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Smart leaders should not wait for the future to happen to them; they will need to conceive and create the future they seek, Janmejaya Sinha tells Alokananda Chakraborty
BCG's new book is about winning in the future. As the book points out, resolving to own the future is one thing. Doing so is quite another - and altogether more challenging. So how can organisations ensure that the modifications they undertake today are sustained over time?
Quite often turbulence and volatility lead to inaction. The truth is that they require urgent, and often, more action. Status quo does not allow a company to sustain its market position even in normal times and therefore it is even worse hit during turbulent times. So the first thing for companies to understand is that they need to act. The book offers a lot of lessons on what they might need to do under the 10 attributes of outstanding organisations.
Turbulence is increasingly becoming a challenge that organisations must confront. But it is value neutral - it creates winners and losers. What are the wrong ways to respond to turbulence?
Going into a brace position and waiting for the turbulence to pass works only for passengers in an aircraft. Companies must ask the simple questions and answer them in turbulent times. Companies and their leaders need to become more adaptive than they were before. The right analogy is driving in a mist versus driving on a sunny day. You need the wipers to see more clearly but also the agility to respond to the conditions - take a few diversions and make the vehicle such that it is not overloaded and is adaptable to the new conditions. It is important that the vehicle continues to move at a fairly reasonable clip, otherwise others will overtake it. The vehicle is the company.
Volatility is now a part of life. There is no point waiting for it to pass. It might change but you cannot ignore it. In some industries it is faster than others. So companies have to ask what is the change, how does it affect me and what do I need to do. Then companies need to start doing some of these things.
Leaders must evaluate what they see in the market and not what they believe because it happened in the past. To retain leadership they should make their company agile and adaptable to these market changes and not get frozen by them.
The recent financial crisis didn't cause a turbulent business climate-it was merely a symptom of underlying turbulence that has been building globally for decades, says Don Sull, a professor of strategy at the London Business School. The real culprits are rapid diffusion of technology, interdependence of markets - the very same factors that led to the economic growth over the past few decades. Would you agree?
The global reset is creating a fundamental challenge as everyone, everywhere is competing for everything, a concept we have named 'globality'. The emergence of two to three billion new consumers who are redefining the middle class and who will consume large amounts in lower ticket sizes, has led to the rise of new companies that are trying to become global champions and some of which did not exist 10-15 years ago. The business models that were required for these new opportunities will need to be new. You are right, the underlying shifts are creating the fundamental shifts. The global financial crisis has accelerated the shift to the East - in that sense it has hastened this process.
This is also a time when many business leaders across the globe are facing the almost overwhelming task of restoring confidence and respect in leadership and business. How can leaders communicate confidence and capability during uncertainty?
Leaders will need to face up to their situation with openness and candour and then act with a clear purpose and with integrity. Leaders need to have what Hans Paul calls in his piece "strategic optimism", where he highlights it is all too easy to take a dark view of the future. The leaders will need to conceive and create the future they seek. They should not wait for the future to happen to them. In fact, Gautam Buddha had said many centuries ago, "I do not believe in a fate that falls on men, however they act, but I do believe in a fate that falls on them unless they act."
If the situation is this grim and pressured, how can you expect people to rethink the way they operate?
They say a crisis is too good an opportunity to waste. Smart leaders will not waste the opportunity.
But there are some situations - you see them in military dictatorships and in many family businesses - where no one is exercising leadership. All you have is a strong authority figure. And yet these groups seem to do well, in some cases for years...
We have gotten too used to trophy leaders. In fact, many family businesses have had very entrepreneurial founders. They build a business and bequeath it. But then businesses do not last in perpetuity. Family businesses struggle to go past the third generation. So all businesses need strong and thoughtful leaders, simple authority figures will not succeed unless they have many other attributes. They have to be adaptive, global, connected, sustainable, customer first, fit to win, value driven, trusted, bold and inspiring -- 10 attributes we highlight in our book. These are the attributes we believe allow organisations to succeed for a long time.
THOUGHT LEADERSHIP
- Sinha's primary focus is financial services and he has worked with clients in the United States, United Kingdom, Europe, Australia and India on issues encompassing strategy, corporate governance, risk, operations, and organisation
- Before he was tapped to serve as Boston Consulting Group's chairman of Asia-Pacific, Sinha managed the firm's operations in India, which jumped five times in revenue and partner headcount during his five years at the helm
- He was able to build a dominant financial services practice, building largely on his own personal background as a key central banker in India
- In 2010 Consulting Magazine considered Sinha among the top 25 most influential consultants in the world
