India is experiencing growth at warp speed. Sectors that have hardly had a chance to evolve are being hit by a wave of innovative firms. Retail is a good example. Bricks-and-mortar chains like Shoppers Stop and Big Bazaar have been seriously challenged by the explosive growth of online retailers like Flipkart and BigBasket.

This trail of disruption will hit sector after sector. Evolutionary theory will not hold true here. It is not the fittest that will survive, but the most innovative. And start-ups are leading the charge in three ways.

They use technology to do what you do. They do it cheaper and faster. They do it with fewer people, and reach out and engage customers without the intermediaries you have in your chain.

They find that little gap you left in your offering and dig into it. If you sell something, they find a way to rent it. They create a second-hand market for your own products. They buy up your competitors’ spare capacity and get products made cheaper. They pitch their private labels against brands you have built over decades. Worse still, they create marketplaces where you and your competitors are on an equal footing.

They create new ways for your consumers to achieve their goals. This is the most dangerous thing that can happen to your business; it can sideline your offering and divert consumption. I won’t discuss what happened to Kodak, BlackBerry, Nokia and Blockbuster. By way of an example, if you are into plain vanilla ATMs when it is inevitable every Indian will use smartphones to transact, you should be worried.

Sure, there are several case studies of Western companies that have adapted and thrived. But there is a vital difference: they play in large and deep markets, which have been relatively stable for long periods. That gave them time to adapt. They also have a cadre of experienced managers who have been baptized by fire over several downturns.

Our markets are relatively shallow, our firms much smaller, and our middle managers younger. Most haven’t seen more than one slowdown. The Indian consumer psyche is not helping either. They are ready to jump on an app-driven bandwagon with the lure of the buy one, get one offers. Add to this the billions of dollars flowing into mobile and consumer Internet businesses, and we have the recipe for a perfect storm.

Is that spreadsheet with my five-year business plan relevant any more? How do I adapt? How do I create version 2.0 of my business? One-and-a-half decades in the media business have taught me some lessons.

Know that it is an unequal war

A task force carved out of your existing team will not help. You need new DNA. Business 2.0 is a different animal. It requires different skill sets, teams and approaches. You also have to accept that if technology can lubricate or eliminate an activity or function, it will. Use technology as a strategic asset to reach your customers and conduct your internal processes faster and better.

When I started work on the online avatar of CNBC-TV18 in 2001, I realized that a website (moneycontrol.com) needed a different DNA. In the online space, content is a layer on technology and not the other way round. Your content reaches people because you’ve used technology to engage them. That is why we did not create moneycontrol.com as an adjunct of the television business, but infused it with a life of its own.

The DNA of a TV station would not have allowed the website to flourish. There was no way CNBC-TV18 could have fought the online war either because it had many of its own to fight. Because we kept the two separate, in just four years, moneycontrol.com started to command an audience that would rival that of CNBC-TV18. That seeded the Internet businesses at Network 18 Media and Investments Ltd and we invested in some of the largest destinations like bookmyshow.com, yatra.com and homeshop18.com.

Takeaway: If your future requires a new DNA, don’t deny it.

Separate from the core. Create a labour room

The team at your core business should be focused on maintaining order, on delivering consistently. That’s what the market is paying them for. They are not the folks who should be in charge of changing the game.

Chinese e-commerce firm Alibaba Group Holding Ltd’s Jack Ma (I met him when we set up an alliance between Network18 and Alibaba in 2008) said he took seven of his best people from Alibaba, sent them with $50,000 to his old house and asked them to create a marketplace that would rival eBay in China. The result was Taobao and Tmall, the world’s largest online marketplace. He did it again when he launch Alipay. He created a labour room to give birth to new businesses.

Takeaway: Ring-fence the team.

Find the entrepreneurs

Find intrapreneurs who can inspire people to join them and have the necessary internal influence to pull resources from within the group. Or find an entrepreneurial leader from outside. Managers are not cut out for this. Don’t force them.

My first start-up assignment was with Vineet Nayar at HCL Comnet Ltd, a company we created within the HCL group to hit the data-communications market. HCL then was primarily a personal computer, server and hardware company. A bunch of us came together with nothing but a cheque for the seed amount and office space. We built a business without any regard to the mother ship. It worked and Nayar went on to lead HCL Technologies Ltd as one of India’s most celebrated IT stories. HCL Comnet is a billion-dollar business today.

Takeaway: Choose the passionate over the smartest, and empower them to hire the smart ones.

Purpose and pride

Commit in public to a new idea. Make it a matter of pride for the team. Responsibility for success is no longer diffused then, it is their’s. A public commitment also sends a signal to the rest of the organization that they need to remove speed breakers in the path of these guerrillas.

When we wanted to launch Forbes India magazine, we found Indrajit Gupta and Charles Assisi, who were passionate and single-minded about creating a great product. The purpose was not to launch just another business magazine, but capture mindshare of the business community with an offering that stood tall over the others. That passion came through in a winning product.

Takeaway: Drive people with purpose, not process.

Create lean, built-for-purpose structures

Breakthrough teams will be successful only if they have no turfs to protect or any legacy to worry about. Free them to focus on what the market needs. Let the team decide how to build itself. Don’t impose structure, compensation or equalize things.

Each division at Network18— news, entertainment, consumer Internet, home shopping, print and transaction services—was given its own resources. Each sat with a leader and team to design an organization that fit the war they were fighting.

When we were preparing to launch a new channel, Colors, it sounded hare-brained. Viacom18 Media Pvt. Ltd, a joint venture between Viacom Inc. and Network18, was an ailing 100 crore company trying to give birth to a 1,000 crore gorilla. The core team had never handled investments of this size or risks. But we had a great team in Rajesh Kamat and Ashvini Yardi. We moved them out into a separate office and built out a new team to take on the big networks. It worked—they had a public commitment, had their own team and built their own organization to fight the triumvirate of Star India Pvt. Ltd, Zee Entertainment Enterprises Ltd and Sony Entertainment Television India, and won.

Takeaway: Manage the risk, not the business process.

Self-disrupt or self-destruct

Examine your business—every touch point, every activity —and see whether it is a source of competitive advantage. Act like a patient reading his test reports, and then commit to a plan to get back to health.

Talk to your people. There is not a single failed company where the employees did not know exactly what was going wrong. Everybody does. They just don’t dare tell the captain. Have a space where employees can freely speak up. Of course, you may want to call it the innovation room as long as you make sure you are connected with reality.

Takeaway: Open your eyes to your own faults.

Be the cheerleader

You have to genuinely believe that the team owns the project. You only provide the canvas, paints and brushes. The painting is that of the team. You are there to applaud, and when they are falling, to offer confidence and support. That’s the perfect chief executive.

Takeaway: Know it’s their baby. You are only the midwife.

An unabridged version of this story is available on www.foundingfuel.com

Haresh Chawla was founding chief executive of Network18. He joined the firm in 1999 when it had revenue of 15 crore. When he moved out in 2012, he had built it into a 3,000 crore media conglomerate. He is now partner at India Value Fund, and mentors several start-ups.

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