Leadership After Coronavirus: Explorers Show the Way in Healthcare
Coronavirus pandemic has shown to the world, India’s prowess in pharmaceuticals and the country can rightly claim the title “pharmaceutical factory of the world”. This was not always the case.
As late Dr. Anji Reddy, founder of Dr. Reddy’s Laboratories (DRL) writes in his memoirs An Unfinished Journey, one explorer’s feat, Neil Armstrong setting foot on the moon seeded the idea that “I should venture into uncharted territory”. When Dr. Reddy decided to turn into an entrepreneur in 1973, the pharmaceutical industry in India was dominated by American and European multinationals such as Pfizer, Glaxo etc. although some Indian companies did set roots early such as Bengal Chemicals in 1901 and Alembic in 1919, the pharmaceutical business was heavily skewed in favour of multinationals which held 70% of the market share. They had the latest technology and capital while Indian companies had neither. The global companies produced bulk drugs called API (active pharmaceutical ingredient) in their home countries, imported these in India to produce formulations such as tablets, capsules, syrups etc. They did not transfer the latest technology to India and kept prices high due to their monopoly status.
Government of India introduced the new Patents Act of 1972 ushering in the take-off of the Indian pharmaceutical industry. Anji Reddy synthesised the formula for the manufacture of metronidazole an antibiotic, which was the first of its kind in India after overcoming several process obstacles. The quality was even better than the Italian ingredient being imported till then. This key achievement led to several companies in India manufacturing formulations based on it and break the monopoly of multinationals. Dr. Anji Reddy debuted in APIs which are more difficult to manufacture, require knowledge of complex chemistry and exact specifications compared to formulations such as tablets, capsules, syrups etc. which are easier to produce and where most of the Indian companies concentrated their efforts. All at a price which shook up the multinationals. The situation is the same today. Earlier, we imported APIs from Europe, today we are dependent upon China from where we import about 60% of bulk drugs from China.
Walking on uncharted territory like Anji Reddy requires a different mindset. This is the hallmark of an explorer’s mindset, which is all about the quest for new experiences and embracing the unknown. No breakthrough or quantum leap change can be achieved without this mindset. This relevance is more pronounced for rapidly changing and volatile environments, where disruptive developments and innovations have become the norm of the day. This mindset is needed even for the actual formulation of the strategy of a startup, diversification, merger or any major change in the direction of an SME or a corporate setting.
During the 19th century, much of the interior of Africa was unknown. It was left to explorers like Captain Richard Francis Burton to fill in the blanks. He was curious about the source of the Nile River, a mystery unsolved since Roman times and went into Africa with little knowledge about what lies ahead. He writes “Of the gladdest moments in human life, methinks is the departure upon a distant journey to unknown lands”. He suffered from malaria and other disease, desertions of porters, death of his riding asses, the encounter with dangerous animals, hostile tribes, disappointing forays into several false leads but in the end, tasted sweet success.
A map of Africa from 1818 (Wikimedia)
The Explorer’s Mindset is all about:
Curiosity about the unknown or little known: All discoveries start with a curiosity about the unknown and cultivating it widely within organisations allows us to think more deeply and bring out innovative solutions. However, most organisations stifle curiosity as management feels, it leads to unnecessary risk-taking and losing control. Future-ready organisations such as Amazon and Microsoft encourage curiosity which leads to experimentation, learning and unlocking new knowledge.
Raising new questions: Every day brought new horizons, raising new questions as to which way to move next. The more knowledge they gained, the more questions they asked.
Risk-taking: It goes without saying, every day brought new dangers never encountered before and the explorers had to be mindful of the same. We see today that in seeking high growth, many companies ignore the risks involved, such as high debt leverage in an uncertain world.
Keep little supplies: The explorers were gone on expeditions lasting several months or years. They carried some supplies, to be augmented on the way. The modern-day explorers also begin his journey with little information at hand and as he forms new networks, meets new vendors, attends events etc. more information and insights are added to his kitty. The explorer also observes changes happening in another industry, location, technology or people. Explore also what is changing in the environment and look always beyond the visible boundaries.
