom sector. One of them was a CA and held a doctoral degree in management with a number of research papers to his credit. The ed-tech sector as it’s known the world over, has been a sunrise sector for last 15 years. A number of companies made their mark in this sector. One of them is Educational Initiatives, started by three IIM A alumni in 2001, this company focused on the learning disabilities of children in two subjects— children dread most in India – English and Mathematics. Over the years with more than 5000 schools as its clients the company made its mark with a cloud-based software teaching the two subjects to children and trained thousands of teachers to use the software and assess learning disabilities of a particular child in an average class of 50-60. There are other companies who focused on the school segment, commonly known as K-12 segment, like Byju, Udemy, Simplilearn. Byju mainly focused

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on the home – where many parents couldn’t provide adequate education and guidance to their children and designed a software that aids the learning of the child in all school subjects. Byju hired one of the top Bollywood actors – Sharukh Khan as its brand ambassador and marketed aggressively. Over a period of time in the last ten years hundreds of firms, start-ups have sprung up in the ed-tech sector, some focusing on the K-12 segment, while others on the higher education like UpGrad. UpGrad provides management degrees on specific subjects like MBA in Blockchain. There are other companies focusing on providing courses on the fourth generation technologies like Big Data Analytics, Python, Machine Learning, Artificial Intelligence and Robotics. A particular company called Autobot India focuses on providing EV technologies to the electric vehicle industry by providing training on artificial intelligence related to electric vehicles. Today the ed-tech sector resembles a red ocean in India, highly competitive and crowded. Against this backdrop Skill-Cert (SC) and its three founders focused on a particular glaring gap: lack of sufficient knowledge about innovation in companies and management colleges. The two-year MBA degree spanning six trimesters or four semesters across the world is very similar. The course teaches as many as 35-40 subjects and gives the student a bird’s-eye view on a variety of subjects. The course has a heavy quantitative emphasis with subjects like accounting, statistics, economics and operations research dominating the first-year syllabus. The second year has electives in marketing, human resources, finance or operations. The entire course reflects the twentieth century management style in mass production companies, where the manager plays a supervisory role over the shop floor workers or sales force and imparts specialization in four basic functions in a company.

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Starting from the beginning of this century, fourth generation technologies began to take hold and started automating many of the routine management functions. Also, an increasingly better-informed customer (aided by the Internet and information explosion) started becoming aggressive and demanding. For example, 20 years back a customer relied on the salesman’s description of a car to buy a new car. Today, the customer arrives in showroom armed with all the information gathered from more than ten websites offering expert and customer reviews on a car. The customer behaviour has been gradually morphing and changing over the years, demanding a greater degree of customization and modification of a product including cars and consumer durables, shampoos and instant foods. This demands a great degree of customization on the shop floor and companies that are used to produce a few models or variations or flavours with tight cost control systems and lean supply chain management are finding themselves at the receiving end of customer ire and sharp sales declines. A leading passenger car company in India has experienced more than 50% decline in its sales in the last two years and although it is blaming the pandemic, the excuses blaming the external environment like rising fuel prices, higher insurance and road tax for new cars will not work for long. This company is producing cars in India for nearly three decades now and made its mark by producing and selling fuel efficient cars at low prices and low cost of ownership. Today the customer is demanding a greater degree of customization, which the company is unable to fathom and provide for – the result is a declining sales graph. A time will come when all the production in the world will be taken over by AI powered robots and the entire supply chain management system will be handled by cloud based and AI powered analytics. Humans will have little or no role to

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play in this setup. Innovation will become the only business of the companies as products graduate into platforms with Internet of things and the platform concept has infinite possibilities – bundling hundreds of products with thousands of services in a million possible ways. Innovation has to be integrated at three levels. Innovation at a product level using design thinking methodologies. The design thinking methodology has been around for decades since 60s, however largely ignored by the corporate world obsessed with cost efficiencies. It is only of late, hammered by increasing ire from customers and declining sales graphs that companies are taking up the concept of design thinking seriously. Companies like Samsung employs a large team of design thinkers – who come from diverse backgrounds and the design thinking department focuses on customer behaviour – building products with human centred designs, not cost. Low costs are no more the deciding factor in selling a product and the concept of cost leadership as advocated by 20th century strategic management textbooks may soon go out of fashion, obsolete. Samsung has experienced considerable success with human centred design philosophy and has made inroads in the Indian consumer durables market with mobile phones, washing machines, ovens and other electrical equipment with better design. The second level of innovation occurs at a business level, also known as business model innovation. Designing a product is fine! How to sell it? How to build a digital business platform to deliver the product and bundle the product with a bevy of services? For example, today’s vehicles come equipped with a large electronic display screen, showing a number of applications or APPs as they are known. There may be as many as 40-50 APPs on the screen, starting with Android auto guiding the driver on navigation to music, videos, and other useful applications on a drive. The major issue that comes up

Short Case Studies 259

here is to build a collaborative business model and designing a business activity chart clearly outlining and delineating all activities and value addition points. The classic business model concept as enumerated by Constantinos Markides of the London Business School and the late Clayton Christensen has four basic elements: the customer value proposition, the key resources, the key processes or activities and revenue model – how the cash will flow in and out of the system. This model with its four basic elements has to be digitized and the model should capture the company in a single diagram. Innovations can occur at various points. Business model innovation is known to give inimitable competitive advantage and management students for three generations have passed out by reading stories of business model innovation of South West Airlines, VISA card, Dell and others. The third level of innovation is more difficult to understand and is hard to comprehend and very few companies really understand it: innovation of management practices. Historically, the end of 1918 Spanish flu pandemic after two years saw a spurt in economic activities and a series of new management concepts such as management accounting, brand management and multi-divisional organizations. These three innovations spawned the 20th century Fortune 500 giants. As the fourth generation technologies take hold and start giving way to the fifth generation technologies, the third generation management practices (first was steam based, the second was oil based, the third will be based on renewable energies, SMART power grids and SMART cities) will be witnessed in coming years and a series of innovations in management practices will completely change the way companies are managed and these third generation management practices will be AI powered and digital. SC’s team understood the change that is brewing over and the time is ripe to launch a specialized course in innovation.

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The topic of innovation traditionally has been given the short shrift in management courses all over the world – with just one or two papers taught and often combined with entrepreneurship. Top academic journals in strategy field have been emphasizing the fact that the distinction between a manager and a entrepreneur is vanishing fast and in future there will be a different kind of job profiles in firms emphasizing on “INTRAPRENEURSHIP”: entrepreneurial behaviour in the corridors of companies. Hence, strategic thinking and innovation will just not be left to a few top managers – it has to pervade the middle and junior ranks. Intraprenuership will increasingly take hold in companies. The SC team realized this and floated a specialized course, with advanced topics which have been only taught so far to PhD scholars in management field, such as business model and management innovation and design thinking. The logic of such a course was evident, but is the market ready for such a course. The course was launched, and the pandemic arrived! Shutting down companies and universities and for nearly six months till October 2020 nothing could be sold as the world was under a lockdown. From November 2020 companies have started opening up, offices opening up and personnel being called as the second killer wave of the pandemic gradually started subsiding. The question the SC team is increasingly facing: is the course has a market, especially right now? Is the course ahead of the time? Are companies and management college students ready for such a course. Many advised the SC team to split the course and sell it for low prices, but the SC team has been opposing the idea on academic grounds so far. The suggestions that have come so far:

(a) Sell the design thinking module as a separate course.

(b) Focus on this alone as there is a craze among students about design thinking.

Short Case Studies 261



(c) The two modules teaching a higher level of innovation will not sell – try them a pilot.

(d) Focus on the government sector comprising MSMEs – teach them design thinking. (e) There are no companies which have an integrated innovation management system – precisely the reason SC floated the course – the team had a sense of mission. Building world class Indian companies with the course.

(f) Many have mocked and derided SC’s vision and the big dream – saying that Indian companies don’t have the maturity to understand such an advanced course and they are not ready for it, only MNCs understand the importance.

However, the SC team undertook an in-depth research and interviewed more than 50 managers in various Indian firms known to be professionally managed. Every one agreed that the time for such an advanced course has indeed arrived and unless Indian companies focus on building a dedicated team of innovation specialists, they will not survive future competition and may go out of reckoning if advanced technologies and digital business platforms are not built. On the one hand the SC team is increasingly facing the prospect of zero sales of the product, highly priced at 50,000 rupees and facing derisive comments every day that the average student and manager can’t even comprehend the course. On the other hand, the team was not willing to give up the big dream: build world class Indian companies with an integrated innovation management system.

CASE

15

Stay home or venture beyond the shores?

Note Reference case: “Go Global or No?” By Walter Kuemmerle, HBR June 2001 The main theme and issue are similar to the original case; however, names, characters, place and business context have been changed to Indianize and give a twist to the case. Case facts: Going global and becoming a global organization is the ambition of every company. Every company wants to become another Toyota, 3M, Apple, Wal-Mart, Citibank or Volkswagen. But everyone forgets that these global giants didn’t become what they are today in one day. It took them years. Years of patience, continuous learning & research and hard work to become a Fortune 50 global giant. Of late many Indian firms have ventured overseas and acquired companies. Tata Group acquired a clutch of companies like JLR, Corus, Tetley. AV Birla group acquired Novelis – the aluminium giant. Other companies like M&M and Airtel ventured into the African markets. However, just venturing beyond the shores and opening offices and factories abroad doesn’t make a real global giant like Toyota. It takes a lot of cultural reengineering to establish a uniform code of conduct and decentralize the strategy and R&D process like GE/IBM did by setting up R&D hubs in India. ABB/Alstom collaborated with Indian Railways to make electric locos of the WAP and WAG series, which the

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railways use extensively today for passenger and goods trains and to run superfast trains at 130+ km speeds on key trunk routes like Howrah-Delhi and Delhi-Mumbai. Also, to become a true global giant involves building up a set of global capabilities and processes, one can’t become a global company with Indian culture. One has to set certain parameters and guidelines and again these parameters can’t be set in a day. They evolve over a period of time. It’s constant experimentation and having an open mind. It’s an EMERGENT PROCESS and takes years before a company has a number of offices and factories abroad and is termed, a global giant. ATR is a leading south Indian snacks maker. They manufacture and market a range of popular south Indian snack mixes like Dosa, Idli, Upma, Vada, a range of spiced powders and chutneys. ATR has become a national brand, starting with one small and non-descript joint selling dosas in a major metro in southern India more than 50 years back. They started making mixes and sending the mixes to supermarkets and carried out extensive campaigns. The Indian public in general doesn’t need to be educated about popular south Indian snacks, especially Idli and Upma, two very popular breakfast items. And today a number of families all over India love eating Idli or Upma in breakfast – since they are boiled and steamed, not fried. Combine them with a sharp flavoured chutney and one can have a good, healthy and filling breakfast. Hence, no one needed convincing about the merits of having a filling south Indian breakfast and soon ATR’s snacks were selling like hotpots all over the country. The most popular ones were Idli and Upma mixes, followed by Dosa and Vada – these were fried items and were popular as a weekend leisurely breakfast. As frying a dosa piece by piece is time consuming. Over and above the four popular and well-known snacks, ATR also marketed a range of chutneys and rice mixes. Like the Puliogre Mix – the popular rice mix eaten all over southern

Short Case Studies 265

India, spiced with chillies and tamarind and lemon rice mix – very common all over southern India, consumed with Sambar, the popular south Indian dal. ATR’s sambar mix, chutney mixes, spiced powders (commonly known as karom podi) and rice mixes soon become popular and started selling in big numbers all over India. They were extremely popular in Delhi and Mumbai – which housed a large number of immigrants: south Indian families and even their north Indian counterparts took to these dishes and preferred a breakfast of steaming hot Idli or Upma over the Paratha or Poorie-Sabji or the standard bread-butter-omelette. ATR contemplated venturing overseas and market these snacks abroad. A number of hurdles came up: • Absence of managers with experience in managing international operations – the single biggest hurdle and it was not easy to get such people. They were always short in supply! • Negotiations with local suppliers for managing the supply chain – the issue was whether to open a plant abroad or export the snacks? • The NRI population in Canada and USA were large, however was not large enough to provide volumes. • The even bigger issue was finding shelves in super markets. ATR wanted to find shelve space in mainstream breakfast snacks section – not just be pushed into a corner with Asian and Indian food section. Negotiating with retail giants like Wal-Mart was a major issue and the big-ticket retailers were simply not willing to listen to an unknown south Indian snack maker. • Educating the western public about merits of eating south Indian snacks was another issue • The powders and chutneys and rice mixes were spicy and hot – appealed to the Indian palette, but will not go with western consumers, who were not familiar with these items and their eating habits don’t synchronize

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with these food items. They may go well in places like Bangkok or Singapore or Kualalampore, Hanoi, Hochi Minh City, Manilla or Rangoon – in these cities and in towns of China and Japan people do have the habit of eating rice and rice related snacks. The spicier varieties are consumed in large numbers in cities like Bangkok or Kualalampore or Djakarta. The countries like Thailand, Malaysia and Indonesia have food eating cultures similar to India and curry eating with rice is common. What is not common was eating vegetarian food. Use of pork or beef and chicken/fish is heavy. ATR realised that they can’t venture in Western markets and Asian markets in one go, venturing in Latin American or African markets is an even more unknown proposition. They have to go one country at a time and make significant modifications to their snacks to gel with the culture prevailing in these countries. Penetrating US/Canadian markets is a tougher proposition as retailers in these markets are not going to entertain unknown brands and ATR will be simply pushed into a corner of a large Wal-Mart outlet and clubbed in the Asian food section. ATR is not going to find space shelves in the mainstream breakfast foods section, used the company is to see their packs displayed prominently by Indian retailers like Big Bazaar. Venturing in Asian markets seemed a better and easier idea to start with. As India has a Free Trade Agreement with a number of ASEAN nations including Thailand, ATR is more likely to be welcomed there and given prominent shelf space in retail outlets in Bangkok. ATR decided to explore three cities to begin with: Bangkok, Kualalampore and Singapore. They negotiated with a number of retailers and managed to obtain favourable trading terms and prices and display parameters. ATR decided to start with their two best known and popular breakfast items – Idli and Upma, which could be steamed quickly, and a spicy chutney

Short Case Studies 267

pack was provided as an accompaniment. The merits of eating these dishes were prominently displayed with a leaflet inside the pack and the company ran advertising campaigns in local television channels. The overall investment in setting up a footprint in these three large and bustling Asian cities ran over Rs. 50 crore. The manpower was local – this ATR was strongly advised against. That is managing the operations with expat Indian personnel. There was a senior manager dealing with the local managers and the local managers ran the show. However, sales were not encouraging even after a year’s operations and it appeared that consumers in these three cities were not taking to the idea of hot and steamed Idli and Upma. Some feedback was taken from buyers who bought these items. The general feedback was appreciative of the taste and the consumers loved the chutneys! The spicy flavours seemed to be liked by consumers in these three cities. However, the habits varied. The main breakfast dish was rice, duly accompanied by pork/fish/beef and a spicy sauce or noodles and momos. The idea of a vegetarian breakfast was alien to people in these cities. ATR evolved into a typical south Indian company and making non-vegetarian items was totally alien to the company’s culture. Neither the company had any expertise in making sauces and chutneys that can go well with pork/fish/beef or chicken. Another obstacle was something the company didn’t anticipate: breakfast in these big cities was the single big meal people consumed every day and went out for work. Hence, the breakfast was the all-important meal to start the day and comprised rice/noodles in large quantities with curry and non-veg items. This is not the way Indians treat their breakfast. They inevitably take a lunch break, which can span 30-45 minutes in offices. Whereas such long lunch breaks were not common in factories in these three cities and many other Asian cities like Tokyo, Hongkong, Hanoi, Djakarta and so on.

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All in all, ATR found itself out of sync with eating cultures in large Asian cities. Although dealing with the local authorities and retailers in these cities was not a problem. The governments of Thailand, Malaysia and Singapore were largely friendly to the Indian companies and Indians in general. The degree of hostility of authorities and retailers towards immigrant Indian businessmen and companies usually found in West was not there. ATR had two choices:

(a) Develop a range of rice/noodle dishes and sauces that go well with eating habits of people in Asian cities and venture into non-veg items – totally alien to the company culture and a number of senior managers were averse to the idea of preparing non-veg dishes in the factory.

(b) Expand the footprint to Western cities – in USA and Canada, where consumers are more open to eating vegetarian dishes and are familiar with south Indian breakfast items. But finding premium shelf space was a major issue – this was not an issue in Asian cities. Both the choices looked difficult, the alternative was to fold up the operations in three Asian cities and stay home. If ATR had to nurture ambitions of becoming a global retailer in food items – it had to shed its Indianness! This was amply clear to its top management. Does Toyota behave like a Japanese firm in India? Does Kellogg behave like an American company in India? Does Mc Donald behave like a typical American fastfood giant in India? The answer was obviously no! ATR’s management realized that this needed deeper research and finding answers to some very complex and wicked problems – of evolving its traditional south Indian work culture into a global work culture. They can’t become a global company with south Indian roots! Reasoned some of their senior personnel. Was this conclusion, right?

Part-6 Case Teaching Notes: Building a New Set of Core Competencies (Translating Theory into Practice)

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This part focuses on translating theory into practice and using the 3-C framework to build one’s own theory – not to provide solutions! There are no fixed answers in strategy. Strategy is not statistics or finance or information technology with a “yes-no” or “1-0” solution. This is something many managers with a quantitative bias (acquired in the MBA course) don’t understand. Unfortunately, management courses the world over still teach in the 3 S mode, emphasizing efficiency, cost optimization and with a special emphasis on numbers. The understanding that still prevails is that strategy must be translatable into numbers and finally strategy boils down to a game of numbers, with which to convince the investors and stock brokers and jack up the stock prices. Nothing can be farther from the truth. Ultimately the forecasts made never materialize, due to faulty assumptions, poor understanding about customer behaviour, technology and competitive trends, macro factors influencing input costs and the fast changing geopolitics. The conventional PESTLE analysis is a static method with an emphasis on economic modelling and doesn’t include factors related to customers and competition. The right approach is to not to look for a solution and deal with the uncertainty – make it a way of life. This was the main emphasis of the essays in parts 2 & 3. We are facing a “once-in-a-century” challenge and the COVID crisis has accelerated technology, customer and competitive trends by a decade. So, what was supposed to happen in 2030 is happening now in 2020! Looking for clear “1-0” solutions or “either-or” propositions will turn out to be a suicidal approach in a business environment, where everything is up in the air. The right approach is to ask the right questions and decide on a path, solutions will emerge! Looking for a solution at the very outset was the old 3 S approach in a stable environment in pre- 1990s era. The environmental turbulence that we all talk today and many call it as VUCA (Volatile-Uncertain-Complex-Ambiguous) probably began

Case Teaching Notes 271

in early 1990s with the fall of the erstwhile Soviet Union and the ten flattening forces of Thomas Friedman. The ten forces when coupled with changing customer behaviour with increasing exposure to the Internet and social media and emergence of disruptive competitors at an increasing pace aided by Tech V 4.0 technologies produced the VUCA conditions that we see today. Today the pace of change we witness didn’t gather momentum all of a sudden. As stated, the beginnings perhaps can be traced to the fall of the erstwhile USSR and the geo- political realignment that commenced with rise of China as an economic and military superpower, rise of India on the world stage as a responsible democracy and the strengthening QUAD alliance between India-USAustralia-Japan on the seas to counter the influence of China’s growing naval power. The Internet and technology further accelerated the changes and today the 3 S approach to strategy, which the book talked about in Part 3 is totally obsolete and archaic. Unfortunately, MBA courses still emphasize on arriving at a “1-or-0” “Yes-No” solutions using numerical methods. Data science has progressed tremendously with ever increasing computing power in last 25 years, however data can never replace STRATEGIC THINKING – this is something many managers don’t understand even today and a situation often arises where richness of data is missing – necessitating the use of abductive reasoning as pointed out at the beginning of Part 4. A Resilient Thinking approach is the best way to handle the uncertainty and the best approach is to adapt the right path – THE SOLUTION WILL EMERGE. It is essentially connecting the dots one at a time as pointed out in the design thinking approach in the chapter titled: “Coordination”. HENCE ADAPTING THE RIGHT PATH is critical – the solution is not known. This is the right approach to strategic thinking for next ten years till 2030 and the world will transform beyond recognition

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beyond 2030 with SMART grids, cities & fifth generation industrial technologies. A whole new set of management practices may come into the play, which can’t be envisaged today. No one knew about management accounting and brand management in 1918 – the two keystone management innovations that powered the rise of 20th century Fortune 500 giants. Similarly, what new set of innovations is going to come in next ten years with advent of 5th generation technologies can’t be envisaged today, it is even more difficult to foretell what effect these innovations will have on strategic planning methods and business model designs. The book talked about building one’s own theory in Part 4. Indian industry has been marked by short termism and opportunism, coupled with knee-jerk reactions. A lot of course is to be blamed on the inconducive business environment. Even after 1991, the business environment was not conducive for innovation, the inspector raj prevailed and continued to harass small and medium enterprises. Labour issues, archaic labour laws, shortage of power and absence of a world class supply chain system had its negative effects. Fortunately, things are changing now and next ten years can be decisive: it’s now or never. The time is ripe to combine the 5th generation technologies with third generation management practices (explained in part 7) and make a serious attempt to build one’s own theory, instead of indulging in short termism and opportunistic behaviour. The starting point is to build a set of regenerative beliefs – the twelve beliefs outlined in the resilient thinking framework provides a solid foundation. The next step is to build a set of standard organizational practices. The 3-C framework provides a set of nine practices, in real life there may be variations. The 3-C framework provides a model to guide managers. The third step is to build a set of organizational capabilities. Only when the “belief-practices-capabilities” framework is in place, a clear strategy will emerge, with which one can approach markets. The big mistake

Case Teaching Notes 273

many companies made in past (especially large MNCs) is to formulate strategies in changing business environments without first building a set of new core competencies. Building one’s own theory is: how to build a new set of core competencies (as enumerated in part 4). These competencies can be anything – from launching new products continuously to venturing in overseas markets, to taking over companies, to launch new and unrelated businesses in totally unfamiliar domains, like HUL ventured into consumer durables from FMCG with its PUREIT brand of water purifiers. Once a set of new competencies is in place, strategy will follow and solutions will emerge. Looking for solutions at the very outset without building one’s own theory can be an exercise in self destruction. Part 6 then attempts to translate theory into practice—how to apply the 3-C framework to build a set of new competencies. The case teaching notes to the fifteen hypothetical cases will focus on this aspect – building a set of new competencies. Not strategy and not how to approach the market with what product price, placement and promotion – the 4Ps of marketing in other words. Inculcating a set of beliefs and organizational practices is a set of regenerative dynamic capabilities. How these practices can help a firm to build a set of new core competencies is a set of first level dynamic capabilities. The solution then follows in the form of strategy and the 4Ps of marketing – but the teaching notes doesn’t dwell on this aspect. In practice it is virtually impossible to predict the final solution – which will vary widely from industry to industry and even from firm to firm, given a set of predispositions that exist – boundedly rational behaviour (refer the chapter in Part 4, grounding the 3-C framework in theory) of the managers. The teaching notes to every case will answer five questions:

(a) What is the main issue in the case?



