A 2018 wish list for Indian companies
The end of an year in which high-decibel corporate battles in and outside the boardroom dominated the news headlines allows us to step back and look at what might have been and draw up a wish list for Indian companies in 2018.
Here’s a five-point agenda for Indian companies in the new year.
Unleash women power: Let more women take strategic business decisions. Whether it is the muscular no-holds-barred battle between Reliance Jio Infocomm Ltd and Bharti Airtel Ltd or the almost unnecessary strife between key shareholders and top executives at Infosys Ltd, one clear, inescapable fact is how it has been completely dominated by men. What’s missing is women’s unique ability to seek and find a common ground that is mutually rewarding. Dutch neurobiologist Ruud van den Bos found, during the course of his research, that men took increasingly higher risks when under pressure which leads to a spike in the cortisol levels. Women on the other hand, actually handled a slight increase in cortisol much better, leading to better decision making.
Forget CSR, have a larger corporate goal: Let’s dump once and for all the humbug of corporate social responsibility (CSR). Companies need to be socially responsible not because they are mandated by regulation but because that’s what their customers and employees expect from them. When there is a breach in behaviour, whether it is by polluting the environment or by cheating on taxes, there is a clear and proven impact on corporate performance as well as on the stock price. In a seminal paper titled The Firm of the Future, Bain partners James Allen, James Root and Andrew Schwede point out that increasingly people want to work for a company that pursues a higher purpose in addition to profits. That calls for a fundamental change in mindset.
Seek wisdom, not consensus from board members: Assembling a galaxy of high-profile board members who proceed to rubber-stamp the decision of the principal shareholders or even the chief executive, is counter-productive. Board members need to have a mind of their own and the freedom to express their views freely and fearlessly. A place on the board should be earned, not taken for granted. And to do that each one must give her perspective independently. The time for unanimity comes after a decision has been made—that’s when everyone puts his or her weight behind it. But for a sound decision to be made every shade of opinion must be aired and heard. Board members have to present dissenting views because if they don’t who will.
Take some leaps of faith: Yes, several of the mega acquisitions made over the last decade by large Indian businesses did go wrong. But that’s no reason for Indian companies to go into a shell. The world is littered with great assets available cheap and the current mood against globalization is just the right opportunity for Indian multinationals to seize the moment. Globalization is a phenomenon that can’t be rolled back and in a post-Trump world it will again be companies that have supply chains across markets which will be the big winners. Alibaba Group Holding Ltd and Amazon.com Inc. are using success in their home markets to establish beach heads in future markets like India. India’s business leaders should take a cue from Jack Ma and Jeff Bezos and fuel their own aspirations rather then sit back and applaud at fireside chats by them.
Cut the jargon, get real: Any B-school wannabe today can reel off the latest management jargon and string together the latest buzz words to mount an impressive presentation. That’s not going to cut any ice in the market. The name of the game is to be authentic. That applies to the foods the millennials seek as it does to their expectations from companies. Two of the most successful companies of 2018, ITC Ltd and Maruti Suzuki India Ltd, are also the least flashy. They stick to the basics—great products sold by motivated salespeople through excellent distribution channels. In 2017, Maruti muscled out auto industry heavyweight General Motors Co. from the country despite contributing little to the emerging cult of electric vehicles (EVs). Even as ministers, experts and environmentalists talked up EVs, the Indian market leader held its horses. Yet, when the market turns from vapourware to real sales, you can bet Maruti will have a product among the frontrunners.
Sundeep Khanna is a consulting editor at Mint and oversees the newsroom’s corporate coverage. The Corporate Outsider will look at current issues and trends in the corporate sector every week.
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