The Xenophobia Decade

(writing from Europe)

Krishna Jambur
June 2008

“…the French National Assembly has adopted legislation tightening immigration requirements. The senate has not yet examined the bill, which includes a controversial provision for voluntary DNA testing. But, from Paris, Lisa Bryant reports the measure reflects a choosier France - and Europe - when it comes to immigration policy…”

Voice of America, September 2007

“…Immigration has -- once again -- become a hot political topic in Germany after Hesse Governor Roland Koch called for a crackdown on "criminal young foreigners" as part of his campaign for re-election. Immigrant groups have criticized his rhetoric (more...) for being xenophobic, but Koch's populist stance did strike a chord with many voters…”
Spigel Online International, January 2008

 

‘For more security’: poster released by the Swiss People's Party (the Schweizerische Volkspartei or SVP)

 

 

 

 

These news clips give a peek into what has emerged as the biggest issue to capture the collective imagination of Europe – after the crusades, renaissance, reformation, colonialism and the two world wars – Xenophobia. In other words, the matter of controlling, regulating, monitoring the influx of immigrants – legal and otherwise – is dominating the political, social and economic debates across the continent to a degree that could prompt one to label this era as the ‘Decade of Xenophobia’.

The politics
Even in the era of rising fuel prices and food crises, elections and political battles are being waged – although only a few have been won – on the ‘immigrant manifesto’. Right-wingers and conservative candidates are trying to impress the electorate with more accurate precision artillery: namely tighter immigration laws. Laws that promise to effectively screen outsiders and selectively give them the privilege of entering one’s land. It is easy to see that the implicit promise is that of protecting the local interest.

One cannot miss the similarity of such promises closer home. In the recently contested Karnataka assembly elections, JD(S) supremo Mr. Deve Gowda vowed to secure a third of all IT jobs in Karnataka for Kannadigas if he came to power. The Maharashtra Navinirman Sena or MNS has intensified its attack on north Indian migrants, who it says are responsible for (1) dirtying Mumbai through poor civic sense and (2) increasing crime rates.  Compare these allegations with Herr Koch’s statements made during his re-election campaign:
"How much are we prepared to take from a small proportion of violent youths, who frequently have a foreign background?"
"We have too many criminal young foreigners"
"German must be the language in everyday life and it must be clear that the slaughtering (of animals) in the kitchen or unusual ideas about waste disposal run counter to our principles."

During my month long stay in Europe, I witnessed protests against skyrocketing fuel prices; grave concerns about Ireland’s no to the Lisbon treaty; initiatives being undertaken to address ‘un-banked’ Europeans and the global food crisis. I was quite eager to see how Sarkozy (refreshingly undiplomatic and intriguingly frank) took on the mantle of the six-month EU presidency. I am neither disturbed nor surprised to see immigration as the first of the four key mandates identified by him.

The society

India is often quoted and admired as a melting pot of cultures, languages and religions. Over millennia, India has gained a reputation as a great host. It is evident we have completely distorted the statement ‘atithi devo bhava’ when all we can do is speculate on the number of illegal Bangladeshi, Pakistani, Nepali, Tibetan, Sri Lankan, Bhutanese, Burmese and east African immigrants while our states squabble on river-water sharing; border districts and inter-state migrants. The stability of any society is assured only when the propriety or boundaries of every relation – host-guest, master-servant – is maintained and honored. What else can India possibly learn and teach in the matter of hospitality?

Indian scriptures from the Upanishads to the Dharma Shastras have abundant advice on how to be a benevolent host (and guest!). Indian mythology is replete with numerable parables where God tests his devotees by visiting them as an atithi – one whose arrival has no fixed time. The Neeti Shastras advice the king on how to welcome and attend to visiting foreigners and asylum-seekers. The holy Tirukkural devotes an entire chapter to hospitality. It says, “The purpose of earning wealth and maintaining a home is to treat guests.”

