Those who live by the Sword

By Roopen Roy

The ability to transform and adapt is key to the survival of any living organism. This is equally true of companies and business leaders. When markets and conditions change and evolve, holding on to old strategies that made a company successful in the past is not an option, as they are a recipe to make the past brighter, rather than the future.

How can companies and business leaders perform encores? How can they adapt, innovate and transform? The clue lies in continuously watching product and service portfolios. Companies must be prepared to reshuffle product and service portfolios ruthlessly and regenerate leadership in order to stay ahead of the change curve. Companies that keep perfecting “how to fish”, become obsessed with operational excellence and cost-cutting. They often forget that the essence of good strategy is knowing “where to fish”.

There is an interesting case study in our epics. In Mahabharata, Arjuna was one of the greatest battle heroes. But towards the end of his innings, his ability to perform enduring magic was put to the severest of tests. And he failed. The story goes like this: Arjuna was escorting the ladies and the Yadava wealth from endangered Dwarka to the safety of Indraprastha. As they began their long march, Dwarka was engulfed by the rising sea. The Dwarkaites looked back in horror and saw their beloved city with its glorious past,perish before their eyes.

Then the time came to cross the land of Pancanada — the traditional enemies of Yadavas. As soon as the Pancanadas saw this mobile band of senior citizens, women and children protected by a lone warrior, Arjuna, they launched guerilla attacks. Arjuna was overwhelmed by the tactics of his maverick enemies. He raised his Gandiva, which had consigned thousands of skilled warriors to Yama’s abode. The Pancanadas didn’t fight by the book. They were street urchins and vagabonds with sticks as weapons. Yet, they dared to attack a group protected by Savyasachi, who could send arrows with his right and left hands with equal dexterity.

Arjuna warned them, but, the Pancanadas were unaware of Arjuna’s glorious past. They started kidnapping young women. Arjuna readied his Gandiva and fired a few arrows. But it dawned upon the hero that he could no longer conjure the magic of his divine weapon. His quill, which held an unlimited supply of arrows, soon became empty. As Arjuna watched helplessly, the enemies disappeared with a large number of Yadava women and most of the precious jewels. He realised that the weapon that crafted the glory of his past battlefield victories was no longer effective. Ordinary warriors had vanquished the greatest of all warriors with sticks and maverick tactics.

Economic history is replete with examples of the Davids slaying the Goliaths and of yesteryear industry leaders becoming dinosaurs of today. Take the case of a Japanese company.

Way back in 1890, its claim to fame was the invention of the wooden loom. It was essentially a textile machinery company. The company diversified into cars and produced the first vehicle in 1936, which was called the A1 model. These odd-looking vehicles looked very similar to the Dodge Power.

When the company began to export cars to America they were considered as cheap, low-quality mobile boxes. It is now a different story. It is feared and revered by Detroit — the name of the company is no longer Toyoda (meaning “fertile rice paddies”) but Toyota. The company pioneered just-in-time and lean manufacturing practices and the “Toyota production system” embodies some of

the best practices in manufacturing.

We have many examples of disruptive technologies completely changing the competitive landscape. A good example is digital photography. When digital cameras first appeared in the market, they were expensive, stodgy devices that produced grainy, low-definition photos. The traditional manufacturers of film and photography at first ignored their potential to disrupt. They did not realise that they were in the imaging business, not in photography. They did not grasp that films were a type of storage media competing with DVDs and disks in storing retrievable images.

Today, all established manufacturers of camera equipment, such as Nikon, Canon, Leica and even the much venerated Hasselblad, have performed creative destruction by cannibalising their traditional product lines. They now sell digital devices as a mainstream offering rather than an exception. Digital imaging helps people send photographs and videos across the internet, store them in web sites for sharing with groups of people and manipulate and edit images using sophisticated computer software.

The other dramatic technological disruption that has benefited countries such as India is digitisation of work content. It is digitisation that has spawned the huge IT and ITeS business in India. And this has happened because technology has made human knowledge-working electronically portable. This disruption has completely altered the price/performance curves and impacted the delivery systems of global outsourcers such as Accenture and IBM. Technology has changed completely the way we think, communicate and work.

New technologies will mercilessly repaint the landscape. New competitors will not play by the rules of the old game, they will change the game. Those who live by sword forever, will some day be shot by those who do not.

The writer is the managing director of Deloitte Consulting, India.

The views are personal.