Unexpected destinations: Heaven or Hell for India’s SMEs?

By 28th August 2014Article

What can the future tell us?

I recently journeyed to the future with the CEO of a promising SME based in India. In fact we travelled to two destinations. The first we called, ‘Heaven’.  It was a place where his business was growing, his organisation strong and his board satisfied. We sat back with pride, and examined the key turning points that had led to success. These included changes to his operating model, new technology, management team, and client accounts.

The second destination was more unpleasant. This was ‘Hell’; the sum of his worst nightmares.  Growth had been too quick. His business was haemorrhaging disgruntled customers and he was firefighting and hyper stressed. His organisation was crumbling from low morale and his Board hostile. We examined, with discomfort what had been the key turning points that had led to this unfortunate place.

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Once we completed this exercise we journeyed back to the present with new insights to consider. “Mr CEO” I asked, “was our metaphorical journey into the future plausible”? “Of course!” he replied. He went on, “Two things in particular stand out. The two future destinations shared similar journeys and turning points.  But yet, their outcomes differed“. He thought more and then added, “Our organisation’s strength made the difference. That’s what ensured at each key turning point we took the right course of action“. “And do you feel your organisation is strong enough yet?” I asked. “I don’t know… or at least not yet” was his honest response.

 Which destination are you heading for?

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India’s post-election honeymoon is shining a light on many home grown SMEs with an eye for rapid growth. These companies have the opportunity to become the successful corporations of the future. But, despite these positive conditions, ‘Hell’ remains a plausible destination for some.  Businesses with weak organisations that think short term, over-extend their ability to change, are especially at risk.

So can you avoid Hell? We believe you can, but consider these five questions before embarking on your journey. Do you have the vision, leadership and values to inspire your organisation? Can you build the necessary coalition of alliances and support to succeed? Do you have the right framework to make important decisions? Do you know what creates sustainable value for your business? Have you got a journey plan in place to sequence the necessary flow of events?

What factors will influence where you end up?

Sustainable growth (‘Heaven’) or failure (‘Hell’)? During this exercise we unearthed some interesting themes. For failure, the primary cause was poor ‘Leadership’! Principally, the capability of top management to set a clear vision and strategy; and then connect it to their people. Other causes included an inability to adapt to customers, inflexible planning and indecisiveness.  Another key factor behind ‘Hell’ was poor internal communications. Underlying this was a lack of transparency and trust. This infected the core relationship between employee and their leaders.

In contrast, the story of Xerox during the 1950s and 1960s provides some interesting pointers to ‘Heaven’. In his book ‘Business Adventures’ by John Brooks, he charts the initial beginnings of Xerox. Bill Gates and Warren Buffet believe this book to be one of their most influential reads. Two important themes stand out. Firstly, the strength of the values shared by the pioneers of Xerox, notably – tenacity, enthusiasm, risk taking and idealism.

“To set high goals, to have almost unattainable aspirations, to imbue people with the belief that they can be achieved—these are as important as the balance sheet, perhaps more so.” J.Wilson, President Xerox.

Secondly, the ideal of social responsibility. At a time when CSR was unheard of, they invested 1.5% of net income in their local community. Its purpose? To underline the “Xerox spirit”! To show that business is not so much a means to an end as a matter of emphasizing “human values” for their own sake.

Conclusions?

For SMEs in India there is a clear market opportunity. But how to grow and where you will end up is the big question. Without doubt, history is littered with the wreckage of growth mishandled. Indeed Xerox itself is now a business case in malaise and mismanagement resulting from scale. What we do know is that working in the future and working backwards is a vital tool for leaders to test scenarios of their future growth. We can also start to see recurring themes emerge too. A compelling vision, sound strategy, good management practices, connected customers and engaged workforce will stave off ‘Hell’. But to reach ‘Heaven’ – that needs aspiration, high ideals, belief and tenacity. In short, human values that inspire.

Want to find out more or talk to us about how we can help?

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If you’re interested exploring in more depth your capability as an organisation to succeed, we are developing an online survey you can take. It will also shed light on the essential components of building a strong organisation and an effective journey plan. At Blacklight Advisory we have a track record of working alongside our clients to help them achieve their aims. We specialise in organisation and culture change, and have managed lots of tough projects. Let us know if you want to discuss how to manage change in your business. After all, we want our clients to arrive in Heaven not Hell!

 

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