Reimagining business
The trend of ‘anti- globalisation’ has been watched with some anxiety across the emerging economies. While India cannot be insulated from the global winds, the economy is well-poised to register a new phase of growth. In fact, India is uniquely positioned to leapfrog with the technological advances and at the same time avoid the trap holes that the rest of the world has experienced in their journey from “developing” to “developed.”
According to government data, it is estimated that less than 5 per cent of India’s total workforce has undergone formal skill training, compared to as high as 90 per cent in the developed world. This is where businesses must step in to lift the capabilities and put as much emphasis on developing shopfloor workers as managerial talent. Educators, government and businesses have to work together to radically transform the on-the-job training and vocational learning systems in order to develop a workforce that is employable in different parts of the economic value chain. This is not just what India and other emerging economies need, but is increasingly the need of developed nations as well.
The world needs growth and so do businesses. And this growth needs to be good for all — consumers, communities, the economy and shareholders alike.
Today, the expectations of consumers and society from businesses are changing. Consumers demand better products and services at lower costs, and society has little tolerance for the pursuance of the bottom line at the expense of all else.
The erstwhile shareholder driven model of growth was one that focused on the three Gs: growth that is consistent, growth that is competitive, and growth that is profitable. These 3Gs are important because without these, a business cannot create economic value. However, in today’s changing times, these alone are not sufficient. We have to move from the 3G model to a 4G model where the 4th G recognises the importance of “responsible” growth.
The mantra of 4G is quite simple: Business should be able to do well by doing good. Companies cannot afford to be just innocent bystanders in what’s happening around in society. They have to play their part in serving the communities that actually sustain them. So, how do businesses grow, remain relevant and at the same time earn their right to exist within the communities?
In order to grow, businesses need to constantly innovate. In an increasingly digitised and connected world, old business models are being continually disrupted. In order to avoid a ‘Kodak moment’, businesses need, not just product innovation but innovation across their value chain.
According to Clayton Christensen of Harvard Business School, to innovate is to do something different that creates value across every part of the organisation. This requires companies to embrace technology and creativity and bring both magic and logic into their product experience and go- to- market models.
In order to achieve this, the key is to stay close to changing consumer behaviour and evolving trends in technology. Companies need to continuously innovate around their core portfolio and simultaneously seed disruptive business models of the future. What people buy, where they buy and where they can be reached is radically changing the consumer goods landscape.
Innovations for the changing world needs to be underpinned by an organisational structure that fosters agility, connectivity and diversity. The idea of a workplace is changing rapidly and companies need to adapt to the needs of the new-age workforce that is connected, innovative and entrepreneurial. Businesses need to embrace enabling technologies and social collaboration tools that help create a flexible work culture more suitable to diversity and inclusiveness. Companies need to create a non-hierarchical interface that breaks away from traditional silos and matrix structures, and makes way for a seamless work culture that is focused on outcomes.
Ultimately, people power organisations. To compete in this connected and networked worlds, companies need talent that is equipped with the skills and capabilities required for the future.
According to a survey conducted by the WEF, the impact of technological, demographic and socio-economic disruptions on business models has led to transformation in the employment landscape and skills requirements. This has resulted in substantial challenges for recruiting, training and managing talent. On an average, by 2020 more than a third of the desired core skill sets will have changed and nearly 35 per cent of the core skills required for key roles in future are currently missing from the equivalent roles today.
Developing the right skills for the future is even more important today not only for businesses, but also for the economy. Companies will need to play an important role in developing employability of the future workforce. They need to collaborate with educators and government in order to impact relevant skills through large scale apprenticeship programmes and on-the-job training to develop a future- ready workforce. Skill-based vocational courses that focus on developing individual skill sets, will have to replace the cookie cutter college courses.
While innovation, organisation culture and developing talent for the future are essential for businesses to operate in the new world, it is their role in society that will ultimately decide their success in the long run.
The new-age employees are motivated to work in an organisation that has a sense of purpose and gives back to the society that it serves. Also, with concerns about the environment and sustainability continuing to build momentum around the world, consumers are becoming increasingly aware and prefer brands that address these concerns.
We live in a fast-changing world. Technology is both an opportunity and a challenge as established business models and industries are being constantly disrupted. At the same time, pressures on environment and resources, coupled with growing income inequity are posing a serious threat to globalisation. The key is to reignite growth, but growth that is sustainable and responsible. Business needs to reimagine its role in society and commit to doing well by doing good.
(The writer is chairman, Hindustan Unilever Limited)