Death of an Expert?

In this fast paced, ever changing world, who would make a good Leader? What is valued most? Is experience in a specific field (that we call Expertise) relevant? What traits would position a Leader to be successful in the future?

World is changing at a very rapid pace. Gone are the days when the changes were cyclical in nature. Today, we are faced with structural changes most of the time. There was a time when an average product life cycle was five years and a business model used to be relevant for atleast 18-20 years. Today, a product is outdated as soon as it hits production and a business model needs to be reinvented every three to five years (or maybe sooner depending on the nature of business). To stay ahead in the race, every company is looking to cannibalize their own products (Example being Samsung with a clearly focused tagline – “What’s Next?”. This tagline has driven the innovation in the company with Samsung launching new models even before the current ones completely percolate into all the markets).

Today, we are seeing three major trends in the world:

Transcending industries: Boundaries between industries are being erased. A company is transcending multiple industries and is foraying into multiple products by leveraging their core strengths. Example being Apple - In which industry do we say Apple is operating in? They are a hardware company, software (within Software, they have an Operating system, Office software, Apple maps, apps), Cloud computing, Music distribution, Telecommunications, Consumer electronics and are foraying into Television with soon to be launched Apple TV (beyond the current version that they have). Another way to think about it is to ask who is a competitor for Apple? We would end up listing multiple companies across multiple industries.

Surprise competition: Competition could be coming in from anywhere and any source. It is not always from a direct competitor. Did camera companies ever expect to see competition from mobile companies? Today, many people opt for camera phones as against buying a separate camera resulting in severe pressure on revenues of camera companies. Similarly, Google search is coming under pressure from Apple’s Siri voice based search; Call center companies are under pressure because of advent of social media that is redefining customer contact/experience; most recently, within India, many of the major bookstores are facing stiff competition from Flipkart (similar to Amazon story); movie industry coming under pressure from television/digital cable; single screens from multiplexes and so on. Could Airtel Money be a competitor for credit cards? (Going back to the previous point of transcending industries – is Airtel a mobile company or a financial company?)

Globalization: Globalization led to huge number of opportunities and challenges at the same time. While it had introduced many new markets and multiple cost bases, it brought in challenges like complexity of dealing with multiple currencies (foreign exchange risk), multiple regulations & regulators, multiple cultures & dealing with different talent/global teams; different customer tastes etc.

In such a scenario, who would be best to lead, say, a telecom company? A Leader with thirty years of experience in the telecommunications industry or one who has traits to be successful in a changing environment? What value is experience, when today telecommunications companies have more revenue from data based services as against voice calls? Average age of the consumer much lower and consumer preferences changing at a very rapid pace?

I believe following traits would be critical for a leader to be successful in the future:

Learning ability: It is critical for Leader to continuously learn from diverse areas and fields. As the opportunities are spread across businesses/industries, Leader has to be constantly open to learning – about new markets; new technologies; business models; cultures; languages (if required); impact of regulations/political changes; new risks etc. Learning could occur from different sources – Reading, Networking, Social media; Videos (Youtube is a great source); Podcasts etc.

Adaptability: With so much of change, Leaders have to constantly adapt and embrace change. Gone are the days, where a Leader puts together 5 year plan and sticks to it. Today, even a yearly plan has to be adapted to changing environment. Hence, embracing change becomes critical to the success of the Leader. This requires the Leader to be willing to change and then to lead the rest of the organization through change management.

Business Savvy: Every Leader has to understand the underlying business model of her business thoroughly and be able to assess the impact of changes occurring in external environment to her business. Keeping the financial goals in mind, she should be able to identify the requisite capabilities she has to build in the Organization. Most important aspect though is in identifying the impact based on external changes. More often than not, this gets missed until very late.

Develop Talent: Biggest differentiator for companies today is the talent they have in the Organization. With innovation happening at a rapid pace, any other value differentiator gets lost very quickly. However, the talent within the organization could make a difference to the success or failure of the company. Hence, Leader who is genuinely interested in the development of people; puts together coaching programs and builds the requisite capabilities would lead her organization to success.

Risk taking: Leader cannot wait for the right opportunity to push forward his business. He has to take risks and create opportunities. While some risks may pay off, others may not. That’s ok. A Leader who takes risks has higher probability of success than a Leader who does not.

I strongly believe that the above traits are more critical for the Leader to be successful than experience in a specific field. It is always great if we can get an individual who has immense experience and has the requisite traits. But if we have to choose one, I choose the required Leadership traits over relevant experience/expertise. What do you think?

