Friday, 9 September 2016

Corporate India - Systemic Faultlines

This is an article written by Mr Amitabh Sinha - Director - Finance & Investment, SME Chamber of India | Director, Start-Ups Council of India | CEO SMEConfex, reproduced here with his permission. I welcome Mr Sinha to my blog, and hope to see other articles as contribution. My comments on his article are highlighted in shaded green boxes…


The Four Horsemen of the Indian Start Up Ecosystem




Director - Finance & Investment, SME Chamber of India | Director, Start-Ups Council of India | CEO SMEConfex


I was asked recently why Indian Start Ups are unable to capitalize their potential. There is neither an easy answer, nor a short one. But having been a regular and active part of this ecosystem, I feel, there is definitely an answer. I am not planning to come at this from the regular routes of dollars and innovation definitions or that much abused but little understood term called ‘disruption’. I am also not about to wade into LTVs and CACs and a trillion other gauche clich├ęs that the start up space seems to spawn on a weekly basis.


Businesses are socio-cultural organisms and this post will examine the socio-cultural genesis of this existential conundrum for Indian start ups. If digging into and agitating the miasma of socio-cultural constructs is not your thing, I suggest you stop reading now. To my mind there are four main culprits – four hurdles blocking the road to success. For those who choose to read on, let’s get started.



The ‘Shortcut’ Syndrome


This is the greatest possible paradox and best illustrated by the recent offer of the Haryana Chief Minister to reward any Indian Olympian who won a Gold medal at Rio with Rs. 60 Million. So it’s a laughable stratagem yes, but highly symptomatic of the Indian start up ecosystem.


Nobody stops Haryana or any other government in investing in infrastructure to promote sport, to create the right environment for success, but that isn’t done. Developing the capability to win isn’t a priority, winning is. For a people as template addicted as us, this ought to be counter-intuitive, but it’s instinctive. The urge to skip the stepping stones and attempt the Gold has been carefully cultivated in our societal DNA over the last several decades. It doesn’t matter what are the constituents, so long as one succeeds, regardless of the legitimacy or efficacy of the planned short cut.


We have often celebrated how India tends to leapfrog and how we skip developmental steps in our race to stay with the pace of growth the world sees. This leapfrogging however has consequences. We tend to mislay the perspective that intellectual infrastructure must keep pace with the aspiration to leapfrog. We cannot lay pathways with great gaping holes. But we do. Therein lies a huge problem, structures without support beams in the right places tend to be weak and have insufficient load bearing capacity. This dogs what we do both in physical and intellectual terms. Rigor and ethic do not lend themselves to being profitably short changed. We have to learn this.



My view on this : Short-cuts are the bane not just of the start-up scenario, but also the more established companies, as quite often due process and fundamentals of business are abandoned in favour of seemingly more effective  methods. What most people mistake is the treatment of short-cuts as strategic tools; short-cuts can only be tactical maneuvers designed to respond to specific challenges in the business atmosphere. This becomes a problem when the tactical response transposes into an over-arching strategy statement.

Business is never static; it is a flowing river. It changes paradigms every so often; even if the paradigm doesn’t change, there are all-too-frequent disruptions, changes in current etc of the river that warrant a more focused fundamental approach  to business. Each constituent function that is a contributory has clearly defined fundamentals; these need to be identified and worked on. These are individual to each company, and it is a fallacy that each industry has common fundamentals. Within the limits imposed by industry fundamentals, each company has a sub-set of fundamentals that are unique to its own strategic and tactical atmosphere…



Replication – the Success Mantra



Another prime socio-cultural cause is how we condition our generations during their formative years. For us as a people, success is templated. Right from early childhood we are relentlessly taught that the route to success is replication. We follow a laid down path and are encouraged to direct our efforts into reproducing what has been done before.


We engineer endlessly, we doctor growth paths, we administer regimen. We teach children to colour between the lines, slapping down ruthlessly their natural instinct to peep beyond the confines of the line. To confound things further we celebrate successful replication, but openly frown on, condemn and stigmatize mistakes resulting from exploration as ‘failure’. We breed fear of failure.


When we bring up generation after generation believing that independent thought is social anathema and that questioning established regimen is akin to heresy, we cannot in good faith lament that we do not raise a population of solution seekers.


We have conditioned ourselves to seek cues on ‘what to do’ from elsewhere rather than taking lessons on ‘how to or how not to do things’. That Pratap isn’t Peter or that sauce for the gander may not be sauce for the goose is a fact that we tom-tom but unfortunately do not seem to understand. Until Indian entrepreneurs start evolving solutions for the Indian paradigm that can extend to global markets when needed, we will keep seeing significantly lower rates of success.


