Tuesday, March 06, 2007

Driving blindfolded?

Businesspundit links to a Business-Standard article titled, How relevant is Drucker, making an interesting observation about Indian business culture as compared to the west.

At a recent SME (small and medium entrepreneurs) conference, three leading Indian businessmen echoed a similar thought. Their choice of industry was not something that they knew anything about, but consciously one that they knew nothing about. They reflected that this was because it ensured they worked hard to learn and listen to others and perhaps their "naiveté" ensured that there was enough innocence left to provide for innovation. This goes against classic western business management theory of driving business by core competence.

Read Robs piece and I think he is right. Perhaps the "choosing ignorance over knowledge" bit is overstated.

I read the piece in BS and though the author makes a few good points about the "differences" in India. True, the Tatas, Nirmas, Reliance and Godrej succeeded, but they all did so when the market was relatively less mature and there were fewer brands out there. Then it makes sense going after a brand that is known. Today will you buy a Nirma or a Godrej car? Tough to say.

Is that really instinct over intelligence or madness over method? I think not. These companies knew what they were getting into and those were days when competition was, really, very less if not entirely non existent.

What is obvious is that the Indian industrialist as the Indian consumer seeks value. Maximising gains, much like any other consumer. But in India, since the pyramid is a huge one, there is a substantial chunk that demands more value for less cost. It is in servicing these customers that gets companies to innovate, reach out and serve those who they have never tried to serve before. If it were not for this attitude of the average customer, we would still be saddled with "rejects" and expensive mobile phone services.

What is obvious is, Clearly culture needs to be considered as a dimension when developing management principles and theories.

Rather than blindly adapting western principles and attempting to bring “method” to Indian “madness”, the challenge is to find method in the Indian madness and develop new a new theory.

I think we are already doing that. Our mobile phone industry, our retail formats, our "sachet" marketing are all examples of a new management theory, though I would hate to call it that.


niti bhan said...

You hit the nail on the head with your insight neelakantan. what next steps?

Neelakantan said...

Basically, as nilu pointed out, what the author is saying is old hat. I realized only after I read his post. So, niti, the next steps are happening even as we speak!

niti bhan said...

you must write the book, its already htere in your blog. just some editing required for flow.