The Hindu Business Line : Adapting to survive

The strange part of the unfolding bleak global landscape is that neither the pundits nor the technocrats saw it coming, and no one knows anything for sure about how things will play out finally and when.

Personal change is a precondition for organisational change.

V. K. Madhav Mohan

Dominic is teetering on the edge of panic. The company he founded and nursed over 25 years is now on the verge of bankruptcy. In a space of months the sales and profits have evaporated. He’s down to the last couple of lakhs in cash. Salaries and overheads are bearing down on him like a fully laden truck. Creditors are pressing like vultures poking a mortally wounded animal.

Dominic’s Desperation

At first Dominic did everything that all his contemporaries and business acquaintances did: getting tough with his sales team, collecting outstandings with a vengeance, cutting back on expenses. Instead of monthly reviews he switched to weekly reviews, then daily reviews and now…hourly reviews. Nothing seems to work…cash is hemorrhaging faster than inflows.

Morale is dissipating and new orders are like mirages in the Saharan desert. People don’t seem to trust each other anymore. The pressure of expenses and the spectre of liabilities, particularly the bank cash credit irregularity and term loan repayment backlog that have to be regularised by March 31… or else.

The situation is telling on Dominic in more ways than one. Persistent headaches led him to his doctor who noticed vastly elevated blood pressure and cholesterol levels. Family relationships are strained since tempers are like short-fused firecrackers. Binge eating compounded by uncontrolled drinking followed by massive doses of guilt at his own indulgences…Dominic is desperate and feels like he’s sliding fast into oblivion.

Self-destructive trajectory

Sadly, Dominic is locked into a self-destructive trajectory. Even though he reads newspapers and online knowledge sources, he dismisses most of the stuff as “gyan” that won’t work in his situation. In fact his favourite phrase has now become “it won’t work”. Many people close to Dominic are struck by the change; how did such a positive person change into a tired, wearied pessimist who won’t try anything different or new?

This is the dramatic and dangerous change we’re seeing all around us now. Essentially cheerful and optimistic people are subtly, without their own knowledge, becoming anxious, bitter naysaysers.

It’s about time we did some deep introspection and ask the question: “Am I becoming more closed, resentful, panicky and negative; have I locked myself into my old patterns of thinking and behaviour; does any new idea seem scary or impractical; am I afraid to experiment with a different way of doing things; am I terrified of living life in a manner different from what I’m used to?”

Inertia of Habit

Habits, patterns of thought and behaviour exert a centrifugal force that is stronger than gravity! Only supreme willpower can generate the centripetal force that is necessary to break the stranglehold of the status quo. Willpower can be focused and powerful when understanding of stark realities is complete. As the saying goes, nothing concentrates a man’s more than his impending hanging.

Today the reality is as brutal and final: there is no going back to life as usual because usual is certain death. The strange part of this unfolding bleak global landscape is that neither the pundits nor the technocrats saw it coming and no one knows anything for sure about how things will play out finally and when!

So we’re all pretty much left to our own devices! The only certainty is that amongst the ruins of the information age lie concealed the opportunities that contain the seeds of the next phase in the evolution of mankind. This is a decisive inflexion point in our progress and as apt coincidences would have it, this is also the 150th year after Charles Darwin published his magnum opus The Origin of Species. As Darwin postulated, the fittest survive and by fittest he meant the most adaptive, not necessarily the strongest.

Species contain a collective intelligence that allows the entire species to survive through adaptation. In his book The Future of Management, Gary Hamel notes that widespread poaching for tusks has led to tuskless offspring amongst Asian elephants. What this means is that the species removed the primary value driver for the enemy, namely tusks. The same survival adaptation is possible and necessary for business and individuals in the emerging scenario. The fundamental value drivers that have come to define business must now be radically altered.

The new value drivers will be environment conservation, community welfare and balanced individual lifestyles.

After 200 years of material hedonism we’re forced by our own excesses to gravitate back to the basics: equilibrium punctuated by a predilection to the spiritual.

Neither wealth nor technology maximisation has helped mankind find the right quantum of solace. Therefore the shift will now perforce have to be towards optimisation rather than maximisation. Optimisation by definition means balance by factoring in all constraints.

Personal Change

Organisations can only reflect the personalities, behaviour and value-system of the individuals involved. So personal change is a precondition for organisational change. Therefore, CEOs and business owners like Dominic must now become role models for personal change. They must break the intertial force of habits and lifestyles and demonstrate a new trajectory in their lives. Only then can their organisations adapt to survive. So what substantive change does Dominic need to demonstrate?

How about going back to learning mode? Install humility in every aspect of thought and behaviour. Enrolling in rehab for giving up drinking and smoking. Becoming vegetarian. Fasting once a week. Giving up desserts. Hitting the gym five days a week. Meditating every day. Observing silence for an hour a day. Listening without interrupting when subordinates talk. Cutting his own salary by 50 per cent unilaterally.

Paradigm Shift

At an organisational level, how about dismantling head-offices? Internet-enabling people to work out of home. Shifting people with their concurrence into new geographies and functional areas. Partnering customers to create new value propositions and products.

Constructing models to help people measure and define their own value-addition. Shifting compensation packages primarily onto a results-based model. Making CEO tenure and compensation subject to appraisal by customers and subordinates.

Cascading accountability and responsibility down to the front line subject to audit checks and transparency created by automated work flow. Liquidating assets even at discounts to repay loans. Converting loans into equity. Eliminating credit sales and switching to cash and carry. Multiple strategies and actions dovetailing into a compressed timeframe.

The synergistic combination of personal and organisational change will throw up new ideas and opportunities for adaptation and not just survival but growth. Cut and dried formulas and sequential thinking are not going to succeed; audacious lifestyle change and organisational paradigm shift are needed in the new environment.

The interim stage in the metamorphosis of a caterpillar into a butterfly is messy and harrowing… and so the changes will be traumatic for Dominic and his organisation. The ideas are extreme and painful but so are the realities today…..and tomorrow. The alternative is less palatable: extinction!

TheLonelyCEO@gmail.com

http://TheLonelyCEO.blogspot.com

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