In the book, Transformation in times of crisis: Eight Principles for Creating Opportunities and Value in the Post-Pandemic World, the authors illustrate eight principles and ten tools that can guide corporates and leaders to transform their companies, not merely in light of the current pandemic, but perennially, to address those disruptions emanating from highly innovative companies, climate change, recessions and others. The book provides learning from various successful companies and allows one to think about what applies to you and what does not!
Philip Kotler, in his foreword, lauds the book for presenting a clear roadmap for transformation in times of challenges and crisis; it is not that some companies disrupt their industries ‘by chance’. Successful disruptions are born out of acting fast enough in spotting a need and filling the same successfully!
Harish Manwani, writing the second foreword, mentions the extraordinary situation of how the world saw tectonic shifts and changes over a few weeks, which were never seen for decades. How do companies need to transform in such circumstances? The important question he says, more than what needs to be done, is how to do it? This is where the strategy execution plays a crucial role, which this book elaborates in great detail, quite aptly and timely. Further, the authors underpin the need for ‘bold leadership’ to successfully navigate such organisational transformations!
Challenging one’s own mental models is vital to stay ahead; mental models represent the way one views and interprets the world. Leaders running corporations come with biases and are often unable to see beyond their own business models that have been successful for decades. The authors argue that such mental models need to be periodically re-examined, challenged and changed, if appropriate, pushing the leaders beyond their comfort zone in order to stay ahead.
Challenging mental models
Pandemic or otherwise, the authors anecdotally illustrate how innovators and disruptors challenge their own mental models. Although Uber started as an ‘anytime, anywhere cab hailing app’ it did not end there; it has transformed itself across dimensions that include driverless cars, on-demand electric bikes, a freight tool that connects trucking companies with shippers, food delivery, online grocery retailing and matching temporary workers with businesses (Uber works). Further, it is considering the introduction of e-flying, taxi/air-mobility with electric vertical take-off and landing aircraft by 2023. The authors provide a number of other such illustrations to explicate their message.
One of the early triggers for challenging the mental model arises from reimagining and reinventing the approach to customers and stakeholders. The first step in designing a great corporate strategy starts from ‘the customer’; beyond ‘segmentation’, the authors make a strong case for understanding the customers on a one-to-one basis so that the company can personalise and highly customise their offering and communication. This can happen not only with understanding and anticipating customer needs, but also in their ability to co-create value with customers; this is where typical legacy companies get disconnected from their customers.
The authors recommend companies to move from a ‘back-to-front’ model to ‘front-to-back’ model where the customer is at the centre of all that the company does! Further, companies need to align their objectives with all its stakeholders, including customers, consumers, employees, investors, suppliers, distributors and society at large.
Data and analytics become extremely important to achieve such ‘hyper-personalisation’ and organisations need to speed up digital transformation in order to remain ahead. The authors illustrate established and emerging digital technologies, including geo-fencing, voice recognition, visual search, facial and emotional recognition, virtual reality, augmented reality and mixed reality. The importance of developing an integrated data strategy has been showcased and how cutting-edge disruptors such as Amazon, Walmart, Stitch Fix, Sergio Rossi, Ducati, Moderna and Nestle are leveraging such technologies to harness data and insights.
The book strongly argues that the best, fast and most cost-effective innovations may not always come from within the company, thereby underpinning the importance of embracing ‘open innovation’ and the wisdom and power of the crowd. Quoting numerous examples of crowd sourcing of innovative ideas, the book refers to innovations in organisations like NASA where ideas are sourced from outside the organisation and from people who have no experience of space travel at all. Accessing external talent is important for reinventing a company’s talent strategy; for example, Apple’s growing and vibrant twenty-three million developers, who are not employees of the company, but develop the most effective valuable apps that are best sellers in its app store.
The book is loud and clear to say that speed, agility and adaptability with respect to adjacencies is vital to stay ahead. This entails a combination of the ability to discern and adapt quickly to change, expand into related, adjacent products and markets; all of these done with speed in execution. This is the mantra for disruption and entails the leadership and the company to be fast and always in top-gear in order to be ahead of competitors.
The authors illustrate their claims through a number of examples, including that of how PepsiCo and Coca-Cola are trying to penetrate into their adjacencies and modernise their product portfolio based on consumer trends. In order to be successful in creating a meaningful portfolio of related products and services, persistent innovation and experimentation is inevitable! An organisational discipline to design new initiatives as experiments is paramount. Only experimentation tells which strategy worked best and what to do next; adaptive experimentation and A/B Testing are vital tools for experimentation.
Moving beyond legacy, mental models and established routines, experimentation helps the organisation build a portfolio of initiatives across innovation horizons, some of them well beyond the organisation’s comfort zone. Such initiatives offer new valuable experiences and also address new markets in both the short and long-term; in times of crisis, this is all the more important! Organisations need to address the current crisis, create opportunities it offers, and prepare for the next crisis! The book finally emphasises the importance of an ideal organisational design that constantly recreates the organisational architecture, thereby, orchestrating its network to be ‘disruption compliant’.
The authors prescribe tool kits that encompass gaining insights from consumer behaviour and cultural trends, morphological analysis, benchmarking and ability of organisations to generate creative options perennially. In essence, as Philip Kotler comments, the authors play the role of a doctor, analysing the aches and pains of organisations and showing them the right medicine for what ails it!
(Dr Suresh Srinivasan is Distinguished Professor (Strategy & Accounting), Great Lakes Institute of Management, Chennai)
About the book
Transformation in times of crisis: Eight Principles for Creating Opportunities and Value in the Post-Pandemic World
Nitin Rakesh and Jerry Wind
Rs 809; 552 pages