India: Beyond The Coronavirus
COVID 19 pandemic is unprecedented with an unprecedented use of the word 'unprecedented' to explain it.
It has affected 210 countries worldwide almost simultaneously and caused stress to the world economy, health system and employment security.
Brian Chesky of AirBnB said,” the world needs human connection now more than ever. The human part was, is and shall remain more important than anything else. Only the medium of communication maybe digital. We are about belongingness and at the center of belonging is love.”
To control the spread of disease and gear up medical facilities and infrastructure, countries had to resort to imposing lockdown which in turn led to businesses and operations to stop and many people are fearful, apprehensive and cautious while being uncertain.
However, every crisis is also an opportunity and it should not be wasted. COVID 19 is a 'Black Swan Event' as Nassim Nicholas Taleb would call it.
So while industries like hospitality, tourism, aviation are severely affected / have collapsed, digitised businesses in online education, video conferencing and online sales boomed.
A new norm or normal way of lifestyle and work style has/ is emerging and we shall need to adopt, adapt and convert to the new normal to find that light at the end of the tunnel, albeit, with different encounters.
India was already in an economic slowdown and unlike always rural consumption growth was not encouraging. There were only some Green shoots in the last two quarters of the Financial Year 2019 -20 and then COVID struck.
One of the questions that occurs in one's mind is whether India can be the next World Capital as China had tried to be.
Let us see how India poised for such a position is, if it is.:
Factors that contribute to India's Competitive Advantage are:
* India is an ancient land
* India has strategic geo political, democratic advantage with a free media and without expansionistic aspirations and global conquest dreams, unlike China.
* Arguing that a powerful India maybe better than a powerful China to help grow the world economy seems to be a no brainer.
* India is probably the only nation other than USA which can contain china's onslaught.
* As opposed to China, which has an even higher population but became a factory for the world, India is driven by high consumer demand.
* It has a growing young population which means that it has the capacity and the capability to develop the necessary skills and achieve the scale at the speed required.
* It is an emerging market power
* India's growth model is built on consumerism which means work, earn, spend and also save if possible.
* India’s rural market is mirroring the urban market.
* India has a World class IT industry, second only to the United States.... It can build solutions the world needs at an affordable price.
India can and should build the necessary infrastructure, as soon as possible, to achieve its position that it very much deserves in the comity of nations.
However, since there are always two sides to a coin, the issues that also need our attention are:
* India is still dependent on China for many parts of its supply chain. It will have to become self-reliant.
* We will need to pivot ourselves or perish.
* We will need to prepare for war when there is peace.
* This crisis when over should not be forgotten. Each of our 720 districts need a 500 bedded teaching hospital.
* About 5000 towns need to be made IT Enabled...
* Windfall gains from crashing crude oil prices should be well realised, recognised and utilised.
* Outsource and Digitize are two key words now.
* Outsource and contract manufacturing for Exports to Rest of the World.
* Respect Environment and Mother Nature and not to overlook those in our pursuit of building industrial infrastructure.
* We need to coalesce the government, bureaucracy, academia, industry and entrepreneurship to cease opportunities, execute efficiently and build greater mutual trust for effective collaborated functioning.
Prime Minister Narendra Modi in his Aatmanirbhar speech also emphasized on Integration as opposed to Isolation.
There are reports and views to suggest that industries like travel and tourism including ocean liners and cruises, hospitality industry i.e. restaurants, bars and clubs, entertainment platforms like cinemas, theatres, events, sports and amusement theme parks, fitness centres like gym chains, energy producing companies built on oil, physical retail outlets of garments and fashion products are all severely affected by COVID 19. However, one maintains a slightly contrarian view that such will be the phenomenon in the short run and even these businesses shall spring back perhaps in some modified forms, in the medium and long term.
One says so because while there is a lot of observation that Covid-19 has changed consumer buying behaviour from 'want' to 'need', we should not forget that human beings are social animals and time is a big corrector of situations and therefore as things gradually normalise or adopt the new normal, 'wants' as characterized today may become 'needs' of the future.
As Nandan Nilekani also says, “this pandemic is a rare combination of business, professional and personal challenge but after this crisis, things will come back with a bang, so let's embrace uncertainty and ignite change”.
Strong, stable, debt free Indian companies will be able to better leverage the opportunities that this challenge has provided.
Financial Inclusion across all strata of the economy especially the BoP (Bottom of the Pyramid) who are largely unbanked, as an objective has already been embarked upon by India but the opportunity to do much more is now, with a large section of Migrant Population which has gone back to their villages and have the skills to create productivity with financial assistance.
There is enough negative news about the crumbling of the media industry in India. Does it not reflect the loss of conviction by the media owners in their own industry, product or service? Perhaps, what it probably should have called for is effective and innovative solution to the problem. New media thinking embracing a better understanding of the consumers psyche and integrating it with digitisation, technology and innovation would have probably done the trick.
In support of this strong view of mine, I would like to share one thought for the print industry and one observation from the television industry.
During the Corona pandemic lockdown time in India, even avid readers of newspapers decided to do away with the newspaper in the apprehension that during its journey from its printing press to the readers house it could have become a contaminated carrier of the virus. In the process, newspaper media lost audiences it used to take so much pride in with their 'Right of Way' into people's households.