Learn to live off the land-Adaptable: The explorers discovered new edible plants, for example, banana and animals to augment their supplies. The present-day explorer also must be observant to new knowledge and signals coming from the environment and adapt business strategy based on new insights.
Expect setbacks-Resilience: The route into the unknown is not without its perils. New dangers appear not anticipated or without any warning. Captain Burton’s expedition was attacked by tribesmen and one of then struck a lance in his jaw. He carried the scar all his life. Today, the dangers come in the form of financial meltdown or coronavirus. Resilient leaders prepare for unexpected setbacks through strong balance sheets, minimise fixed costs and keeping contrary thinkers around them.
Question status quo: Exploration is all about changing the status-quo through discovering new knowledge. Galileo did not accept Aristotle’s theory that the Sun moves around the earth which was also the dogma of the most powerful catholic church in the 15th century. He proved through his observations that earth and all planets move around the sun. This brought him in conflict with the church and as punishment had to face home imprisonment throughout his remaining life.
Experiment: The old explorers always experimented with new treatments for diseases, different food and suitable attire for the climate. Nothing exemplifies the explorer’s mindset more than the history of “The Society of Jesus” or Jesuits. They were an order of the Catholic Church which was given the mandate, in the 15th century, of taking the message of Christ beyond Europe, to the population of distant lands and convert them to Christianity. However, Jesuits did not limit themselves to this aim (their core purpose). When Jesuit missionaries travelled to distant lands, they became explorers stepping into the unknown. Their exploration led to an explosion of new knowledge including the discovery of quinine for malaria in Peru.
In an era of unpredictability, limit your prediction. Take small steps over the visible future with small investments. If it works, learn why and take further steps. If things don’t work as planned, then walk away with a valuable lesson. Amazon’s future strategy rests on building a culture of experimentation. They win over the customers by executing smaller series on building an everlasting relationship with customers. According to their founder, their major innovations are of incremental in nature.
An explorer’s mindset forces us to challenge our mental maps because our minds recognize patterns and want to follow the same routes. We get fixed into one approach, one method, and one strategy without seeing other approaches and other points of view and find an ambiguous territory in which the processes used to produce expected results are now ineffective.
The explorer’s mindset is very much present in our DNA. Our hunter-gatherer ancestors moved out of Africa around 70,000 years back, in awe of the vastness of the world and explored the uncharted territory day by day till they occupied the entire earth. Children still possess this mindset but the process of rote education and working under routine and uninspiring leadership has robbed us of this critical competency.
Once again with a long stint of coronavirus, which has suspended most of the world’s economic activity, we are again entering into uncharted territory. The business will not be as usual and many changes will take place due to changes consumer behaviour, especially discretionary income, focus on health insurance, supply-chain mass transportation etc. Coronavirus will change the complexion of all industries and many new opportunities will appear, weak signals of which are already being received. There would be more demand for IT services due to increased investment in Industry 4.0, AI, autonomous transportation, data analytics, fintech, machine learning etc.
For example, India’s pharmaceutical industry will expand and there will be new opportunities for merchant API producers to synthesise new products, set up greenfield projects and expand capacities. A large number of countries from Oman to Ethiopia; Peru to Russia will start formulation production so that they are not totally dependent on imported supplies but except a few, they cannot produce the APIs. Aside of China, only India has the capabilities in chemistry to produce these key pharmaceutical ingredients for the world. Government policy for this sector is already in place and now there is a need for many more Anji Reddys’ to go out into the unknown and synthesise new APIs and venture into a global business. Those who take the untrodden path will definitely find rubies in the saddle.
(With inputs from Dr. Ashok Kumar, who is a Ph.D. with professional qualifications in Business Management & Demography with advanced training in Management at Ashorne Hill College of Management, UK and has authored books and papers. He is a consultant with Centre for VUCA Studies, Amity University and has 47 years of experience as Professor of IIM Indore, Professor at Amity University and GM in SAIL)