The economics
Interestingly the current xenophobia that has gripped Europe is beyond race, colour and religion. It is not difficult to see that the root cause of the ‘immigrant’ issue is economics. Race, colour and creed are the last things on the mind of a hungry, unemployed man. It is unadvisable – not to mention politically and socially disastrous – for a state to feed its guests while starving the natives; especially when the migrants are known to reciprocate by blatantly misusing resources, amenities and facilities. For any guest, the dharma therefore is to accept as one’s own the host state’s people, language, culture, traditions, infrastructure, natural resources and laws. The adage ‘When in Rome, do as the Romans do’ was never more relevant! Particularly for new Indian managers, who will create, shape and define management philosophies in the neo-Xenophobia era.

Lessons for the new Indian manager

Businesses that operate in a globalized economy need to adopt global policies in all spheres including manpower planning and human resource management. This translates into a) employing the most efficient resources and b) sub-contracting work to profitable locations. While efficiency and profitability should be the mantras of any serious business, they should not become the only mantras. The realization that employee satisfaction is not only more important than, but also a key contributor to, customer satisfaction is not new. But today, more than ever, there is a pressing need to extend the horizon of employee welfare to include the nation, state and society in which the business exists, operates and ultimately expects to prosper. Marginalization should never be allowed to rear its ugly head. For as history – past and recent – seems to tell us: it does not take too long for xenophobia to turn to xenocide. And to practice one’s dharma is the only path. There can be no better act of corporate social responsibility.

(The author is a market research specialist who has travelled and written extensively)

 

From Grassroots to Global

From Grassroots to Global

  Rahi Gaikwa

While waiting for Padma Shri Prof. Anil Gupta to arrive at the venue of the 7th National Day organised by National Innovation Foundation (NIF), I met an old gentleman called Premjibhai Patel. "How were forests created? The trees you see around you, how did they come about? Who put them there?". These were the questions Premjibhai flung at me in the form of a greeting and, sensing my perplexity, went on to tell his fascinating story–"The secret lies in the seed. When people plant trees, they just plant saplings. This way you can't grow many trees. But just imagine how many trees you can grow using seeds. I say, just sow the seed and let nature do the rest. I have gone around Saurashtra with truckloads of seeds, around 5 billion, and strewn them around. Now 20 years later, people have sufficient fuel for cooking."

And that was just half of the story. Menasibhai, who works with Premjibhai talked about the latter's ingenious way of supplying plants with water throughout the year and his efforts in building check dams to solve the water problem of the villages in Saurashtra. I knew I was up close and personal with one of Prof. Gupta's grass-roots innovators.
Premjibhai is the kind of person Prof. Gupta, Kasturbhai Lalbhai Chair in Entrepreneurship, IIM-A, wants students to know about. When he used the metaphor of the honeybee (which takes the nectar without harming the flower) in the context of rural wisdom, it was to bring forth the idea of imperishable knowledge. It led to the foundation of SRISTI (Society for Research and Initiatives for Sustainable Technologies and Institution) in 1993 and NIF (National Innovation Foundation) in 2002. In his interview, he calls on MBA graduates to turn their attention to local wisdom and create value for all, rather than sacrificing their potential at the altar of booming salaries and westernised management fundas.

Why should MBAs know about innovations at the grassroots?
For the simple reason that the value of knowledge does not diminish. If I read a book, it does not become less available to somebody else. And where does knowledge get produced? I always give the example of cycles. The design of cycles manufactured by cycle companies has not changed. But our innovators have brought in so many different cycles, which run on water, generate energy from the bumps on the road, charge cell phones–a whole range of them. How is it that people in the rural areas are able to innovate and the corporations cannot? I talk about grassroots innovations because it gives a student or a scholar access to a body of knowledge, which is unencumbered by the constraints of modern mind. If we want a new model for development in this country and the whole world as well, grassroots to global should become our mantra. Instead of merely providing low-cost labour we must make high- value low-cost products, imbued with Gandhian values of not treating anything as junk. We should also be able to rejuvenate used products. Say, parts of a discarded computer can be used in other machines, for example, a washing machine. Like donating your eyes after death. The idea is to create value out of everything. If China starts creating junk the way US and Europe do, there won't be enough place on this earth to keep the junk!