(b) What possible belief system to build up using one or more of the twelve tenets of resilient thinking?

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(c) What organizational practices to follow?

(d) What new core competencies to build up, what path the organization should follow?

(e) What possible solutions may emerge in future?

CASE

1

Aggar  wal Sweet Shop

What is the main issue in the case? As evident, Sanjay is facing two major strategic dilemmas: (a) What to do with the Rohini shop – sell off? Revamp? Open something new there?

(b) How much risk to take on the highway projects? Where to invest, when to invest and how much?

What possible beliefs Sanjay must build up? The very first thing Sanjay should do is to think INDIAN! This is the very first tenet of resilient thinking under the heading coordination. The lure of foreign tourists is very strong in the case in both the locations. Scores of visitors from abroad visit the holy shrine of the saint in Fatehpur due to its historic attraction and they also visit the Ranthambhore national park to see tigers in large numbers. The winter months from November to February witness a throng of foreign tourists in both the locations. Hence, to entertain them with Indian Mughlai cuisine – which they hear so much about is very strong. However, a larger number of Indians visit the holy shrine throughout the year – from all religions and castes and creed to seek the saint’s blessings and this number is very large, at least ten times the number of foreign tourists. Secondly, a traditional Indian vegetarian restaurant on the Dausa- Sawai Madhopur road will not only cater to people going to see tigers, but it can cater to the local population as well. Where Indianization comes into play? Focus on Indian tourists, not

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foreign! The various resorts on the Agra-Fatehpur Sikri came up lured by the prospect of charging dollars to foreign tourists – which is opportunism once again and not all are making money. Secondly Sanjay must look forward to leave a deep impact, whether it is with a revamped shop in Rohini, a new shop there or the highway restaurants. People should talk about his eateries and flock to eat to experience great food. EXPERIENCE! That’s the magic word here, Sanjay should look forward to deliver an experience following the platform concept, rather than just food. Thirdly Sanjay should find a deep purpose. What does his shops want to deliver? Is he in just food business or is he in business of catering or is he in business of providing novel and original cuisine? There is no shortage of talented and trained chefs from IHM today. The 20 odd IHMs are producing enough number of talented chefs today aspiring to win a Michelin Star award. Sanjay should hire a team of 2/3 talented young chefs and ask them to watch top level global contests like Master Chef Australia/USA or the Michelin contests. The keyword here is – ORIGINAL. Being GOOD or being ORIGINAL? Being original is extremely difficult in creative fields like music, arts, cuisine or writing. But that’s the only way out to survive and prosper in the long run in a competitive field like food services and catering. Hence, the three recommendations closely follow the concept of coordination and design thinking. The design thinking principles will play a big role here and Sanjay first should find enough inspiration, followed by a long and tortuous ideation process and implementation later. Coming to collaborations, Sanjay should look forward to collaborate extensively with the catering institutes and one of the best IHMs is in Delhi itself, the other one is FCI – Food Craft Institute in Faridabad. He should listen to his inner voice

Case Teaching Notes 277

rather than listening to investors or his father, he should ask himself – what his grandpa, the founder, would have done in such a situation. He should not look to start the business with plenty of funds – this is the experimentation and own theory building stage and a fat bank balance can be detrimental here, leading to wastage of funds. Isolation and resource shortages are part of the story. Sanjay is not used to this coming from a banking background with a well-paid job. He should look forward to the learning first – hire a few chefs to do research, visit catering colleges, attend Epicurean Gild award functions and other award functions, reach out to venture capitalists who are in the business of funding new restaurants, seek their advice. He should think like the Mossad’s 10th man – what can go wrong? What will go wrong if he invests a large sum on the highway projects? What will go wrong if he invests a large sum on the Rohini shop? What can go wrong if he closes the shop and starts something else there? Coming to the concept of co-evolution, this will not happen in a day. Sanjay has to understand that his venture can’t start with a big bang or splash – that’s a risky approach. It’s not that firms don’t start with a big bang! Toyota and Hyundai came to India more or less at the same time – 1993-1997. Toyota started cautiously with a phased-out model from its Asian Markets – the QUALIS, whereas Hyundai hired one of the top Bollywood stars – Shahrukh as a brand ambassador and invested more than a thousand crores in a greenfield plant to launch two models in one go – SANTRO and ACCENT. These two are different approaches: - entering the market like the proverbial camel entering the tent and entering the market with a big splash. Toyota played it safe, whereas Hyundai adapted an aggressive approach. Here investing all the 8 crores and opening up three new shops can be risky – it may succeed, it may fail miserably, failure will largely occur due to lack of understanding customer behaviour – which brings us back to

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design thinking approach again. Sanjay should appreciate that he lacks an identity in the catering field. His Agarwal Sweet shop is like potatoes and onions in a vegetable market and he doesn’t yet own a famous eating joint like – Karim’s or Haldiram. Karim is more than a hundred years old brand and Haldiram has been around for more than half a century, beginning from its humble origins in Bikaner. Hence, he should get used to his new underdog status and not behave like an investment banker – that’s history! It’s time to unlearn and relearn. Combining insanity with logic! This is where his team of chefs, their creativity and knowledge will come into play a year later after a period of intense learning and research, forging collaborations. It’s not the question of Mughlai food or vegetarian food! Creativity and original dishes can be created in any type of cuisine – this takes time and it’s once again CONNECTING THE DOTS ONE AT A TIME! A little sustained effort everyday will produce that magic. What organizational practices Sanjay should adapt? He should first hire a core team of 2/3 chefs, 2/3 sweet/snack makers from Bikaner or Kolkata. He should extensively train his team in the following: • Observe the customer • Reflect what the customer says • Introspect and think of solutions • Assimilate new knowledge • Devise absorption mechanisms. Send his team to various contests to test their learning. • Transform the knowledge base from standard dishes to original dishes • Combine customization with standardization

Case Teaching Notes 279

The path Sanjay should adapt (building his own theory) and building up a new set of core competencies • Transform his venture from one non-descript sweet shop to a chain like Haldiram or Mainland China or Nazeer Foods/Karim/Moti Mahal – the notable feature of these chains is that they specialize in only one type of cuisine. They don’t mix it up. • Hence, he shouldn’t look forward to offer both Mughlai cuisine in one location and North Indian vegetarian cuisine in another. There is no substitute in being original and Sanjay should train his team of chefs to deliver original and novel dishes in one particular type of cuisine, this is building up the CORE COMPETENCE one step/one dot at a time. • He should build a core team of chefs/sweet makers. Sweet making has been his family business for half a century now – he should not close it down. Instead he should retrain and make his sweet makers (Halwai as they are called). If they refuse to learn or oppose new ideas – he should let them go and hire fresh talent. Sanjay should also decide which type of cuisine he wants to make a name? Vegetarian cuisine? Snacks and savouries? Or Mughlai cuisine? His family has been in the business of the second type for more than 50 years now – and to refine and rebuild that as a core competence appears to be a good choice. • He should then only invest in knowledge assets, building a set of organizational practices and inculcate a set of beliefs. This will require minimum investments – which he alone can do – let us say an initial investment of Rs. 50 lakh is sufficient. He should put all his expansion/ refurbishment/selling plans on hold. Don’t take any strategic decision at present and understand how consumer behaviour is changing.

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What possible solutions will emerge? Once he has followed this path for a year – a number of alternatives will appear and can be feasible. They may include closing the current shop, selling off the land, revamping it and offer a range of newly created sweets – with less calories and sugar content, open a series of small takeaway sweets & snack joints all along the NH 11 – starting with one small joint near Fatehpur and expand as the brand builds up. There are no shortcuts to success, pumping money will not fetch more money and short termism will not yield results. These are the three basic truths Sanjay must realize.

CASE

2

JHA Enterprises

What’s the main issue in the case?

1. Should JHA continue the component manufacturing business or close it down?



2. In case he continues to manufacture components, should he charge higher prices to engine repair customers?

What belief systems JHA enterprises should build up? First of all, this case appears to be a curious case of starting with something and ending up being something else, as cash flowed from unexpected sources. The component manufacturing gave JHA an identity: being a supplier to reputed OEMs. Which attracted a different set of customers and cash readily flowed from there. The first thing JHA needs is clarity of purpose. What the business is all about? Does it want to be a specialized component manufacturing company or be a repair specialist? In other words what you will do and what you will not? This is also known as “trade-off” in Michael Porter’s language (refer five tests of a good strategy in the book written by Joan Magretta on Michael Porter). Trade-off here implies what the company will do and what the company will not? Being very clear about it. South/West Airline doesn’t entertain customers demanding full-service flights, BMW never makes cheap cars. Just because the customers are demanding Indian food – a specialized Chinese joint should not think of offering Chicken Tikka with

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Yan-Chow fried rice! Such customers should be politely informed that the restaurant is a specialized Chinese joint. Hundreds of Indian family businesses have perished in the past, because they chose not to trade-off and the lure of ready cash diluted the purpose and the original purpose was lost. Eventually, competition sniping at the heels took the customers away. Sixty years back Ted Levitt wrote in his landmark HBR article: - “Marketing Myopia”: there is no such thing as high growth industry or business. Every business grows, matures and declines. Secondly, Jaspinder, instead of listening to his BCG friend’s recommendations, should listen to his inner voice. Although the engine repair business was meant to be a separate business, now the mix-up has occurred and JHA has two options here: (a) clearly separate the two businesses, erect another factory shed and signboard and hire a team of personnel for engine repair. (b) Charge higher costs – appears to be a more profitable and easier option, as the engine repair business has developed a strong reputation and charging 25% to 30% higher prices may not take the customers away immediately, although murmurs may be raised and customers may go away over a period of time. The three JHA founders should do a deep introspection and mull various options and find a big purpose. Being an engine repair company is not a sustainable option. There are hundreds of them and JHA’s engine repair business is highly profitable and cash rich because of its component business and not otherwise. JHA should think of growing further into the field of automotive engineering and become a specialized component manufacturer. The apprehension is that if JHA stops focusing on the engine repair business, the ready cash will dry away. JHA must understand that resource shortages are part of the growth story. JHA can another third option: do nothing about the current component making and engine repair business, let the engine repair business run as it is and shift the component

Case Teaching Notes 283

manufacturing away from the current premises and develop expertise into further aspects of automotive engineering. This may result in two outcomes: (a) the engine repair business will be charged higher prices, and (b) the customers will shift out and eventually the cash cow will disappear. However, it will be at least an year before the cash cow disappears and the cash from the engine repair business can be used to develop and do R&D in components to become a specialized component maker. However, this strategy again has a downside! As the government increasingly is emphasizing on e-vehicles and e-mobility, the fossil fuel based engines may be stopped altogether by vehicle OEMS. The question is when and how long? The pace of technological development combined with inclinations of the government suggests that switch to electric vehicles may happen sooner than one thinks. By 2025 at least 50% of the vehicles on roads in major metros at the minimum may use electric power and by 2030 the transformation to e-vehicles, coupled with e-mobility and SMART energy grids may be complete. This steers the discussion towards finding a big purpose – an element of coordination. JHA must look beyond fossil fuel engine components and let both the businesses dry out by running their natural course. Hence, the question of finding a big purpose and listening to the inner voice rises. The inner voice should guide JHA in the roughshod days of resource shortages that may be about to follow – during the transition. The big purpose should be to develop expertise in e-vehicle component manufacturing, which is the sunrise industry. Hence, closing down or separating the engine repair business, shutting down the component business – none of these are feasible options if one thinks like the 10th man. Also collective resilience is hard to beat – this is the time that JHA with its three founders and the entire component and engine repair manufacturing team learns something new – transits

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into something new and sees through the days of resource shortages through together. The shortage of cash may follow two years down, as competition eventually may outprice the engine repair business and customers may start switching to cheaper options, also the OEM auto makers may start ordering lesser number of components as they move towards winding up fossil fuel engine making. Here the concept of co-evolution will play a critical role in the coming years. JHA has to learn to collaborate and co-evolve. JHA must collaborate with e-vehicle makers abroad and absorb new knowledge, JHA must learn to play the underdog role for some time, when its current profitable businesses eventually get shut. They must understand that being an underdog is not a disadvantage, as the fuel switch kicks in, an entire batch of engine component industry will face a technology disruption and vanish, unable to make the switch or shut down due to lack of orders, unable to garner sufficient investments to make the switch. Here two more tenets of resilient thinking under the heading co-evolution comes into play – practise what you dislike, this will especially appear to be true when they are going through the learning phase. Secondly, as the two current businesses start running out of customers and cash – increase the pace of learning and commence the learning process right away when things are still good and cash is still flowing in large amounts. JHA should preserve cash for rainy days and decide to retain a core team – that will transit into the future, while saying a decent goodbye to others. What organizational practices JHA should adapt? JHA should adapt a B2B mode of strategy and aspire to transform itself into technology company in the domain of auto-electrical engineering. The background exists – as all the three founders are engineers and experienced in the field of automotive engineering. Transformation is the third pillar of dynamic capabilities, if the reader recalls from the discussion in the Part 4 (grounding the framework in academic theory)

Case Teaching Notes 285

and transformation is the long drawn and painful process. Accordingly, organizational practices related to coordination are irrelevant for the company. JHA should assimilate-absorbtransform new knowledge. Attempt to co-evolve locally and globally, attempt to combine customization with standardization into its future products. These are the five key organizational practices JHA should adapt. What path JHA should adapt? • Run the current two businesses as they are, as long as the cash is flowing in – conserve cash. These two businesses are bound to run out of steam in coming days in next one-two years, get the best out of them and shut down when losses kick in. • Chalk out a detailed future strategy – about transformation of JHA into an auto-electrical engineering company. • Decide in which domain of e-vehicles to invest – given JHA’s current skill set, electric vehicle component manufacturing is the most likely domain to develop expertise. • Chalk out a detailed manpower strategy. Who will remain when both the businesses are shut and who will remain? Ideally, a small core team of 10-15 people should be retained and their salaries for one year should be provisioned. • Collaborate extensively — with electrical vehicle companies, with JHA’s alma mater – IIT D and other research labs specializing in e-vehicle technology. Build the technology base with training programmes. • Scout for a venture capital firm – who would invest in a new technology venture and provide funds for the new company – the capital expenditure including expenditure on training and knowledge absorption.

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What possible solutions will emerge in future? JHA can commence its new business in the bus domain. E-buses are coming up in a big way in all major metros and even in other state capitals and the e-bus domain is a good place to start. E-vehicles will come up in a big way after 2025, but JHA should actively get into the e-bus and e-auto domain by 2022. The transition will not be entirely smooth and without pain and sacrifice – but will be worth it!

CASE

3

Express Meat Shop

What’s the main issue in the case? There are three main issues in the case:

1. How to retain the existing customer base, i.e., prevent it from eroding?



2. How to expand the menu range? Given the shop’s limited resources for capital investments?

3. How to transit into an online store? And more significantly how much online and offline sales can happen in future? More significantly, is it necessary to switch to online? Rajesh and Ravish should think of novel ways to compete. Given the shortage of resources in terms of manpower and funds – their options are limited, but in one aspect it is unlimited! Improving resilient thinking and increasing the knowledge base. This is the only way out, when all the doors appear shut. What belief systems they should follow? Indianness of products: They should do a deeper research. As the COVID pandemic subsides, some of their lost customers may be recalled by companies. HCL & Samsung have started calling back retrenched personnel already. Companies are reopening and calling back employees. The shop’s customer base has shrunk largely due to employee turnover. But the shop still enjoys a significant advantage: brand equity built

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over 25 years. Indians love spicy food and the shop should expand its range on Indian non-veg snacks, in fact think of switching over mainly to non-veg snacks, keeping the non-veg: veg ratio at 70:30. There is a significant rising trend: increasing number of Gen Z employees are switching over from being strictly vegetarian. Their parents and grandparents followed vegetarianism strictly. But this generation is more adventurous and is willing to experiment with a different lifestyle. Young professional women too are not averse to enjoying alcohol in bars and many young men are switching to non-vegetarian food, at least on an experimental basis on weekends. The definition of “Being Indian” is changing and is undergoing a gradual transformation. Rajesh and Ravish should do a deeper research in understanding what “Indianness” means now! Finding a purpose and its clarity: Rajesh and Ravish should do some deep soul searching. Can a meat shop have a great purpose? If yes, what? Should they continue to remain a meat delivery shop or should they transform themselves into being a specialist in a range of non-veg snacks? Just serving Chicken Tikka, Chicken Lollies, and Chicken Kalimirch limits the options. A large part of their clientele are South-Indians, IT engineers, who would love to see famous Hyderabadi, Keralite, Mangalorean and Chettinad snacks such as Chicken 65, Chicken Chettinad, Kerala Mutton stew, Mangalorean Chicken Masala Fry, Prawn Fry and so on. These snacks are not served by too many outlets in Delhi NCR and they have a huge market potential. This transformation into a non-veg snack specialist doesn’t require heavy investments. Reading cookery books written by the famous chef – Sanjeev Kapoor will suffice. There are a number of other chefs like Ranveer Brar, Rakesh Ragunathan from South and Kunal Kapoor, who appear in number of TV shows in food channels like Food-Food of Sanjeev Kapoor, NDTV Good Times and Zee Zest. Rajesh and Ravish should read cookery books published on Indian non-veg snacks, invest time and energy in reading and burning

Case Teaching Notes 289

the mid night oil. They can then train their existing staff to increase the snacks range from just three or four North Indian items to a large range of 15-20 snack items. This transformation requires investment of Mind! And enhancing the knowledge base. With time and effort this transformation is possible within a span of 2/3 months. So, becoming an Indian non-veg snack specialist is a very good and clear purpose to pursue and accomplish. Listening the inner voice: Rajesh and Ravish should do a deep introspection. The glory days of 2018/19 may never come back and may take a lot of time. They should not just listen to advice and latch on to the increasing trend of online delivery. They should do a deep introspection and ask themselves – should they really go online? It will require an investment of Rs. 50 lakh to the least. Will that investment be justified? It is not that offline brick and mortar retail business is about to vanish. Offline retail will continue to co-exist and even in some cases thrive with online. While many customers prefer online shopping, many still don’t! The ratio may be at 50:50 today. Even among the Gen Z, many don’t prefer offline and after the pandemic subsides, many may return to physical visits of retail outlets they loved to visit. They should postpone the idea of going online for sometime now and observe the trends. Isolation and resource shortages are part of the story. They should not feel inferior and suffer from the complex of being a small and standalone shop with limited resources. They have built a brand equity over 25 years and they should enhance the brand. Feeling inferior in the face of competitive onslaught is a self-destructive mindset and reacting to competitive trends is akin to committing hara-kiri. 10th man thinking: Rajesh and Ravish should adapt a counterintuitive approach. That what appears to be a sure-fire success formula may not at all work for them. Investing Rs. 50 lakh by borrowing funds may be turn out to be a dead duck approach.

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It may not pay off at all. What will work and what doesn’t have to be determined over a course of time. Starting the transformation process one step at a time into a specialized non-veg snack outlet is the right approach and this transformation will take months. Hence, what appears as the right way out in light of the advice and current trends may not work for them. They should think of novel ways to differentiate themselves from competition. Being an underdog is not a disadvantage: Rajesh and Ravish should not fear competition from large online meat supply shops. There is always enough scope for off-line shops to flourish, despite the retail sector getting crowded with online players. Large investments don’t always deliver the desired outcomes. Billions of dollars have been shrunk in false ideas by companies in past. Here Rajesh and Ravish should do some research in false ideas – false positives and negatives. A false negative idea is always counter-intuitive and offers out-ofthe-way and novel solutions, which may look crazy at the outset and infeasible. Combining insanity with logic: The insanity part comes into play in creativity. Creativity in designing the snack part. The raw meat supply of chicken and mutton is a commoditized business and has no brand value. The shop has to differentiate itself in creating some really great snack items and emphasize on tasting them before buying! This will draw more customers to the shop. The shop still enjoys a significant advantage – the only good, clean and hygienic meat shop within a 10 km radius. In this radius there are more than 50 societies, where at least 20,000 families reside. Post-pandemic they are bound to come back to regular buying and many still don’t prefer buying non-veg items online. Hence, this gives them the scope to combine insanity with logic and experiment in small doses. A little sustained effort everyday will produce the results. This is the right approach for this little shop tucked away in

Case Teaching Notes 291

one corner of a busy market with limited resources. Rajesh and Ravish shouldn’t look for heavy and risky investment options. Instead they should do some research into varieties of non-veg snacks they can offer and spark the process of transformation, gradually – one little step at a time over a period of six months. The time will certainly arrive when people will line up to enter the shop once again on weekends! What organizational practices the shop should adapt? Observe-reflect-introspect: The three key coordination practices. The shop should keep introducing a new snack and observe customer reactions, provide feedback forms and reflect on customer feedbacks. That’s the only way to build a specialized non-veg snack shop. Assimilate-absorb-transform: The shop must absorb a lot of new knowledge on snacks. If necessary, one of the brothers must visit the major metros across India – Mumbai, Kolkata, Bengaluru, Hyderabad and Chennai to check street side vendors offering non-veg snacks and taste and observe how it is made. The three southern metro cities have thousands of vendors offering non-veg snacks all over the city and they represent a rich source of information and knowledge. The brothers can also visit Kolkata’s famous China Town to taste and sample Chinese snacks, the famous eateries of Nizam, Badshah, Siraj, Arsalan and Armenia to taste their famous Kathi Rolls and other Kababs. Mumbai offers a range of varieties of non-veg snacks, some the eateries are more than 50 years old like Light of Asia café, near Mumbai CST station and there are a number of other snack offerings across Mumbai. This knowledge gathering process is infinite and can go on, absorbing one little at a time and coming back to try something new. What path the shop should adapt? • Defer online conversion decision for some time – it may not be a feasible option at all.

