The subject ‘reinventing' is very dear to my heart and it is close to the space in which you and me live and work in. Today every one is saying that we live in a tri-polar world. Gurus across the globe are talking about how India is going to be a part of this tri-polar world along with America, the current largest economy and China, the largest economy that is due to emerge by 2015. Everyone seems to be very gung-ho about the prospects.
However I personally am not very convinced by this phenomena and I'm going to take this opportunity to strike a gong of caution in each of your hearts. I am going to shout from the roof tops and say unfortunately India is not going to be a part of this tri-polar world.
Don't get too excited or too dampened by the prospects because there are short term perspectives, medium term perspectives and long term perspectives and human beings are very appreciative of short term perspectives. They get very excited about things in the way they are. They think the future is bright and that's how it's going to continue to be.
Well if we do not re-invent ourselves, we are going to have exciting times only for the next two years i.e. 2007 - 2008 and possibly the first half of 2009. However by 2015, India is not going to be in the tri-polar gang anymore and by 2050, it is not going to even rank in the top 8.
Necessity of re-inventing
One of the first things we tend to ask is why re-invent? This is because we normally don't like to re-invent ourselves and we tend to try it only when we are pushed to do so.
So why is it so important and necessary to reinvent? Well primarily because there are three types of businesses and people.
1. Businesses / People that make things happen,
2. Businesses / People that actually watch things happen and
3. Businesses / People that wonder what happened.
All businesses go through this cycle and 83% of businesses in India belong to the third category i.e. businesses that wonder what happened. 11% of businesses in India are businesses that watch things happen and only 6% of businesses in the India of today (i.e. in the last 18 months) are businesses that make things happen. So if you want to be in the first category of businesses that make things happen, it is important to re-invent.
Today forecasting is dead. For those of you who believe in the tools of forecasting and have used retro tools like regression or analytics, let me tell you that forecasting does not work in a progressive economy like India, Brazil or China. It only works to a certain extent in countries like America and Germany at this point of time. You cannot plan anything by looking at the past or by trend analysis as trends don't predict the future. The reality of the future is in scenario planning.
One must re-invent because nothing already invented can make you the money that you can make by re-inventing. 2605 times is the kind of return you can get from re-inventing. So if an already invented business gives you a return of x then x multiplied by 2605 is the kind of quantum jump you can actually get in a reinvented business. This is an actual number.
Characteristics of Re-inventing
Re-inventing is a mindset and is totally change and development oriented. It is absolute dynamism and is future- proofed and solution centric. It is the one thing that will take you into the year 2015 and will also take you to year 2050 reasonably intact. It can touch every single business and vertical of the industry both small and big alike. It can touch peoples lives both rich and poor and change the lives of the poor drastically.
The Future of Businesses: Today the future of a business is in social marketing. The future is not about marketing to the rich but about marketing to the poor and if you can't market to the poor you are not a very good at marketing since one can actually make money from the poor.
There is a proposition by the World Bank that talks about the next four billion. So in aof world population of say six billion people, two billion sits on the top and the next 4 billion sits at the bottom of the pyramid. It is this four billion that is going to be growth engine for the future.
So guess where the markets actually are and guess where there is further growth? Well, they are at the bottom of the pyramid and India, China, parts of South America and Africa lie there. The GDP growth rate of America is likely to be 2.8%, whereas the GDP growth rate of India is likely to be 8.5% and that of China is a surprising double digit number of 10.
In the old days businesses left the bottom of the pyramid out. But today you can't afford to do so. So what should every company do? They should have two separate businesses, one that addresses the 2 billion at the top and the other addressing the 4 billion at the bottom. If one doesn't address the bottom half of the pyramid now, it's likely that the business will suffer in the next 10 years starting from now.
Examples of Re-inventing
One good example of an Indian brand that has re-invented itself is the Surf Excel detergent. When I was in HLL and we were working on the brand, the enemy number one was Daag (Stains/Dirt) and everything we did in those days was to fight these stains. But guess what? Today in 2007, they say "Daag acche hain" (Stains are good) in a very respectful way. Why? Because having stains on your clothes mean that you are hard working and so these stains are good. Look at the turn around of the advertising campaign This is what reinventing is.
A few other examples of re-invention
Food: Food is constantly being re-invented in many parts of the world. Catfish that looks like brinjal (Germany), square water melons (Japan), purple ketchups (U.S.A), coffee baths (Japan), are just few of the examples of how re-inventing is shaping food in a big way.
Fashions: Fashion is being re-invented on a day to day basis. You have new cloth made from banana and fungus fabric with natural colors to scented socks that release sweet scents even when you are sweating.
To summarize, planning and forecasting are dead. Brand life cycles are shortened and dramatic and unforeseeable changes are in. There are no cutting edge tools other than re-inventing continuously to grapple the future for consumers, products and markets.
This was an excerpt of a talk at an event ‘Celebrating Change' organised by Businessgyan and TASMAC. Complied by Sandesh Shenoy - a consulting correspondent for businessgyan
Issue BG74 May07