My view on this : This follows from the first point above, which is on short-cuts. As a necessary corollary to the reality of the ever-changing business atmosphere is the obvious need for encouraging intellectual debate within proscribed limits in an organization, and the attendant independent thought. This is hard to do; carried too far, it leads of loss of control and anarchy; but at the same time, this needs to be done so that, problems are spotted early, internal solutions are identified and talent is developed. A person working on short-cuts will most likely miss the early warning signs of change…



Defensive ‘Smuggism’

 

Fear of failure when used judiciously, when built into exploratory processes leading to robust examination of consequence can be a constructive tool. But divorce it from laser focus on results and value; it becomes a tool of the devil.


On one hand we do not want to fail, on the other we’re loathe to do the required hard yards. This makes us insecure and the insecurity manifests in the form overt aggressive postures that assure the world, we feel we have nothing left to learn. From anyone.


The other manifestation of this aggressive defensive insecurity is inability to seek collaboration and to treat the world as a crouching beast, ready to rip away our meager gains. We defend where we should seek to co-create, collaborate and combine.


We present this as a smug certainty that not only do we need nothing and no one; we are so far beyond the capabilities of others to contribute that we can only treat them with scorn. The belief that if someone else succeeds, I would have failed, keeps us tethered and hobbled, but what we show the world is supreme if hollow confidence.


Maintaining this posture is a drain, it sucks away creative energy that could otherwise be deployed in value creation. It leaves us short and our aspirations short changed.

         
My view on this : Success breeds confidence; constant success breeds intolerance as well as overconfidence. Both are, by themselves, innocuous in calm waters, and ensure delivery of targeted achievables; things change when the river changes flow, temperature, current, or obstacles come in like logs. This requires not smugness, but humility to know you have been beaten by the situation, that you need to forget how great you are, and that you need to change so that things can improve, or at the very least, stay the way they currently are…



Meism’


The fourth big part of the answer is 'Lack of Commitment'. Our contemporary would be business leaders tend to suffer from a marked inability to commit; to vision, to dreams, to staying the distance, to the greater good and most of all to relationships. To those who closely watch the Indian start up space, this is not news; they’ve been seeing it and often despairing.


India is a rich and fertile breeding ground for ‘isms’. Ranging from Gandhism to nationalism to socialism to regionalism, realism, casteism, communalism, federalism, surrealism, fatalism and barbarism, we have literally millions of isms and the resultants schisms and fractures. They all have one thing in common – they are loud.


In the midst of all that noise, one ism crept quietly in over a period of several decades and conquered – ‘Meism’.


For me, ‘Meism’ is the certainty that ‘Me’ the individual is always at risk, always at war against every other claimant – legitimate or otherwise – of every resource ‘Me’ could possibly claim and that a commitment or a relationship is either a convenience deliberately if temporarily worn for profit or a constraint reluctantly accepted and to be exited as soon as possible.


In spite of all the hoopla regarding the traditional richness and compassionate nature of our grounding, the bottom line, at least contemporarily is that we are fast becoming a selfish, short-sighted people. Growing up in an atmosphere that seems competitive even in the most innocuous and inane situations, it’s as we’ve been bred for nothing but grasping at everything, regardless of its value. We seem to have grown up believing that for us to succeed, another must fail.


199 years of the British Raj, followed by almost 70 years of ‘grab as grab can’, of perpetually clawing, of having things snatched away by those who could, of relationships abused at the whim of the stronger partner, we have come to believe deeply that commitment to anything or anyone else must take a back seat to our overriding commitment to securing ourselves.


We therefore tend look at all commitments either as constraints or as vehicles. The tragedy is that this is not a thought through posture – but ‘bred in’ instinct. We are always looking to protect ourselves, to hedge our bets and of course to slide out of giving away more than we absolutely must.


Indian entrepreneurs often fail to see beyond the 'Me', this myopia makes us treat relationships as use and throw consumables rather than the foundation of business. If we can't commit to people without letting our 'Me' get in the way, we're begging to fail.


To my mind this almost congenital inability to commit to almost anything as passionately as we commit to our own short-term gratification is at the root of our malaise.


What goes around comes around. And quite often bites us in the ass because we weren’t careful while sending it around.





My view on this : Meism is, in my opinion, a straight function of the times we live in. This isn’t limited to entrepreneurs, but is a social reality in the changed business atmosphere. There is nothing much that can be done; even for employees, there is a tendency to place self-fulfillment and self-targets above all; at times, this leads to long-term harm as well, as rightly indicated above. There are many parameters to this issue, and in my opinion requires a full dedicated article all to itself. I would like to request to author of this excellent article, Mr Amitabh Sinha, to pen his views in detail…

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