Thriving in uber-uncertainty
Corporate leaders love to say change is the only constant. But major disruptive changes taking place in multiple arenas simultaneously can shake the confidence of even the best CEOS. This is where management consultants and books written by them come in. They prescribe strategies, offer new frameworks to re-examine established strategies, and sometimes just repackage common sense advice into suitable management-speak. Their value lies, most often, not in offering any great insight but simply in bringing an outsider’s perspective that helps management look at the problems with fresh eyes.
Beyond Great falls in this category. It has been written by three senior partners of Boston Consulting Group (BCG) and as it mentions on the cover, it offers nine strategies to business leaders to navigating and thriving in these uncertain times.
While there are several books in this genre that have been released recently, Beyond Great distinguishes itself by recognising the greater number of complexities that the business leader needs to deal with today. The authors accept that the social tensions arising from the disenchantment with capitalism and rising inequality is something that a corporate leader today needs to deal with. Equally, the rise in environmental consciousness among customers as well as investors is something that affects all big businesses these days. Most other books of this genre would only recognise technological disruptions (the rise of AI and other digital technologies) and changes in political thought (the rise of nationalism) as the issues that a business needs to worry about.
The authors explain the nine strategies well —and give a great many examples to illustrate their points. The most commendable thing about this book is that the authors realise that it would be impossible even for the bestrun corporation to simultaneously put all nine strategies into practice or for any of these strategies to be implemented overnight.
Having said that, this volume — like so many of its genre — suffers from a few failings. Many of the ideas propounded as strategies are not new.
Their advice to integrate “doing good” into a company’s business strategy and operations is not very novel. Some business titans had recognised this intuitively even a century or more ago. Tata Steel’s Jamshedpur story is well known — it had recognised that just being close to iron ore and water were not the only factors that would make it successful. Building a proper community, taking care of employees and other things were equally important. Similarly, when Henry Ford decided to reduce the worker hours from nine to eight, double pay and give workers two days off a week instead of one, the productivity in his plant shot up and his employee turnover dropped dramatically. Ford had realised early that taking care of workers was good for his business.
Over time, with the rise of the profit-only, shareholder maximisation and ultracompetitive culture, many companies stopped practising this. But lately, many organisations have realised that it is not an either/or choice. Taking care of all stakeholders and taking the environment into account as well is also good for profits and share prices. The idea that total shareholder return (TSR) should be integral to the company’s core strategy and operations is making a comeback.
Equally, the idea of selling services not merely products has a long history, especially in office automation. Xerox realised even in the 1980s that instead of selling copiers outright, it could get steady revenues by allowing a client to pay only for the number of copies they would make every month. This saved the client big upfront costs but gave Xerox a steady revenue stream and expanded its user base.
In the 1990s, the idea of product-as-a-service became such a rage in India that a large number of companies tried to see if their businesses could also apply the idea. A cosmetics and skin care products firm tried setting up a chain of beauty salons. A detergent manufacturer tried setting up Laundromats. In some areas, the strategy was successful while in others, the returns were not commensurate with the effort needed.
While some of the ideas mentioned are old, examining and reminding businesses about these strategies is important now because digital tools exist that make things that were not possible earlier. Internet-of-things (IOT) devices allow many products to be offered as services which would have been impossible earlier. Other tools like 3D Printers have made mass customisation easier. Big data analytics and artificial intelligence are powerful tools that make many strategies more viable today than earlier.
The dark sides of many of the examples are also overlooked in the book. Alibaba’s financial innovations, especially in lending, are throwing up problems now. New-age, asset-light players such as Uber have been immensely successful but only because they burnt cash to scale up.
Still the book is useful because it packs a great many ideas in one short volume. And while not all of them are new, even old ideas should be re-examined when new tools become available.