Authors R Gopalakrishnan and Hrishi Bhattacharyya have between them a hundred-plus years of leading their companies. Their learnings, supported by numerous examples, make for riveting read.
R Seshasayee
Chairman, Asian Paints Ltd
Few managers adopt a scientific approach. Some exceptional managers, like scientists, scrutinise each management experience and formulate them into a conceptual framework. They grasp the cause-and-effect relationships from their experiences, enabling them to anticipate, identify, understand, and effectively manage future situations. However, many managers seldom engage in this practice due to the pressures of meeting monthly or quarterly targets.
The pace and scale of changes today require transformation to occur almost continuously. Business transformation can no longer be a decade-long initiative or something that happens only with leadership changes. It is essential for us to understand why transformation is necessary and how it should be implemented.
Transformation is no longer a game solely played by leaders at the enterprise level; it must involve numerous individuals throughout the organization at their respective functional levels. The evolution of nearly every successful and sustainable technology demonstrates that top-down, reductionist approaches are not the sole path to success. For instance, artificial intelligence, stagnant for decades under reductionist principles, saw a breakthrough only when it embraced neural network patterns about 20 years ago.
Organisations must foster networks and cultivate leadership at all levels to drive changes organically. This approach reduces the need for large-scale transformations every five or ten years. Every node within an enterprise must act as an agent of transformation. Transformation isn’t merely a series of processes necessary to achieve a desired goal, nor is it a strict adherence to rules to attain an end result. It involves both subjectivity and intuition; and objectivity and rationality.
Gopal and Hrishi talk about three major forces of change: customer or societal needs, technological advancements, and shifts in business models. These three forces, although distinct, are interconnected, and their interplay generates value. Moreover, this interplay can both threaten existing businesses and create significant opportunities for wealth creation. Therefore, before formulating a strategy, it is crucial to anticipate future trends.
The first step is to set a target, derived from a clear purpose. The second step involves preparing the mindset. The third step is to map out how these three impactful forces are affecting businesses. It’s crucial to have empathetic leaders who can under-promise and over-deliver.
R Gopalakrishnan
Author
Many of you may be aware of the Bhagavatam, an ancient Indian text. It talks of the story of a very pretty girl named Usha, the daughter of a ruling King. She was imaginative. In her dream, she saw her ideal and potential husband with strong arms and long eyelashes. She woke up from the dream and was scared. When her friend asked her why she was scared, she said, “I saw my future husband in the dream. I want to embrace that future husband.” Her friend asked, “Where do I go and look for him?” Usha said, I don’t know. But if you don’t get him, I’ll suffer and die.” The story goes on and she finds out her future husband, who turns out to be the grandson of Lord Krishna. His name was Anirudha.
In this story, Usha imagines her future husband and wants to embrace the future. When I tell this story to three groups of people, one group says, “Did they know about artificial intelligence those days?” The second group says, “What a lovely story!” The third group says, “How can I put some rigour and make this happen in my life?” Imagination a very important part of embracing the future. You must imagine what is uncertain. You could go wrong also, but if you follow the right methods, you will always get it right.
Once I was walking around a museum in London and wondering how the sculpture would have imagined the arms, the thighs and other parts of the sculpture. The guide who was with me clarified, “Great sculptors imagine the block. They figure out what to remove from it. The residual is what makes the statue.” I don’t know if that is true. Imagining the future is about removing what is not required. Celebrating the past is about keeping what you have and enjoying it.
Hrishi and I started our careers in the late 60s. We were given 100-day targets and understood that reorganization occurred roughly every decade. However, by the time we retired as leaders in our respective fields, we discovered that reorganization was a constant occurrence. Raising a child involves managing both the immediate needs and dreaming about their future. A mother is adept at balancing these short-term and long-term responsibilities, as if she has two circuits in her brain, both operating continuously. Men, on the other hand, tend to find this balance more challenging.