I want MBAs and lay people to know that poor people do not lack knowledge. They just don't have access to resources, tools and techniques by which they can commercialise their knowledge. So, I think management students must look at more entrepreneurial avenues so that they can facilitate change at the grassroots.

So you think that entrepreneurs will play a large part in shaping India's future?
I absolutely believe that entrepreneurs can contribute in a big way. I remember when my students came up with a magazine on entrepreneurship, they asked me to give them a message. I told them, salaries always make news. But that is not my dream for the institute. I am looking forward to the day when the media and society will look not at the money MBAs make but the amount of million-dollar investments generated by the business ideas. I want the world to invest in our ideas and our intellectual, entrepreneurial and social capital. That to me is the future of MBA education.

I want to see the day when institutes stop celebrating the salaries earned but the salaries students pay others. We should be job generators. I fully understand that we need people to work in enterprises, but at least 10-20% students in every institution should be job givers. And the nature of jobs should be a value-add. For example, a first-year student came up with an idea of 'just-in-time volunteering'. Say an appointment gets cancelled and you have some free time. Now suppose there is a portal where people call and post their needs – a poor child needing help in a subject or an old widow wanting someone to take her to the bank–there could be a whole range of needs in society which the market does not clear. In your unexpected free time, you access the portal on your cell phone or call up and offer assistance. A need is met and you feel good about making good use of your time. Now, I thought this was a futuristic idea and with venture capital investments, the student could run a company doing this.

Many a times, students have ideas, but they let others decide the price of their ideas. I think future MBAs should really be operating knowledge markets on the strength of their ideas and 'shape' the future instead of just looking at how it's going to be. They should create value out of what people know and are good at. They can make business plans, find investors or become entrepreneurs themselves.

How should MBA schools aim to train students so that they are able to take up the mantle for change?
I think we have done enough damage to the minds of our management students by teaching them only Kotler and whatever have you. Markets of the future will not depend upon the 'four Ps', but they will be markets of mind, values and sensibility. It's a shame that you do not realise the relationship between theories and the context in which they emerge. Either we create an America in India and then apply those theories, which is what most people are trying to do by distancing the metropolitan from the grassroots, or we create a new kind of society, new theories and models. I can give you an example. A company in Baroda manufactures medicines at a fraction of the cost incurred by large companies, but ethically. The public health system in Tamil Nadu, for instance, places a lot of orders with this company. TN's public health cost goes down, the company works on low margins and everybody benefits. Why can't we generate such business models that combine ethics, efficiency and excellence?

Your influences are very different from those of the youth today. The images and values projected to them are replete with the idea of a slick lifestyle and big money. So, it's difficult for students to believe in ideals and be driven the way you are.
I don't blame the students. I hold the teachers accountable. I will not mind using a stronger term – lazy intellectualism. I think we are not looking around enough. There were two friends-cum-business partners in Ghaziabad. When they wanted to split, they decided that one person will divide the company – HR, finance, property, equipment etc. and the other will just choose one division. Now, the person who has made the division does not know which division will come to him, so he ensures that both the divisions are equal. This is an ingenious and a typical Indian way of dividing business so that you remain friends. Which finance book teaches you this method? The point I am trying to make is that it is our teachers who need to be challenged so that they can challenge the students. I am quite optimistic about students.

Do you think we can become a knowledge power?
Yes, if we stop barking up the wrong tree and following the wrong model. If we don't keep 25 million people engaged in menial work, then we can; not otherwise. Government policies are designed to keep poor people poor. To merely keep them alive is meaningless. Employment of an individual on the basis of his knowledge will be our success. We should produce keepers of knowledge, not menial workers.  P

I am looking forward to the day when the media and society will look not at the money MBAs make, but the amount of million-dollar investments generated by the business ideas. I want the world to invest in our ideas and our intellectual, entrepreneurial and social capital. That to me is the future of MBA education.

