As enterprises struggle to deal with the ongoing disruption in the marketplace, there are certain key principles and transformation priorities that need to be incorporated in order to win big, say experts.
Pointing out that most companies would need to figure out the new rules of the game and transform themselves, private equity experts and technology leaders highlighted how the key is to shift from being world-class to world-changing.
Thriving on VUCA
“It is no longer enough to be good. Conservatism, discretion and understatement are not going to serve you today,” said Vishal Mahadevia, Managing Director, Head of India, Warburg Pincus.
Mahadevia was speaking at the recent #ready2018 event in Singapore, organised by Capillary Technologies. Private equity chiefs, retail and digital experts and technology leaders spoke on how to thrive on today’s VUCA (volatility, uncertainty, complexity and ambiguity) world.
Recalling how entrepreneurial firms have scaled in times of volatility and uncertainty, Mahadevia said it was necessary to be over-invested. “The most important thing for a company looking to scale up is to over-invest, in the team and in the people.”
Mahadevia has dealt with firms across different spectrums such as logistics, manufacturing, technology and retail, and is a member of Warburg Pincus’ executive management group, leading the firm’s activities in India.
“Companies need to have a team in place that can run a billion-dollar company, even when the said company is a fraction of that size. Because one needs to go with the expectation that you are going to get there,” he said.
However, when businesses are scaling up fast, “there are always going to be missteps along the way,” he said. “There will be a bad quarter, or a bad year, but if there is a strategy and a goal post in mind, companies need to be nimble and change accordingly, and also be able to filter out the noise.”
GV Ravishankar, Managing Director, India, Sequoia Capital, maintained that simply applying yesterday’s business frameworks and solutions to tomorrow’s problems would not work.
Insisting that entrepreneurs are fast learners, he said: “Given their ability to learn and adapt, and their speed of decision making, most entrepreneurs tend to follow it up with rapid execution, But it is necessary to have the right people to help execute what needs to be done.”
Ravishankar, who focusses on consumer, tech, education and healthcare opportunities to invest in, said some businesses, however, do not need to scale up fast.
“Some have the first-scaler advantage and try to grow very fast which takes them way ahead of the competition and allows them to absorb both capital and talent very quickly. But not every business is worth scaling up fast. It is not necessary to push the pace just because one has to, because you might end up in a J Curve from which you might not recover at all,” he said.
‘Caution is fine’
Ravishankar also opined that it was impossible to carry the entire burden alone. “The best entrepreneurs don’t carry the entire burden of every decision alone. Especially if you have five or six different investors.”
He added that it was also okay to be afraid. “Some people think the wheels are going to come off the bus and prefer not to take risks.”
Providing a ringside view of the challenges facing high-performing start-ups and businesses, Harshul Sanghi, Head Global Investments, American Express Ventures, said it was necessary to build with caution, “so when you scale rapidly, it adds to the bottomline.”
He added, “Real businesses will continue to matter, as will value, economics, technology, product and engagement with consumers.” The event was aimed at highlighting ‘consumer-ready’ business strategies, and to showcase how technology is fundamentally transforming the e-commerce space as well as the start-up and retail ecosystem.
The writer was in Singapore at the invitation of Capillary Technologies