Change: Strategy to survive and succeed

Change: Strategy to survive and succeed
15 Jul, 2008, 0049 hrs IST,

With technology seamlessly connecting the world into one big marketplace, companies are finding it harder and harder to keep pace with ever expanding competitive scenario and fast changing demands from customers. Since information technologies (IT) is the backbone for facilitation of enterprise wide change, chief information officers (CIO) are at the realm of all organisations. The Economic Times Think Turf in association with NetApp had recently held a panel discussion in Mumbai with CIOs to deliberate and communicate their collective opinion on change management with respect to the changing IT industry.

On the panel were Tom Mendoza – vice-chairman NetApp, Arvind Ganpat Tawde- CIO Mahindra & Mahindra, Dhiren Savla – CIO Kuoni Travels, Manish Choksi – Chief-Strategy Officer & CIO Asian Paints, Sumit Chowdhury – CIO Reliance Communications, Vijay Mehra – Group CIO Essar Group, Vinay Patkar – senior VP NSE (IT). The discussion was steered by Sivarama Krishnan – executive director PricewaterhouseCoopers.

Mr. Mendoza of NetApp, in his key-note address said that during the dotcom bust in 2000, NetApp underwent lot of changes as their revenue shrank from $1 billion to a $250 million. Overcoming this crisis, the company has now grown to $4 billion. “At the end of the day it comes down to leadership and culture. You can have the best strategy, but if you are asking people to change they have to believe in the change.” said Mr. Mendoza. He mentioned that an important aspect of change is to inform employees of the path you shall be taking and give them a reason to trust their leaders. “Leaders have to lead from the front, tell the people where they are going. Better way to do business is to focus on growth, do the right thing and let the numbers speak for themselves,” he added.

The opinion was shared by Mr. Patkar of NSE. The exchange has changed the face of Indian training operations and has made India the only country which has over 98% dematerialised trading. “NSE has transformed the way people trade in India. Change is the only thing which is constant, if you want to improve and excel in what you are doing.” he said.
While technology provides change backbone, it is merely a change catalyst. According to Mr Choksi of Asian Paints, people are an important factor of change. “Asian Paints is a well-recognised brand globally. But essentially paint is a commodity business and once applied it is difficult to say whose product it is. Technology is best a time limiter and will not fundamentally protect you forever.” He said. According to him, everyone, right from the leadership to those one or two rungs below, contribute to the success of the company. “Teamwork plays a big role, when you are introducing changes,” he added.

“We go back time and again to see where there is the unfulfilled demand from the customer end. In 1996, we sold zero litres of paint and we then introduced an emulsion which completely changed the industry dynamics.” said Mr. Choksi. “We need to reinvent ourselves continuously. We are not just about selling paint cans, but giving a fresh look and giving people a chance to express their thoughts through colours.” he added.

“In good times, change is about competition, leverages, forward thinking. Best practitioners in the world are when they cut their losses during bad times and do not forget the bad times, so they can plan better for the future.” said Mr. Mehra. “We are re-vamping our business end-to-end through IT enabled solutions (ITES) and we do not look at it as just the technology. We look at IT in a holistic manner.” In most IT solutions globally, the notion of business requirement is misunderstood. No one thinks of end-to-end core business process, everyone thinks of individual departments, he said.

It is a different story for Mahindra & Mahindra, as they have moved from divergent businesses like automobiles to IT. However, the steep increase in prices of oil, steel and fluctuating dollar rates have brought uncertainty in the business, Mr. Tawde.

“In the last 10 years, our core industry of automobile manufacturing shifted to customers, major transformation within the organisation itself. It is a tough time.” he said. “Communication is important if we want people to follow our vision. Our CEO and MD communicate to the employees. Here technology plays an important role as it helps them address the employees,” he added. However, he felt that technology not only made things challenging, but also helped the organisation.

For Reliance Communications, acquisition is a way to grow. “We have acquired a lot of companies and when we bought Flag, we had to integrate it using our systems. Even Reliance Telecom was a separate company and we went through the entire change management cycle to integrate them into our systems.” said Mr. Chowdhury. However, it took some time to make these organisational shifts which made people secure about their future, he added.

“We are making 1400 changes in our system every year, which means 5 changes everyday. It is very important to communicate these changes and IT plays an important role in the communication process.” he said. Kuoni Travel Pvt Ltd has also undergone business changes by inorganic acquisitions and has implemented these changes without losing focus of customers. “We have recognised that change is not only a mantra for survival, but also a mantra for success. The innovation lifecycle is reduced to nearly zero.” said Mr. Savla. “What you launch today will be copied by someone else quickly. A decade back, innovation lasted longer. Now it is short-lived.” he added.

Apart from internal factors, organisations need to respond to the change brought in by external environment. For instance, increased exposure of foreign institutional investors to the Indian equity market post 1991 economic reforms forced Indian stock exchanges to adopt electronic trading. To facilitate this, exchanges had to educate not only the investors but also the traders who were until then used to conventional trading systems. “Educating trading community to adopt electronic trading was a key challenge. It was a kind of paradigm shift for the Indian equity market, which resulted into increased level of knowledge for our members,” said Mr. Patkar.

While organisations need to address the changes in their environment, the task becomes Herculean when business portfolio is diversified. Different business segments will come across their respective change agents and it becomes important for organisations to deal with them individually. “In case of managing change for a diversified portfolio, the key lies in the segmentation,” said Mr. Mehra. Essar Group is one of the leading business conglomerates in India with interests in diversified fields including oil and gas, power, shipping, steel, retail and telecom. “Managing change across various business segments which share no commonality with each other is a task in itself. Each segment required different pace and style of change. This also has an influence on investment made in IT infrastructure. At Essar, we laid down different IT strategy for each of the businesses. While supply management is key for our old businesses, new businesses are customer-centric,” said Mr. Mehra.

Mr. Choksi pointed out that many a times necessities prompt organisations to change. “Business necessity helped us improve our supply management process. We ripped off our old IT systems and adopted new package based approach. Processes need to change in order to change business,” he said. He also emphasized the need to align the vision of business partners with that of the business in order to facilitated change effectively.