It is our teachers who need to be challenged so that they can challenge the students.

About SRISTI
SRISTI is an NGO that aims to bring to the fore the creativity of grassroots inventors, innovators and ecopreneurs working to conserve biodiversity and developing eco-friendly solutions to local problems. It also publishes a newsletter called Honey Bee.(www.sristi.org)

About NIF
It was established to leverage SRISTI's work to a national scale. Established in March 2000, it actively looks for innovations and innovators from across the countries. The focus is on innovations that use local wisdom and meet local and individual needs. (http://nifindia.org/)

 

The Bakshali Inheritance

The Bakshali Inheritance

Ajit Balakrishnan

Ajit Balakrishnan is the Chairman, CEO and founder of the web portal rediff.com. Before he moved to achieving dreams in the new economy business, he had founded the advertising agency Rediffusion at the age of 22. We bring to you the speech that he made at the convocation at IIM-C, his alma-mater, this April. In another context, he has said that, “Media is not just about entertainment and information; that is a very limiting interpretation.” We at Advanc’edge MBA prescribe to this view and believe that media should also make its readers think interpret and analyse. His address to the students of IIM-C definitely will.

Let me start by telling you a modern tale: Five private equity funds get together to buy a large international steel company. The seller states his price: he wants half the money that the first fund has plus all the money the other four have. He gives them other alternatives as well: he will sell his company for a third of the second fund plus all the money of the others, or a fourth of the third fund plus all that of the others, and so on. The question is: what is the price the seller wants for the steel company and what size fund does each private equity player have?

Our ancestors have been doing cleverer things and for very long.

Those of you who are mathematically inclined will recognise the problem as one of solving a set of indeterminate equations. Those of you who are students of history will recognise this as one of the many problems from the Bakshali Manuscript. This manuscript, written on pieces of birch bark was found by a peasant in 1881, in a village called Bakshali near Peshawar. It is written in a language that was a precursor to Sanskrit and has been dated between the 2nd century BC and 2nd century AD. In the Bakshali manuscript, it was five merchants who set out to buy a jewel and not five private equity funds to buy a steel company. But otherwise, the formulation of the problem and the method of finding the answer is the same.

I can see from your faces that you are all eager to go on to the real world of business. I want you to remember that the Bakshali manuscript serves as reminder of the great intellectual tradition you come from.

In 1971, I remember waiting in cap and gown, like you wait today, eager to receive my diploma and set forth to conquer the world. It was on a day much like today, the romantic Calcutta winter had receded into memory but the dog days of May had not yet set in.  But it was different in other ways. There was the sound of guns outside, some from a distance, some from quite close. They served as a humbling reminder that though we were armed with the latest tools of Operations Research and Psychology, there were fellow citizens outside fighting more basic battles. It was the peak of the Naxalite uprising. The government, desperate to find a solution, called for an election. The usual election officers - the state and central government employees were wary of taking up election duty, so they called for students. I was eager to contribute as I thought the election was a solution to the strife and volunteered for election duty.

Thus, soon after graduation, I found myself at Sonagatchi - the red light district of Calcutta, assigned the job of marking indelible ink on the fingers of voters while guns went off all around us. This is why I have boasted for years that I have held hands with most of the sex workers of Calcutta! As I stand here today it is quiet outside. The social battles of the 1970’s seem so far away and quaint. What is different in today’s India compared to when I graduated in 1971? I suppose the big difference is that the world’s macroeconomic factors have swung India’s way.