When you want to deal with the past and preserve tradition, the left brain is very helpful through memory. When you live in the present and seek to solve problems, the fluid part of your intellect works to find new solutions. As you age and ascend to leadership positions, you rely on what’s known as ‘crystallized intelligence.’
Imagine a pot of water into which you’re adding sugar. If you keep adding one spoonful at a time and stir continuously, eventually it will become saturated. Beyond that point, it can become super-saturated and begin to crystallize. This parallels our own development. We start like an empty pot, filled with knowledge akin to sugar, and over time, experience is added. After 40 or 50 years, things begin to crystallize in the mind — these crystals are products of our own experiences.
The great advantage of envisioning and embracing the future is that it requires a blend of raw intellect, the sweetness of fresh ideas, and the mature wisdom crystallized through experience. This integration becomes vital as we grow older. Leaders must harness both heart and mind.
Hrishikesh Bhattacharya
Author
We’ve been discussing the power of imagination and its significance. Let’s rewind to 2015 and then further back to 2000. Back in 2000, people viewed 2015 and 2024 as distant future milestones. At that time, concepts like online marketplaces didn’t exist; today, they constitute a $6 trillion market. Similarly, innovations such as ride-sharing, which now amount to a $1.5 billion market, were conceived. Mobile payments, pioneered by PayPal around 2010, have grown into a $60 billion industry worldwide. Digital entertainment and streaming, now ubiquitous, were non-existent. These extraordinary businesses were envisioned and created by individuals in the early 2000s, highlighting the transformative power of innovation and foresight.
Unfortunately, there is a flip side to these advancements, driven by the march of time and change. Between 2000 and 2024, a staggering 52% of Fortune 500 companies have either been sold, merged, or ceased to exist altogether. Iconic names like Kodak, Nokia, Motorola, Blockbuster, and RadioShack, which were once dominant forces, have vanished or significantly diminished in a mere 10 to 15 years.
Coping with change presents both opportunities and existential threats. While innovation can propel growth and success, it also demands adaptation and forward-thinking strategies. Yet, many of us harbour a sense of apprehension towards the future and the unknown. We often avoid grappling with these uncertainties, citing lack of time or a reluctance to confront what lies ahead.
Some individuals believe they’ve achieved genuine business transformation if they’ve made a significant impact on their customers’ lives. However, this perspective is in the minority. The majority view of transformation tends to be inward-focused, emphasizing organizational restructuring and addressing internal issues to achieve success in the market. While cost-cutting and operational efficiency are crucial and shouldn’t be dismissed, they alone do not constitute true transformation.
Transformation, in our view, must not only affect people’s lives but also substantially improve them. Consider the example of the cell phone or smartphone, which has revolutionized daily existence for billions worldwide. There are currently 8.64 billion phones globally of which, 2 billion devices are in China and India. The US has only 375 million cell phones, and Europe has 400 million. Genuine transformation transcends mere operational changes.
If you look at all the change around us, there is probably a way to process that change. The right things come into your boxes and the irrelevant things are not put into the boxes. Secondly, the change, if it’s classified properly, will sit in the right boxes. Then you look at the societal change, the technology innovation and the business system innovation and endeavour to bring them into balance.
Panel discussion
R Seshasayee: How does the concept of embracing the future stack up with creating and designing future?
R Gopalakrishnan: To embrace the future, you must first imagine the future. Apple thought that they needed processes and systems and brought in a big company man, John Sculley. Things didn’t work out as they were still in the imagination phase. As children, we were in the imagination phase. When we come to the embracing stage, we’re a little older and can stand on our feet.
Hrishi: Embracing the future requires a mindset with which leaders and managers must approach the future. They must not do it out of dread or uncertainty. Corporate purpose is the future that they are setting up for their company 20 years hence. Imagine that future that you want and work backwards. We normally tend to work from the present to forward. Through modelling, you will be able to work backwards from your goal, the corporate purpose and the targeted future that you set for yourself.