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• Instead just maintain a website displaying snacks on the offer – invest a little money on digital marketing of the website, distribute pamphlets on the website across Noida in all societies – this is a low risk option with little investment. The task can be accomplished with as little as five lakh rupees. • Keep offering and improving the snack range, even try western snacks like pork sausages in various varieties – pork eating is increasingly becoming popular and the shop already has customers coming and buying pork items such as Ham, Sausage, Salami and Bacon. These four items can be offered in a wider range. However, the shop should stretch on Indianness – this doesn’t include pork. The shop should nurture the ambition to be a specialized non-veg snack provider representing all regions of India. • Don’t think of going into vegetarian snacks. This will land the shop into the realm of Halidram and Bikanerwala, a crowded red ocean and offer a limited range of vegetarian items. The vegetarians never visit a meat shop anyway! Neither they will buy vegetarian snacks from a non-veg shop. This is a minority crowd for the shop. Don’t invest money and rack space on vegetarian items. Better to do away with vegetarian snacks altogether. This is following the classic Porterian Trade-off in strategy (refer the essay on Deep Thinking in Part 2 for the five tests of a good strategy). • There is a liquor shop opposite the meat shop with licensed space to sit and drink. A large number of customers flocked the liquor shop in evening hours till 10 pm to eat snacks with drinks. The pandemic, of course, stopped it. But customers will start crowding the liquor shop, once the pandemic subsides. Rajesh and Ravish should tie up with the liquor shop to offer a range of

Case Teaching Notes 293

non-veg snacks. This is something they have never explored before. At least 90% of the customers in the liquor shop prefer non-veg snacks, mainly in chicken and the quality of snacks offered by the liquor shop’s own stuff is of substandard quality. The poor quality of non-veg snacks has been a long-standing complaint of customers. Rajesh and Ravish should explore the quality gap. This can fetch them a substantial revenue every evening between 6 and 10, post-pandemic. What possible solutions will emerge in future? Express Meat Shop should consider changing its name reflecting the status of a snack provider and over a period of time the shop can start selling a range of readymade curries in tetra packs, invest in a small factory manufacturing ready to eat non-veg curries – offer these curries in large retail outlets such as Big Bazaar in refrigerated racks. Big Bazaar has a separate non-veg section in many of its outlets, especially in premium locations and over a period of time EMS should think of becoming a manufacturer, rather than just being a retailer. Then tie up with various online delivery companies for ready to eat curries is possible. The ready to eat food market will only grow in India in future, as increasing number of families may find it tough to spend time in kitchen on weekdays, where both the husband and wife work and both arrive home too tired to cook.

CASE

4

Should a great free service be charged?

What’s the main issue in this case? Should Aditya make the downloads chargeable? What belief systems Aditya should adapt? Find a great purpose: If Aditya follows the investor’s advice and decides to charge for the downloads, he must find a great purpose: if he is not interested in the money earned, what will he do with the money? One option is to donate to NGOs. The other option is to help struggling musicians – this can be a noble purpose and syncs well with the site. It should be flashed across the site: “We are charging you, and this money will be give as small loans to struggling musicians – who are finding it hard to make a living”. Another purpose can be to help young musicians showcase their talent to prospective customers – music composers of Bollywood and other music show organizers. Make it a platform. Invite music composers and companies to pay a nominal sum and subscribe and be present on the site. So a great twin purpose can be built up on the site: (a) help struggling musicians with small loans ranging from Rs. 5 lakh to 10 lakh and support them up to two years to practise and develop their talent, and (b) built the site as a platform, where young musicians, experienced music teachers and composers can come together – to promote, guide students and help musicians flourish. Look forward to leave a deep impact: The impact should relate to the field of music. Not helping NGOs. In India there is

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a surprising lack of system promoting and showcasing young musical talent. The reality shows such as Indian Idol only promote singers, that too only for Bollywood films. Film singing is not a genre of music like classical, jazz, or rock. It is a hodgepodge of all genres and a very wrong way to promote music. A musician must specialize in a genre of music. Also, there is no system or TV shows to promote instrumentalists, which is shocking. In USA and in other European countries there is a system to promote instrumentalists. That’s how great pianists, violinists, guitarists come up and further enrich the three main genres of music: rock, jazz and classical. That’s how great guitarists come up and great rock bands like Guns & Roses or Green Day are born. In the absence of a system, hundreds of young and talented musicians take to singing Bollywood songs or songs which will attract the Bollywood music composers over the You Tube. This leaves a serious deficiency: not developing and mastering a genre of music and the foundations remain weak, as Bollywood music doesn’t follow a particular genre. So, 90% or more musicians get frustrated and give up a musical career, opting for safer choices to earn a living. If the site can be developed to promote, nurture and support musical talent, as a platform to bring musicians, composers and teachers together, it will be the first site of its kind in India and encourage many musicians to visit the site, rather than flock to auditions of Indian Idol – which is anyway a copy of American Idol and doesn’t promote the instrumentalist like American Idol does. Clarity of purpose: Aditya should be clear in his mind and examine the various pros and cons in building up the site. The purpose may not be clear from day 1. Aditya should learn as he goes along, spend an hour every day on the site and improve the site as more and more people start visiting the site. Take it one step at a time. The first should be to invite young musicians to showcase their talent in the form of a music video. The

Case Teaching Notes 297

second step will be to connect the student and the teachers. The third and last step will be to invite the composers from all over the world to visit the site and scout for talent in various genres of music. Listen to your inner voice: Aditya should not blindly say a NO and do a deep introspection. Is it possible to play a larger role? What kind of role? How much time will it take to pay off the investor? What kind of income can be generated from the downloads? Are the numbers projected by the investor realistic? Some downloads must be kept free. Such as downloading the musical scales, chord construction charts, the music notes and their significance, the rhythm patterns – in other words the fundamentals of music. Secondly, what kind of instrument must he promote? Only the guitar? Or should he expand? This answer can’t be found in a day. The guitar follows the Piano’s system. Piano music notations and guitar music notations are largely similar. Thirdly, what should be chargeable? A song sheet music can be chargeable. Aditya being a trained guitarist can write the sheet music himself in an easier manner – which explains a rookie guitarist how to follow the sheet. The difficulties of reading sheet music can be overcome. Aditya can spend some time and write sheet music of 200 or 250 popular rock songs over a period of time and upload them with copyrights. Lastly, Aditya should think whom to help and how? How to check and have a system to avoid fake requests for financial assistance? How to help a genuinely struggling musician? Think Like the 10th Man: Aditya should think of unusual options. What are the current deficiencies in promoting guitaring talent? How can the site bring out another Slash (Guns & Roses) another Metallica band? Another Brian Adams? There is no dearth of guitaring talent India. Why then India has not produced any top-level rock band? He should draw inspiration from Aditya of “Rock On!” film and examine

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the shortcomings of the current system. Most important, as the famous composer of 3 Idiots film, Shantonu Moitra, once remarked that non-film music must be promoted, without flourishing of non-film music, Bollywood music will never survive. There are hundreds of talented guitarists who come from the north-eastern region of India and Shillong is known as India’s rock capital. Aditya must visit that part of India and take a tour of major towns of north-eastern states and cities like Kolkata, Bengaluru and Mumbai – which has a large rock music following. Even Delhi, where the crowds mainly followed Punjabi and Sufi music earlier has a large rock music following today. Aditya must think of promoting non-film music, especially guitarists to begin with on his site. Later on, he can expand to include other instruments like the piano, synthesizer, drum and Indian classical instruments. A real 10th man thinking will be to bring the Gharanas of classical music on his site. There are more than 10 major Gharanas in Indian classical music and these Gharanas largely remain isolated and localized, except a Facebook page they don’t have any other way to showcase. This can be a real avenue of 10th man thinking. The other avenue of 10th man thinking can be to promote various genres of rock – in Indian languages. Rock itself has more than 10 genres like Heavy Metal, Rap, Reggae, Blues, Traditional Classic Rock, Rock and Roll of 40s and 50s. Rock and Roll is one genre which is still very popular with the Indian crowds and many are not aware of the greats of this Genre like Chuck Berry, Elvis or Little Richards, who performed in 50s through 70s and 80s. Aditya can think of reviving this genre of music, by performing himself and by providing You Tube links of past Rock and Roll greats. Another 10th man thinking can be to promote past hits of Bollywood using the guitar – encourage talented guitarists to use sheet music and perform great Bollywood hits of 50s and 60s and 70s using the rock and roll style or heavy metal. This will go very well with the Indian music lovers, who love the great hits of Kishore

Case Teaching Notes 299

Kumar or Mohammed Rafi or Lata Mangeshkar. Thus, there are numerous possibilities Aditya can explore. A little but sustained effort everyday: Aditya should plan it out, have a clarity of purpose, be clear of the sequence of steps he should follow and just spare an hour everyday in building up the site. He should be in touch with the developer, develop his system of sheet music and decide what to promote, whom to help, how to help and what final purpose does it serve? What organizational practices Aditya should follow? Since Aditya is an individual and he is not running a start-up or he appears to have no plans to start a company, the nine organizational practices don’t exactly apply to him. At a much later stage when his website is attracting musicians and composers and experienced music trainers from all over the world – if at all the site reaches that stage after 3/5 years, Aditya can follow the three organizational practices of co-evolution. But he has to overcome many obstacles and question marks to reach that stage, where musicians from all over the world are visiting the site. What path Aditya should follow? • Decide what is downloadable and how much to charge for the downloads. • Decide what instrument to promote first? Only the guitar or include other instruments as well? • Decide whether to promote only one genre of music he is familiar with – Rock or promote other genres of music as well? • Decide much later whether to promote only the instrumentalist or the vocalist as well? This may complicate the situation later on. • Write the sheet music of 200/250 popular rock songs himself. • Promote videos of Rock & Roll hits. Revive this lost and popular genre.

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• Encourage musicians to showcase their talent in the form of videos. • Encourage experienced music teachers to provide both free and downloadable lessons for a nominal charge. What possible solutions will emerge? A site which is visited by rock musicians from all over the world. A site which is promoting Indian non-film musical talent. A site which is helping struggling musicians with financial assistance. A site which is bringing the composers, teachers, musicians together. There are various possibilities which only time can tell.

CASE

5

What to do when there is a fire in factory?

What is the main issue in the case? The issue is of choosing the right alternative, keeping the longrun implications in mind and just not find a short-term solution. In terms of thinking – quick thinking was required to control and limit the damage – which was done. But a bigger issue is now staring on the face of the top management of TCIL: what are the long-run strategic implications of choosing one of the three alternatives? Let us examine them one by one first, before applying the 3 - C framework.

(a) Option A of outsourcing inferior quality compressors is a quick and cheaper option – but with a possibility of high warranty costs in case of failure and loss of both the goodwill of OEM customers and their retail B2C customers, who will purchase these 35,000 units. TCIL had a reputation of making high quality products – its compressors were known to be efficient in cooling and not consuming electricity in large doses. The 200% cost computed by the costing department was a direct and visible cost. There is a hidden and shadow cost – cost of reputation loss, which can’t be computed and estimated. The probability of all 35,000 units failing is low, but can’t be ruled out. In case all the 35,000 units failed at the residences of customers, who purchased the fridge it can result in a large loss of order from the OEM in future – as the purchase manager then in charge may

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not be aware of the fire incident, who joined later and he may take a decision to cancel all TCIL orders in future – which can result in loss of nearly 50% of production capacity – as this OEM ordered 50% of the TCIL’s annual capacity. This loss can be large and crippling for the company. (b) The option of outsourcing motors is even riskier – as this unit was not producing refrigeration compressor motors of smaller capacity. These motors will be assembled in the final assembly plant of TCIL and compressors go with the TCIL label. In case of a motor failure – the warranty costs are invoked and all the risks associated with option A kicks in. Here probability of failure is even higher – as these companies had no experience of producing smaller motors and they had to alter their assembly line to produce 35,000 units. Motor winding with copper wire is a delicate and intricate process and even the slightest error can result in a short circuit with the motor catching fire. The robots in the TCIL assembly shop were perfectly programmed by the German technicians to synchronize the robot’s movements for accuracy in coil winding process. That accuracy may not be achieved by this plant, as the motors will be wound manually by workers. The chances of motor catching fire due to a short circuit is very high and if a fire occurs at customer’s premises – it can be disastrous both for the OEM refrigerator maker and TCIL, resulting in cancellation of further orders and even existing orders. Even one fire at premises of one customer can spark a chain of events with unknown consequences. Hence option B is more risky than option A.

(c) Option C appears to be the safest and the best option but with opposite consequences! TCIL might have to

Case Teaching Notes 303

initiate a series of changes in its manufacturing and management processes to produce higher quality compressors with superior rotary technology – which Matshusita used. This entails absorption of new technology and upgrading the entire manufacturing process in a relatively short time. As the OEMs may start demanding rotary technology compressors from TCIL. This was also the market trend at that time and has become the standard technology for compressors in 2020. TCIL’s technology was that of an older generation: reciprocating technology. Unlike reciprocating compressors, rotary compressors are lighter in weight, vibrate less, consume less electricity and are less noisy. Resulting in higher reliability. Switching to rotary technology would have required significant capital investments for TCIL – to the tune of 10 crores at least, with major modifications made in the machine shop in 2001 terms. But that investment was for knowledge upgradation, new technology absorption and marching into the future. Hence, considering all three options – option C is the best option, with no risk of reputation loss and failure at the retail customer’s end. TCIL would have to draw up investment and training plans to switch over to the new technology in next six months. Considering the technology switch and recommending option C as the solution to the case, let us now see how the 3 - C framework applies. Since TCIL is a technology company operating in the B2B mode, the principles of coordination, which mainly involve customer focus and application of design thinking principles don’t apply. For TCIL collaboration will play a major role and co-evolution will play the most crucial and decisive role. Listening to one’s inner voice: The TCIL top management must constitute a core team, comprising a cross-functional

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compass of managers from all departments. This team’s main task will be to see TCIL through the technology transition. This team should do a deep introspection on what changes in manufacturing processes and practices are going to come and what can be accomplished with minimum cost and maximum output. TCIL’s parent company was more than willing to assist in the changeover process. But the team has to examine the cost angle and the time angle at every turn and anticipate them as much possible beforehand to prevent cost overruns: a most common problem in the changeover process and transitional processes in many large organizations. This team has to keep asking at every step: what can be achieved at a lesser cost and time? This requires really innovative and out-of-the box thinking and the combined efforts of the team was the need of the hour, so that cost overruns are prevented and more investment and time and effort is directed towards product development, rather than spending time on operating and production process issues. The cost and time savings had to be made in these processes. Resource shortages are part of the story: Anywhere and everywhere, unless the right mindset prevails, people and managers will keep complaining about shortage of manpower and funds. The right mindset is to learn to deliver more with less and this is not easy and doesn’t come to us naturally. That’s how billions are sunk in false ideas and projects with no eventual promise. At every step of the technology transition process this team has to examine – where cost savings can be made? Where more investment and resources are required? The three key stages of the transition process are: (a) installation of new machines and training in the new technology, (b) product design and prototyping, and (c) setting up the production line and commence trial production runs. Here maximum costs and wastage of resources occur in the third stage. This is where careful planning and thinking can save a lot of costs.

Case Teaching Notes 305

10th man thinking: The 10th man thinking will apply in the later two stages: prototyping and trial production runs. Maximum things go wrong where the company has a lesser degree of control: suppliers. The suppliers who will supply the components of the compressor can err in quality at least in the initial stages, despite being provided clear designs and processes. The transition in the first two stages can be perfect, but can go wrong in all directions when regular production runs commence, throwing up quality and productivity issues, high rejection costs and frequent altercations. So, the team has to think all the cons carefully. What can go wrong and to what extent once trial production runs commence? Every possibility must be examined and nothing ruled out. Collective resilience is hard to beat: This thinking trait will play the most crucial role right from day 1 to the day when complete switchover has been made. It’s just not the team – the support has to come right from the CEO and the vice presidents and must boil down the worker on the shopfloor. But the team plays a crucial role and must display resilient thinking right from day 1. The team must treat the transition process as a “Valley of Death” and anticipate a very tough period ahead: full of stress and unanticipated risks. A period of high uncertainty, yet at the end of the tunnel lies a brighter and different future. The top management has to set an example: by making sacrifices and drive home the message that the entire management team comprising production engineers, support staff, accounts and HR personnel must display a collective resilience – willing to make the necessary sacrifices, invest the long hours, returning home late, facing a series of unanticipated obstacles with a smiling face and managing with scarce resources. A collective resilience is the most significant trait, that every company needs in a transition process and this is where many transition efforts fail. Being an underdog is not a disadvantage: TCIL is a company with a long history and tradition and has built a reputation as

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one of the best employers and ethical company. This has taken the company more than half a century. Technology transitions have caught many a big giant on the wrong foot in the past and companies have vanished, unable to adjust to the new regime, new environment and changing customer and competitive behaviour. Here mindset plays a major role and this is known as POPS or “Prisoner of Past Success Syndrome.” Hundreds of Fortune 500 giants have perished in the past due to this syndrome and were unable to adjust to the new situation as underdogs once more! This from hero to zero and once again attempting to become a hero from zero is a never ending one and goes on. TCIL’s top management team must realize that they are facing a similar situation and they must not meet the fate of companies that have perished in past, due to mindsets. A time will surely come when TCIL’s reputation as an ethical and transparent organization combined with new technology and a product line will propel it to top. Combine insanity with logic: This thinking trait will specifically apply at product design and prototyping stage and to an extent in trial production runs – in exercising creative thinking, combined with discipline to effect cost savings in design of the production line in machine shop, which will undergo maximum changes. Once designed, costs are locked in forever and a lot of future cost savings should be envisaged in terms of productivity, wastage, tooling costs, maintenance costs and quality control costs. Here choice of machines and knowledge about machines will play a critical role. TCIL must approach industrial engineering specialists, or even industrial engineering experts at NITIE-Mumbai to effect future costs savings and help TCIL narrow down in choice of machines. Choice of the correct production machine will play a decisive role. Practice what you dislike: This thinking trait will have to be applied at every stage of the prototyping and trial production

Case Teaching Notes 307

process. Often the team and even top management will be forced to make choices they don’t like, but there is really no other option but to forge ahead, despite a crisis looming and given the time constraints many hard choices will have to be made. Technology transition also brings a major cultural transition in its wake and many new processes and practices will have to be adapted, which may raise resistance from employees. Overcoming employee resistance is major part of any transition process – and hundreds of pockets of resistance will rise in every corner. This has to be anticipated and countered. A little sustained effort everyday will produce that moment of magic: this thinking trait especially applies at the prototyping and compressor design stage and everyday a little extra effort collectively will produce that moment of magic. What organizational practices TCIL should adapt? TCIL already has an excellent work culture in place and it’s a major name in the field of compressor manufacturing. However, four organizational processes will play a crucial role. Assimilate new knowledge: Knowledge assimilation process can be difficult and time consuming. Learning a new technology under time constraints becomes a difficult task, if learning abilities vary. A company’s assimilation capability depends a lot on its culture and past processes. If the company has the regular habit of sending its employees for training programmes in academic institutions – its employees will be used to the process of learning at regular intervals. TCIL had a culture of learning and used to send its employees at regular intervals to IIMs and IITs for academic learning. Hence, the technology absorption process should not be difficult, however special attention must be paid when the new knowledge is applied and prototypes designed. This is where many companies falter, in the absence of learning and application mechanisms.

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Absorbing new knowledge: TCIL must send a small technical team to NITIE or one of the IITs to understand deeper aspects of rotary compressor technology. While prototyping and trial production runs go on, this team must understand and absorb the finer nuances of the technology and how it is applied in various cooling applications in refrigerators, water coolers, rack coolers, air conditioners and so on. Transform new knowledge – this is the stage where successful trial production runs will have to be executed – from learning to successful trial production runs – the path is strewn with thorns! Co-evolve globally and locally – TCIL must look forward to make its plant a major export hub and tie up with various OEMs. A global outlook will entail understanding various applications of the technology in various product segments. A local outlook will make TCIL understand how requirements of the local conditions vary. This is the technology of the future and how cooling applications in future will evolve will have to studied and understood on a continuous basis. What is the path ahead? • Unlearn and relearn! • Build collective strengths • Learn to deliver more with less • Switch over within six months • Renegotiate prices with OEMs for the new product • Build a set of new manufacturing practices • Last but not the least blend new cultural elements with the old, the most difficult task What possible solutions will emerge? If no switch is made to the new technology and company continues in its old ways – soon it will be forced to undergo painful transformations. If TCIL pro-actively attempts the transition, a lot of possibilities will arise in future where TCIL will be able to attract new customers.

CASE

6

From Regional to a National Level Brand

What is the main issues in the case? There are three major challenges: (a) Managing supply chain: Tying up with local and national level suppliers for spices.

(b) Scaling up: Beyond metros, there no large market.

(c) Building up a team of cooks locally: Not feasible to carry cooks from Hyderabad. For SEH, the first and third challenges are operational issues. The second challenge is a strategic issue – a major decision to take. If this decision is deferred, then the first and third issues will not arise. The company has to have a “flipthe-box” approach. SEH has bigger ambitions and wants to become a national level brand – this has not been accomplished by any biriyani making hotel or company so far, to have a national level brand like Mainland China in Chinese food. They are concerned about the challenges of supply chain and the fact that the Hyderabadi Biriyani is an extremely specialized dish, which can have a maximum of 4-6 varieties, unlike an entire range of authentic Chinese food that Mainland China offers. The issue of scalability and “Chef’s Skill” element arises. However, these challenges shouldn’t keep SEH from scaling up to a national level brand. The bigger issue: what makes a national level brand? What is the quantum and depth of presence across India? There is no niche food chain, which has become a national level brand. The food chains of southern

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India like Kamath, Annapoorna, Tajmahal, Saravana, Sagar Ratna, barely have a presence beyond the five southern states. A few of them have one or two outlets in Delhi NCR like Saravana and Sagar Ratna. It’s only Mainland China and TGIF, which specialize in American Cuisine like steaks and fries have a national level presence in all metros with multiple outlets. Hence, scaling up to a national level biriyani specialist is indeed a Herculean task and it is here the “flip-the-box” approach comes into play. They should ask themselves: if we are to have presence across India then, what is necessary? The second critical question – how much to scale up? Having answered these two questions the next step is to see what challenges will come up and find ways to overcome them. The right approach is to first have one outlet each at four other metros: Kolkata, Mumbai, Delhi and Chennai. Run them for a year and see the response. Scale up next to 3-5 outlets in each of these metros. Expand in Bengaluru as well. After three years the vision is to run 20 outlets in six metros efficiently. That gives a fair identity of a national level biriyani brand – not accomplished by any other chain so far. Online chains like Biriyani Blues and Biriyani By Kilo have some presence in these metros, but again not noticeable. SEH shouldn’t look beyond the vision of 20 outlets in six metros. They should not think of further expansion as of now. Neither think of going online. Considering this overall vision, the 3 - C framework now can be applied as follows. What belief systems SEH should follow? Find a great purpose: The vision of becoming a biriyani specialist at a pan India level is a big one and they should never give up on the idea. The idea should not be restricted to just the biriyani – but an entire range of Hyderabadi dishes, like the Lukmi, Sheermal, Nihari, Badami Murgh, Khatti Arbi ki Sabzi, Baghare Baigan, Imli Gosht and Seekhampuri Kabab.

