The Hindu Business Line : `Knowing customers' needs vital for value creation'

Mr S. Ramadorai, CEO and Managing Director, Tata Consultancy Services, delivering the valedictory address at the MMA annual convention in Chennai on Saturday. - Shaju John

Chennai , Jan. 22

REACT to change in a positive manner and deliver the expectations of consumers. This is key for value creation, said Mr S. Ramadorai, Chief Executive Officer and Managing Director, Tata Consultancy Services (TCS).

Anticipate change in advance and position the change to business advantage, he said in his valedictory speech at the Madras Management Association's annual convention here on Saturday.

To manage change, companies need to gain insights into what is value for customers and prepare themselves to deliver. Companies must create value by changing rules of the game, understand stakeholders' needs and service them, he said.

Dividing organisational value creation into four quadrants — control, compete, create and collaborate - Mr Ramadorai said in the control quadrant the mantra is "better, cheaper and surer."

Companies must create shareholders' value, take up value enhancing activities, deal with growing new markets and foster disruptive innovation. They must focus on building organisational competencies and creating the right culture.

On fundamentals of value creation, Mr Ramadorai said values get generated for all stakeholders only when solutions address variations in stakeholders' business, understand and address the voice of stakeholders continually, improve process capability to meet the said and unsaid expectations and identify risks of failure and build controls.

According to Mr Ramadorai, only few global organisations have created value. These include South West Airlines (change from high air fares to freedom to fly), Charles Schwab (financial advice for wealthy investors to customised advice for all investors), Dell (made to inventory to be direct), Nokia (vanilla mobile phones to miniaturised phone and expanded features), General Electric (inward focus to boundary-less customer centricity) and TCS (technology focus to information technology for business excellence) have significant value.

Some of the common attributes of the change among these companies include sensing market needs ahead of time, delivery with great speed and change market through disruptive innovation, he said.

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`Knowing customers' needs vital for value creation'

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