It started in the 1990s with the Western world’s information technology industries developing an insatiable demand for low-cost English speaking manpower to convert billions of lines of computer code that had been patched together in the early days of the computer industry. Luckily, at that time, India had a large number of such programmers idling, because Indian trade unions at that time would not allow computers to be introduced. Smart entrepreneurs seized the opportunity to ship these programmers abroad and moved on from there to build IT services companies that are now the envy of the world. This labour cost arbitrage opportunity has continued. Western financial service, health care and customer service industries have started a transition from a craft mode to an industrial mode. During this transition, they need a large supply of reasonably skilled, low cost, English-knowing workers. Low telecom costs have made it possible to serve this need long-distance from India. When that transition is complete the arbitrage opportunity will disappear. But, that is still some time away.

A second fortuitous wave that is propelling India farther forward is the tremendous liquidity surplus in the world. Capital today is gushing out and finding its way to Indian equity markets, into real estate, into almost anything that you can name. But big questions stare us in the face and yours is the generation that will have to find the answers to these questions. What if the rupee that today trades at about Rs 45 to a dollar goes to Rs 20 or even Rs 10 per dollar in the next decade? What if the current excess liquidity situation in the world tightens and capital becomes risk averse and expensive? What if millions of our countrymen say we too want to be part of this Shining India that is currently available only to the sons and daughters of people already in the middle class?

Remember, one day, one of you will be invited to make a Convocation Speech just as I have been invited today. If it takes the same time it took me to be invited, it will be the year 2040. By that date, some say that India’s GDP in US$ terms will exceed not only the European countries and Japan but also perhaps the United States. But what these reports also say, and this part is often overlooked, is that in 2040, India’s per capita GDP will be just 15% of that of the United States and a third of that of even Russia.

Another way of putting it is that even thirty-five years from now, the average Indian will earn just Rs 5000 a month. On this income, he will have to feed and educate his children, look after their healthcare needs, afford entertainment and life insurance. This means he must have a place to stay with clean water supply at say Rs 200 per month, uninterrupted electric power perhaps at 50 paisa per unit at the consumer level, medical insurance at say Rs 10 per person per month and life insurance perhaps at Rs 5 per person per month. If we have to achieve this we need to convert our economy to one that has the lowest transaction and transformation costs in the world.

These seem impossible targets to achieve using the current management methods and the present economic institutions. We need to devise new paradigms that achieve these targets without any subsidies, and those that allow businesses that provide these services excellent returns on their capital. In finding answers to such challenges, in the past, all of us in Indian management have borrowed paradigms from the west and force-fitted them into the Indian situation.

For example, we often hear calls for reducing “labour rigidity” in India. Every such call should remind us that we are trying to force fit Henry Ford’s mass manufacturing system to India. We forget that this paradigm assumes a social system in which business cycle downturns can be dealt with by lay offs and production cuts. It assumes both, a labour shortage economy where people who are laid off quickly find other jobs and a social security system that pays you for the time in between jobs.

Similarly, when people cry to “improve quality” as a panacea for problems of competitiveness they forget that the Six Sigma Quality paradigm was developed by Deming in the context of the 1960’s Japanese consumer electronics boom. It works very well in industries like electronics and automotives, where efficient assembly is the key to success. Transplant it to creative software product development, for example, and it becomes merely a marketing gimmick and makes little difference to results. Finally, a third example, the much-admired US National System of Innovation as it applies to the healthcare industry. We forget that it assumes a State that lays out vast amounts of money for research, allows private companies and individuals to own the patents that rise out of this research employers who bear the cost of the resultant high-priced healthcare system. US companies in the older industries find themselves in an impossible situation today and American business and political leaders are desperately trying to find a way out of this debilitating system.

In a few years, many of you will head large corporations and will be responsible for producing the vast array of products and services that our fellow countrymen will need. Others among you will hopefully join academics and contribute to theory. Whatever you do, please remember the inheritance you carry within you and the obligation that you owe to your less fortunate countrymen.