Case Teaching Notes 311

They should commence with biriyani first and build a supply chain in all five metros to cook and prepare these dishes. Except the spices, everything can be sourced locally. The challenge will be to train and retain the cooks. Instead of hiring cooks from Hyderabad, the company should look forward to hire a team of talented and young chefs from the Institute of Hotel Management (IHM). The IHM has branches in all metros and the IHMs of Delhi, Kolkata and Mumbai are counted as the top three in the country. That of Kolkata has a rich tradition of producing some of the best chefs India has seen, locally famous as the Taratola Catering College. These chefs can train local cooks and a clear policy of retention, promotion and encouragement should be given. Look forward to leave a deep impact: Making Hyderabadi cuisine popular is a big goal to accomplish. Hyderabadi cuisine is known all over the world, but beyond the biriyani not much is known about the cuisine even within India. It’s a tall task. The real deep impact will arise if the company can take the cuisine to the classrooms of IHMs! All the six metros of India have an IHM, which produce talented chefs. From the outlet to the classroom will be a deep and long-lasting impact, producing a line of chefs taking the cuisine all over India and beyond in the coming years. The company should look forward to do this. The IHMs mainly focus on the Lucknowi variety, which is also known as the North Indian Mughlai cuisine or the Avadhi cuisine. Hyderabadi cuisine is restricted to the biriyani. Hence, it will be a real big impact to take the dishes cooked in homes of the lanes and by-lanes of the Hyderabad to the IHM classrooms. This, in future, can spark a school of thought and produce a rich lineage of chefs hosting TV shows and cooking contests. Clarity of purpose: SEH should break down the overall vision into a balanced scorecard framework with clearly achievable goals with clear time outlines. Each task should be clearly spelt out – so as to who will do what and within what time interval

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and what challenges and constraints the person will face? The first objective should be to build a very good supply chain. This may take up to six months. Lengthy and protracted negotiations with suppliers will go on. The company should hire a food supply chain management expert on project basis. Such experts are available in India today. McDonald took four years to build their supply chain. SEH, of course, doesn’t enjoy the advantage and brand power of Mc-D and this is a minus point going against them. They should be even more careful in negotiations to overcome the challenge. The next objective is to select 4 good locations in the four metros. Location can make or break the new initiative. It need not be a prime location, but should be accessible and well connected by public transport. Delhi and Kolkata are well connected today with metro, Mumbai with its famous local trains and Chennai with bus service and local trains. The third is to opt for extensive digital marketing once the supply chain negotiations are finalized in ink. Listening to the inner voice: The vision of Hyderabadi cuisine being cooked by IHM trained chefs winning the coveted Michelin Star award is the ultimate and big one! The path to the ultimate goal is strewn with thorns! Starting with supplier negotiations, training the local team of chefs, running the outlets, expanding, building the SEH brand, visiting the IHMs….a long way to go for next three years and challenges and obstacles will arise. To overcome them requires a deep inner conviction – to build a famous food chain brand specializing and bring back a lost cuisine alive from the lanes of Hyderabad. Isolation and resource shortages are part of the story – given the fact that investor is going to lend funds, there may not be fund shortages. But other kind of resource shortages may arise, such as sourcing of the spices from Hyderabad – and sourcing on a large scale. This can be a major challenge later on when 20

Case Teaching Notes 313

outlets are running with a central kitchen in each of the six metros. Apart from supply chain challenges, shortage and turnover of chefs can be a major headache later on – however best the company tries to stop it, there will be certain amount of turnover of chefs – the company has to learn to handle it and overcome this key resource crunch. Think like the 10th Man – the 10th man thinking principle will play a big role – especially in the supplier negotiation stage. Later the 10th man thinking will play a big role in the designing and presenting the dishes. The way biriyani is served in Hyderabad with the various accompaniments like the Mirchi-Ka-Salan and the spicier variety of the biriyani. In general Hyderabadi dishes are on the spicier side than their Northern counterpart of Lucknow and incorporates a sharper and tangier flavour. This may not be liked by food lovers in other cities. In the beginning it is best to play safe and introduce the biriyani alone in veg and non-veg variety. Just start with 3/4 offerings and see the reaction of customers. Later on, one step at a time a dish like Imli Ka Gosht, Badami Murgh or Seekhampoori Kabab can be introduced. The key idea: Connect one dot at a time. Being and underdog is not a disadvantage: The underdog strategy is a hard to follow and unusual path taken, not thought about normally. SEH can follow an unusual underdog strategy. Organize food festival of Hyderabad in a big way in the four metros and extensively market it digitally. This can be done only once or twice in a year as it is expensive and hosting it in a premier five-star hotel can be a costly affair. Here SEH can choose a prime location and hire marriage halls to reduce the cost – splash all over the city with big banners and posters. Hosting it in a marriage hall coupled with prime locations will help SEH to keep the prices low and increase chances of high footfalls. This is a difficult to execute strategy, but if pulled off correctly can be a major brand booster. Later on, customers

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will start visiting the outlets to eat more of the biriyani and other dishes. The other unusual strategy can be to start as a takeaway joint and go on line in these four metros – a risky strategy, but with chances of increased sales are also high, as more and more customers after the pandemic will prefer to eat at home rather than sit down in a restaurant. Combine insanity with logic – this belief comes into play in cooking and presenting the dishes. A good degree of experimentation and variations are possible, rather than just sticking to bring the rundown Irani joint of Hyderabad alive with traditional ways of cooking and mixing spices. A little sustained effort everyday will produce that moment of big magic. SEH shouldn’t short change the long process of reaching the IHM classrooms. They should be patient and take one step at a time and take five years if necessary, to build the brand – as a specialist in Hyderabadi cuisine. It is a long and lonely road – A boulevard of broken dreams (as the famous song goes by the Green Day band). What organizational practices SEH should follow? Observe-reflect-introspect: This should be a continuous process in early days of the outlets. Constant feedbacks should be taken from customers, thought upon, reflected and the dishes modified. Assimilate-absorb-transform: Knowledge assimilation, absorption and transformation will play a critical role in the first three years. After three years there may not be much similarity between the dishes served in the SEH outlets and the original dishes served in the lanes and by-lanes of Hyderabad. A lot of modifications will be incorporated. Even the traditional cooking practices will undergo a transformation when coupled with modern technology and management methods. Customization with standardization: This will play a significant role in the first three years. SEH should be willing

Case Teaching Notes 315

to modify its dishes to meet customer’s expectations and choices. Some may prefer it hotter and spicier, some may not. Some may like sharp and tangy flavours, typical of the cuisine, some may not. Dishes like the Baghare Baigon and Mirchi-KaSalan have very sharp flavours, which is loved by the people of Hyderabad. But customers in other cities may prefer otherwise. This factor has to be kept in mind and SEH should be willing to experiment and keep an open mind – only then transformation and growth will be possible. What is the path that SEH should follow? • Take one step at a time • Be aware of their underdog status • Be open and sensitive to customer’s preferences and feedbacks • Keep the costs as low as possible • Keep eyes and ears open for potential signs of trouble – chef turnovers and supply chain breakdowns • Keep the prices affordable, never look for huge margins • Efficient team management and good HR practices • Constant upgradation and assimilation of new knowledge and collaboration with IHMs • Be patient! What possible solutions will emerge? A chain with 20 outlets, starting from just a few today in Hyderabad and Bengaluru, a chain that has reached the IHM classrooms, organizing cookery contests and TV shows, attracting famous Michelin Star awarded foreign chefs and a much talked about Hyderabadi cuisine brand.

CASE

7

Just fire the wrong people or innovate new management practices as well?

What’s the main issue in the case? The plant is facing two major issues:

1. Absence of good manufacturing practices, and low level of skills and knowledge of the workers and supervisors.



2. Absence of a conducive work environment.

Many of the Indian family businesses today have overcome both the issues and undergone a transformation from the pre-91 days. However, SHC initially suffered from a typical family owned business culture, which plagued the Indian family businesses for very long. Some relearnt, and grew into giants like the Reliance Group, AV Birla Group, M&M, but many others perished like the Shriram Group – a premier industrial group in 70s, Escorts – which employed more than 15000 employees once and made the famous Yamaha RX 100, which was very popular with the young generation in 90s. Others like the Eicher Group underwent a radical transformation under Siddharth Lal and the iconic Bullet made a great comeback (refer the case study on Bullet in Part 1). Many other family owned businesses in India have perished due to lack of modern management practices and a professional work culture. SHC’s bane was an unprofessional work culture – a company with 700 workers, and a one-man show! Fortunately, Mr. Patil realized his mistake and he had ambitions which were really

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big. To become another Reliance Industries. He rightly hired an experienced and professional CEO and gave him a free hand. The discussion follows in the light of Mr. KJP’s arrival and what steps he should take. What Belief Systems SHC should follow? Look forward to leave a deep impact: Being a healthcare company this is the first belief that comes up and KJP should examine how SHC can create a deep impact. SHC should not only supply to hospitals and doctors for business, side by side the company must participate in disease control programmes, and reach villages to donate some syringes and infusion sets to local NGOs. This will serve a twin purpose: it will build up the SHC brand and it will create an image of the company as a responsible and sensitive company that contributes to the society. Clarity of purpose: This is the first thing KJP should do as the CEO. He should hire a good industrial relations specialist and he should take a series of training sessions. The IR manager with the cost accountant and a senior production engineer should identify the rumour and gossip mongers, call them aside and tell them in no uncertain terms to mend their ways or leave the company. Instead of enforcing a new culture, the engineer and cost accountant together should train the workers and supervisors on benefits of productivity, efficiency and how a cost efficient SHC will not only make profits, but will serve the society and tomorrow when SHC becomes a famous brand, every employee will be proud to say that he/she is an SHC employee. Listening to the inner voice: KJP doesn’t want to fire people and he wants to improve the work culture of the company. The real damage makers and useless and incompetent staff have already left. Firing more people will only increase the fear factor and workers will go into their shells even more. KJP

Case Teaching Notes 319

should place suggestion boxes all along the plant and encourage employees to leave their suggestions and complaints in the box without mentioning names. This frank feedback system will dramatically improve the work culture and iron out the cultural deficiencies and innovation blockers. Thinking like the 10th Man: KJP should adapt some unusual approaches to unearth the truth: the inner feelings of fear. The main approach should be to unearth the truth: not appoint counsellors but encourage employees to speak to his core teams who understand the local language and Hindi. He should appoint core teams and adapt a 10th man approach in anticipating what can go wrong? Production issues, morale issues, clashes, rumours, wastage – he should make a list of 10 devils that plague the company and chalk out a clear strategy to combat the devils. Collective resilience: Building the team spirit. Constant counselling and driving across the message that SHC can become one of the best healthcare companies in India later on with public issues. These management teams and the team of 700 workers can build a great company with turnover reaching to Rs. 1000 crore. Collective resilience can be built by constantly motivating the employees to shirk feelings of fear and adapt wrong practices and train every employee to discourage wrong practices. KJP must drive home the message that the management including Mr. Patil wants to see this plant do well and every right move will be suitably encouraged and rewarded. KJP must install a reward system: nominal amounts and display the employee’s name and photo openly in the plant for good deeds done – cost savings effected, productivity gains, machine performance improvements, wastage reductions. KJP must adapt the Japanese Kaizen practice. But here Kaizen will have to be practised in a different way, at a more personal level to start with. His core team comprising the costing managers, maintenance managers, production head, IR manager must actively roam the plant throughout the day

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and practise MBWA (management by wandering around) and KJP himself should hardly be found on his seat, instead he should actively walk around the plant and smile and welcome the employees and conduct a weekly meeting, where his speech from English language should be translated into local language and read out to the workers. All these moves will build a sense of togetherness – the essence of collective resilience. Practice what you dislike: This belief will play a crucial role in the first six months. As most of the tasks undertaken by his team will be unpleasant and difficult to execute. What is unpleasant and what appears difficult and impossible are the tasks that must be undertaken to undergo a radical cultural transformation. Most of these tasks will involve employee training and counselling and facing unexpected emergencies and unpleasant situations. A little effort everyday will produce that moment of magic, the cultural transformation will be painful, gradual and slow. It has to be effected one step at a time. KJP should hire an HR expert, with psychology background on a project basis and ask him to undertake the steps to effect changes in the employees’ attitude. This expert must know the local language well and how to deal with the workers on the shopfloor, many of whom are females. What organizational practices SHC should adapt? Observe-reflect-introspect: KJP and his core team should chronicle employee reactions and key feedbacks. Reflect on them and introspect. Take corrective action. The cycle of observe-reflect-introspect should become a habit – like the Kaizen. Assimilate-absorb-transform: There should be numerous training programmes every week for workers in the local language. Simple lessons on productivity, waste management, machine performance, quality control and cost management

Case Teaching Notes 321

must be provided. Lessons on leadership, motivational stories of great business leaders on how they turned their companies around must be told. Workers will absorb one thing at a time in little doses. The process of transformation in the attitude of workers will take a long time, may be even an year. Fuse business with social goals: This is where SHC can distinguish itself and create a very strong image for itself. A clear sum from the earnings every month must be set aside for CSR activities in villages and later a team of workers with managers must be set up to visit local villages regularly and undertake tasks related to health issues. Visit local dispensaries and NGOs and provide them with syringes, antibiotics and disinfectants to improve healthcare and sanitation in villages. Over a period of time following the “shared-value” concept as enumerated by Michael Porter can evolve into a unique business model for SHC, in which it will have no competition and can distinguish itself at the national stage, like the “Arogya” scheme of Novartis. What path SHC and its CEO: KJP should adapt? • Active involvement of a core team • Encourage good practices • Training programmes management

on

productivity

and

cost

• Employee counselling sessions • Weekly meetings with the CEO • Share the company’s progress openly with the employees • Encourage social practices and improving the health conditions of women and especially providing care for the newly born child • Train a team of engineers to read and absorb advanced technology and invest in more modern machines to increase production and improve productivity • Constantly drive home the big vision: SHC the best healthcare company in India one day

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What possible solutions will emerge? The aim of SHC should be to first engineer the internal changes, giving a timeframe of six months. It has an established clientele. It must adapt a broader strategy to involve the external stakeholders, apprise them of the internal problems and seek their advice and help if necessary. Seek financial assistance from the government to provide financial schemes in terms of short loans to employees – so that the sense of loyalty and togetherness increases. Complete progress is only possible when internal and external stakeholders come together. An year down SHC can build up a strong brand image of itself through the social initiatives – unexpected solutions can emerge in the form of large doses of investment by any healthcare MNC – whose management may be very impressed by the social work done by the company. Assistance may come from the government as well.

CASE

8

Expand rapidly or one outlet at a time?

What is the main issue in the case? How to expand? In what manner? The son wants to diversify into a dessert style restaurant, which entails high investment. It also entails extensive training and investment in new knowledge. It also involves a fair degree of risk – will the footfalls happen? The father wants to play it safe and open a series of small chocolate outlets near metro stations across Delhi NCR. His argument has a sound logic. People irrespective of their background and upbringing love chocolates and at Rs. 10/piece is an irresistible buy. The chocolates will sell. On the other hand, competition is lurking round the corner and has not yet invaded Delhi, but is already present in other metros and seeing the success story of BlackChoc outlets may soon invade Delhi. This is bound to happen sooner or later and the boutique chocolate market is bound to become a red ocean in next two or three years. The gap between branded chocolate maker like Cadbury and a boutique chocolate maker still persists and this gap will continue to be exploited, till Cadbury itself realizes the opportunity and launches a series of designer chocolates in different flavours, other than just standard flavours like almond or fruit & nut and dark chocolate. Also, as India’s economy grows and the incomes rise with increasing exposure to the Internet, old biases like not eating liquor chocolates will be brushed aside. The liquor chocolate variety in Rum, Brandy,

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Drambuie, Cointreau and other liquors has a huge following in West and it’s not long before that the liquor chocolate market in India starts growing. Seeing the transformation reputed Swiss, French, Russian and American brands (the best of the international niche brands are from these four countries) may invade the market. They, of course, will sell at high prices, which the affluent buyers in the six metros will not mind. Hence, the chocolate market in future will evolve in two ways: (a) a market for standard chocolates – the standard variety in nut, fruit and dark flavours, which is what Cadbury sells today, and (b) a market for boutique chocolates in a wide range of flavours – which is what chocolate makers like BlackChoc and Nahom in Kolkata sell and there are numerous other bakers in other metros like Nilgiri Bakery in Bengaluru and Chennai, famous for their cakes, Zamzam Bakery in Secunderabad – one of the best known confectioners in the twin cities. These bakeries may start diversifying and expanding into the chocolate market rapidly, seeing the growth of the boutique chocolate market. The father is unable to visualize how the chocolate market will evolve in future. Hence playing safe is not an option at all. There are two feasible options for Black-Choc: (a) Further intensify and refine the core competence. Conduct a six-month long research into chocolate making, visit the best-known chocolate makers in the above-mentioned four countries and learn further about varieties of niche chocolate making and invest in a factory – start manufacturing boutique chocolates and market with the Black-Choc brand wrapped in paper cartons like foreign chocolate makers. Become a niche chocolate manufacturer. This will also entail knowledge and investment. An investment higher than the proposed 8 crores will be required in a plant.

Case Teaching Notes 325

(b) Diversify from chocolates into the field of specialized desserts as the son proposes. This also entails a lot of research. Fortunately, both the father and son are trained and knowledgeable chocolate makers. The son being a trained chef from IHM. The desserts need not be expensive and need not be sold in a high-end restaurant. They can be packed and sold in small plastic or paper wraps – chocolate based or coffee based, mixed with cream and liquor. It can be even sold in super markets. Opening a high-end restaurant in a premier location is a risky option. Selling 10-15 varieties which can be taken away and eaten on the move is a far better option. These desserts can be sold anywhere by any retailer. The desserts can be sold in five or six popular flavours: chocolate, coffee, strawberry, orange and vanilla, mixed with cake, cream or liquor. Selling liquor desserts as a branded product may face legal hurdles of excise laws and this option can be explored later consulting the authorities. However, non-liquor varieties can be sold straightaway. This option too entails a lot of research and investment. In either way, the play-safe option as envisaged by the father is no option at all. Both options A and B entail a lot of effort, research and careful investment planning and expansion strategy into a plant either making chocolates or desserts or both. This is another third feasible option: - manufacture and market five or six varieties of niche chocolates and another five or six varieties of desserts. Considering either option A or option B, the 3 - C framework is applied as follows. What belief systems Black-Choc should follow? Indianness: This is what will distinguish Black-Choc in the long run and make it hard for the competition to imitate it, especially when foreign boutique chocolate and dessert makers start coming into the Indian market. What Indianness entails

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here? And more significantly how the very definition of being an Indian and Indian taste is changing? The second question is more important. India’s young population is rapidly evolving and changing. They would like to follow certain time bound traditions, but in many other aspects they no more want to eat and live the way their parents and grandparents did and they find many beliefs outdated and irrelevant today. This is Gen Z Indians and it comprises more than 70% of the population. Even the opinions among Indians who were born in 1970s are changing today. Hence it is important to conduct a deep research with the help of a market research agency and understand how the definition of Indianness is changing. Indians do love chocolates and as the experience of Black-Choc shows – they are not at all averse to eating chocolates laced with liquor. However, before investing a large sum, BlackChoc should undertake a deep and sustained research with help of a firm which specializes in Design Thinking techniques. Find a great purpose: Between the mix of desserts and chocolates lies hidden a great purpose. Which can further enhance the definition of Indianness. There exists a large number of Indian sweets – such as the Sandesh of West Bengal, Kalakand and Rabdi from Varanasi and Bikaner and Jodhpur, which can be imparted a chocolate flavour. How this can be done fusing western and Indian sweet making traditions can be a major topic of research and this can trigger a chain or a school of thought in dessert making, which is already a major topic of cookery contests, Michelin Star contests and dessert making is a major topic in Master Chef Australia – the premier cooking contest for non-professional and aspiring chefs. Look forward to leave a deep impact: Take the art of dessert making into the TV shows, cooking contests and in cooking schools. Or alternatively open a specialized dessert school. Specialized cooking schools in India unlike the West are few and far between. The IHMs mainly focus on hotel management,

Case Teaching Notes 327

as the name suggests and a few IHMs have developed a tradition of producing great chefs. But by and large specialized cooking schools, specializing in Indian cuisine is absent. This is the tragedy! Black-Choc can later aspire to open a cooking school specializing in Indian and Western desserts. Clarity of purpose: What has to be done? Which option? How and when? What are the steps to take? The first step is research, the next step is the decision – dessert or chocolates or both? The next step is to experiment and freeze the products, the next step is to set up the plant, the last step is to market. These steps with timelines must be clear to the father and son and they must consult an experienced management consultant who has good knowledge of the food and restaurant industry. Listen to the inner voice: Consult! Research, listen to people, take feedback, experiment. The father and son shouldn’t jump into the pool without first finding out whether the pool is safe or infested with crocs! Taking carefully thought out and well calculated risks and playing a waiting game, taking one step at a time is the way to go. Think like the 10th man: Continuously think what can go wrong? What can be the surprises? What unanticipated challenges can arise. There are two types of unknowns – the known unknowns and the unknown unknowns! The second one has proved fatal for thousands of companies in the past and we have discussed the prisoner-of-past-success (POPS) syndrome in one of the earlier cases (TCIL) and also earlier in this book. The POPS syndrome has destroyed Fortune 500 companies and the inability to anticipate the unknown unknowns stems from the POPS syndrome. Black-Choc can be prone to the POPS syndrome, owing to its past modest successes. The father and son need to unshackle their minds and think fresh. Look around, consult, ask, learn and gauge – what can go wrong?

