Diversity - A Business Case

I attended an event organised by the Indian Institute of Management ( IIM )alumni. There are about 500 members working in Singapore, making it probably the largest congregation of IIM alumni outside India and USA. The keynote speech focussed on the topic of "Diversity".

Globalisation brings about a marketplace of participants of diverse backgrounds. It is increasingly common to discover, that goods which brands we tend to associate with a particular culture and or locality, that their origins can be traced to far flung places e.g. Nike makes shoes from factories in Tengarrang, Indonesia, or Guangzhou, China targeted at shoppers at the Third Street of Santa Monica, California, USA. A CRM package is configured by System Implementers from Bangalore, India for a Japanese-led consortium investing in the US. Hence, a business case can be made of a business model whose composition matches closely the makeup of the marketplace it serves is better poised to prosper in that marketplace than one whose constituent is homogenous.

Another part of the business case is how well a business model utilizes its diversity. This is often referred to as inclusion. If a business model is diverse in makeup, but all the key players are of one primary group, diversity may not add much value.

It has been recognised that it will be far too expensive and not feasible to stage-manage this process at a macro level. Interest has to be aligned to make this a possibility, and the business case be well articulated and communicated, so that the benefits are evident to the participants, thereby ensuring the smooth execution of its value proposition. As a minimum, there must be a natural basis for reciprocity as well as an element of "mutual deterence" to achieve the desired outcome i.e. increasing the payoff for the cooperating group.

When this happens, albeit slowly at the intitial stage, and its efficacy is underpinned, can there be a paradigm shift with a more broad based acceptance by the players. Only then can we hit tipping point.

India and Singapore took different routes in the past 40 years in developing their respective economies after gaining independence. India is very much focused on combating poverty, disease etc given its huge population. In a knowledge-based era, this same constraint proves to be the trump card for India to leverage on its skilled workforce to build a world-class franchise evolving around its pool of telented professionals, particularly in the IT sector. Its management graduate program draws on the IT sector to turn computer scientists and engineeers into business managers.

Singapore with its unique brand equity, offers diversity and a conducive environment for these professionals to thrive, and as well as allowing them to plug into the fast growing Asia-Pacific marketplace.

The value proposition to make this partnership a success must be suffciently compelling to overcome inherent biasness so that the fusion of talent in a melting pot could produce a kaleidoscope of exciting and innovative solutions mapping out uncontested marketspace.

For this to thrive, it must be done from the ground up, albeit with the right policies being put in place. The desire to innovate and create must come from individuals who have the passion and the drive to seek and pursue excellence. Now that the first step has beeen taken, we need like-minded counterparts who can appreciate the benefit of collaboration to take advantage of the multitude of changing phases and or events in the marketplace to make this a fun and happening place to work.

Next: What Are The Possibilites?

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Ant Game When eleph-Ants Make Love

Crystal-ball glazing to the Year 2020....

1. It is tempting to extrapolate on the basis of the past that 10 million manufacturing jobs in the Western world maybe lost.

2. The world's largest economy looses its dominance in automobile and information technology sectors as well as in the capital market.

3. The rest of us exporting commodities, and doing shoeshines for a pastime.


We are refering to the emergence of China and India as economic forces to be reckon with.

In a win-win Nash equilibrium scenario, consumers in the developed world will benefit with abundant supply of affordable products and services in addition to creating a class of consumers from China and India willing and able to buy luxury goods ranging from Prada bags to private jets. In a zero-sum game, the dire outcome means that life will be a grind for the less well off and even the more highly skilled workers may feel vulnerable.

If logic prevails, it is not sustainable nor reasonable for the world's largest economy to consume more than it produces and hence for the two emerging economies to share the load by opening their markets, and consuming more products and services. A major step in the right direction by way of floating the yuan currency produced the right sentiment for believing that a win-win Nash equilibrium optimal outcome is achievable. And the question to pose is how to incentivise the Chinese corporations and consumers to buy more and of what? A more expensive Yuan will naturally spur the US economy to make further gain in productivity and perhaps in the short run, discourages consumption of imported goods, hence improving the balance of trade.

It also means more demand for health care, housing, amongst other things. It is said that China's health-care spending per dollar of GDP can potentially grow by 2X before it matches that of the U.S.

For pride and prestige, it is natural for everyone wanting to dominate the most coveted space. While the principle of comparative advantage dictates that different economies compliment each other by producing complimentary products and servcies instead off vying for the same space, and to improve trade flow as well as to achieve higer output. Like most matters in life, the devil is in the details in striking a rational outcome.

In the near term, as they jostle for a optimal position, life can be precarious for those in the vicinity. Particularly with the pressure to create shareholder value, Corporate World is compelled to modify its business design and seek out cheaper labour and white-collar workers will be next in the firing line.

However, it remains a possibility to thrive in such an environment if one is nimble enough to sidestep the footprints of these giants and seek out uncontested market space.

The ant game is to stay alive and thrive!

Next: How To Stay Alive and Thrive? Small Is Big!

Categories: Strategy

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Paradigm Coexistence - Reality and Idealism

Have been out of action for a while in the virtual world, as I was kept occupied by brick-and-mortar tasks. Am glad to be back to share some insights. There is a constant vacillation between realism and idealism, a clear instance of the tug-of-war between the "left and right" side of the grey matter.

I had dinner with a very nice gentleman, and we touched on the issue on how can we incorporate best practices into our business model. A fair number of organisations may have legacy issues that make it daunting for them to embark on change. Change is inevitable given the customer-centric environment that we are in today. Task-oriented masters in their desires to enhance performance may be looking up the wrong lamp post. With a well-established body of know-hows that works fine in a developed and transparent market, the trick is how to tweak it successfully for a less forgiving environment that we live in. Perhaps a strategy-focused performance measurement scorecard with a human touch could be the way to go.

Individuals are willing to accept change and we need to understand the motivation for that. It is perhaps heartening to experience first hand of individuals willing to make a call to champion a cause, push the envelope to embrace change, and to take some knocks along the way. We all come out wiser and better from the experience, and also progress towards a new paradigm. With such positive experiences, we ought to take the time to understand the motivation for the change. How can we replicate such successes to future instances? One important consideration to note, is that although the future is by definition uncertain, some traits are less susceptible to change, thus some outcomes in the longer run can be predicted to some degree of accuracy. It is crucial for us to detect such signals, at times weak, and take the cue to take advantage of the available opportunities and avoid the pitfalls.

Examples:

Positive
1. Develop a compelling value proposition with first mover advantage. Resolve the last-mile issue so that the fulfillment to the customers is complete.

2. Leverage on core competencies and relevant technology to create uncontested marketspace.

Negative
1. Hop onto a bandwagon likened to the days of the gold rush two centuries ago, just to make some quick bucks. As barrier is low and ease of entry, it also attracts marginal players, and the end result is a commodity-type environment, and the basis of competing is price. It is inevitable that a shake-out will occur, and all the time and effort came to nought. Remember Bubble Tea!

2. Me-too idea with no or limited differentiation. Customers are empowered with better choices, and the emergence of micro-markets as the result. It is better to establish a niche and offer top-notch service with no peers in that category.

With perserverance and foresight, we can map our path accordingly, and we should take the time to articulate our thoughts before communicating them to the target audeince. With clarity of mind and focus, the team will be up to the task to execute.

Next: How to surface and nip issues at the bud?

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