Business Growth Strategies From INSIGHT 2013
In the second of a two-part series, Deepak Satwalekar, former CEO and MD of HDFC Standard Life Insurance, and Ram Charan, favorite CEO coach of Fortune 500 companies, discuss business growth strategies, and the various problems and solutions that emerge when SMEs attempt to scale up.
Deepak: On the leadership side, I think this is about possibly the best time to start taking a slightly longer term view. Look at building up people capacity. There’s not too much action happening anyway if everyone is complaining about business not growing. I think earlier we talked about getting the right people in the right places. If that is so, then this is about the best time for you to start doing that.
I think the Indian mindset even on recruiting is different from the mindset that you would find in other developed markets where they would spend significantly more time in finding the right person for the right job. Over here, as long as we get a seventy percent fit, we will say, “Fine, let’s take him on board, and we’ll be able to manage,” which is just about the Indian style of doing things. Everything is a little bit more ad-hoc, everything is a little bit of an adjustment here, a little bit adjustment there and I think the time has come that we use this opportunity to really fix the way we do recruitment. If we get that done, then planning for the longer term is something that we need to do in a much more focused manner. I think we have got all the talent that you want in India. There is no sector where you can find a shortage of talent. It is just about having the patience to find the right person.
Ram Charan: Most entrepreneurs I see across the globe are initially hundred percent doers. Nothing wrong. When you scale up, there comes a time where you got to convert yourself to not only an entrepreneur, but also a leader. Leadership is very simple – easy to say, hard to do. You decide the “it,” get others to do the “it.” That’s your personal growth. If you don’t go through that transition and you do everything yourself, you cannot scale up. And to get it done, as Deepak is not about the best people, it is the right people.
A large part of the imports from China are not from large companies. It is from SMEs. Their trade deficit is increasing and it is not good enough for us. It can go to a point in five years that there could be political problems. Our SMEs need to think about and act to be world competitive on export. I’ve not heard that India has too many exports from SMEs. A large part of the export is not from SMEs. We need to move that way.
Interviewer: Final word Sadhguru. Why is it so difficult to let go and according to you… what advice would you give to the SMEs in terms of scaling up?
Sadhguru: A common thing that you hear in the United States if you mix among the business people is, they are all trying to sell their businesses. Always they are thinking, “Build it to this point, sell that business. Create another one of a higher level.” But in India, that culture is completely missing. Only now in the technology sector, a little bit is being seen. Here we only think of selling the products that we make, we never think of selling a business. Selling your shop is out of question. You only sell the wares that you sell. This is a certain way of looking at things, it need not necessarily be a disadvantage. But one thing we need to understand is, at the beginning of twentieth century, the whole world’s population was 1.5 billion people. In that sense, Indians are a world by ourselves at 1.2 billion.
I feel it is very important that India builds a vibrant business process within itself. And then transactions happen outside, that is fine. Wherever I go, this percentage talk is going on, “We’re growing at 5.6 percent, United States is only at 2 percent.” But 5.6 percent of what? For 1.2 billion people, you don’t have an economy of that size. Okay, we are touching two trillion but that’s nothing for 1.2 billion people. So, percentages, numbers, financial markets, all those things are important but the most important thing is to build a vibrant economic structure within the nation where both the production and the market is within the nation.