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Being and underdog is not a disadvantage: When foreign competition and big MNC dessert and chocolate brands finally come in the Indian market, Black-Choc will face this issue. This can be overcome by emphasizing the Indianness and inventing a new range of sweets, which is a mix of Indian dessert or Mithai traditions and western flavours. This of course will take a long time. In the meantime, the inferiority complex of being an underdog must be resolutely countered. Following a risky underdog strategy which entails unusual and risky moves is not recommended and also not required. Combine insanity with logic: To invent a new range of desserts, combining a certain degree of creativity bordering on insanity, with logic and sound cooking principles is necessary. The father and son have to combine the two extremes. A little sustained effort everyday produces that one big moment of magic: the father and son have to realize that the big goal of becoming a branded niche chocolate or dessert maker and to build up the brand will take more than five years of continuous effort or learning and burning the midnight oil on research. But the end result will be worth the effort. What organizational practices Black-Choc should follow? Black-Choc is still a small shop and not yet an organization employing hundreds of employees and not yet a registered company under the Indian Companies Act. However, they can follow all the 8 out of 9 recommended organizational practices later on when Black-Choc becomes a manufacturer. The last one–fusing business with social goals doesn’t exactly apply to them. What path Black-Choc will follow? • Examine the changing Indianness – with respect to sweets and desserts • Research, experiment, consult, ask – and decide upon a product mix

Case Teaching Notes 329

• Tie up with suppliers and distributors for procurement and manufacturing. The most critical raw material is milk and the next is chocolate and other basic ingredients like coffee, fruits, condensed milk. Secure the supply of milk first by tying up with Amul or Mother Dairy at a reasonable rate. Increasing costs of milk can ruin profitability in future. • Explore an unusual option: - selling the chocolates and desserts in Amul/Mother Dairy outlets. This will involve lengthy negotiations and a lot of investment, but will be worth it. as both the companies have a wide distribution network. This move will insulate Black-Choc from future competition. • Build the brand one step at a time and eventually one day start a specialized school of dessert cooking. This is the ultimate and last goal – and integrates the BlackChoc brand with the world. World famous Michelin Star awardee chefs may start visiting the school. What solutions will emerge? Black-Choc will either evolve as a specialized niche chocolate maker, or a dessert maker or a mix of both, and may include a range of fused Indian desserts – a new dessert range such as Fruit Rabdi.

CASE

9

How viable is the big Idea?

What is main issue in the case? Should SIM become a specialized banking institute or diversify into three different fields of marketing, international business and banking by expanding its student intake? The case is a typical case of Indian management schools and the main challenge is to retain a balance between teaching and research. Revenue and quality. A majority of the school’s owners opt for teaching – to earn revenue and give research a short shrift. The results are already visible with closure and winding up of a number of schools. Even the top tier business schools including the older seven IIMs have expanded their student intake in last ten years by doubling it. The vexing question remains. More teaching? More research? Certain schools like the XLRI, Jamshedpur have not expanded their student intake since their inception. This is to maintain the quality of intake. XLRI today remains as one of the top 5 B-schools in India. On the other hand, the Indian Institute of Management, Ahmedabad has increased its student intake over the years, yet remains India’s best B-school. So! Will increased intakes reduce the quality? There are no clear answers to it. If the student-faculty ratio is properly maintained, balancing teaching and the research tasks, with proper policies, the school can make a name for itself both in placement and publishing – the two key criteria to improve rankings.

332 India: A Billion Dreams Rise from the Dust

Fortunately, the owner of SIM understood that teaching has to be balanced with research and publishing in top tier academic journals and he had a clear vision – to see his school be counted as one of the best private business schools in India. He wanted to take his school in the top league over a period of time. And the doctoral programme from a well-known central university like the JMI was certainly a ticket to the top league. However, this decision has long-run implications. A specialized banking and finance institute limits its scope in terms of placement in the banking and fintech sector only. This by itself is not a negative factor. Such specialized academic institutes do exist all over the world, like the specialized cooking schools in Europe, who only focus on producing outstanding chefs, and not on hotel management in particular. In India itself such specialized academic institutions exist, like the Delhi School of Economics, Indian Statistical Institute or Indira Gandhi Institute of Development Research. The Food Craft institute in Faridabad specializes in cooking like the famous European cooking schools. However, a vital question has been overlooked. Technology and its effect! This is a factor that has been overlooked by many business schools including the premier ones across the world. How technology is automating entry level managerial jobs in marketing, banking, production and HR functions and that companies are reducing their campus intake for management trainees. Digital marketing has reduced the need for selling jobs and even marketing jobs. Blockchain has replaced a number of entry level banking jobs and robots and AI are replacing production supervisors. This, of course, is Schumpeterian creative destruction in full swing and the loss of jobs is a temporary phenomenon. Technology will replace the older jobs with the newer ones – requiring a reskilling. However, there is a time lag of three to five years. In the meanwhile, students coming fresh out of the campuses are the silent sufferers.

Case Teaching Notes 333

Considering the technology effects, a specialized banking institute is not a totally unviable idea, but students will have to be trained in blockchain technology, big data analytics for jobs in the rising fintech sector. The problem is that these are still sunrise, not mature technologies with a number of papers published in the field and it is hard to get good faculty in these fields. The few available ones are hard to get. There are a number of ed-tech companies who are flooding the market with courses in Tech V 4.0 technologies, but the quality remains doubtful and ambiguous. There are two options for the school. Either convert itself into a specialized institute in banking and finance domain, with investments in blockchain and big data software and hire faculties who know these technologies well. A PhD from Jamia remains the icing on the cake. In this case the intake should not be increased beyond 120 – to retain quality. However, then there will be a limited number of faculty members from other domains and the entire focus shifts to the fintech sector. The second option is a more general option and looks safer at present, but can be a major problem in future to place 300 students, as placements increasingly dry up with less and less companies visiting B-school campuses. Post-pandemic the entire business model of management schools will undergo drastic changes, including course structures and the NEP: New education policy recently announced by the Government. A third (and suggested) approach will be to introduce two courses: - a one-year MBA in fintech sector, export-import, and digital marketing. Do away with the two-year general MBA – it will have no takers in future. Instead convert the two-year MBA into a master’s degree programme in management with specialization in finance and tie it up with the PhD programme of the JMI as a five-year integrated course. The intake should be only 30 or even less – as much the university permits. The integrated MBA-PhD degree should be awarded by the

334 India: A Billion Dreams Rise from the Dust

university. Thus, SIM should aspire to strike the right balance between teaching/placement and research. In light of the recommendations the 3 - C framework can be applied as follows: What belief systems the institute should adapt? Finding a purpose: The statement of purpose should reflect in the vision statement. What the institute wants to be? A specialized institute in the domain of banking? A mix of banking, international business and marketing? Both the approaches have their pros and cons. The institute has to decide Look forward to leave a deep impact: Here, of course, the deep impact factor is research and publishing in top tier journals. The faculty should be given a trimester off to do only research and mail at least one good paper to a top tier journal. Research is time consuming and a hazardous task with a high degree of uncertainty – which reduces over a period of time as more and more papers of a faculty get accepted for publishing. Top tier business schools in Europe and USA provide a fiveyear window to their faculties to publish in ABDC A and A* rated academic and practitioner journals. Given the constraints of resources of a private school, a five-year tenure may not be possible to offer. However, a three-year tenure can be offered with a condition to have at least one paper accepted for publishing in a top tier journal. SIM should draft appropriate policies. Clarity of purpose: Absence of policies dilutes the purpose. The owner of the institute should constitute a panel comprising faculties from IIFT, MDI, JMI, JNU, DU and other top tier national level universities and business schools and let the panel make clear recommendations on policies, courses, student intake and research policies. Post-pandemic the entire business environment will look radically different. The changes should be envisaged, a few CEOs must be consulted on how the placements will happen in future.

Case Teaching Notes 335

Listen to your inner voice: Here the owner’s conviction and his vision about how the institute will look in 2025 will play a crucial role. If he wants to convert the institute into a specialized entity for the banking and fintech sector – what are the implications? Then he should be ready to forego the revenue earned from more than 200 seats and do with the current 120. Keep the institute smaller and more focused. That’s one way to reach the top. Over a period of time SIM can be the first choice for many fintech companies in Delhi NCR. Many of them are based in neighbouring Gurugram in Haryana – a major hub for IT industry. The other choice is to increase the number of seats and have a mix of three courses with a specialized integrated programme in banking and finance awarded by the JMI university. This has a different set of long-run implications. The owner should consult a well-known and experienced academician and finally decide on a course of action. Think like the 10th Man – here the villain is the transformed business environment post-pandemic. Very difficult to gauge. The owner and the faculty team should wait and watch. Continue with the current 120 intake and wait for a year till 2021 July to see the developments. Many unexpected and unanticipated changes may occur. Big banks and big corporates may stop campus hirings altogether and the hiring momentum may shift towards start-ups. Entrepreneurship and starting a new venture within an established firm – intrapreneurship may gain momentum as the difference between a manager and entrepreneur is vanishing very fast. It can happen that the idea of a specialised banking institute may look completely out of place in 2021 July, replaced by a different idea and JMI’s commerce dept may do a volte face in light of a fast-changing environment to offer PhD degrees. So, anything can happen and a wait and watch policy right now is the best option. Collective resilience is hard to beat: Here collective resilience has to come from the faculty team. Faculty must stick together

336 India: A Billion Dreams Rise from the Dust

and commit to build a top-class management school. They must not think of switching jobs and go away for better salaries. Faculty tenure is the most critical component of a B-school success. Of course, a significant role has to be played by the owner and the director in retaining and encouraging the faculty. However, to a large extent how the faculty members conduct themselves and coordinate between themselves without indulging in one-upmanship will be the deciding factor. Building team spirit is not easy, more so when you have thirty PhDs in one place! Differences of opinion spring up quickly and spontaneously. Being an underdog is not a disadvantage: Although SIM is not considered one of the premier B-schools, it enjoys certain advantages. Its main strength is a good faculty team who were attracted to the school for good salaries and the tremendous locational advantage. The owner of the school always paid well, on par with IIMs. Which was much higher than other B-schools in the Delhi NCR and this was a major attraction for a good faculty to join. It takes years to build an academic brand and SIM already has existed for more than 20 years and enjoys a certain degree of reputation as a good MBA college. A little sustained effort everyday will produce that moment of big magic. Here the owner and the director will have to play a significant role in guiding and motivating the faculty. What organizational practices SIM should follow? Observe-Reflect-Introspect: The SIM faculty should wait and watch and interpret the environmental changes to arrive at the final policy decision – should SIM be a niche player in the banking sector or offer a mix of courses. The faculty team also should reflect and think carefully over changing student behaviour post-pandemic and decide carefully on the student intake – in either of the three options. Assimilate-Absorb-Transform new knowledge – this process is part and parcel of any academic institution and SIM will be no exception.

Case Teaching Notes 337

What path SIM should follow? • Consult academicians and industry people • Work on course outlines incorporating new technologies, the tech V 4.0 technologies that relate to management such as Block Chain, AI and Big Data. The course outlines should explain students how these technologies work and how to apply them in managerial decisions • Encourage faculty to publish in top tier journals with a three-year window • Frame policies for faculty retention, research rewards What possible solutions will emerge? SIM can choose either of the three options and this largely depends on the faculty team’s observations, inputs from industry leaders and finally the owner’s convictions – how does he want to see his institute after five years?

CASE

10

David versus Goliath – What the store should do?

What is the main issue in the case? How Roshan Store will compete with Big Bazaar? India’s retailing industry is undergoing a disruptive transformation. As on date when this book is being written, the Big Bazaar brand has been taken over by Reliance Industries and the Goliath grows bigger! Big Bazaar at its peak didn’t go online and later on as Amazon first and then other online retail start-ups like Grofers, Big Basket grew at its expense, combined with the pandemic Big Bazaar incurred big losses. Postpandemic, less and a smaller number of people will prefer shopping for groceries and will go increasingly online due to safety issues and the convenience of home delivery. Even later on as tech V 5.0 technologies (enumerated in Part 7) take hold, retail industry will be increasingly AI powered and AI powered software will do the ordering and delivering and payments – completely automated. The day is not far off when AI invades homes, crossing the business corridors and shopfloors. It has already started happening. Does this mean that the days of small mom and pop stores are numbered? Not quite. Online shopping and AI powered systems will certainly invade Indian homes in the six metros and other state capitals by 2025. However, in smaller towns and villages the retail system will continue to rely on visits. Roshan Store should think of switching over to other avenues of business. One option is to take up distributorship

340 India: A Billion Dreams Rise from the Dust

of a large FMCG firm like HUL. Become a regional sales agent (RSA). This requires a huge investment to the tune of three to five crores. But the brothers have built up a healthy bank balance over the years and some part of the amount can be taken up as a bank loan. A distributorship of a large FMCG brand combined with a home delivery system tie-up with Amazon can be a viable option. The second option is to approach Amazon and become their retailer for distribution and delivery of Amazon’s orders. Although the margins are not high, but volumes will certainly be there. The third option is to tie up with the successful retailing start-ups and become their distributor. Starting its own online system can be an expensive and risky option – as this will put RS into direct competition with Amazon, Big Basket and other online retailers. Another option is to take up distributorship of Big Bazaar itself. In essence instead of competing with the Goliath as a David, RS should join hands with the Goliath in some way. It can’t survive as a David for long and follow a risky underdog strategy. RS hasn’t got the means to do it. The brothers are no trained professionals and they neither have the intellectual resources, nor the physical resources to compete as a David in the retail industry to survive. Their golden days are over. They can even think of selling off the store with the land and enter some other business with the money. The store is situated over a 160 square yard plot and the land will fetch a tidy sum exceeding a crore of rupees. The last mile delivery is the most critical part of retailing and every big retail giant relies on it and their reputation and business growth depends on it. RS can opt to become the last mile deliverer for any of the retailing giants. To accomplish the task RS should consult a supply chain management expert and understand the steps to follow and the funds to invest to build up a last mile delivery system spanning an area of 20 square kilometres around its location.

Case Teaching Notes 341

Which will involve maintaining a fleet of small trucks with drivers and luggage handlers. All this will entail investment to the tune of five to seven crores to start with. Selling off the land, combined with the savings built over the years provides the brothers the necessary funds to do so. They need management expertise to build such a system and hiring a supply chain management expert for three months is the answer. Hence, the brothers have two options:

(a) Either sell off the store and contemplate starting another business.

(b) Convert themselves into a last mile distributor for a large retail chain. The second option appears more feasible, as RS has been in the retailing business for years and the brothers are still well known to the public around the area. Although many of them have left. Considering the second option, the 3 - C framework can be applied in a limited way. For a mom & pop store the framework has limited applications, and yet a few tenets of the framework can be applied. Think like the 10th man and being an underdog is not a disadvantage: the RS brothers must realize that they can be a vital cog in the large supply chain management system of a large online retailer and they have built a reputation over the years – which can be an asset to a large retailer as no one knows the locality better than them. They should carefully hammer out a favourable deal with a large retailer, without feeling inferior and play to their strengths – familiarity with local people. They should carefully think out what can go wrong in the negotiation process with a large retailer and here the 10th man thinking in anticipating what can go wrong will play a crucial role. They should figure out all aspects of a distribution system, study it for days of other last mile retailers in Delhi NCR and take advice on how to negotiate with a large retailer.

342 India: A Billion Dreams Rise from the Dust

Organizational practices RS should follow: RS is not yet a professionally managed organization and the brothers don’t have the intellectual means to build a professionally managed organization. However, they have a keen business sense and they should look forward to build up the components of a distribution system brick by brick over a period of time. The six principles of coordination and collaboration will apply once they entire system has been built. This may take up to six months What path RS should follow? • Sell off the land and the store or keep the store as a godown for stocks. Raise money to build a distribution system. • Hire a fleet of small trucks – say four to five Tata ACE trucks and five drivers. • Decide upon what goods to supply – choose a feasible range and keep the young generation in mind. The middle-class blue-collar generation, who believe in frugal living is no more. • Negotiate the wholesale rates of these goods with a large retailer – bargain hard. • Adapt an 18-hour delivery system, from 6 am morning till midnight – as many of the IT professionals work in the night or return home very late and require late night supplies for food items such as ready to eat snacks and noodles. What possible solutions will emerge? Over a period of time RS can grow into a large distributor, covering a large part of the Faridabad town – which is a very large township south of the national capital, spanning across almost 20 kilometres on both sides of the G.T. Road going towards Kolkata. Switching from retailership to distributorship is the only option, if the brothers want to grow big and prosper. Otherwise they will continue to wallow in price wars and discounts and fight a losing battle.

CASE

11

How to handle commoditization?

What’s the main issue in the case? How RC will counter an aggressive and innovative competitor? This is a universal question that every company is bound to face during the course of business and volumes of papers and books have been written in strategy literature over last sixty years on this, with countless number of suggestions, theories and frameworks. Competition and long-term survival are the two central themes of strategic management literature, what is surprising is despite the richness and diversity of the literature companies continue to fail and vanish and the rate of disappearance is only increasing. The average life span of a corporation today is close to single digits down from 60+ years in 1950s and the rate at which firms are vanishing is only increasing. RC had three choices: (a) Start a takeaway joint and sell the same RC dishes at half the prices. (b) Come out with a new range of dishes not offered by OC.

(c) Revamp the outlets, reduce the overheads and offer the same RC experience at half the prices.

The first choice looks tempting and easy. Doesn’t involve painstaking research required to invent new dishes, which may take a year and a takeaway joint concept also looks very tempting in the light of the fact that post-pandemic many

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customers will not prefer leaving their homes, rather prefer to be delivered or take away. However, this choice has a major risk: cannibalization of the main RC restaurants. Customers may altogether stop visiting the RC outlets with expensive décor. The idea of a special décor was to provide a great ambience to celebrate a special occasion such as a birthday or anniversary in the family. RC over the years has earned the reputation as a “go-to” place for special occasions. Whereas OC’s brand positioning is totally different: a visit to the Big Bazaar for groceries and a quick inexpensive meal, with good taste, or a working lunch for office people on weekdays or a quick meal on the go, as one gets down from the metro and walks to office or home. So, one has a Chinese meal more than often. OC’s brand positioning was: “we are part of your daily life”, whereas RC’s brand positioning was: “c ome to us for something special on special occasions”. The second option looks more feasible and goes well with RC’s brand image, which it has painstakingly created over the years, for this RC has to wait for a year or six to nine months at least before a new range of dishes kick in. The reduction in footfalls due to pandemic is a temporary phenomenon and it will certainly increase once again once the pandemic subsides totally and people will once again visit RC’s outlets on special family occasions. The downside of this option is the food prices. If the prices continue to remain at pre-pandemic levels, customers may stop visiting the outlet. Customer’s perceptions have certainly undergone a major transformation and many of them have lost their jobs during the pandemic. As a result, many of them may think twice before visiting a high priced joint. The third option is a direct reactive response to competition and may land RC in a price war situation one day with OC and this is a situation no company wants to get into. Reacting to competitor’s moves is a sure-fire way to extinction.

Case Teaching Notes 345

Innovation must result in more value for money for customers. The perception of what constitutes value for money is undergoing a radical change and this change is gradually happening over the last 10-15 years. The idea that what is expensive is always good and is exclusive – enhancing one’s status symbol exists no more. Even the affluent is more circumspect before taking out the card for payment, as people are increasingly apprehensive of an uncertain future. In the light of these changes of customer and competitive behaviour RC will do well to realize that its golden days will not be the same as they were. It’s not that the golden days will not be back – but will be back in a different avatar. In light of the discussion so far, the 3 - C framework can be applied as follows. Think of Indianness: Indo-Chinese cuisine is a growing and increasingly popular school of cooking and RC so far emphasized on purity and authenticity of its offerings as genuine Chinese food. This perception may have to undergo a change. RC should explore the Indo-Chinese option more in depth – and think of a larger range of variations, where a Chinese dish can be offered with Indian aromas. Instead of visiting China and South-East Asian countries for sourcing more variants of the Chinese food and spending a lot of time in finalizing dishes – this is a viable option. This requires that RC engages one of the well-known Indian chefs and consults on Indianizing its offerings, - imparting an Indian flavour to its Chinese dishes and offer an increased range under two headings: authentic Chinese and Indo-Chinese. This will especially go well in the snacks and starters section, where the scope to Indianize is much more and goes well to start the meal with a spicy snack and a drink. Clarity of purpose: Think of innovation in not only as a way to increase offerings, but also was a way to offer at a more affordable price. Hence, the brand image of RC as it was in the

346 India: A Billion Dreams Rise from the Dust

past may have to undergo a minor change. Instead of as the “go-to” place on special occasions as a place you can visit more often on weekends and even for a good meal on weekdays. The quality and richness of the food must be way above its competitor – OC, but RC should never emphasize on “Chineseon-the-go” concept. Instead, RC should think out its brand positioning more clearly as a food joint that offers a particular range of IndoChinese cuisine that is not offered by many – it is here that a high degree of product differentiation and innovation will come into play and draw crowds to RC outlets to taste its unique Indo-Chinese menu at affordable prices. The price will play a major factor. Premium prices charged in pre-pandemic days will not work anymore. Customers will be no more willing to spend Rs. 5000 to 10,000 on special occasions. The purpose should be to offer an affordable and enjoyable experience at less than 5000 for a family of four or five. Accordingly, the overhead structure must be carefully examined and cost savings effected in every RC outlet and lot of work on cost management has to be done, right from sourcing of raw materials to the cooking process to the ambience. A food industry management expert must be consulted to bring the costs down. Innovation has to be on two C’s: cuisine and cost. Together they will produce the magic. Listening to the inner voice: At this stage; RC’s top management must do a deep introspection. The future is not what it was! Customer perceptions are changing, lifestyles are changing, attitudes are changing. Uncertainties are increasing. Many of its past customers no more have well paid and secure jobs, they may never be employed on a full-time basis and work on project basis instead, earning a bunch of cash in one go and then no income for months to come. Also, an online work culture and free-lancing will increasingly become the order of the day.

