BackIndian firms can deal with slowdown: CEOs
Indian firms can deal with VUCA scenario, say executives at Navigating VUCA global CEOs conference
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Mumbai: Indian companies can deal with a sluggish economy amid volatility, uncertainty, complexity and ambiguity, or a so-called VUCA scenario, said chief executives at the Navigating VUCA global chief executive officers (CEOs) conference organized by the Indian Society of Advertisers in Mumbai on Wednesday.
The term VUCA, introduced by the US military when the Cold War ended, best describes the current global situation, the executives agreed.
The concept has been prevalent in India since long, but is only being acknowledged by the Western world in recent years, said R. Gopalakrishnan, director, Tata Sons Ltd, at the event. “Indians are better equipped to deal with it (VUCA)," he said, adding that during tough times, companies should leverage turbulence instead of controlling it.
Manu Anand, the newly appointed managing director of Cadbury India Ltd, a part of Mondelez International Inc., agreed. “Companies should look at this as an opportunity and make selective bets, investments and emerge out stronger," said Anand at the global CEO conference.
A slowdown can be used as an opportunity to cut flab, he added. “You can become leaner company as you come out of the downturn," Anand said.
Apart from focusing on portfolios and profitability, another important thing is to keep a constant conversation with a company’s stakeholders, he said.
The Indian economy has been going through turbulent times since 2012. Gross domestic product (GDP) growth for fiscal 2013 was the lowest in a decade at 5%, and analysts expect it to fall below this level.
In a report dated 23 October, India Ratings and Research Pvt. Ltd, a part of Fitch Ratings Ltd, said it expects GDP growth in 2014 to remain sluggish at 4.9%.
“A speedier administrative action on the economic/policy initiatives already taken and quick movements on pending reforms agenda is therefore crucial for the uptick in investment and consumption growth," India Ratings added.
For Tata Motors, which acquired Jaguar Land Rover Automotive Plc (JLR) in 2008 when the Indian company was not performing well, a downturn has been very opportunistic, said Ravi Kant, vice-chairman of Tata Motors.
“Around 80% of our profits are coming from JLR. When we bought it five years ago, everyone thought it was a loss-making company, but today it is making whole of the Tata Motors group survive," Kant said.
Using predictive analytics like data forecast models is a great opportunity to look at short-term risks, according to Kant. Along with all of these, innovation in products is key in a slowdown, he said, adding, “innovation can be a game changer."
Harish Manwani, chairman of Hindustan Unilever Ltd, believes VUCA has become the “new normal." “We live now in a VUCA world surrounded by black swans," he had said at the HUL annual general meeting on 26 July.
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