Please remember that each management paradigm has its societal context and cannot be that easily borrowed. Original management paradigms to address the Indian challenges have to be developed and it is your generation that will have to do that. Be inspired by the early examples that demonstrate such a possibility:  The Aravind Eye Care System that treats over 1.4 million patients each year, two-thirds of them – or almost a million patients – for free is often cited as an example. They apparently succeed because they have improved surgical practice and invented low-cost eye implants. If you succeed in doing this, you will release a tsunami-like demand that will not only create jobs for the millions coming on to the job market but also allow them to live a fulfilled life in which life’s necessities are within their reach. If you succeed, Indian managers and management theory would have made its own unique contribution to the world and you will personally have lived a worthwhile life.

Each management paradigm has its societal context and cannot be that easily borrowed.

Our ancestors have been doing cleverer things and for very long. The Bakshali Manuscript is evidence of this. If you occasionally wonder whether this immense task is within your talent, remind yourselves that you come from ancestors that created the Bakshali Manuscript. If you ever doubt the power of ideas to transform the world, be inspired by the Bakshali Manuscript- it’s written on crude birch bark, the language in which it is written has been long extinct, but the power of its methods is relevant even today.

Thank you very much for inviting me today. I wish you all a very successful management career. p

(This article has been sourced from Ajit Balakrishnan’s blog ajitb.rediffiland.com with his permission)

 

Strategic-thinking Capability For CEOs

Strategic-thinking Capability For CEOs

Vijay Govindarajan

Vijay Govindarajan is the Professor of International Business at the Tuck School of Business at Dartmouth and the Director of Tuck’s Center for Global Leadership. He is a leading expert on strategy and has been cited by BusinessWeek, Forbes and The London Times as a top ten professor in strategy. He is also the author of the much-acclaimed book Ten Rules for Strategic Innovators.
In this article, VG looks back at his formative years and relates his learning  of  those early years to the strategic thinking abilities that  managers in decision-making positions need to make.

Strategy used to be about protecting existing competitive advantage. Today it is about finding the next advantage. In fact, strategy starts to decay the day it is created. My work with CEOs and top management teams in Fortune 200 corporations focuses on developing strategies that address tomorrow’s business realities. Before describing how I go about this task, I’d like to explain how this work became so important to me.

Two experiences profoundly influenced my life and my work. Even though one of the experiences was rather negative, both shaped who I am as a person and how I practise my profession. Surprisingly, it is through the negative experience which occurred in early adulthood that I have been able to appreciate and learn from the positive one.

I was just twenty-two and fresh out of college when I was recruited by a leading corporation in India. I was one of twelve individuals invited to participate in a senior management training programme that had received thousands of applications on a nationwide basis. My life was set. All I had to do was follow the track laid out before me.
For more than two years, I participated in a high-visibility rotation programme, gaining experience in a variety of operations, from marketing to manufacturing to finance. Towards the end of my second year, I began to realize I hated what I was doing. The well-defined and structured box in which I had to operate tolerated little variation from the norm and the lack of freedom and flexibility was suffocating me. When I first landed this position, everyone—including me—believed I had struck gold. But the lustre of organizational life faded rapidly.

It became very clear to me that although this company was considered one of the most progressive and well-managed firms in India, only the top few leaders had any influence within the organisation. It exemplified a model in which the people at the top think and the people at the middle and bottom do. There was no forum in which good ideas from the middle and bottom rungs could be heard or debated. The message clearly was, “You are not supposed to do a lot of thinking here.” I did not feel my intellect was valued.

Concurrently, I observed people not much older than I, with PhDs from American universities, visit the organisation and get instant access to senior managers who were willing to listen to their ideas.

I saw the professional life that I wanted—one that mixed the intellectual challenge of exploring new ideas with the influence to make them a reality. I resigned from my job, even though my friends and family thought I was crazy to do so, and soon left India to pursue a doctoral degree in the U.S.

The positive experience that influenced me spanned the majority of my childhood and early adult years. I grew up in the small town of Annamalainagar in southern India. My grandfather was a very religious man, but more importantly, he was an intellectual. Before he moved to Annamalainagar, he was an advisor to the Maharajah of Mysore.