Case Teaching Notes 347

A customer may work on multiple projects from home on a 24 × 7 basis. In essence the changes in work environment makes it more uncertain and exciting as well. But this has a huge effect on footfalls at RC premises. RC may have had customers in the past who visited regularly on weekends to enjoy a luxurious and unhurried Chinese meal. Such customers were its mainstay in the past. These very customers may be now extremely busy even on a Sunday executing urgent tasks for a client. They may now visit the nearest RC outlet only once in a month or even less. On the other hand, OC in this respect is better positioned to encash the “Chinese-on-the-move” trend. However! There exists a group of customers who still prefer to visit his/her favourite RC outlet for a lesser price and experience novel varieties in the menu. On the whole RC must ask and redefine the three basic questions of Customer Value Proposition: Who is our customer? What will we serve the customer? How and at what price? The classic “Who-What-How” has to be re-examined in depth. Think like the 10th Man – this counter-intuitive thinking will come into play, when RC starts focusing on the two C’s of innovation – cuisine and cost and many “flip-the-box” ideas may come into play while designing the dishes and redoing the entire business model to reduce the costs, right from procurement to delivery of the dishes on the table. Every minute cost element must be examined, every ingredient must be tried and tested and experimented. Here hiring a Michelin Star awardee chef from abroad, who are famous for innovation like Gary Mehigan, who is very familiar with India or David Rocco, Vikas Khanna may help. These chefs don’t come cheap, but the effort will be worth it. Combining insanity with logic – this belief will play a major role in innovating a new range of Indo-Chinese dishes. Often an idea may appear insane and a false negative idea (refer the theoretical discussion on design thinking for false ideas in

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Part 4 under Coordination) and is likely to be rejected by the chef team. However, the best chefs in the world, who have won multiple Michelin Stars always work on false negative ideas A little sustained effort everyday produces that moment of magic – the pandemic will take a long time to subside and till then good days are not back. It’s a lean period, when the outlets are not full and every table is occupied on weekends. This is the time to work extensively and deeply on the two C’s, so that when the economy bounces back and people have more disposable incomes in their wallet, they start flocking the RC outlets again. What organizational practices RC should follow? Observe-reflect-introspect: The changing customer and competitive trends and this should be inculcated as a belief system right down to the waiter on the table at every outlet. RC must hire a food industry management consultant to devise simple and effective ways to drive home and build a culture of Kaizen – continuous experimentation, observation and learning and should put up suggestion boxes and encourage every employee to write – anonymously. Assimilate-absorb-transform: Assimilate new knowledge, absorb it and transform it into new dishes. This is the essence of innovation in cooking and RC will be no exception to this rule. Especially applies to the chef team. Co-evolve globally and locally and combine customization with standardization – the two principles of co-evolution apply to RC in a big way. RC just not should innovate a new range of Indo-Chinese cuisine, but should send a team of chefs all over the world in best Chinese joints of the east, Europe and USA. This world tour is essential once a year. RC must identify the top 100 Chinese joints all over the world and make it a point to visit at least 25 in a year. Thus, keep evolving constantly and keep introducing newer menus. Chinese cuisine is popular the world over and there exist many variations.

Case Teaching Notes 349

Combining the opposites, blending the opposites to produce a unique flavour can give RC an inimitable competitive advantage. It has to be raised to the level of an art. RC must devise a system to customize. Not all customers demand it, but a good number of them will. Some will like it spicier; some will like it lighter, some will prefer strong and tangy flavours, others more delicate and subtle flavours. RC must invent a range of dishes, which can be customized. Yes! Not all can be customized. The menu card can separately display – which of the dishes can be customized and which absolutely can’t be. This will be surely appreciated by the customers and increase the footfalls, besides giving a hard to beat competitive advantage. What is the path ahead? • Work on a range of Indo-Chinese cuisine • Redo the entire business model to reduce costs by at least one-third • Visit other parts of the world, apart from the east to learn more Chinese offerings • Combine insanity with logic • Think like the 10th man • Observe changing customer behaviours carefully • Observe emergence of any competitor like OC which can upset the applecart • Resort to digital marketing to impress upon a changing RC setup with new range of dishes at a reduced cost • Emphasize on customization • Never emphasize on online delivery and takeaways. RC should aspire to remain the BMW of Chinese food segment in India. Competing on cost and offering food on the go was never its business.

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What possible solutions will emerge? Affordable, who offers a novel eating experience, combined with a high degree of customization and good ambience. Still a “go-to” place on special occasions at a lesser price.

CASE

12

Did We end up being a one-hit wonder?

What’s the main issue in the case? Inability to repeat the initial success story! This is one of the major reasons start-ups vanish after an initial flush of success. This happens to even large corporations. Ford with more than a century of car making experience had produced two models, well received by the Indian car buyer. The first was the Figo. When launched, Figo was a runaway hit. However, the subsequent versions of the Figo were not received well by the car buyers. Neither its other low-end offering: the Aspire clicked, which was based on the Figo platform. On the other hand, the Swift has been one of the best sellers for MSIL: India’s largest car maker with continuous updates and changes. The Corolla has been the face of Toyota Motors for more than half a century. We talked about the heady comeback story of the iconic Bullet. Enfield hasn’t experienced much success with its other models. The classic 350 cc Bullet enjoyed a tremendous brand recall and nostalgic value. Many young men of this generation saw their dads ride a Bullet in 70s and 80s. Bullet fan clubs existed in the country even before its relaunch and its fans flocked the Bullet again. Hence, Bullet relaunch was a runaway success story due to its glorious past. Ford cars are known for their build quality, ride and handling. The first generation Figo was just that – a brilliant hatch, which was spacious, sturdier than the competition with a punchy diesel and reliablity. Ford somehow

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was unable to repeat the success story with Figo’s subsequent next generation launch. Although EcoSport was also a major success story. Renault’s Duster was another runaway hit, so was the Kwid. But as competition in the urban SUV segment intensified with launches by MSIL and Hyundai, the Duster couldn’t sustain the momentum. The authors of this book did research into the phenomenon of one-product wonders for quite some time. More common in the start-up domain, this disease seems to plague big corporates as well, especially in the passenger vehicle industry. We asked some of the Ford dealers – why the second generation Figo was not well received. The reply was: it’s not as sturdy as the first generation and the brilliant ride and handling for which Ford cars are known for, rather for which a car buyer will opt for a Ford over cheaper options went missing. Ford made the Figo lighter, to make it more fuel efficient – whereas the prospective Ford customer is not looking for efficiency! He has other options, if he wants to buy a car just for fuel efficiency. More so in this era of GIG economy and metro systems coming up in more and more cities beyond Delhi and Kolkata, people no more use cars for commuting to office. Cab pooling or metro are more viable and convenient options. Hence, it’s wrong to put the blame on customer for not buying the product. Fuel efficiency no more remains the deciding factor for car buying, it has been replaced by parameters like comfort, and convenience. Also, with rising incomes coupled with the fact that the car is no more used for commuting to office customers are increasingly asking more questions about models and venting their displeasure over social media for car makers not meeting their expectations. Rising incomes with less use of the car has resulted in gradual vanishing of the A or entry level segment – the ubiquitous small car. The small 800 cc car had a lot of relevance in the 80s, 90s or even till 2010. Today MSIL sells a smaller number of

Case Teaching Notes 353

small cars and more of the bigger models starting with the 1.2 litre engine Wagon-R. The basic thing is – if you don’t deliver what the customer expects, you don’t sell! With the Figo success story, Ford’s customers expected an even more brilliantly made second generation Figo with even better engine (which the company fitted the Figo with) and the same build quality, ride and handling – which went missing and so the sales went missing! The Figo’s success story and its subsequent inability to repeat it provides some insights and this probably makes the 3 - C framework even more relevant in today’s context. More so in case of start-ups, many of them end up being one-hit wonders and they fade away after an initial success. In case EM’s case they latched on to the growing e-rickshaw segment. After five years the e-rickshaw segment now is overcrowded, a red ocean and the government is planning to bring stricter laws to regulate it. Although stricter laws will not curtail the growth of the industry, it will certainly make selling the product more difficult. What are EM’s options then? They can explore the cargo segment, the e-auto segment or the electric truck segment – which requires large investments. They should work on the electric vehicle technology of larger vehicles like a mini e-bus, with only standing facilities – which can carry 40-50 passengers for short distances from metro stations to houses and to metro stations. This product can be a viable option. Such buses will be well received by the government and will replace the numerous e-rickshaws that flood the metro stations of Delhi NCR today to a good extent. These buses can ply on arterial roads. E-rickshaws and small e-cargo trucks to replace the Jugaad are last mile transportations. Very large E-buses made by bus manufacturers will come on the roads in another two or three years and may replace the current CNG and diesel buses in all metros. However, the mini bus segment – which can

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carry anything from 20-40 passengers to and fro from metro stations is underserved. At times a commuter’s house is at a considerable distance from the nearest metro station and he/ she uses a scooter to ply the distance, park his/her scooter in the parking and board the metro for office. Mini e-buses can play a vital cog in the last mile transportation from the main road to the station and from station to office and vice versa. So, EM can choose between the e-cargo option, but this option has to meet the expectations of the Jugaad operators, who often misuse and overload the small truck and they will obviously blame the company for not meeting their expectations. The e-auto is a more viable option, along with the mini e-bus with a capacity for 20 people standing. These are the two possible solutions. However, certain essential beliefs and organizational practices are essential to repeat success stories and thrive. What are the essential traits to repeat success stories and not end up being one-product wonders? Let us examine them. Clarity of purpose: Examine the customer value proposition and how its changing with changes in business environment. Finding a great purpose and the desire to create a deep impact was the cause behind the first success story. Rediscovering the purpose and refining it enables one to repeat the success story. If a firm is unable to re-examine and redefine the CVP of its offerings, the success story obviously will not be repeated. Listening to one’s inner voice: We have discussed this previously and we reiterate this point – to stop being a prisoner of past success. The POPS syndrome is a disease that has plagued the business for two centuries and maximum number of one-hit-wonders or business failures occur due to this syndrome. It’s like the sleeping sickness which afflicts poultry or the foot & mouth disease of cattle. It affects almost every business and most of the start-ups after they experience an initial flush of success. The EM founders must listen to their inner voice and bury the past success story.

Case Teaching Notes 355

The 10th man thinking: This can prevent many a failure. Had FORD thought – will the next generation Figo be a success story again? If not, why? The feedback was mainly on the engine – that the 1.4 diesel and the 1.2 petrol engines are underpowered. Ford worked on them. The negative feedback was not on other parameters. Customers and car review experts alike simply loved the Figo’s superb ride and handling, which gave it a big car feel and the way doors shut with a heavy thud. Lighter cars shudder and become unstable at high speeds, speeds in excess of 100. The Figo displayed no such instability due to its build quality. EM’s founders should think of the pros and cons of the e-auto and e-minibus carefully. The technology glitches, the development costs, cost overruns, the pricing aspects, the selling and marketing aspects and so on. Sustained effort every day: This is another belief that can prevent being plagued by POPS syndrome and prevent complacency. The sustained effort should be towards new product development and considering various other options of e-vehicle technology development and its various applications in various segments of cargo and passenger transportation. What organizational practices EM should follow? Observe-reflect-introspect: Three essential practices to prevent complacency and to repeat success stories. Here EM can follow the strategic risk framework as enumerated by Slywotzky and Drzik (HBR 2005, The Biggest Risk of Them All). The authors outlined seven key strategic risks: industry, technology, customer, competition, brand, project and sales stagnation. For EM the technology and industry risks assume prime importance. Any organization which assesses the strategic risks and is aware of them can avoid failure and closure of business to a good extent, if not entirely. E-vehicles, being a sunrise industry, the competitive threats of a mature industry are absent. The cargo segment has a huge potential

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and development of the right technology is the key success factor here. Assimilate-absorb-transform: How to translate and how to further develop the cargo vehicle technology? The EM team of six engineers should wait for a year, visit premier technology institutions like MIT or companies in Japan, Taiwan. Learn and burn the midnight oil, come back and experiment and keep building battery and bus/cargo truck prototypes to arrive at a cost-effective solution – which can be attractive. This is a field where new knowledge is being developed every day. The transformation part here is the most difficult part. How to convert the knowledge gained into a product, which will be used by bus operators who will overload? Truck operators who will overload? The battery not charged at regular intervals? The apps disconnected? All this, of course, forms part of the 10th man thinking, but the knowledge assimilationabsorption process should lead to 10th man thinking and thinking should lead back to the knowledge acquisition process. Only then the transformation into a product will be possible, which will be welcomed by the bus and Jugaad operators. Six months after the launch of the product, constant feedback from the operators will improve the product or connecting the vehicle to a central server through an App will provide real time feedback. These real-time feedbacks taken continuously for a year will help the transformation process. The path EM should follow • Study the operators – their habits, what kind of misuses occur? • Undertake a deeper study of technology–how it is evolving? • Research on cost-effective designs and ergonomics • Design financing options with banks – long-term loans, or lease finance

Case Teaching Notes 357

• Examine the e-vehicle system in some major European countries – how the operators are buying, using and earning revenue • Don’t undertake large doses of funding now, source just enough funds for technology development to begin with, funds for manufacturing and business expansion can be obtained later • Last but not the least the mindset to learn, and not allow complacencies to creep in will keep the entity going What possible solutions will emerge? The key is to witness and emerge how any product develops, that is hard to predict. EM should work into various product lines – auto/cargo truck/mini bus. And EM should work on a two-year product development programme. If the current e-rickshaw segment starts incurring losses due to various reasons including regulatory – they will have to shut it down or sell it off. Whichever product develops into a model which suits the operators will be the right model to go to the market. Commercial viability is not the deciding factor here – it is the operating viability. If EM can overcome the challenge of Indian Jugaad mindset they have won the battle!

CASE

13

Are we chasing a false positive idea?

What is the main issue in the case? Whether the idea that the two friends are mulling upon is a false positive idea, that is, the idea looks promising but actually has no potential. Here none of the ideas that the friends worked upon and animated are false positive ideas. If well made after deep research and with help of an experienced animator – the man-eating leopard of Rudraprayag could have been a superhit. The film industry is full of ideas that were never well executed, but held promise. These are actually not false positives, but false negative ideas – that the film maker himself was never convinced about and didn’t put a whole-hearted effort. Hours of research and countless number of failures were experienced before the brilliant expressions of the Jungle Book characters were captured, especially that of Sher Khan, Baghira, Colonel Hathi, Bhalu and Mowgli. A leopard that doesn’t instil fear as a maneater and a hunter that doesn’t display the energy and determination of a hunter make a surefire recipe for failure. The right way to go is to decide to do a series on the thrilling tales of the famed hunter. Corbett shot seven man-eating tigers and tigresses and two man-eating leopards. The most thrilling tales, where the hunter stretched himself to extreme conditions of physical endurance, despair and almost gave up hopes before experiencing success are the tales of the Thak man-eating

360 India: A Billion Dreams Rise from the Dust

tigress, the Talladesh man-eating tigress and the man-eating leopard of Rudraprayag. The friends can animate them as Corbett trilogy. They must plan well, visit these locations. Although years have passed (the Rudraprayag leopard was shot in 1926, the Talladesh tigress in 1929 and the Thak tigress in 1938), people in these areas still remember these tales and the stories have passed from generation to generation. The legend of “Carpet Sahib” in Kumaon region of Uttarakhand state will never die. There is a local saying that Corbett will be reborn and come back. The friends must visit every location in the Kumaon region, where Corbett shot the tigers and the leopard and gather bits and pieces of history. Just as the makers of the famous film Lion King visited the land of Masais in Kenya to make the character of Simba come alive. The next step will be to consult experienced animators of Pixar studios. This need not be an expensive affair. One thing is to engage a consultant, the other is to find out someone who can really lend a helping hand. Can the 3 - C framework be applied in case of a film start-up? To a good extent yes! Let’s see how it goes! Indianness: The very idea of portraying the fearless hunter is Indian! Corbett remains the best-known hunter of man eaters in India. There was another hunter, even more daring than Corbett, who shot more than 30 man-eating tigers in Southern India – a Scotsman named Kenneth Anderson. Corbett shot his last man eater in 1938. Anderson hunted through the 30s to 50s. He worked in the aircraft factory (now HAL) near Bengaluru and hunted in the five southern states extensively. Corbett shot his man-eaters during the day, except the Rudraprayag leopard and the Panar leopard – which he shot with his double-barrelled shotgun half in the dark, with the lights of Mashals around him – lying on the ground, left by his companions who fled in face of the charging leopard. Whereas

Case Teaching Notes 361

Anderson shot many of his man-eaters in the night with a torch fixed on his 0.405 Winchester single barrelled bolt action rifle. Hence, there lies a huge unexploited potential of animating both the hunters and do a series. But the first thing is to get the first film right. Find a great purpose – bringing the courage, the sacrifice, the determination and the endless hours of agony in chasing a wily maneater to light – man’s wit and courage against one of the deadliest hunters. As narrated in the case, Corbett chased the Talladesh tigress on 5th night with his left eye closed, left shoulder blocked, neck immobile and he was wracked with pain. Yet his sense of mission and purpose to get rid of the deadly menace that had killed 150 people in eight years egged him on. At the age of 63, with thirty-two years of tiger hunting experience behind him, Corbett chased another wily tigress high and low in the hills of Thak and Chuka Village in eastern Kumaon for days. He writes “this was my last day of maneater hunting and it is hard to describe the depression that follows failure. Yet I feel I left nothing undone. I would like to exchange all my thirty-two years of man-eater hunting experience for that one unhurried shot at the tigress”. As he went down and as the sun sank lower behind the Nepal Hills, the tigress called in a valley down below his left and once again Corbett writes: - “here comes a chance, however forlorn it appears”. The sun was sinking fast, within another 30 minutes it will be dark, then Corbett, his four companions and two goats – seven lives will be at the mercy of this tigress. Should he imitate a Tiger’s call and draw the tigress close? Or should he just walk away? Corbett indeed called the tigress and seconds before total darkness buried two bullets on the tigress’s face from his 0.450/0.400 double barrelled Jeffries. Here lies the greatest sense of purpose: to take decisions for greater good, foregoing his own safety. Corbett decided that the safety of thousands of hill folk is a greater purpose than safety and lives of five men and two goats. The friends can

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draw ample motivation from these two thrilling stories and how they depict it will decide the success of the film. Clarity of purpose: How to depict it? how to bring it alive? It appears that apart from not doing deep enough research, not enough research has been done to bring the emotions of the characters alive. How to accomplish this feat? The friends should watch some of the best animated characters and how they were brought alive. Sher Khan in Jungle Book displaying the devilish cruelty of the tiger who wanted to kill Mowgli, brilliantly voiced in background by Idris Elba, or the rat in the Ratatouille. Listening the inner voice: It will play a crucial role in bringing a character alive. For example, to bring a cunning and wily expression on the man-eating leopard’s face! This leopard escaped all attempts for nearly a year between 1925 and 1926. There can be several occasions where the inner voice will guide the young film makers to capture expressions and make the thrilling stories come alive. Isolation and resource shortages: As emphasized before in earlier cases, this is an essential part of an entrepreneur’s journey. This shouldn’t deter the two young film makers. If they find a great purpose, that will keep guiding them and help them to overcome resource shortages and obstacles. They need help from one animation expert, a good cinematographer and a bunch of motivated young actors to make Rudraprayag Leopard a runaway hit. 10th man thinking: Things have horribly gone wrong on two occasions and by now the sixth sense of the two filmmakers should be sharp enough to understand what can go wrong or what is terribly going wrong in the process, which requires a redo. Several “re-do’s will occur before a brilliant sequence comes out and the 10th man thinking process is the very essence of a brilliant film or song.

Case Teaching Notes 363

Combine insanity with logic: Essential part of creating a brilliant character going against common wisdom. Spiderman, Harry Potter, Jack Sparrow (Pirates of Caribbean), Simba, Kung Fu Panda, the list runs long. Here since the film makers are attempting to make a true story come alive, they have to combine creative thinking with a lot of logical thinking to impart a sense of reality and thrill together – where a man’s courage and skill and confidence with his rifle is pitted against a cunning and wily hunter. The tiger and the leopard can see in the dark and their sense of hearing is one of the best in the animal kingdom – as both the Englishman (Corbett) and Scotsman (Anderson) had to say. This particular trait can be vividly portrayed to make the film thrilling and enjoyable by making the leopard follow Corbett stealthily in the dark for an ambush. In real life the leopard is a master of ambush from a tree. In the actual story of the Rudraprayag leopard, the leopard followed Corbett and his friend Ibbotson once very closely, as the petromax lamp broke and the two friends walked back to the dak bungalow in the dark after a failed sit-up to shoot the leopard on a tree, they had an uncanny feeling that they were being followed! If the film makers can capture this vividly – it will make a film worth seeing more than once. What organizational practices the film makers should follow? We offer no advice here, as it is a start-up in the field of animation film making. What path the film makers should follow? • To make films that inspire people, depicting the struggle, the courage, the depression and the final moment of triumph of Corbett and Anderson. • Understand animation technology deeper – burn the midnight oil, read and join courses if necessary, learn about special effects and how to bring expressions in animated characters.

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• Pick up inspirational tales from other fields – sports, such as Mary Kom, P V Sindhu in badminton, stories of social entrepreneurship and so on. • Build a good team of voice actors, with fresh NSD graduates. • Search for one or two like-minded investors – who are interested and motivated to promote 3 D animation films in Indian context. Hunting tales of Corbett and Anderson can become international hits, as these two hunters turned conservationists are well known globally for the books, they wrote. What possible solutions will emerge? A series of 3 D animated Indian films, the main topic being inspiration, overcoming the odds in the face of grave danger and challenges that life threw.

CASE

14

Do we stand up for a cause or junk the cause for profits?

What is the main issue in the case? This is a typical issue many businesses face, especially the social entrepreneurs. A great product versus profits. A product that consumers may not like or understand, a film with a deep social message – junked by producers because that kind of film will not sell in the box office. The primary goal of a business is to make money – and there is no dispute on this. Often this goal comes in clash with ideology, a big dream, to launch another Sony Walkman or VW Beetle, another iPod. This clash is ongoing and no literature has solved it. SC has devised a great product – the first of its kind in India. Innovation is still given short shrift in management courses – stuck in a time warp, where students are trained as jack of all trades and master of none. The kind of supervisory role managers played in the last century in the mass production era exists no more in corporations and the mass production paradigm is undergoing a transformation with AI and robotics and Tech V 5.0 (enumerated in next part). Innovation is taught as a single paper out of 40 odd papers that students read. Whereas the academic literature on innovation has grown by leaps and bounds in the last quarter of a century. The regulators of academic institutions: UGC and AICTE realized the shortcoming long back and has been encouraging the technology and management institutions to provide more focus on innovation and entrepreneurship/intraprenuership.

