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A new tilt in the tale

Business guru Ram Charan's makes the short point that economic power is shifting from the North to the South

M S Sriram 

Every few years there appears a business book that dictates the discourse; changes the spoken language and that too shall pass. Business is all about winning the consumers and outwitting the competition. This needs a sharp sense of where the world is moving and how one can spot opportunities. Consultants are better placed to spot these trends because their core business is in being voyeuristic about others' businesses; understanding the levers of success and transmitting it. Gurus attain their position because of their universality of view rather than the specificity of a context. Ram Charan's latest book is to be seen in this light.

The world of business is constantly looking at markets to be penetrated, markets not saturated, markets with purchasing power and markets with enthusiasm and appetite translating a pent-up desire into an actionable purchase. These markets are not only to be identified but doing business in those settings is to be learnt. Like Ruchir Sharma's Breakout Nations that looked at how economies function, and how to spot long-haul performers and Rama Bijapurkar's We Are Like That Only that contextualises the opportunity, Ram Charan's Global Tilt is designed to combine both - identify the opportunities and then offer nuggets on how the opportunities could be encashed.

Ram Charan identifies that the opportunity set is moving away from the North to the region below the 31st parallel - that is to say, the South. That is the "Global Tilt". In this Tilt, the North's assumption is that it is moving into the so-called emerging markets from a position of strength. This needs to be rechecked. It is somewhat similar to the comment Muhammed Yunus made when Grameen tied up with Danone to supply low-cost fortified curd in Bangladesh. Yunus called this "Social Business" and said Danone was convinced about the "purpose". Somebody asked him if he was sure that Danone was not using Grameen, he turned around and said, "Why do you think Danone is using me, and not that I am using Danone?" This is the line of argument that Ram Charan offers: Identifying vulnerabilities and proving how this current belief of a position of strength is really a weakness in the long run.

This is an interesting argument. If a company were to occupy a new market, it would need a partner in order to understand the new territory and get its feet on the ground. The "occupier" has technology, experience and product. However, access to markets is provided on a partnership basis with the partner with "territory" having a major stake. While the "occupier" company looks at this as a door ajar, to be pried open to get full access, the host actually welcomes the guest to get access to the technology, and eventually a steep learning curve ensures that the partnership progresses with a position of equal strength.

What Ram Charan further states is that the governments themselves have these policies laid out; the governments of emerging economies are smart; they will eventually give the "occupiers" a run for their money. I am not sure that all emerging economies have a well thought out national competitiveness strategy. As he rightly identifies capital, human resources, and ownership of corporations is becoming seamless; without nationality and mercenary. It is natural that businesses move to locations that provide the best arbitrage. According to Ram Charan the new "occupiers" are countries like China, India and countries of the South. These emerging "occupiers" seem to be doing much better in regions like Africa, while it should have been a natural destination for the traditional "occupiers" from the North.

Basically, Ram Charan's thesis ends there. He adds one more term repeatedly used in the book: "outside-in future-back" strategy. Look at the business dispassionately and place yourself up on a time-scale and review your current situation. His book ends when he proposes that economic power has shifted from the traditional regions to emerging regions. This essence is in the first 24 pages. Beyond this he moves on to explain the financial world to the reader, rather ineffectively. The rest of the book is written in a somewhat preachy, condescending tone which is more of a to-do and a not-to-do list. Random examples pop up every now and then to justify and illustrate a grand universal phenomenon that he tries to explain as a concept. The book is a great example of how a good, tightly-written article for Harvard Business Review can be pulled and stretched into 300-plus pages. In places, the book also becomes incoherent and verbose.

As to the longevity of the Tilt theory, before a new fancy term replaces it - your guess is as good as mine. Given the stature of the author, people will talk about it for a while, before he or somebody else invents a new buzzword. My estimate is that the Tilt theory will last about six months.

The reviewer is a faculty member with Centre for Public Policy, Indian Institute of Management, Bangalore.

Leading Your Business Through the Great Economic Power Shift
Ram Charan
RH Business Books, 2013; pp. 321

First Published: Thu, May 30 2013. 21:30 IST