It would be an understatement to say that the world is going through a period of unprecedented uncertainty. In India’s context, this uncertainty is not limited to the economy alone but indeed the very fundamental political, civil, and social landscape as well. Never since independence has the Indian state appeared weaker and directionless. The very basic security of the citizens appears totally compromised with wanton acts of terrorism taking place with impunity. Rampant goondaism and horrifying acts of violence against individuals even in the capital are responded to with highly insensitive statements from central ministers and chief ministers. Political parties openly offer moral and financial support to those who are being officially regarded as suspects in perpetuating heinous crimes against the country. Communal fires burn unchecked in several states and risk is spreading further. The country’s physical (including roads, power, potable water, irrigation, and public transport) and social infrastructure (including education and healthcare) is in dire need of radical overhaul and massive investments and yet the ministers and their ministries remain oblivious to the magnitude of the challenge or fritter away time and energy on less relevant issues. The cancer of corruption continues to proliferate to a point that a single florist in Delhi is able to get more than 15 officials representing three different government entities snared through a self-planned sting operation. In this environment, the country’s political leadership including the Prime Minister and the chairperson of the UPA have inexplicably chosen to remain deafeningly silent, and glaringly invisible, making one wonder what they are really up to since even in the ancient times, Nero was purportedly known to be playing some musical instrument as Rome was getting ravaged with fires.
While the nation will soon have a chance to give its verdict on the capability and the achievements of the current set of representatives in Parliament and some state legislatures, the business leadership has to act more sagaciously and decisively to steer their companies (and the economy to a large extent) safely through these troubled times.
A good starting point will be to snap out of any state of denial that the Indian economy will come out unscathed or that while doing business will be tougher in the coming months, no radical changes (beyond cost controls) are needed in conducting the business itself. The finance minister certainly knows something that the rest of the country does not; else he would not be so confident about predicting that the economy will still grow at 8% this fiscal and then actually grow even stronger next year to touch 9%. However, till the time he is able to share the basis of his optimism with others, it would be prudent for the business leaders to prepare for a rapidly declining economic growth rate in the next many quarters. The CEO must, then, share his/her perception of the situation relating to his /her business with all the employees so that the gravity is clearly understood by all within the organisation. This has to be followed up with a clear message to all that it may not be “business as usual” till “normalcy” returns in the external environment and hence in such a situation, performance expectations from each employee are going to become even more demanding.
The next step that most business leaders should be undertaking is to ensure that the core of their business (whatever it is), or for diversified companies, whatever constitutes the core businesses for them, is given the maximum attention and protection. In this process, some potentially good initiatives for future growth and some businesses that have the potential to become star performers in the future may get short shrift. However, it may still be prudent to take decisions based on raw survival instincts without letting too much of emotion come into the decision-taking process.
The usual tendency in tough times is to let the focus come on cutting costs. Up to a certain point, this is desirable and must be done. However, counter-intuitive it may sound, more focus must be given on new (read: more appropriate for the current environment) products or services development that have a better chance to sell, more resources deployed on getting better understanding of changing consumer (or customer) needs and behaviour, and more efforts devoted to marketing including business development, promotions, sales, and customer relationship management. All businesses, including consumer products companies, have to keep in mind that as long as the overall economic growth rate in India is in positive territory (and likely to remain about 5% in the next 12 months or beyond), customers and consumers will have the money to spend. They may just need newer (more value) products and need to be wooed more aggressively, and pampered more sensitively to encourage them to continue to spend.
And finally, and perhaps most difficult to achieve, is the need for business leaders specifically and the so-named intelligentsia, media, and citizens-at-large to all rise in a chorus to expect and demand strong and competent leadership and non-partisan, firm, result-oriented governance from our political leaders and the bureaucracy that supports the governance.