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However, there exists a shortage of academic expertise to formulate courses on innovation across the academic spectrum. This book itself attempts to bridge the gap to an extent. SC’s course unfortunately due to the pandemic and closure of colleges and companies has no takers in the market. In the meanwhile, advice is pouring in to sell components of the course at hugely discounted prices. Advice is also coming in to junk the course and sell only design thinking. The argument against is that topics such as business model innovation and management innovation is too advanced for the market. However, SC knows from its research and from the opinion of certain industry captains that time for such a course has indeed arrived and industry once it reopens post-pandemic, will look forward to it. There is one important question SC needs to answer:

(a) Who are our customers? (clarity of purpose)

A majority of the college students, including the ones in premier B-schools don’t have sufficient maturity and depth of mind to comprehend this course. This course can primarily be understood by managers with mature mindsets, who has at least five to seven years of experience in professionally managed corporations. Companies who will venture out into new projects post-pandemic, sunrise industries such as E-vehicles are the prime customers for this course, with enterprising owners from the MSME sector – who want to innovate new products and scale up their businesses from a few lakhs to hundreds of crores. These two segments may comprise 80% of SC’s customers in future. A limited number of college students, who have deep ambitions to start a company and build another APPLE or TOYOTA will be attracted to this course. SC accordingly needs to fine-tune its marketing focus and target a specific number of companies and the MSME segment to market. Hence, having just a great purpose is not enough, clarity of purpose is necessary.

Case Teaching Notes 367

Listen to your inner voice: This is the essence of a false negative idea. Had Stan Lee not listened to his inner voice, we would have never seen Spiderman, had J K Rowling junked the idea despite heavy rejections, Harry Potter would have never come alive. The KFC’s originator – Colonel Sanders faced hundreds of rejections, before one chicken outlet decided to try his formular and a Fortune 500 giant was born that day. SC’s course on innovation is a false negative idea with absence of right focus. Isolation and resource shortage are part of the story. This is true of all start-ups, junking a great product and dismantling it to sell cheap is akin to selling a BMW for five lakhs, which originally costs 40 or selling off the car by dismantling it and selling the parts cheap. Just like the way UX Gorilla built and innovation ecosystem, SC should build up opinion on social media by connecting to CEOs and Academics. Build up a strong opinion among industry captains by constantly posting short notes in LinkedIn, building a group in LinkedIn, build up an innovation ecosystem. Think like the 10th Man: Think of an unusual and “flipthe-box” solution to overcome customer resistance. Use design thinking approach to unearth hidden needs for innovation systems in companies. Highlight the value factor – and how this course if done by a group of managers can spark innovation in a company and help it to launch new businesses. Think of unusual ways to convince company CEOs and manager. Highlight a benefit of the course which will immediately hit the mindset and a resounding YES will be the answer. Think of a benefit of the course that the customer, the company manager never thought of. Collective resilience is hard to beat: This is the valley of death that the SC team must cross and the team has to stand resolutely together. Those who want to leave should leave. Even if the rest of the team can stick out and cross the valley of death together – they will never look back.

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Being and underdog is not a disadvantage: There was a time no one knew about Apple, there was a time when no one knew about Microsoft, there was a time when no one knew about Future group until Big Bazaar followed, Alibaba started in one room. Being an underdog will allow SC to follow some unusual strategies, such as look for collaborations and tie-ups with companies who are working on similar ideas and offer a range of courses as a package at a very reasonable price. Being an underdog enables SC to reach out to a large audience with a “no-string-attached” approach, which will not be possible as a reputed company five years later. A little sustained efforts everyday will produce the big moment of magic – SC should focus on various aspects of building an innovation system, building technology and strategic alliances, organize a few workshops with academic institutions, which can be sponsored by an investor, look for an angel investor who will support SC’s cause and last but not the least – SC should drown all negative opinions about its product. No one ever thought that the Walkman will go on to create history. What organizational practices SC should follow? Since SC is a start-up with a small team and its business model is in nascent stages, not all organizational practices apply to it. In a limited way, the coordination paradigm of “ObserveReflect-Introspect” can be practiced. What path SC should follow? • Organize workshops on innovation, invite research papers. • Seek knowledge partners. • Build alliances for knowledge transfers. • Reach out to marketing agencies and pitch them the course.

Case Teaching Notes 369

• Reach out to corporates directly – give demonstrations. No company needs to be convinced about the need to innovate. • Write a series of posts in LinkedIn stressing on the need to innovate and changing business environment. What possible solutions will emerge? The course may sell in parts, it may sell in big numbers as a complete pack. But all this will depend on the steps and the path that SC follows with patience and determination to create another Sony Walkman.

CASE

15

Stay home or venture beyond the shores?

What’s the main issue in the case? ATR is a typical Indian company, and its Indianness: which is one of the tenets of resilient thinking need not be built up. It’s already there and its Indianness is the key success factor. However, if it wants to become a global firm – it needs a cultural reorientation, this is amply clear and this is the main issue in the case: Build a global work culture or remain an Indian company? What belief systems ATR should follow? Finding a purpose: ATR must look for a sound cause, a sound reason to become a global organization. Going global for the sake of it is no purpose at all. It’s not that great corporations are always global. There are many US companies who has never ventured beyond their shores and yet are counted as great companies. There are other companies with limited global presence. Not every company need to become a Fortune 500 global corporation. Hence, finding the purpose of going global is very important. Does ATR want to be a breakfast specialist? Does ATR want to promote south Indian breakfast items? Does ATR want to drive home the message that south Indian breakfasts are healthy, low on calories? What is the purpose? Look forward to create an impact: ATR should look forward to create a deep impact with its range of products. The impact can be on health, impact can be on finding a social purpose –

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distribute breakfasts to the needy and impoverished in Africa and in other parts of Asia – providing them with a good meal to start the day. South Indian breakfast items ideally serve this purpose. They are healthy, filling and low on calories. A plate full of Idli or Upma can ideally provide a good breakfast and keep a person going the whole day. ATR instead of venturing into the affluent segments of Asian and Western markets can explore the poorest segments in many Asian and African countries. Clarity of purpose: Once the purpose is clear, how to execute it? What are the steps? God lies in details. Every step of going global with a clear purpose must be put as a sequence of steps with clear timelines, accountabilities and as action goals. Ideally, ATR must first work on its vision statement. Follow classic Porterian strategy: spell out the vision, then plot it on a balanced scorecard format. Listen to your inner voice: Explore the purpose deeply. Find a compelling purpose to go global. If the purpose is not compelling enough, there is no need to go global. Stay as an Indian company and do well. Here the ambitions of going global and after the initial failure – must be tempered by a deep inner voice. ATR’s top management must explore the question in depth and examine the pros and cons of going global. Think like the 10th man: Provided ATR has arrived at a clear strategy – and answered the question – go global or no? if we go global – what was our experience? What aspects we overlooked like the eating habits of people in the three large Asian cities? What can go wrong if we go west? What can go haywire in a business with a social mission? What if we stay Indian and never venture abroad again? What is the long run strategic implication? These questions must be answered. Being an underdog is not a disadvantage: In whichever market ATR explores, the underdog tag of an unknown south Indian breakfast maker will not go and will remain for five

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years at least. This will on the other hand allow ATR to follow an unusual underdog strategy in terms of pricing, brand positioning, reach the streets of large cities if necessary and sell breakfast item straight on the road under ATR brand as a breakfast hawker – such a strategy can be risky, but worth pursuing. ATR can never pursue such a strategy after five years. The time to do something and turn conventional wisdom on its head is NOW! Practice what you dislike: If ATR has to go global, practising what it dislikes such as going for non-veg items, or starting in one corner of a Walmart store – it has to adapt and get along. The premium position it enjoys in India will not exist, it has to compete and jostle for space with hundreds of breakfast makers from other countries. Here the 10th man thinking comes into play. ATR has to list out a range of issues its management absolutely is against and dislikes to adapt – that will come up if ATR nurtures ambitions of going global. If ATR’s management is not willing to face these issues, its better remains an Indian company. Organizational practice ATR should follow This is a case where all the 9 tenets of next gen management practices apply, going global or not. Observer-reflect-introspect: ATR must watch its existing customer base – the Indian consumers, how their eating habits are changing. Many Indian families have twin income sources, the husband as well as the wife rushes out in the morning. The time to cook a dish of steamed Idli or Upma may not be there! Instead they finish breakfast with instant items like bread and an omelette, ready to eat noodles, or cornflakes. Their Indian consumers are changing and habits are changing fast. Does this make a compelling reason to go global? ATR must examine this issue in depth. Assimilate-absorb-transform: ATR must experiment with Indian breakfast dishes further and if it doesn’t want to shed

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its aversion for non-veg items, it can experiment with breakfast items from other parts of India and expand its range to become a specialized Indian breakfast company – this will give it a sense of clear purpose, growth and create a strong image in minds of public. To accomplish the objective ATR’s management must be willing to absorb new knowledge and undergo extensive training, undertake visits. To make an impact on the minds of its Asian consumers, ATR can visit the China Town in Kolkata and explore vegetarian menus and experiment with Chinese and Asian breakfasts in a vegetarian way. This willingness to experiment is the starting point of absorbing new knowledge, transforming itself into a specialized breakfast company. Co-evolution – globally and locally, combine customization with standardization and fuse social goals with business goals. Without going global further, ATR must explore its existing network in three large Asian cities deeper and find ways of evolving and changing with its Asian customers. Introducing a range of Asian and vegetarian breakfast items can also go well with Indian customers. Indians normally don’t eat non-veg items in breakfast except eggs. The non-veg ingredients are normally consumed either in lunch or dinner. Hence, this is one way out to go global. Combining customization with standardization will involve introduce the breakfast items in spicier and bland flavours, introduce a range of Chutney mixes as accompaniments. Fusing social goals will involve starting a charitable NGO to distribute breakfasts to the poor and needy in India itself. Start it as a small experiment and see how it goes. What path ATR should follow? • Challenge mindsets. • Practise and adapt to changing circumstance, think out what they dislike. • Observe changing habits of Indian customers.

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• Expand its Indian breakfast range. • Think of going global one step at a time – connect one dot at a time. • Understand the fact that going global is not easy and takes years to become a global company. It has to go one step at a time and this process will go on infinitely. • Stick out to its Asian outlets in three major cities for next five years and build a brand as a specialised Indian breakfast company – either only veg or both. The question of opting for non-veg items can be deferred as of now, but may come up later. • Start the social venture in a small way. What possible solutions will emerge? ATR has to adapt the path of becoming a specialized Indian breakfast company. There is no alternative to it. This is clear and this is the only way to grow further. Whether ATR grows into a brand in its three extant branches in three Asian cities remains to be seen. This should be the next goal and may take a long time. After that questions such as going global in all Asian cities, going west can be explored.

Part-7 The Concept of Counter-Intuition: The Art of Making the Impossible Possible

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In this concluding part we talk about the concept of COUNTERINTUITION which is an adaptation of Daniel Kahneman’s concept of “Thinking Fast and Slow”. Counter-Intuition is all about challenging one’s own intuition! Very Hard. This part also gives a brief glimpse of the future-management V 3.0 & Tech-human interface.

The Phenomenon

We often come across an event or a phenomenon, that seems completely unfamiliar, our intuition, judgement and past experience proves futile in explaining the event. It can be the way the voter behaves in elections or a strange pattern of consumer behaviour, or launch of a product that defied wisdom of the day (which has often happened in past and will be taken up in detail shortly), it can also be a way a patient responding to a new vaccine, eradicating the disease. It can be macroeconomic trends which economists can’t explain. It can be one company earning huge profits in a saturated industry, where everyone else is incurring losses. Such events are counterintuitive! They go against intuition, judgement and past experience. Instances of counter-intuitive thinking abound in war history also. Nokia was the first to recognize the new emerging reality in mobile handsets. While technologies for making a mobile phone existed and Motorola and Ericsson were already in the market, nobody saw that the mobile can be a mass market product and its cost can be drastically brought down to make it affordable to the common man. Two discontinuities in the global telecom industry were emerging then: (a) changing government regulations allowing private operators to enter the arena, and (b) a combination of hardware and software technologies maturing to make the mobile phone affordable. Nokia sensed the reality and didn’t allow itself to be fooled by

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past wisdom, of course, the same Nokia two decades later was blinded by smartphones. Nokia stopped learning and paid the price. Similarly, more than a hundred years back it was Henry Ford who had connected the dots and created a new reality with Model-T in 1908. Before Model-T, existing car makers never thought of the car as a product for the masses. Instead of the car being stationery, what if the car moved and workers remained stationery? This was the element of counter-intuitive thinking and the era of mass production began, ushering a new kind of prosperity never experienced before, providing employment and disposable income to millions of workers, who could now afford cheap and mass-produced goods. Two decades later General Motors created the multidivisional organization structure, controlled by a set of measurable metrics, such as the return on capital employed (ROCE). Thus, was born management accounting and multidivisional organizations, the foundation of 20th century industrial capitalism. Nearly a century later Steve Jobs created a new reality with iPod, iPhone and iPad, by combining hardware, software and the Internet. A life-saving example of CIT occurred during the World War II, when invasion of Europe began and allied bombers were raiding Germany. The casualty rate was high, many planes were shot and not returning to the base. The statistician Abraham Wald was asked to examine bullet holes and suggest where to put more armour plates. Wald saw a pattern, two sections of the planes that returned had fewer bullet holes, they were under the wing section of the fuselage and under the fin stabilizers on the tail. He suggested more armour plating there. Intuitive thinking – put plates on places with more bullet holes. Counter-intuition – it wasn’t the holes Wald was seeing, it was the planes that didn’t return. Absence of holes under the wings and tail implied that the planes which got hit under these two sections weren’t returning and they were returning despite bullet holes in other places.

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The concept of counter-intuition involves challenging your past judgement, learning, experience, all building blocks of intuition and accepting something or visualizing a scenario that is thought impossible. More than a hundred years back people conceived the car as something impossible. Music anywhere anytime was an impossible concept till the Walkman came along. Connecting people anywhere on a 24 × 7 basis at an affordable price was thought impossible till Nokia mobiles came along and with more communication satellites being put up in space the cost of airwaves kept falling rapidly. The 12 tenets of resilient thinking teach us the art of making impossible possible—the very essence of entrepreneurship and bedrock of innovation – make the impossible possible. Do the unthinkable, stretch your imagination beyond into the realms of what is thought impossible by wisdom of the day – and that is the very essence of progress. This book has demonstrated the tenets of resilient thinking at length in parts 4 to 6. We take the opportunity here to demonstrate the element of counter-intuition beyond business in other walks of life through some thrilling adventure stories.

FIND A BIGGER PURPOSE AND YOU CAN OVERCOME THE GREATEST STRESS TO ACCOMPLISH IT 1929 April. Jim Corbett was directing an elephant mounted hunt for birds, wild-boar and deer. There were more than 10 shooters mounted with different guns on 10 or 15 elephants. An accidental discharge of a powerful rifle next to his left ear, singed his inner ear drum. Abscesses started forming in his head. A surgeon in Nainital informed him that nothing can be done. This was a time; antibiotics were not invented. There were two man-eaters menacing the lives of people in Kumaon – the Talladesh man-eating tigress and the Chowgarh tigress. Off to Talladesh Corbett went ignoring all protests! He arrived in Talladesh region after walking for days and witnessed three mysterious lights on the peaks above the

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Purnagiri Temple on the way. He was told that he is the first European to witness the lights – it’s the spirit of a saint who worships the Goddess Bhagwati and only when one is on a very difficult and noble mission – one is accorded the privilege of seeing the lights. This privilege was accorded to him by the Goddess because he was on a mission to save lives. He arrived in a village named Tallakote. Shortly after his arrival he was informed by the villagers that three tigers are sunning themselves in a valley below the village! It was the man-eating tigress and her two cubs. With his 7 mm (0.275 caliber) Mauser Rigby, he shot the cubs with two bullets and severely injured the tigress with the third. The tigress was lying unconscious stuck on a sapling. After a few seconds it fell from the sapling and rolled down the grassy slope of the hill. Corbett fired a fourth one on the rolling tigress and missed. All thought that the tigers are dead! People started dancing! Suddenly, the tigress started running! A boy detected the parting of the grass and the tigress through it and pointed out – look Sahib the tigress is running away! Corbett had last one bullet in the magazine of his rifle and the distance was 500 yards – just within the range of this light rifle, as he was asked by the doctor to not to use his heavy 11/10 mm (0.450/0.400 calibre) double barreled rifle. He fired and missed. He regretted the fourth shot – which he fired when the tigress was rolling down the grassy slope! It was matter of one bullet to finish the tale. Which was not to be!! His sufferings had just begun. Corbett chased the tigress up and low in the valleys of Talladesh for next five days. His miseries kept increasing as the abscess kept becoming worse. By fifth day evening the abscess grew very big. Blocked and closed his left eye, immobilized his left shoulder, he couldn’t move his neck to left. His left ear drum was destroyed. The abscess practically immobilized his left side! Last 48 hours he chased the tigress living on a diet of milk-based tea! On fifth day evening after chasing the tigress for 18 hours that day, he decided that the

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night is the do-or-die moment to settle scores with the tigress, who has killed 150 people and if she recovers from her injuries, she will kill more. He walked in to the jungle in a moonlit night. His six Garhwali servants standing and crying. He was resting for a while under an oak tree, when he spotted the tigress 150 yards to his left. Corbett started running with his head bent. Was overcome with vertigo. His head started spinning. There was an oak tree nearby. He climbed the oak tree and sat down with his head buried in his hands. At that moment the abscess burst! “No greater joy is known to man with the sudden caseation of pain” – writes Corbett. It was midnight. He lay asleep on the tree. Woke up at dawn to see that his left eye was open, he was free to move his neck and he was well! That day morning, he came face to face with the tigress and put two bullets on her head to finish the tale.(1)

A CHANCE HOWEVER FORLORN SHOULD BE TAKEN AND A GREATER SENSE OF PURPOSE CAN HELP TAKING DIFFICULT DECISIONS, MIRACLES MAY HAPPEN! Jim Corbett’s last man-eater hunt was the Thak maneater in 1938. He was 63 then. By then he had added 32 years of man eater hunting experience and shot more than ten man-eaters. Yet this tigress troubled him to no end and he said: “I would exchange all my thirty-two years of man-eater hunting experience to take that one unhurried shot at the tigress”. He searched the tigress high and low through the hills and ravines of Thak village in Kumaon region of Uttarakhand for days and couldn’t even see a breadth of her hair. This shrewd tigress eluded him till the last day of his man-eater hunting. Corbett writes: “this was my last day of man-eater hunting and it’s hard to describe the depression that assails a man on failure and yet I feel there is nothing that I left undone”. As he wearily trudged down the hill path, he heard the tigress call a few (1) Adapted from The Talladesh Maneater in the Temple Tiger, Oxford University Press, India, 1997.

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hundred yards down to his left in a deep ravine full of thick forest. It was 5 pm in the evening and the Sun was casting a red glow, darkness would descend in another thirty minutes. He had four men and two goats following him. He understood that this was a mating call and the tigress is searching for a mate. Corbett was an expert in imitating a tiger’s call and he faced a life challenging dilemma: to call or not to call? He had about thirty minutes to complete the task. If he called and the tigress came, he can put a pair of bullets from his double barrelled 0.450/400 Jeffries and end the miseries of hill people. But what if the tigress didn’t show up? Once darkness descended, five men and two goats had to cross two miles of thick forest and one or more of them may not reach the camp! What should he do? Call or not call? Corbett decided to call! What outweighed the sense of imminent danger was the consideration that if he went away listening the call, chose safety of five men over thousands of hill folk – that regret he will live with for rest of his life! Once he called, the tigress responded immediately and she was on her way to find her prospective mate! Corbett had less than 15 minutes now to position himself appropriately to hide himself behind a rock and keep calling and lure the tigress to her end. Seconds before darkness descended the tigress walked up the hill path and came face to face! Two shots rang out from the heavy double barrelled 0.450/0.400 rifle through the hills.(2)

THINK LIKE A TIGER TO HUNT HIM! THE ELEMENT OF SLOW THINKING Like Corbett in Kumaon, there was an equally daring hunter who shot more than 50 man-eaters in Southern India – a Scotsman called Kenneth Anderson. Anderson’s tales span from late 30s to 60s. He worked in HAL factory in Bengaluru (2) Adapted from the Thak Maneater in Maneaters of Kumayun, Oxford University Press, India, 1997.

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and hunted around the jungles, now part of Mudumalai, Nagarhole, Bandipur Reserve. Once he was with two forest rangers in a bungalow. It was dark by the time the meeting ended. The rangers warned: there is a man-eating tiger prowling around! He should better spend the night in the lodge. Anderson had his trusted 0.405 (10 mm) Winchester with him and a torch was attached on the rifle’s barrel. It was a single barreled rifle with 5 bullets in magazine. He refused and started his walk towards his bungalow – 6 km away through thick forest. After a couple of kilometres his sixth sense – honed by years of hunting (and being hunted!) started warning him!! The man-eater is stalking at him! Yet the jungle was silent. No alarm calls of deer. The wind was not blowing, everything was ominously silent. Yet Anderson was sure! The tiger is stalking him! He had to stop panicking and, in this situation, THINK SLOWLY. He had to fight the natural response when you are stalked by a man-eating tiger in a thick forest – RUN FOR YOUR LIFE OR CLIMB A TREE OR FIRE THE BULLET TO DRAW THE TIGER OUT. No! he had to do something different! Anderson thought carefully. He stood for a minute on the forest path thinking. What is a Tiger’s instinct? He is the king of the forest! He is accustomed to roar and chase his victims! He is accustomed to see his victims cry and shriek in fright! This natural tendency of a tiger has to be used against this man-eater! Anderson looked around and saw a small hillock ahead. He made up his mind! The plan was to run like a victim and climb the hillock fast, with the rifle ready to fire and the torch switched on. He did just that! He ran hard, with a cocked rifle and torch on! The tiger was actually there! He roared out of the bushes and chased him. It was a question of WHO RAN FASTER! Anderson fortunately reached the hillock and turned around just in time to focus the torch on the tiger. The heavy 0.405 Winchester bullet crashed into the tiger’s nose while he was just two feet away. He fired again! It misfired!! It was fortunate that the first bullet in the magazine was a good round, otherwise the tiger would have completed his attack.

