New world, new rules and new mindsets

Where is the world moving to?

Founding Fuel’s co-founder Indrajit Gupta explores that question in a panel discussion with Sumit Chowdhury, founder and CEO, Gaia Smart Cities, and Haresh Chawla, partner, True North—both of whom have a very good understanding of what is shifting. 

The discussion was held at the launch of Founding Fuel columnist Rajesh Srivastava’s book, The New Rules of Business.

The book is based on an eponymous column that Rajesh wrote for Founding Fuel. The column explored new disruptive ideas from his own experience as well as international brands. The book was launched in January at Title Waves bookstore in Mumbai.

In this discussion, the panellists talk about:

1. The younger generation’s abundance mindset, and what that really means.

“The world was never black and white. We had these rules because we wanted to make it black and white,” says Sumit. “… the new way of approaching the world is to look at all shades of grey. How do you balance the probabilities of the world and come up with judgments? We did not have too many options, from our careers, the books we read, the movies we saw… Today’s generation has a lot more options. So how do you do decision making when you have a lot more options? … We used to bring back everything down to binary, we used to have business decision trees which brought it down to a manageable set. These days, you can't do that, there are way too many options….

“They’re not breaking down everything into zeros and ones. It’s a whole lot of probabilities in the middle and that is how they define everything… from the cars they buy, the books they read, to the friends they make. We had few. They are able to distribute their thinking.”  

Haresh, as an angel investor and a private equity investor, is seeing the next generation shape and build out new companies. This is what he’s seeing: “The industrial revolution multiplied the bandwidth of human beings to do things. With the digital revolution, the rules have already changed…. Where you got extra physical bandwidth earlier, now you have extra mental, social and collaborative bandwidth… earlier companies strived for ‘we need to get scale’. Now a Netflix launches in hundred countries in one day… economies of scale, economies of scope, which were ideas of the industrial revolution—production has to be the core of company; produce more, build our distribution to get advantage of the scope….

“[Now] you can code a billion-dollar company into existence in 10 or 15 days. That’s where the confidence is coming in, therefore capital is flowing in. And [young] people know the gifts of technology, who are able to understand you can reach out to millions of people…

“All that infrastructure is falling into place. And you don't have to own any of it. Remember that digital technology allows companies to collaborate. Uber exists because it sits on Google Maps. Google Maps, combined with Uber, combined with the payment systems, so therefore you have a new layer which allows a taxi to be [matched with a user]

“This entire new thinking of how you can collaborate, how you can combine things, how you can use available cloud software to build large scale new ways of doing business…

“These gifts of technology are available to everybody…. This combining of everything is what the youngsters have brought a new mindset to. We are a generation stuck in the old way of doing business.”

2. So, how do older business leaders stay relevant?

Both Sumit and Haresh say that only about 10-15% of their IIT/IIM batchmates work hard to stay relevant today.

Because “success has the seeds of destruction within it,” says Haresh. “Once you're successful, you believe your way is the right way. And the challenge with all of us, including companies, is that their success creates a lens through which they view the world. And that lens in very hard to break…you have to say that I'm going to keep learning. And there should be an incentive to do that as well.

“All of us have a handphone. The best business models in the world are playing on the phones. Every year, some 200-odd billion dollars are spent to excite people on the phone…. the phone tells you everything. All business models are being tried here, and you are the most fertile experiment ground in the world, which is available to you for free.”

What has changed now is that the cost of experimenting has gone down to zero, he adds. You don’t need to worry if you are right or make a perfect plan. “Customers will tell you if you are right.” All you need to do is keep experimenting, “because the cost of failure is down to zero.”

Sumit adds: “As a startup founder, I have no control over what the universe is going to present to me tomorrow. I should be ready for it. They need to see my ability to transform every day.”

3. What do we need to start changing in the way business education is conceptualized and taught?

Harsh says it needs to be about business process innovation. “Outcome determines the process in a company in the beginning. Slowly, as you scale the company, the process becomes the determinant of outcomes and it narrows the bandwidth of the firm completely because they can’t think outside the firm… the process is no longer relevant in most cases. So, [I urge MBA students] when you go into a company, you see these processes running and you will have to question everything… step back and question ‘why are certain processes needed anymore?’”

Though most organizations may not be ready for this, but some companies are allowing young MBAs to speak now. “Several CEOs are saying ‘tell me what's going on’.”

Sumit adds that when we say do frequent testing, we’re not always trying to find the reason why something's happening, we're just saying that “this is the trend, I need to change it now, it is not going the way I want.” It’s about being able to react to micro level transactions that are happening and because computing allows us to do it. He says, “These are fractal models… any fraction is also a similar pattern as the larger thing. So, if you start following smaller and smaller divisions of time and look at transactions in that, it will follow a pattern. If you aggregate over a period of time, that will follow a pattern…. are you able to understand patterns fast?”

Still curious? Watch D Shivakumar’s keynote where he talks about eight principles he holds golden for the new world.