Every weekend early in the morning, my grandfather would leave our home to share ideas with an informal and ever-changing group of children. There was but one common denominator among these children: they were extremely poor and underprivileged. Sitting under a banyan tree in the center of the town, my grandfather would spend hours coaching them—helping with schoolwork, planting seeds of inspiration, encouraging higher goals and wanting them to succeed. He believed in the good in all people and had a genuine respect for the individual.

At the time, I too didn’t understand why he was giving so much of himself. As a child, I found his behavior an inconvenience because we couldn’t eat lunch until he returned home! I didn’t begin to appreciate the value of what he was doing until I was in my teens. Many of the children he had inspired had grown to be successful in a variety of professions. They came home just to thank him.

As I grew older, my grandfather’s work inspired me as well. Without his influence, I may not have had the courage and confidence I needed to leave the security and prestige of a top company to search for and fulfil my own ambitions.

My grandfather also shaped the way I work with corporations today. His mission in life was to make a positive difference in the lives of others. To ensure I have the greatest opportunity for positive impact, there are four questions I continually ask myself. First, am I passionate about what I am doing? I find that passion is contagious and is extremely powerful in influencing others. Second, am I learning — becoming different and growing intellectually? In retrospect, I know my grandfather learned as much from his young students as they learned from him, and that learning kept him motivated and fully engaged. Third, am I altering the aspirations of others, helping them to set their sights higher than they previously envisioned? I believe aspirations provide a guide-wire for our goals. The higher the goals, the higher are the subsequent accomplishments. And, finally, I ask, do I respect the corporations and executives I work with? Genuine respect is a crucial source of influence, a concept my grandfather understood. Fortunately, I have had the opportunity to work with an exceptional group of senior executives from world class companies.  They are intelligent and capable people who know their industries, their companies and their businesses better than I do. My role is to ask the right questions, to challenge and provoke their thinking.

Executives are stretched by overwhelming day-to-day demands, operating in highly complex and fast-changing environments. Sometimes as an outsider, removed from the rigors of short-term pressures, I am able to make sense of the complexity and to question the conventional wisdom and company orthodoxy that block creative thinking. As an outside expert, I come from the point of view that executives have much to contribute and, as a result, I probe deeper as I question and explore ideas with them. Through this approach, everybody learns and grows.

Once I am in a position where I am likely to have a positive impact, I operate with one simple rule and one overarching objective. The rule is that I must always remain humble. I cannot solve CEOs’ problems. I don’t know their businesses like they do. There’s no way I can tell them what their strategies should be. I can inform them about the best thinking on strategy today and provide them with frameworks they can use to ask the right questions. I can facilitate an open and candid conversation. I can push and prod. I can help CEOs diagnose their own issues and discover their own solutions. In the end, my job is to provide them with strategic-thinking capability.

Humility is important because strategy issues are far too complex for any one person to solve. The intellect of the entire management team must be put to work. Unfortunately, it can be very difficult for the senior executive team to talk candidly without facilitation. When two people disagree, my role is to try to clarify differences and resolve tensions creatively.

Senior executive teams, in turn, need to engage the entire organisation in the strategy- making process.  The role of senior executives is to recognise that every employee from top to bottom has strengths, capabilities, and ideas for growth, listen and interpret what each employee is saying and pull the individual ideas together to create a coherent company strategy (break the “top thinks, middle and bottom does” paradigm).

While sticking to the rule of humility, I seek to achieve the following objective: to expand the strategic timeframe, with full recognition of the potential nonlinear changes that could destabilize an industry.

Strategy as Transformation
Senior executives need simple, but very powerful frameworks that help them to think strategically and to align people in the organisation through the use of a common strategic language.  The three box thinking I discuss below is an example of a framework that I use to facilitate strategic thinking and alignment.