Thinking Big - Final Chapter

This is the final article in the series of Thinking Big. In order to understand a concept, it is not just important to know what it is but also to know what it is NOT. While the first two articles explored the facets and examples of Thinking Big, today, we will explore what is NOT Thinking Big. That’s the tricky part. How could we explain what is not thinking Big? While I raked my brain on how to do that, I thought I’d look at missed opportunities as they could have turned things around for the company or would have made it BIG. There is a difference between missed opportunity and failure. Failure is where you have taken risk but it has not paid off. In my mind, that’s good - there is intent of risk that has been exhibited and even if the result is not in line with the expectation, there are enough lessons from that experience that could be leveraged to move forward. However, missed opportunity is where a company has let go of an opportunity without betting on it. I’d like to acknowledge here that we are all smart hindsight but making that decision would have been difficult for the constituents. Having said that, there is always ‘What if’ associated here. Examples of missed opportunities:

Yahoo: Yahoo is currently struggling as a company with multiple changes of CEOs and of strategic directions. However, it had multiple opportunities it missed as a company to make it big. I’d like to highlight two of them. First one is about the opportunity for Yahoo to buy Google.  Having passed over the opportunity of taking over Google search engine when it was initially offered by Larry Page and Sergey Bin, Yahoo tried another bid in summer of 2002. Google was not listed at that time and its revenue was $240 million. Terry Semel, Yahoo CEO at that time approached Larry Page and Sergey Bin to take over Google. Larry and Serge stated their price as $3 billion but mentioned they were not interested to sell. Terry’s team indicated that Google was worth $5 billion and they should push hard. However, Terry Semel disagreed and moved over to Plan B to acquire their own search engine and search-advertising technology to compete for search based ads. Well, we all know the result. Google subsequently went public and is currently operating with a market cap in excess of $180 billion. Similarly, Yahoo made efforts to buy Youtube but could not push forward on it. Eventually, Google bought Youtube and successfully integrated it into its fold.

Second big opportunity it missed was in 2006 when Yahoo sought to buy Facebook. Yahoo CEO Terry Semel almost shook hands with Mark Zuckerberg to buy Facebook for $1 Billion (this was when Facebook was smaller than Myspace – another social portal that went into oblivion). However, Yahoo underperformed on earnings in 2006 and Semel reduced the price offering to Facebook to $800 million. Zuckerberg turned it down. In a subsequent interview, Terry Semel lamented the missed opportunity and felt that Yahoo should have pushed forward with the deal.

We will never know what would have been the present if only Yahoo leveraged these two opportunities. In both the cases, Yahoo was convinced they were good buys but failed to take the necessary risk to pursue the deal. WHAT IF??

India Story: While talking about missed opportunities, I could not resist myself writing about huge number of missed opportunities by India to really make it big. India shining story has always been that of a great future but of a weak present. Even during early years of this century, we talked about India will be a great destination ten years from now, and after ten years, we still say India will be a great destination ten years from now. Inorder to have a strong growth, it was required for the government to make bold decisions and push for strong reforms, but the government backtracked multiple times to appease political interests. That has stalled India story and today, it is being seen as a potential fallen angel of BRIC countries. WHAT IF we have taken risk and pushed for strong reforms and provided good governance? WHAT IF??

Contrast the above examples with that of James Cameroon. He always thought big and made movies in a large scale. He went to Fox studios and pitched to make Romeo and Juliet story on a sinking ship for $150 million. Fox was skeptical but yet gave in to the demands of James Cameroon since they wanted to build a relationship with him. Result was Titanic that earned more than $2 billion. He came back to Fox in 1996 to pitch for the idea of Avatar with a potential release date in 1999. However, he was not happy with the technology that was available and worked on pre-production and production of this film for a decade, with the film eventually hitting the screens in 2009. It instantly turned into a blockbuster and brought in another $2 billion. Imagine spending more than 10 years of your life in pursuit of a goal. You need to be able to dream big, take risks and have great passion. That’s THINKING BIG.

What does all this mean to you? Are you willing to THINK BIG about your life? Are you willing to bet on yourself and take the required risks? THINKING BIG cannot happen if you are not willing to dream big, take risks and have strong self-belief. This world provides a huge number of opportunities to think and make big however, the number of people who capitalize on such opportunities are very few. Are you one of them?