R Seshasayee: You say that we must imagine the future and work backwards and that the outcome is the interplay of three mega trends. The predictability of outcome is really an issue. For example, the edutech business took off during Covid and lots of entrepreneurial ventures came in the space of education. But now we hear that a large number of investors who invested very heavily are in debt. When things are much beyond our control, is the outcome a game of dice?
Hrishi: The model we talked about is a scientific model; it is a working model. The three major forces (societal needs; technological innovation and change in business system) must come into equilibrium. You cannot just tick only one of these boxes.
I’ll explain our model through an example. In India, there are 10 crore people who are diagnosed with diabetes. There are medicines and you can manage that. But look at the societal trend of people who are prone to get diabetes (pre-diabetes stage). 14 crores have a six in Hb1AC test. If they could be counselled or treated, they may never get diabetes, or they can delay the onset of diabetes. Here, we take the societal trend and try to find a technology solution that could serve the purpose. We also have the 2000-year-old science of Ayurveda and some traditional Chinese medicine to prevent diabetes. The third part is the business system change. Today, through digital processes, you are able to be in touch with a patient. That is how, a successful business model emerges.
Q: How can organizations effectively integrate advanced technologies like generative AI while also preserving and fostering human elements such as creativity and compassion?
R Gopalakrishnan: If you don’t have the human element and you integrate all the technology, nothing will happen. Whereas if you don’t have the technology but you have good human element, you can last a little longer. This is why the art of change management and carrying people with you is important. Transformative technologies have transformed lives. In my transformation experiences during my career, the first person I’ve recruited and relied upon is the HR officer.
Q: How can organisations measure the impact of cultivating soft skills like curiosity, creativity and compassion, on the overall performance and success of organisations?
Hrishi: You can’t manage strategy or people in isolation. If there isn’t a goal, then that does not really take you very much forward. Similarly, if you have a goal, and you don’t have the right qualities in your people, then also the success that you are looking for will be elusive. For a business to be successful, it has to make money to contribute to the society and to pay taxes.
Q: To what extent will future business trends and practices mirror those of the past?
R Gopalakrishnan: The fundamental principles of business have not changed for 500 or 5000 years. The way the merchants in Poompuhar were trading in the country and how we do business in today’s modern world are the same. You have be good to your customer. Just like in religion, in business too we follow the same commandments. Take history for the durable long-term principles that have been evolved in the business. I’m not in favour of managers being lost in history. You may take interest in history. Our saints and acharyas have also said that the philosophy has not changed. But the manner of interpretation and execution of that philosophy has changed. We are all part of the same origin. We’ve come through different paths. All these paths lead to the same place. Each must find his/her own path.
Q: Today, most organizations have become lean leaders and they are under pressure to deliver. They tend to focus on KPIs 24 x 7. How can you make leaders think about both short term and long term?
R Seshasayee: I can narrate the story of 12th century poet Avvaiyar and King Athiyaman who was one of the chieftains of a small kingdom. Avvaiyar was spending all the time trying to compose poems in praise of Athiyaman. His rival king invited the poet to his place and showed her his armoury of shining weapons and asked her to praise him. But Avvaiyar said, “Athiyaman’s armoury is in shambles but he wins wars.” You may have so many tools but do they help the organisation’s cause?
I know of another example where an organisation was immersed in Six Sigma but soon the company got into trouble. The problem was that entire management was focused on getting the quality management right. Some of the strategic moves that they had to make was not on the radar of the leadership. An organisation has to balance the short term and the long term.
Hrishi: You can gather a lot of data from the past. This quantitative data brings you up to the present but does not extend beyond it. After that, you can utilize extrapolative techniques to project into the future. The culture of the organization also spans from the past to the present. If you cannot manage the present effectively, you will not succeed in the future. The role of history, culture, and data must be integrated and communicated within the organization in a way that collectively drives business success and helps achieve objectives.
Today’s leadership necessitates a holistic approach that connects from the future back to the present and past, as well as from the past forward to the present and future. If you struggle to operate within each of these three perspectives, you must seek guidance and additional training.