Would it not have helped if the leaders and veterans of this industry could have innovatively modified the way in which a newspaper has been conventionally distributed so far (one is referring to Packaging and not Distribution ‘coz altering packaging in short time amidst lockdown could perhaps have been possible as against changing the very form of distribution since the distribution network is independent from the various media houses?
Imagine, if the readers got their copy of the newspaper either in a cover or a wrapping paper made out of waste paper, the reader would have needed only to take off the wrapper/ cover, wash their hands with soap and water and comfortably continue reading the newspaper. This would have helped media houses conserve their audiences which they built over hundreds of years and could have probably delayed further, the sunset of the print industry, atleast in India.
Media owners seem to have lost faith in their own USP of Content Creation. Instead, they seem to have considered it as a commodity which is evident in the way the editorial staff of most media organisations in India has been shown the door in just about two months of lockdown.
On the contrary, the much forgotten Doordarshan channel of television decided to play on content. It started telecasting Ramanand Sagar's 30 year old serial on Ramayana which also it procured gratis from its producers. When it started it had only 1 advertisement from the Indian cooperative AMUL. The content was so magical, which in hindsight, is corroborated by the fact that it became the most viewed program, that even during lockdown all kinds of advertisers right from construction steel and cement manufacturers to multiple spice brands wanted to grow their OTS (Opportunity To See) by their Target Audiences and build Mindshare of the consumer at such a topical point in time which eventually would probably make them grow their market share.
It seems such brands have a better realization of the fact that downturns are probably good times to focus on Consumer Centricity, build mindshare and eventually effectively grow market share.
The simple move by Doordarshan had MNC Media brands like Star Television to realise their missed opportunity which they were quick to correct and decided to not only repeat Ramayana once Doordarshan completed telecasting all its episodes but realised that people sitting in their homes had appetite for mythological serials at this hour of crisis and they decided to bring even more serials from that genre with continued incremental advertising.
Hence, one does not see the reason why media owners should feel that there is no advertising opportunity. In fact, media leaders seem to be becoming myopic that they have probably forgotten the meaning of the term 'marketing' which is to Create Demand.
I shared the example of the Indian media industry only to highlight the fact that a crisis or a challenge is an opportunity to innovate.
Businesses that embody transformation and do not succumb to the psychological war that this pandemic led lockdown has brought about, but can focus on Customer Centricity, Collaboration with the Ecosystem to connect with customers and be willing to outsource more, could, possibly weather the storm better.
No doubt reality is tough but are we the Problem or are we the solution? This is a time to be at our best - physically, mentally, spiritually, emotionally and creatively.
Tough times require tough action. To counter the challenges thrown by this pandemic we would need to cultivate and strengthen own habits and behavior.
Some work life changes like:
* Self - discipline of maintaining a schedule, as we work from home - a trained and disciplined mind which is called Vinay and regular routine which is called Dincharya is important
* working from home should be comfortable and productive
* do more with less
* be curious, read more and make more friends
* continuously learn, develop and apply new skills
* focus on outcome versus output
* imbibe scenario planning i.e. what iff
* embrace the Power of Now and bring in speed of implementation since implementation of information leads to transformation.
* energy of the leader is contagious to the rest of the organisation
* great management styles are tested best in times of crisis.
* value your people and take care of them
* focus on fundamentals of business, valuations will follow
* use of artificial intelligence, since data is the next oil
* this is the time for partnerships... We are one large family with shared challenges. In other words Vasudev Kutumbakam. Explore collaboration even with competitors
As Warren Buffett says, “we should go to bed little smarter each day”.
CORONA, is an acronym for me for Challenges, Opportunities, Resilience, Optimisation of Resources, Nimble Footed ness and Adaptability and attitude.
A friend of mine terms COVID as Creating Opportunity in Virus Infected Days.
Outlook of Investors - Venture Capital and Private Equity:
* The realisation and recognition that Cash is King and that there is no free lunch is even more today than ever before.
* Investment world has once again regressed to the basics, the mean and the fundamentals of business.
* Entrepreneurs should follow their passion and conserve the resources
* The time is for germination of new ideas, in fact the simple me toos, without differentiation, may not find favour
* Revenue and profit have been key and shall moreso be
* Investor capital follows prudence.
Private Equity, Venture Capital need virality in the business ie it should be repeatable, scalable, sustainable and Monetisable.
Entrepreneurs need to:
* focus on solvency, liquidity and profitability
* clarity in financial objectives, income and profit from operations, adequate cash flows, will help in SMART financial planning.
* understand and engage with clients, past clients and prospects.
* identify customers' pain points and resolve to address those
* Innovatively engage in new customer acquisition
* Explore alternative pricing strategy
* Going Deep might be better than going wide in these times
* maintain proper MIS and be on top of it
* embrace positive manifestations and nurture prosperity consciousness
* these challenging times will offer opportunities for mergers and acquisitions which could help to diversify product portfolio, acquire a new distribution channel etc and therefore a warchest of resources will come in handy.
It is believed that in a situation like this Lakshmi will chase Saraswati!