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He reloaded and fired a third round; the tiger had vanished with the injury by then.(3)

COMBINE INSANITY WITH LOGIC Kempekerai is a small hamlet in north Salem district of Tamil Nadu and in late 30s was menaced by a man-eater. Anderson was summoned to get rid of the menace. He first sat on a tree. Missed shooting the tiger. Then he had a crazy, but workable idea: tracing the tiger’s tracks he chose a dry stream to fix a dummy on one bank of the stream, dig a hole in the stream, ask his helpers to secure the hole with a bullock cart wheel with heavy stones placed on it! Keep a six-inch hole under the wheel open to aim at the dummy and fire when the tiger pounces on the dummy! A crazy and brave idea indeed. The plan didn’t work out the way Anderson hoped. The Tiger didn’t come from the direction he expected. A bear came before him and discovered Anderson’s position and snooped around. The resulting noise alerted the tiger and he approached the hole carefully to investigate. He discovered Anderson and nearly killed him! It only shows how carefully thought-out plans can go haywire! In sheer panic Anderson somehow managed to touch the tiger’s shoulder with the barrel of his 0.405 Winchester and the bullet smashed the tiger’s left shoulder. But as Anderson sat in the whole wondering what next, drops of rain- water started falling and soon he heard a torrent rushing down from the nearby hillock! It was a flash flood and Anderson risked the danger of being drowned alive! With great difficulty he extricated himself from the hole, and ran out. Seventeen days later, he traced the severely injured tiger’s tracks on the Chinar river and spotted a stone in middle of the river. They were fresh. The tiger was around! His pugmarks showed that he was severely injured on the left side. (3) Adapted from: Sher Khan and the Betamugalam Man Eater, The Kenneth Anderson Omnibus. Vol. 2. Rupa & Co., 2006

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Result of the heavy 0.405 bullet damaging his left shoulder and feet seventeen days back. He conjured another insanely brave plan! Sat on top of the stone, dressed as a farmer. A torch attached to his Winchester. Around eleven he noticed a faint dark shape on the left-hand side about a hundred yards away! Strange! He thought. That shape was not there before! Then it suddenly became elongated and again shortened! Anderson understood! The tiger has spotted him and is reducing the distance slowly, before launching the final charge. He started shivering and perspiring and understood that being afraid will not help! THIS WAS THE MOMENT OF RESILIENCE AND COURAGE. He switched on the torch beam and it revealed the snarling face of the man eater. Three shots rang out. (4)

THINK LIKE THE 10th MAN The famed Israeli intelligence agency MOSSAD has a principle. To anticipate a situation on national security, a 10th man is empowered to challenge and contradict what 9 others are thinking – this is known as the 10th man principle. The Allied army launched operation MARKET GARDEN in summer of 1944. The idea was to airdrop 35,000 crack para units to capture and retain key bridges over Belgium, the 1 British armoured division will follow. The first British 1 para unit and the earlier mentioned units of US army – the 82nd and the 101st were assigned the task. There was a fourth unit – the Polish para division, which was kept in reserve (as General Montgomery was averse to the Poles!). It was assumed that German resistance will be negligible and soon the allied forces will march into Germany. The war will be over by Christmas of 44. One intelligence officer contradicted the entire hypothesis and questioned the wisdom of keeping the Polish division in reserve. He was overruled. He was the 10th voice, ignored! (4) Adapted from The Marauder of KempeKerai, Kenneth Anderson Omnibus. Vol. 1, Rupa & Co., 2001.

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The British first para was the first to be paradropped over Holland on a sunny and clear day. No resistance was offered, but they were watched! As the first para-advanced and entered Dutch villages they came under well directed and well camouflaged fire, taking them by surprise. Their American counterparts were not doing great either. Each of the three para units reached a bridge and held it, fervently praying that the British armour and heavy artillery reach to help them! They were facing heavy fire from the German Panzers, who had camouflaged themselves expertly under nooks and crannies in villages and were now directing murderous and accurate fire on the para units. The camouflaged Panzers were not spotted by recce planes flying over Dutch villages. However, one Spitfire flew close over the villages and took a series of photos. The British intelligence officer enlarged all the photos and one particular photo caught his attention – what looked like a lump hiding under a heap of straw! After a careful analysis he requested another recce flight by the RAF. This time the RAF pilot took better photographs and one photograph revealed a long object under a hay stack! The intelligence officer understood what the hidden long object under the hay stack meant! It was the hidden barrel of a Panzer! The Panzers were hiding in every village, well camouflaged. The Germans knew about operation Market Garden – the ambitious plan to capture the Arnhem bridge and cross the Rhine to enter Germany to end the war before Christmas of 1944. They didn’t offer any resistance at para landings, instead they waited! Allowed the enemy to come in and ambushed! The 10th man understood the plan – his voice was ignored. Either the movement of British 1 armoured regiment or the presence of the additional Polish Para division could have altered the outcome. But that was not to be! What if the Polish Para unit was around? NO ONE KNOWS! (5) (5)  Adapted from the Movie: A Bridge Too Far, directed by Richard Attenborough, 1977.

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MORE IS NOT ALWAYS BETTER – OFTEN YOU CAN DELIVER A LOT MORE WITH LESSER RESOURCES, IF YOU ARE WILLING TO DARE BEYOND THE ORDINARY! September 4-5, 1971. The IAF was given the mandate of obliterating the PAF over the eastern skies so that the army can march to Dacca within 10 days and liberate east Pakistan to create a new nation – Bangladesh. The IAF had eleven squadrons placed around in West Bengal and Assam for the task comprising 3 GNATs, 4 HUNTERs and 3 MIG-21 squadrons. The MIGs were based in Tezpur and Guwahati. The Hunters in Hashimara and Bagdogra in West Bengal. And the GNATS were for air defense around Kolkata. There was one Canberra and a SU-7 Sukhoi squadron based in Gorakhpur used for night bombing. The IAF’s mandate was to bomb the PAF out of existence. For two days the IAF carried out relentless sorties to bomb the Tezgaon airbase near Dhaka, where the PAF Sabres were located. They couldn’t accomplish their task. The range of the fighters were not enough to hang over the base and bomb and when the PAF planes took off to challenge the IAF, the fuel proved insufficient to stay on and bomb. After two days of relentless attacks the Tezgaon base was intact and the enemy was still capable of fighting! Time was running out for IAF. Only one option remained – that required daring skill and courage. To bomb the Tezgaon runway in night at supersonic speed. At that speed in the night the PAF fighters will not have sufficient time to take off and challenge the enemy, neither the PAF’s anti-aircraft guns can do anything in the darkness. A secret project of the IAF was to train ten MIG pilots in practising runway bombing using 500-pound Russian Runway penetrator bombs. The idea was to come down diving from 15000 feet at speed of sound and align the aircraft on the runway to drop and climb back, an operation that required precise mathematics and physics!

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The IAF swallowed the bait and the ten MIG pilots were asked on night of Sept 5 to go into the mission. Eight MIGs flew in the first mission headed by Wing Cdr. Vishnoi on the morning of Sept 6. The technique was to climb to 15000 feet, invert the aircraft, align it with the runway, roll back and dive at an angle of 35-37 degrees and increase the speed with the dive with the bomb sight pointed at end of the runway. At 4500 feet, release the bomb and climb up. At that height and at near supersonic speeds the anti-aircraft fire was useless. It was actually an almost forgotten and not in anymore use technique called “Steep-Glide” bombing, used by the Ju-87 Stukas of the Luftwaffe during WW II and RAF Mosquitos. They bombed the runway and destroyed it. The PAF engineers immediately set off to repair the runway. Sept 7 between 8.00 am and 12.30 pm was declared a ceasefire time zone by the UN, so that stranded foreign journalists and delegates can be evacuated from the war zone. The ceasefire came into effect at 8 am. At 6 am, the PAF planned sorties to stop advance of the Indian army armoured regiments. At 4 am morning the runway was repaired and the PAF pilots were ready. Precisely at that time they heard the roar of the MIG 21’s Tumansky engine in the dark. A solo MIG-21 piloted by Flt.Lt. Manbir (Buzzy) Singh was diving at supersonic speed! The MIG correctly positioned itself over the Tezgaon runway and dropped two 500 kg bombs. The runway was shattered. The ceasefire came into effect at 8 am, the PAF couldn’t take off and the Indian army tanks proceeded at an electric pace towards Dhaka! “The fate of East Pakistan is sealed,” commented Wing Cdr. Dilawar Hussain, the PAF airbase in charge. (6) (6) Adapted from the book, Eagles over Bangladesh, by Jagan Mohan & Sameer Chopra. Harper & Collins, India, 2013.

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FOLLOW THE INNER VOICE, IT MAY DEFY LOGIC YET A MIRACLE MAY HAPPEN! 1 December, 2017 a cyclone named Okchi had stuck two days before. Cyclones are not common in the Arabian Sea, like on the eastern shores of India and although the met department sounded out several warnings about the severity of the cyclone, hundreds of fishermen were out at sea. Partly due to the pressure to earn a living, partly due to the fact that cyclones were practically unknown in western India and Arabian Sea. On December 1 morning, the Indian Navy’s INAS 336 squadron was busy, flying rescue missions and searching for missing fishermen using its helicopters from the Kochi naval base. Around 1 pm, Captain P Rajkumar in his Sea King antisubmarine helicopter was guided by a P-81 surveillance aircraft towards four stranded fishermen in middle of a raging storm. The P-81 guided by a set of surveillance radars and flying at 1000 feet could detect the capsized boat with pinpoint accuracy. The P-81 737 was fitted with sensors and radars, that could detect the smallest object floating on sea surface and its laser beams detected coordinates with unerring accuracy. By evening the SK 528 Sea King had completed its rescue mission of the day, sunlight faded away and Okchi was assuming a terrifying form, with winds howling, and the sea swelling. The P-81 went to its home base. Everything demanded the day to be closed! Mission accomplished! Logic demanded that venturing out to the sea again was as good as hara-kiri. Yet something nagged Captain Rajkumar! He had a strange sense of foreboding, a strange feeling that there might be someone out there in this raging storm who needs help! His crew understood. They were ready! SK 528 was refueled and ventured out into the raging storm in pitch darkness. Missing was the reassuring presence of the P-81 above, it was night and the horizon reference, where the sea blended with the sky to keep the altitude was not possible

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in darkness. Rain blocked the windscreen and the search light reflected was creating a flying hazard, blinding the crew. There were no coordinates, now definite detection of survivors at sea by the unerring radars and sensors of the P-81, no news, just a nagging feeling! And Rajkumar knew the standard saying of the military – there’s a thin line dividing a gallantry award and a court martial. And yet! He carried on – just guided by a strange feeling that someone out there needs help. In the pitch blackness it was nearly impossible to detect a survivor. SK 528’s crew was hunting blind. They knew that there’s every chance that they will fly past their objective. But they stayed on! The endless search continued for an hour. The winds were raging and howling and the waves were rising higher. It was becoming more difficult every second and SK 528’s crew was on the point of giving it up when they heard it! It was a call from a 100,000-ton cargo ship – the Cosco Beijing a Maltese container ship, that was standing stationery 80 km from the Kochi coast. They were communicating on the frequency of 156.8 megahertz, the common frequency for merchant vessels, commonly known as Channel 16. Captain Rajkumar had kept the VHF radios of the chopper tuned to this channel. Now the ship saw the Indian Navy chopper’s search lights and was communicating! “Boat Capsize!” In came the message with a heavy Chinese accent over the radio. Through a series of messages SK 528’s crew understood that the container ship has detected a loan capsized boat and is now pointing a laser beam to guide the chopper to the boat. This was perhaps a superior force directing SK 528! Its crew risked everything and put their years of training into practice, guided by a strange premonition, that in this raging storm there is a life waiting to be rescued! And now the Maltese ship is confirming it! The massive merchant vessel couldn’t rescue the survivor, owing its size in this storm. There was every

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chance that it would have knocked the fisherman over into the sea with its giant hull heaving up and down in a bobbing motion. It couldn’t go near the boat, but its crew spotted the chopper and lost no time in communicating. SK 528 detected the big ship and started circling around it to pick up the laser beam. This was a very difficult task in the storm, as the helicopter was losing power when banked at 30 degrees angle. Says Captain Rajkumar: “No one will fly this long in such conditions. We have been flying hands-on for 6 hours without auto-pilot. But in such missions its adrenalin that keeps you going AND ITS MIND OVER BODY”. For 10 to 15 minutes, SK 528 hovered over the big ship trying to detect the small green streak of light and couldn’t detect it in the raging storm. At last by a sheer stroke of luck Lt. Cdr. Mayur Chauhan spotted the small green ray of light. Being a submarine hunter, SK 528 was designed to hover over a spot for long periods, but not below 50 feet. But under such conditions nothing that the training manuals said were applicable. It was a game of guts and skill. Captain Rajkumar brought the helicopter down to 20 feet. At that height there was a huge risk of a sea swell hitting the tail rotor of the chopper which would have been catastrophic. In pitch darkness the horizon reference was not there and bobbing up and down, with skill of the two pilots SK 528 kept dodging the swelling waves and searched for the capsized boat. They at last spotted the boat. Its blue fiberglass hulls. The boat was overturned and a lone man was clinging to the boat with the help of a rope. He looked almost dead and appeared to have given up on life. This was the supreme moment of flying! Captain Raj Kumar had to simultaneously do two things now: (a) keep an eye on his instruments to avoid the swell of the sea and keep control of the chopper and keep up the lifting power of the engines, and (b) keep an eye on the fisherman to not lose sight of him. Says the captain – “I was at

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one moment looking at the instruments and the fisherman at the other moment, it was that sort of flying we were doing out there”. The chopper now hovered over the boat with a shuddering vibrating through its fuselage at a dangerously low height over the raging storm and swelling waves. Now a terrible dilemma presented itself: captain Rajkumar understood that the fisherman is not in a position to grab the rescue rope with a hook. A diver has to be lowered on to the boat! The decision can go horribly wrong if there is an alarm in the cockpit, an engine oil lubricant light coming on, or the rescue winch not working properly or a severe cockpit vibration, as the chopper was already flying dangerously low just over the waves. If the diver is lowered and anything goes wrong, he has to abandon two lives at sea. It was a gut-wrenching moment. And yet when marine commando diver Deepak Saini said – “I will Go”, the captain knew that the decision had to be taken. Says Saini: “In that moment I knew I had to save the fisherman! In that moment you are not thinking about yourself. How can you? Here was an opportunity to save a life!” Saini was lowered by the other marine diver on the boat with a green fluorescent light to keep track of both. First the fisherman was hooked on to the winch. Then Saini was taken up. The fisherman was clinging to the boat for three days without food and water, a supremely strong will to live kept him alive and a strange premonition on part of Captain Rajkumar, saved his life against heaviest odds.(7) The seven thrilling adventure stories amply demonstrate the art of making the impossible happen and going beyond the ordinary. It is ELEVATION OF MIND! Which is the essence of innovation and entrepreneurship. (7) Adapted from the story: “What’s higher than saving somebody’s life?” featuring Captain P. Rajkumar the Commander of SK 528 Sea King Helicopter. Indian Navy Anti-Submarine Unit. From the book: “India’s Most Fearless Vol. 2, by Shiv Aroor & Rahul Singh” Penguin Ebury Press, India. 2019.

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We come to the main theme of the book: business. What are the practical and strategic implications of counter-intuitive thinking on business? Technology is progressing at a rapid pace and we conclude this book by giving you a glimpse of the future, where elevation of mind will play a major role.

TECHNOLOGY VERSION 5.0 : THE IMPLICATIONS One of the premier practitioner journals of strategy: The California Management Review took out a special issue in 2019 on technology-human interface or THI. How THI is building up and how THI is changing forever the way business will be conducted in future. One of the papers by Lynn Metcalf and colleagues talks about how Artificial Swarm Intelligence can be used for improved business decision making. Another leading academic journal, Sustainability, carried an article on V 5.0, mainly the THI aspect. Hence, we conclude from these two journals that V 5.0 is mainly the THI. It increases interaction between technology and humans and dispels the fear of unemployment and, in fact, improves human thinking and productivity, thus opening up new fronts in innovation. Swarm Intelligence is a term borrowed from biology. It describes how a swarm of bees; a school of fish move in a flock to avoid traps. A school of small fish swerves rapidly to right or left to avoid predators. A swarm of bees attacks a common objective to save their nest or collect honey from flowers. Swarm intelligence using AI is a technique, where the system pools data from lower level V 4.0 technologies such as big data, robotics or machine learning and collects opinions of managers of a possible scenario. The system then throws up multiple outcomes of if a decision is taken. It pools the combined thinking prowess of a team and computes the scenarios using data and AI. Companies who perfect the THI process will be superior in their strategies, which are powered by V 5.0 technology. This

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is just the beginning and as time goes by V 5.0 technologies will take hold powered by AI and amalgamation of the earlier generation technologies. It is yet too early to write on Version 5.0 at length and ideas have just began to appear in premier journals. However, we are sure of the fact that 2/3 years down the line everyone will talk about version 5.0, not 4.0. Version 5.0 is essentially ELEVATION OF MIND. It facilitates counter-intuitive thinking by combining benefits of technology to elevate the human mind and produce thinking managers. When hundreds or thousands of employees provide their opinion into the ASI system – the system combines the opinions with data to throw up novel and never before thought solutions – essence of counter-intuition!

REFERENCES

1. Metcalf Lynn, Askay David A., Rosenberg Louis, 2019, “Keeping Humans in the Loop: Pooling Knowledge Through Artificial Swarm Intelligence to Improve Business Decision Making” California Management Review, 2019, Vol. 61(4), pp. 84-109.



2. Nahavandi Saeid, 2019, “Industry 5.0: A Human Centric Solution”, Sustainability, Vol. 11. 2019.

MANAGEMENT V 3.0: THE ERA OF COLLECTIVE WISDOM AND COUNTER INTUITIVE THINKING It is on the way! The pandemic has accelerated it! It spells bad news for those who are not willing to change their old ways of doing business. Attempting to influence the customer through misleading advertising, not delivering what claimed, auto makers making the cars lighter and poorer in build quality, the manual claims × no. of KGs, the actual car weighs a lot less…. these practices will stop. What then V 3.0 is all about?

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V 3.0 is the next generation management practices, after the steam era and oil era. In the steam and oil era of mass production the attitude was that an average employee is not capable of thinking and needs supervision. Which gave rise to the army of supervisors, later came to be known as managers. Today with the advent of social media and the Internet the average employee is capable of thinking much more and he/ she possesses a lot more information than his/her bosses can think of. V 3.0 is all about harnessing the collective wisdom of employees and some companies are already doing it like Toyota, Michelin and Google. This collective wisdom is all about a swarm intelligence software taking inputs from thousands of employees and throwing up multiple options and scenarios for decision making. V 3.0 will focus on mainly three things • Changing consumer behaviour: Coordination • Extensive knowledge alliances on digital platforms – Collaboration • Combining the opposites: global-local, customizationstandardization – co-evolution. Thinking skills will assume special emphasis. This has been a much-neglected area of management. By thinking today, we understand what the psychologists and psychometricians do. But business thinking as a discipline is yet to see the light of the day. This book gave a good glimpse of what business thinking can look like with the twelve tenets of resilient thinking. In future only thinkers will be hired. With increasing automation and advent of V 5.0 technologies, THI will mature and develop further and students who can interact with THI will be hired. As Virginia Rometty, the last chief of IBM remarked once: “the age of degrees is over the age of skills is on us”. Along with other skills, thinking skills will assume special importance and the only deciding criteria for hiring.

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When a pool of thinkers lends its thoughts into a ASI software, the outcome may often be counter-intuitive. That is, an outcome suggested by the system not thought of by anyone! It may challenge the intuition, judgement, years of learning and experience of many senior managers. Such counterintuitive outcomes may eventually decide the strategic course of action and companies who perfect the art may derive inimitable competitive advantage. The competitive edge will not come from products/services/size/scale/cost – but from the flow of knowledge, customer insights and continuous evolution – 3 Cs in other words. In future, the concept of counter-intuition will play an increasing role in bestowing enduring competitive advantage. Organizations capable of thinking counter-intuitively will outsmart others and it will be very difficult to match their thinking process.

AFTERWORD I am India! I am Infinity! I am the land of infinite wisdom and I today march towards the Infinite Supreme. I am emerging from the ashes of ignominy and dust of millennium like a Phoenix and once again my thoughts will soar into the azure, once again I will lead the world with my thoughts. My thoughts will spawn a new generation of world-class Indian corporations. The new millennium belongs to me! I am the king in tattered clothes, I am the bearded wizard, whose spirit is centuries old and whose wisdom is timeless, I am the savant with only a pen. I will lead the world with my pen not with the sword – those who lived by the sword died by it! Come! Join me in my fascinating new journey! I AM BILLION DREAMS OF A BILLION ENTREPRENEURS THAT WILL RISE FROM THE DUST OF MILLENNIUM.

A BILLION DREAMS RISE FROM THE DUST This book promotes a framework – the 3C framework and through a series of disguised case studies, the book demonstrates the actual use of the framework. It can be used as a text book for teaching innovation & entrepreneurship/intrapreneurship in academic institutions. It can be used by trainers in management field and academics in management schools for conducting management development programs. The 3C framework described in the book can be used by corporate executives to accelerate innovation efforts and build new core competencies to launch high growth new businesses. Key audience of the book: Budding entrepreneurs, intrapreneurs within large corporates, management and engineering students, academic researchers with innovation as key research interest, faculty and corporate trainers in innovation field. Salient Features €€ 21 case studies – 6 real life and 15 disguised €€ Extensive case teaching notes on 15 disguised cases as solution €€ A unique and first-time enumerated framework on innovation – called the 3C framework €€ Explains the concept of COUNTER-INTUITIVE intelligence, which will dominate business thinking post Covid-19 pandemic €€ Demonstrates how to innovate with minimum resources and time and how to get maximum bang for the money spent €€ An integrated innovation framework at three levels – product/business/organization €€ Shows the path to the future – Corporate accelerator models using 5th generation AI technologies on a quantum computing cloud Dr. S. Dasgupta is a Cost Accountant and holds a doctoral degree in strategic management from BITS Pilani. He has 27 years of industry & teaching experience. He has published a number of research papers in international refereed journals. His research interests include Technology-Human Interface, Innovation and Dynamic Capabilities Theory in Strategy. Mr. T. C. Dhoundiyal is a practitioner with more than 20 years of rich corporate experience in companies like Tata group, Airtel and other reputed telecom firms. He founded an ed-tech firm called SKIIL Sertifika, based in Singapore.

978-93-90581-24-5

A Billion Entrepreneurs. A Billion Dreams

A Billion Entrepreneurs. A Billion Dreams

Dasgupta INDIA: A BILLION DREAMS RISE FROM THE DUST Dhoundiyal

INDIA:

INDIA:

A BILLION DREAMS RISE FROM THE DUST A Billion Entrepreneurs. A Billion Dreams

Dr. S. Dasgupta | T.C. Dhoundiyal