How do companies cope with the rapid changes taking place in the industry? Adopt skill development, identify and cater to the needs of the market and take advantage of free-flow of information and data
The last few decades have witnessed the most dramatic changes to the way we, as humans, evolve, operate and coexist. Technology has played no small part in this transformation and, in fact, has acted as the prime mover. Change, innovation, evolution and revolution are some of the key words that aptly describe the times. Recessionary trends in the past followed a cycle that spanned a few decades at the least.
Nowadays, uncertainty in the business environment and economic slowdown has become the order of the day. High growth economies and industries have invariably hit a trough. As the world attempts to recover from one such slowdown, a sense of uncertainty is very high. It was the digital bubble at the turn of the century and then the credit crisis within a few years. Business leaders plan for such times, but expect a period of relative calm that helps them regain lost momentum. India was relatively insulated for some time but given how connected we have become to the global economy the current period of uncertainty was inevitable. The last few years have seen a significant drop in new investments, particularly in developing new ideas and businesses concepts. Rapid obsolescence and unpredictable demand has been the primary reason.
How can companies cope with such rapid change?
Change the thought process: First, investments and forward-looking changes cannot be put on hold indefinitely. What is required is a change in the thought process. Traditionally, companies in India have planned for growth assuming an assured demand. Given the size of the market, consumer or B2B products would always have continuous opportunity. The problem in the current environment is rapid change, which redefines the market contours. The key to success here is not just the ability to plan ahead in financial terms but in effect preparing the organisation for rapid and continuous change. Organisations, and at some level the country itself, need to plan for such times from three angles: skill development, incremental innovation and dynamic planning.
Incorporate skill development: Despite the large population and favorably young demographic profile, there is a distinct lack of basic skills necessary for economic prosperity across the country. The traditional method of K12 schooling lays a lot of emphasis on mimetic education where classroom-based content delivery and after school assignments are the norm. There is little opportunity, and there still is, for application-based learning. The students that come out of this system are well versed in theories of fundamental sciences like Mathematics, Physics and Chemistry. Application-based learning is what drives Engineering and Technology and this has been somewhat lacking out here. Entrepreneurship thrives in an environment where students are taught to do rather than read. This starts with K12 and continues into university education. If you look at the most entrepreneurial countries in the world, most of them have evolved education mechanisms that lay emphasis on doing. This is applicable for companies too. Skill development is a critical component to ensure that the organisation is well trained and prepared. Learning by rote and skill defined by an ability to replicate rather than develop will not help the cause. Organisations, particularly the medium-sized nimble high-growth companies, need to incorporate skill development as one of the fundamental pillars of their strategy.
Cater to the needs of the market: Most organisations define innovation as R&D. The need of the hour is not just new products and technologies but an ability to adapt existing ones to the needs of the market. This change is not only in product development but also in marketing, sales, production and even customer feedback. Not every company needs to develop the next iPhone equivalent. Even traditional products need to embrace alternate strategies revolving around the times. Smaller organisations might benefit more from a culture that just ‘harvests thought’. This phrase that almost alludes to mind-reading, really means encouraging people to translate thought to idea and idea to action where warranted. Nothing would benefit a small enterprise more than having a quarter of their workforce consciously trying to improve things. In that context, innovation is something you should hardly see, but the power of which you will surely feel. In a sense innovation needs to be evolutionary and not always revolutionary or disruptive. Fostering such a culture would be crucial in our current times.
“No one will be able to slow down the rate of change, predict uncertainty or be always ahead of the curve. Organisations need to be ready, adaptive and dynamic to keep up with the times.”
Develop a culture of continuous data sourcing and updating: Information availability has become democratic. No longer are consulting firms and market research firms the only source of data to drive planning. Google provides enough free-for-all data to help planning. This has impacted the consulting industry significantly and organisations need to really take advantage of such information availability. Developing dynamic systems that continuously track environmental changes and contextualising that for the organisation is essential. This need not always involve developing expensive Big Data analysis tools. A culture of continuous data sourcing and updating is what is required. The ability to track, identify and assimilate useful data from the digital world is critical. This cannot be an annual exercise and needs to become a culture that is pervasive. Strategic planning needs to become relevant and highly dynamic.
What cannot be cured must be endured. The adage has never been truer than in current times. No one will be able to slow down the rate of change, predict uncertainty or be always ahead of the curve. Organisations need to be ready, adaptive and dynamic to keep up with the times. Dynamic planning that leverages a highly creative organisation, well trained for the times, is the need of the hour. We live in interesting times.
Jagan Ramaswami is the Director (Consulting), Strategy & Technical Insights of Frost & Sullivan. The views and opinions expressed in this article are those of the authors.