BUILDING SUSTAINABLE ORGANISATIONS THAT OUTLIVE CYCLES, DISRUPTIONS & PEERS

It is in times of flux that we are forced to think of principles that are broad enough to make inferences easy and specific enough to make their applicability unquestionable. This is one of those times. Political circles the world over are abuzz with a new air, age-old norms are being questioned across societies and businesses are consolidating with peers or pivoting to explore new business models. To add to it, the lines that help identify competitors are fast-disappearing and those that define markets are losing their relevance. In hindsight, we will see this period as the perfect cusp between two different global orders. Leaders will find themselves at several crossroads during the course of their operations: should we invest in a new business or in dialling up our organisational capacity? Does it make sense to focus on a project that is likely to yield returns (if at all, that is) only over the long-term at the cost of short to medium term profitability? Is a merger a feasible option? How can we work with governments to ensure win-win public policies? The list goes on. It is impossible to prescribe plug-and-play answers for any of these. That said, leaders would do well to bear in mind three principles that are likely to nudge them in the right direction, should the need arise.

Of Purpose & Profit

Purpose and profit are equally important. Organisations that are centred around a larger ‘core purpose’ are less likely to be disrupted. The true test of a ‘core purpose’ is to question whether it will stand the test of time. An organisation's raison d'être is also important to galvanise its team. As more millennials (and consequently ‘Generation Z/Post-millennials) enter the workforce they are likely to look for and question the ‘bigger picture’ or ‘larger goal’. This is when the ‘core purpose’ comes in handy. It is different from a ‘product purpose’. The utility of a camera is now met by a smartphone for most consumers. If a camera company focused on its product purpose (‘to capture instances worth recreating’) it would probably outlive its peers. Does the product purpose need to be updated? In my mind, yes. It’s only natural to put the product purpose through several agnee parikshas (trials by fire, loosely translated). On a similar note, sustainable organisations must be profitable. It is quite obvious that profits cannot start from day one of operations and there is always a gestation period. That said, it’s not prudent to ramp up investments till a concrete business model has been figured out. In the case of the media and entertainment industry, brands need to build communities, increase engagement and then monetise – before they can generate value. Their valuation is a function of their ability to monetise and not the end goal. Heady fund-raising rounds and headline-grabbing figures are not substitutes for a sound business model. 

 A DNA that’s Wired to Win

The human mind tends to discount phenomena that it can’t really control or measure, objectively. This is probably why many corporate leaders tend to under-estimate the importance of culture. In the new world, performance accountability and transparency will become a hygiene factor. Leaders need to ask if each and every employee in their firm has a clear understanding of their role and how it will be evaluated - and that of their peers and managers. Rewards and penalties for poor performance need to be made clear in letter and in spirit. Organisations will need to live their values and not just plaster them on their walls. Plastering them – preferably as stories - is also important because employees need to imbibe the secret sauce that binds them all. The story-telling format makes them endearing and easier to emulate. The importance of an organisation's values will only grow because firms are being watched by their consumers constantly in a 24x7 connected world. Any dichotomy in their claimed stance and action in the marketplace might lead to a boycott by their consumers. As political environments become more polarised, consumers will expect their favourite brands to toe the line and stand up for them. A seamless, well-communicated and strong culture can be the single most crucial difference between organisations that last and those that don’t. In the world of media and entertainment, market trends and consumer preferences change at an extremely fast pace. A ‘winning culture’ is arguably the only constant that can make management teams excel time and again. This is particularly important in the current environment given that mergers and acquisitions are being actively explored by incumbents across sectors. Added scale can only be rewarding if the DNA of both teams add up to something that’s bigger and better.

The Paranoia of Irrelevance

Paranoia isn’t a much-liked word for obvious reasons. That said, when it comes to relevance, paranoia is an effective tool to ensure that organisations don’t lose the plot. Every morning, leaders must wake up and ask the question that if their customers or consumers did not use their products or services, what would they use, if they would use anything at all? This is important because technology is leading to the creation of competitors that were never part of the conventional set, or competitors who have a way of doing things that’s better than yours. This means that risk-taking must be promoted, encouraged and institutionalised. It helps to share instances of and even reward failures, across the organisation, irrespective of the level at which they’ve taken place. I’ve also found it particularly useful to listen to younger team members for their take on the future, given that for them, it’s still sometime away. We had the brand name for our OTT service – VOOT- crowd-sourced from within our organisation. It wasn’t surprising that it came from a 20-something year old who had just joined us.

It’s difficult to back any of these truths with accurate, objective data. At best one can look towards anecdotal evidence and instances wherein these can be retro-fitted. That however, doesn’t make them any less true.

(The author is Group CEO of Viacom18, an Indian media and entertainment organisation. He runs marathons and tweets @Sudhanshu_Vats. Viacom18 has grown 40x since inception and enjoys a special place in the hearts of over 500 million Indians who engage with its products and services every month.)