Actions companies take belong in one of three boxes: Box 1 — manage the present; Box 2 — selectively abandon the past; and Box 3 — create the future. Box 1 is about improving current businesses. Box 2 and Box 3 are about breakout performance and growth (Exhibit 1).

Many organizations restrict their strategic thinking to Box 1. This tendency has been particularly acute in the past two to three years, as most leaders have emphasized reducing costs and improving margins in their current businesses.

But strategy cannot be just about what an organisation needs to do to secure profits for the next year. Strategy must encompass Box 2 and Box 3. It must be about what a company needs to do to sustain leadership for the next ten years. In fact, the central task of an organization’s leaders is to balance managing the present with creating the future. Examples of successful Box 2 and Box 3 initiatives include: Dell’s direct model in the PC industry, Wal-Mart’s transformation of the discount retailing industry, Apple’s introduction of iPod, and Southwest Airlines’ revolution in the airline industry.

Organisations that operate within a short timeframe base their actions on the assumption that their industry is stable and static. But it takes years for large organizations to change directions. If you take this into account, change is rapid and nonlinear. For instance, nanotechnology and genetic engineering are revolutionizing the pharmaceutical and semiconductor industries. Globalization is opening doors to emerging economies, such as India and China, and billions of customers with vast unmet needs. Once-distinct industries, such as mass-media entertainment, telephony and computing, are converging. Rapidly escalating concerns about security and the environment are creating unforeseen markets. And other, more subtle changes are important as well such as the trend towards more empowered customers, the aging population in the developed world and the rising middle class in the developing world.

As a result of these forces, companies find their strategies need almost constant reinvention because the old assumptions are no longer valid or the previous strategy has been imitated and commoditised by competitors or changes in the industry environment offer unanticipated opportunities. The only way to stay ahead is to innovate.

Part of the job of executives is to make money with the current strategy. That is the challenge in Box 1. Part of their job is to make up for the decay and commoditization of strategy. That is the challenge in Box 2 and Box 3. Too many companies ignore these two boxes until it is too late.

An effective illustration of nonlinear change is the history of the high-jump event at the Olympics. There have been four distinct “business models” in the high jump. Each enabled athletes to achieve breakout performance.

Early on, the “scissors” style dominated; it was much like hurdling. As all high jumpers were using the scissors approach, the name of the game was being the best at scissors. The high jumpers were operating in Box 1. If they were businesspeople, they would have been competing on cost, market share and margins.

One day, someone changed the rules of the game by inventing the “western roll.” (High jumpers launched and landed on the same foot and kept their backs to the bar.) The western roll was the style for twenty-five years until someone changed the rules again, introducing the “eastern roll,” a.k.a. the “straddle.” (Now high jumpers launched and landed on opposite feet and faced the bar.) Then, in the 1968 Olympics, former gymnast Dick Fosbury broke the Olympic record by three inches, creating a third discontinuous change. (The “Fosbury flop” involved a straight approach, jumping with both feet and twisting the body 180 degrees, like a gymnast, looking away from the bar.)
These nonlinear shifts exemplify Box 3 thinking. Each transformed the high-jump “industry”. In each case, the inventive high jumpers were not just managing the present, they were creating the future.

Because the future is uncertain, executives cannot predict it.  They can only prepare to address its challenges and capture its opportunities.  Some of the key questions executives need to address in this context are:  How do we identify the non-linear shifts and market discontinuities (e.g., fundamental shifts in technology, customers, competitors, lifestyle/demographics, globalization, regulations, etc.) that could transform our industry? How do we analyze the opportunities and risks, as a result of our understanding of market discontinuities? How can we create new growth platforms with a view to exploiting the market discontinuities? What are our core competencies and how can we leverage them in the growth platforms? What new competencies do we need? How do we build or acquire them? How do we allocate resources to support growth? What kind of organizational DNA must we have in order to anticipate and respond to changes on a continual basis?

My fervent hope is to help companies transform their industries and reinvent their strategies, just as my grandfather transformed the lives of the children with whom he loved to work.