Grow or sustain?
One of the biggest dilemmas for all the organizations in the current year has been the balance to focus between growth & sustenance. While the pandemic resulted in outraging opportunities in the knowledge industry, the same year also counted for circumstances like the Great Resignation. The ripple effects were also witnessed in the connected industries like automobile, real estate, etc as the spending ability spiked disproportionately. Also, the shortage of quality manufactured products due to the shut down in the previous year further created a gap in the demand-supply chain.
Two paradigm shifts in last year – first the organizations trying to curtail the cost to secure margins and consequently downsizing. A so-called recession at the start of a pandemic or we should say an effort to predict with a pessimist view led to the fright of recession. However, towards the end of FY 21, an absolutely reverse effect started influencing the market which was unprecedented. Unlike the pessimistic view, this was growth. While the futurist predicted recessions after every decade, the same played an important role as the masters were waiting for it since 2018.
The most interesting events that took place during the last two years:
- The strategy of employee focus:
This was a radical change as Trust between the employee & employer became the most important factor for delivery. The traditional approach of monitoring working hours was broken in the blink of an eye. Now the trust has to be redeployed which resulted in failure for taskmasters and reverse stress was generated. Initially due to balancing the work-life with less workforce to secure margins and later due to gap created by longer recruitment cycles as competition brought in enormous challenges. The only successful leaders from this era were the ones who demonstrated a high level of resilience and who could think of new ways to inspire people. Pragmatically, the intimidating leadership demised and the inspiring leadership could sustain. One more key distinguishing factor of the good leaders in this era was also multi-tasking. The leaders who could clearly make business predictable amidst both the chaos. One by planning more and second by preparing the teams for the upcoming times by understanding the pointers to bring unprecedented scenarios under the remit of predictability. They were firm on that one age-old basic – Predictability is proportionate to sustainability
2. Parity and cost arbitrage:
One of the most difficult task in the last two years for entrepreneurs and intrapreneurs were to balance the internal parity Vs the cost arbitrage. While the sound of it says that it should have impacted only the outsourcing industry, however when one thin sliced the situation, its influence is observed on every business owner. While the leaders in the west wanted to outsource more to ensure faster recovery due to pandemics, the leaders in the East were struggling with the rise of direct cost impact due to competition. I’m sure that we have answered questions on this either in front of the CXOs or the board of directors. Here I could observe a very contradictory proposition here. While all the leaders were pessimistic about the circumstances, the positioning was always optimistic. Few examples are like comparing the nos with pre-pandemic and saying we are almost there and recovery will be faster here onwards, SG&A cost has been increased for now for better focus on governance which can be curtailed as we go back to the office, etc
In short, all the questions had a pessimistic approach, and the answers had an optimistic tone. While this is the common tactic in all complicated board meetings to ground-level reviews, what’s intriguing was everyone knew the market scenarios which were challenging and most often termed as unprecedented. These challenges were location agnostic and business agnostic as the world went through it simultaneously with a minor lag from country to country.
I remember that when the lockdowns started in India, Ratan Tata was the only business leader who demonstrated optimism while the other generated hue and cry. He was the one emphasizing taking care of people in losses and they will help you to retrieve success stories once they understand how the organization has sustained through difficult times. Today, on one hand, corporate houses want to grab the growth opportunities which are available in abundance and on the other hand regret the retrenchments and conservative approach taken during the first phase of pandemic
This underscores an important point that while investing one must identify the price of success – volatility & loss amid the long backdrop of growth and be willing to pay it!
