In the city of Rajkot, Gujarat, is the home of the largest organised lime-paste (‘chuna’ in local language used with khaini tobacco and pan) company in India whose product is a market leader and commands a premium due to its superior quality. However, the owner of this firm is a troubled man. He has observed that the younger generation is not attracted towards tobacco and pan chewing and feels that this practice will slowly die out, perhaps in about 10 years. He has hired a R&D manager to discover new uses for limestone in medicine and other areas so that he can diversify well in time. His managers have assured him that the sales are strong but he is adamant. The survey results of the Indian data from the second Global Adult Tobacco Survey also supports his assertion.

We wonder, how many manufacturers of tobacco and allied products have gathered this insight which can have an existential effect on these companies. This is a small example of Seeing Around Corners, the title of a just-published book by Rita McGrath, Professor at Columbia Business School and a global luminary of business strategy.

When rules of the game change

The business arena is full of the debris of once successful companies that could not see which way the future is headed. Thomas Cook has recently joined the list of such infamous companies which include Kodak and Blackberry.

These companies refused to see inflection points which represent a moment when the rules of the game change. The advent of the internet has changed the game for a host of industries from travel to retail but many companies continued to do business as usual.

The book focuses on first, how do you spot these inflection points? These early signals first manifest at the edges of the organisation as the professor uses the metaphor “snow starts melting at the edges first”. The top management may not be aware of these impending disruptions until it is too late. Second is deciding what to do about them? We do not always know the answer and here the discovery-driven process (the author’s previous book) comes into its own. The third is how to sell the coming disruption to the organisation, getting it ready for the change and not mourn the demise of the present business.

The inflection point is neither positive or negative and depends upon the perspective through which it is viewed, whether as a threat or an opportunity. The future too does not come suddenly, it takes a long time to take shape but only looks sudden and panic driven since we were not looking for and deciphering weak or distant signals. Every change is not a black swan event. It takes time for change to manifest where it has implications for the business. In the case of electric vehicles, the development has been going on for over a decade and is still a work in progress. However, the government, automotive manufacturers and their suppliers are surprised by its sudden advent. Many companies, especially forging and casting industry which supply engine and transmission parts to the automotive industry, have not yet thought through the change when their business will be adversely affected, which though still some years away, is inevitable. There is still time to look beyond the automotive industry.

The message from this book is that if you actively and systematically look for and get prepared to act in time, these inflection points can be a source of immense opportunities. In the VUCA world, these inflection points will come faster and change can come from any direction. This book should not only be on the shelf of every CEO but they should ensure that their people also read and discuss the key takeaways for their businesses.

Suhayl Abidi is a research advisor at the GOG-AMA Centre of International Trade, Ahmedabad.

First Published:Jan 24, 2020 6:00 AM IST