Raj's Lab

Strategy and Entrepreneurship


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Is growth to be questioned?

Very often when things are moving smoothly, especially on an upward trend, nobody questions the “Why” behind the growth.  It does on the first glance seem a very silly question, but deeper thinking on this can lead organizations to spot early indicators of both impending disasters (warnings) and huge upside potential (opportunities).

Very often growth of a company is not planned at all. It is serendipitous. The management team being happy in the situation, chooses to remain oblivious to the underlying working. They also do not want to risk hearing tough answers that could come with questioning the veracity and sustenance of the upward move. Infact in all likeliness the growth happens without too much of their interference or planning. This is something that they do not want to hear or acknowledge. This goes against their belief of being in control as designers of growth. So why question when going is good is the predominant attitude. And just as they grew without their knowledge, they also find the carpet yanked from under their feet. And the fall then is very painful

Asking this question is useful because it helps organizations wake up to one of the above possibilities – opportunities or warnings. Identifying both early is useful. Accepting the reality early is a benefit because when tough times descend, company is already prepared to handle the burst of the bubble.

Bursting of Bubble could mean two things – it could mean loss of opportunity to competition or new players; it could also mean ignoring the warning of a disruptive change or disaster. Either ways, it hurts. It does make a lot more sense to seek the source/reasons for this growth and understand it fully.

So the next time, you see a spurt in growth, it may help to stop and ask “Why?”


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Tiding over Turbulent Times

The economic environment has been sending out mixed signals over the past few quarters. In general the short term trend isn’t looking too positive. The macro-economic indicators and forecast of companies are all signalling turbulence. What should be our approach in such a grim situation?

Just like how a flight that takes on a long journey tends to face a few turbulent patches enroute, a business is also no different.   As the pilot feels turbulent patch ahead, he does not panic but realises it is at these times that call for his intervention. He requests the people to settle down while he navigates through the turbulence, with calm and poise.

Similar to the above analogy, as business men and entrepreneurs, are being sounded off and sense early warning indicators of a possible turbulence, they must look at it only as a small patch or a phase in the longer journey.  Decisions taken should reflect the possibility of turbulence and not look like a panic reaction.  Opportunities (new and old), should be equally recognised as threats.

In recent times lot of business news speak about companies safe guarding revenues, holding on to cash, cutting down developmental expenses, delaying new investments etc  While all these can be rationally justified as responses before tough time, historical evidence suggests that it is the focused and courageous business men who have emerged post crisis the strongest.

Bringing in austerity measures by stopping arbitrarily any and all long-term investment and expense during tough times, send extremely poor signals of the management’s commitment to a greater cause. While it may be easy to cut development and related futuristic costs, it is the sign of reactionary decision making. While I am not suggesting being careful is wrong, being discriminate, maintaining equipoise and believing that there is a journey beyond the turbulence will lead to intelligent and responsible decision making.

Let us treat the turbulence arising in the economic climate with due respect but not take action as if this is the last one we are going to face. Tough times are also points in time that has thrown up fresh opportunities. Since we are enroute the spoken about long term growth story, let us carefully watch out and make investments in fresh futuristic opportunities without falling prey to the over-protective herd instinct.

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