Can you buy the future without learning from it?

Eight years ago, Colgate-Palmolive Asia Pacific took a minority stake of about 14% in Bombay Shaving Company (BSC). Shantanu Deshpande, founder and CEO of BSC, has subsequently recalled that one of the attractions for Colgate was the opportunity to learn from the young company’s emerging direct-to-consumer (D2C) capabilities.

Much has changed since then. D2C itself has changed beyond recognition.

Which is why something Prabha Narasimhan said recently is worth paying attention to.

Talking about Palmolive and D2C/e-commerce, Narasimhan, currently Colgate-Palmolive India’s MD & CEO and soon to move into a wider Asia-Pacific marketing role, acknowledged that Colgate had tried to build the capability itself and wasn’t best-in-class at it. The flywheel of a D2C brand, she said, was different from the kind of brand Colgate traditionally knew how to build. Bombay Shaving Company understood that flywheel better, she said, and Colgate was looking to learn from it.

Under the new arrangement, BSC is taking responsibility for Palmolive’s consumer-facing advertising and customer relationships across D2C and e-commerce, while Colgate continues to handle product innovation, quality and supply chain, as well as modern and traditional trade.

There is an entirely rational way to look at this.

Markets change quickly. Capabilities take years to build. Why learn everything through expensive trial and error when someone else has already accumulated the knowledge, people, technology and experience? Buying, partnering and outsourcing can compress time and improve the odds of success.

But Rama Bijapurkar, an old friend, business strategist and independent director at several of India's blue-chip companies, pushed me to look at the question differently.

Her concern isn’t whether buying or outsourcing a capability makes sense. It is what happens to the parent company if this becomes its response to successive waves of change.

As she put it to me:

“The question is not whether you can buy or outsource a new capability. It is what that choice does to the future of the parent. If every discontinuity creates another island of specialised capability, where does that end? How do you manage the whole? And if the parent itself is not learning and adapting to the new world, what is its future?”

That is a harder question.

Because the strategic issue isn’t really D2C.

Today it may be D2C and performance marketing. Tomorrow it could be AI-mediated commerce, new forms of personalisation or routes to consumers that haven’t yet emerged. Every discontinuity will produce specialists who understand the new game before the incumbent does.

The question is what the incumbent chooses to do with that knowledge.

Does it merely gain access to the new capability? Or does it use the encounter to change what the organisation itself knows how to do?

An old FMCG story from the 1980s offers an interesting counterpoint.

By the early 1980s, Nirma had confronted Hindustan Lever with a genuine discontinuity. It wasn’t simply another detergent brand. Its economics, manufacturing, distribution and price architecture challenged assumptions embedded in the incumbent’s business.

HLL’s eventual response was Wheel.

For Bijapurkar, what happened next is important:

“When HLL was seriously challenged by a competitor with a totally different business model, it worked very hard to build the new capability and compete for the consumer segment that it had lost. And that helped it build a whole new business segment and capability that could transcend business arenas.”

What is striking in retrospect is that HLL didn’t simply ask the Surf organisation to make a cheaper detergent. It created what amounted to a different operating system. The Wheel business was separated from the conventional organisation, operated out of Chandigarh rather than HLL’s Mumbai headquarters, and was allowed to depart from established assumptions about manufacturing, pricing, distribution and advertising.

People involved with Wheel subsequently spoke about the importance of the HLL board giving the team permission to do what the competitive situation demanded.

In one sense, therefore, HLL created an island.

But there was an important difference. The island was an experiment in changing HLL itself. The company was learning how to compete in a market whose rules had changed.

HLL would confront the problem again, in a different form. Around the turn of the millennium, Project Millennium sought to create new growth engines beyond its established businesses. A New Ventures unit under Dalip Sehgal was given the job of incubating and testing some of these opportunities away from the mainstream organisation.

This proved harder. Several experiments struggled to achieve scale and, by 2007, the New Ventures structure itself was dismantled. HLL had envisaged incubating these businesses until they were ready to be integrated into the mainstream. But the experience raises another problem: protecting an island while it develops a new capability is one thing. Ensuring that what it learns eventually changes the mothership is another.

That history makes HUL’s acquisition of Minimalist especially interesting.

It is easy to ask why a company with HUL’s extraordinary history of understanding Indian consumers and creating brands chose to buy Minimalist rather than build something like it itself. But that may be too simplistic.

Minimalist brought much more than a brand and revenues. It represented years of experimentation, accumulated consumer knowledge, talent, digital capabilities and a way of working. HUL was buying time and a higher probability of success along with the business.

And HUL appears conscious of the integration risk. It has said it does not want Minimalist to lose its agility or speed, even as it brings HUL’s scale to areas such as offline distribution, international expansion, supply chain and procurement. The founders are also continuing to run the business for the first two years.

There is considerable logic to that.

Five years from now, will Minimalist simply be a bigger and more successful business owned by HUL? Or will HUL itself have become different because it bought Minimalist?

Those are not the same outcome.

The distinction becomes increasingly important as large companies respond to disruption by building portfolios of acquisitions, partnerships, specialist units and external capabilities.

There is a seductive efficiency to this model. The parent supplies capital, distribution, manufacturing scale and institutional muscle. Entrepreneurial businesses supply innovation, speed and intimacy with emerging consumers. Each side does what it is good at.

Perhaps that is indeed the corporation of the future.

But Bijapurkar’s question refuses to go away.

What happens if the capabilities needed for the next wave of change increasingly reside in the islands, while the parent retains the capabilities that made it successful at scale?

At what point does the parent cease to be the place where the organisation learns?

This isn’t an argument against acquisitions or partnerships. Nor is it an argument that every new capability must eventually be internalised. That would make little sense in a world of increasing specialisation.

It is an argument for distinguishing between access to a capability and organisational learning.

The former can be bought.

The latter is much harder.

The deepest competitive advantage of a long-lived company may therefore not be any particular capability—not consumer insight, distribution, brand building, digital commerce or AI.

It may be the ability to keep learning capabilities that didn’t exist when the company became successful.

That is what future-proofing ultimately demands.

Because the real danger isn’t that a startup knows something the incumbent doesn’t.

That has always happened.

The danger begins when the incumbent decides it no longer needs to learn.