19th National Conference of NHRDN
Dr H Chaturvedi addressing the gathering during the NHRDN National Conference held at Hotel Taj Palace on November 19, 2015.
“Architecting the Next Curve””19th National Conference of NHRDNSession on “Contours of Emerging Olympiad” (11.30 am – 12.00 noon)
CONTOURS OF EMERGING CORPORATE OLYMPIAD
Much of the last decade was focused on understanding the forces of ambiguity, glocalization, technology, hyper connectedness and diversity. We know much more today, than we did ten years ago and have now embarked upon the journey to action these learnings. To set the tone for the two days, this discussion will provide an opportunity to reflect on the drivers and influencers of the emerging corporate landscape, discuss contemporary management practices and visualize a roadmap for architecting the next curve.
Within next 30 minutes, we have to contextualize the issues for discussions of next two days. It is not an easy task. In the VUCA world, last few years have seen metamorphosis in how business are organized, planned and transacted. We can only make an honest attempt to learn from the current trends and also to make a guess-estimate for the future.
- What makes A Great Leader?: This year HBR’s Global Ranking of CEOs (2015) has given 20% weightage to Environment, Social & Governance (ESG) and 80% on long-term financial results of the company. HBR ranked @ 907 CEOs selected from S&P Global 1200 list of top global firm. There has been a big change. Last year’s Ist rank holder, Jeff Bezos, CEO, Amazon gone down to 87th This year’s Ist rank holder is Lars Sorensen, CEO of Novo Nordisk. On financial metrics, still Jeff Bezos is No.1 but because of the high ESG score of Novo Nordisk, Sorensen stood No.1 in CEO’s Global Ranking of HBR for 2015.
Berkshire Hathaway’s CEO Warren Buffett’s financial ranking is 23, ESG ranking is 978 and overall 101.
Leader’s will need to be ever more conscious of changes that massive automation will bring about to the changing nature of work, possible unemployment and the danger of mass social unrest.
- Friction Free Economy: (a) The average life span of S&P 500 companies has declined from 61 years in 1958 to about 20 years now. It is a warning to all big corporates !
The Friction Free economy enables companies, with virtually no physical capital, to compete powerfully with capital-heavy incumbents.
- Alibaba is world’s most valuable retailer but holds no inventory.
- Airbnb is world’s largest accommodation provider but owns no real estates.
- Uber is the world’s largest car service but owns no car.
- 21st Century Corporations: Apple, Google, Microsoft, Facebook, Tesla, Twitter, VISA, Fitbit, Nike all are 21st Century Corporations! They represent a New World in which labour, information and money move easily, cheaply and almost instantly.
These corporations are forming starkly new, more fluid relationship with customers, workers and owners. They are rethinking the role of the capital, finding they can thrive while owning less and less of it. They are creating value in new ways as they reinvent R&D and marketing. They are measuring their performance by new metrics because traditional metrics no longer capture what counts in 21st century.
- Exponential technologies: The world is witnessing simultaneous significant leaps in technology that are likely to alter current paradigms. The massive decline in oil prices, the US emerging as a net exporter of oil from being the largest importer, giant exponential leaps in the generation of solar power at lower costs is taking the world from a paradigm of relatively high cost, polluting and in some cases deficient energy supply to a world where clean energy at very low cost is likely to be available in abundance. Similar exponential technology evolution is happening in robotics, 3-D printing, healthcare and numerous other industries.5.What Indian CEOs should do?
a.Transparency: In the age of social media, the currency of leadership is transparency.
b.Middle Path May be a Storm: Dont lead by consensus in a crises. You have to go left or right.What are new rules of leadership which can be learnt by Indian CEOs?i
1.Be Paranoid: Instead of focusing internally, Indian CEOs need to understand their new rivals from emerging markets and particularly from start ups.
2.Seek out patient capital: CEOs from India should often take a long view, building their market share over years at the expense of short-term profits.
3.Radically self-disrupt: Indian Companies must overcome strategic inertia by reallocating capital as conditions change.
3.Build new intellectual assets: The most profitable businesses are in idea-intensive industries, so intellectual capital such as data and algorithms is a prime asset and creativity, imagination and ideation will emerge as the differentiators.
4.Go to war for talent: As populations’ age and talent becomes scarce, now is the time for the top management of Indian companies to give strategic focus on the human capital management. Talent also will need to constantly learn, unlearn and relearn to remain relevant in a rapidly changing world.
5.Speed of execution: Leaders will need to gear for rapid execution of ideas with shorter life cycles to continue to remain relevant and competitive.
6.What traits Indian leaders should focus to meet current and future challenges?
Most important will be adaptability and resilience.