India aspires to be a 5 Trillion USD economy in 2025, not too far away. We have more than 1.2 million companies active in India contributing to India’s GDP. We need all of them to grow and stay profitable.
Over the last 30 years, India has had a growth trajectory fuelled by the consumption of the growing middle class, expected to be 100 million in a few years. Moreover, Government policies have tried to integrate the markets of India with the rest of the world across all sectors, right from financial services, consumer products, telecom to construction, engineering and pharma. These have opened up many avenues for enterprises to grow by capacity expansion and diversification. However, amid the growth story and the opportunity, we need to find the right levels of operational efficiency to stay afloat and keep creating value for the shareholders. This is easier said than done!
Firstly, in a growing market, there are multiple opportunities before a business. Some would say, it is a good problem to have. Sometimes, the business leaders are confused and overwhelmed with many things on their plate; they do not have adequate resources to evaluate each opportunity objectively. So, some end up stalling a decision and some others take a hasty decision based on gut feel. In either case, they end up on the losing side over the long term. And sometimes, they do not have the financial depth to invest in innovation, new partnerships and new technologies.
Hyper-competition is observed across many sunrise sectors which are buoyed by private equity or venture funds. Take the example of e-commerce like Amazon and Flipkart, cab-hailing applications like Uber and Ola, food delivery companies like Swiggy and Zomato, food and grocery delivery companies like Big Basket and Grofers, payment companies like Paytm, PhonePe and CRED, Edtech players like Byjus and many more. All of them have been growing fast and continue to spend much more than their revenues, thus incurring huge losses with the promise of transforming consumer behaviours and creating indestructible value for the shareholders.
Soon enough, investors and shareholders will look for returns on their capital and the business has to deliver on the promises made. Leaders at the helm tomorrow will have the responsibility on their shoulders, however, the leaders today have to lay the ground well for it. Execution is often a part of the organisation’s culture, as much as growth is.
It is not easy for leaders to focus on growth and productivity at the same time because one necessitates outward focus such as presales, marketing and customer engagement, while the other calls for focus on the internal systems and processes like efficiency, quality, objectives and key results. The tasks for the leaders of today are complex because they need to drive both aspects equally well.
Innovation and People
After all, it’s the people who drive the business forward. The decisions they take are based on the insights they gather from the trends in the market and the performance data available within the company, their observation of the activities of the competitors and their practices of dealing with day to day challenges at work. These decisions determine the fate of the company. The legendary companies have survived the volatilities, disruptions and challenges over many decades; they have divested some lines of business and added many new. All of these have been possible due to the people who took those decisions and the people who played a role in shaping those decisions. Their practices of recruiting, onboarding, managing and developing them have been splendid; hence, they have been able to attract and retain good talent consistently.
Given the dynamic and volatile environment in which businesses operate, they need to be extremely flexible, agile and at the same time, innovative. Even if companies operate in a crowded mass market or offer commoditised products, they stand apart from their competition by their ways of running the business. Their innovation culture can churn out new products or services, improvise the business processes and make their systems robust, thus deliver growth and profitability.