Six Key Levers To Succeed In A VUCA World
Wilfried Aulbur, Managing Partner of global strategy consultancy firm Roland Berger, explains that because the market is unforgiving and the customer is very well oriented, companies have to be on their toes
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Technology, easy access to information, a fast changing world economy, the formation of a global village and a very demanding consumer are only some factors that have created a very complex world. The good thing, according to Wilfried Aulbur, Managing Partner of global strategy consultancy firm Roland Berger, is that business leaders and country leaders know how to deal with this complexity.
For some time now, companies have been working towards succeeding in a VUCA (volatile, uncertain, complex and ambiguous) world. Aulbur advises that stringent action towards the execution of six key operational and strategic levers can come in handy towards this objective.
Speaking at the ongoing #PorterPrize forum in Mumbai, organized by the Institute for Competitiveness, he quoted operational excellence as the number one factor. Aulbur explains that because the market is unforgiving and the customer is very well oriented, companies have to be on their toes. Companies such as Maruti Suzuki have set an example, wherein the CEO has greatly reduced the distance between the team leader and the team. The attention and obsession to detail has helped in creating a virtuous cycle that has helped the company.
The second is innovation. Understanding the complex Indian consumer and then addressing need gaps is key. Aulbur quote the Godrej example here, in specific Godrej's innovation with hair cream. "The company went a step forward, and understood the process to the extent that at the end it was able to offer hair cream at one-third the market price. It was not producing for the rich but for a larger mass," Aulbur said.
Choices and tradeoffs is the third important lever. Companies have to understand and accept that they cannot be everything to everyone. "Everyone wants to be a conglomerate, but it does not work for most people," Aulbur said. An example of a company, that made the hard choice but benefitted in the long run, is Bajaj Auto.
Rajiv Bajaj has been quoted on stating that his life could be divided in three phases - the school phase, when everyone was nice to him in hope for an early motorcycle. The college phase, when people were still nice but not so much. And the phase when he wanted to exit the 'Hamaara Bajaj' space, and everyone questioned the decision.
Bajaj had reasoned then that the company could not have succeeded in both motorcycles and scooters, and had to choose one. The company chose the larger segment of motorcycles, and then focused on doing it right. "Today, Bajaj Auto is either number one or two in the 66 markets that it is operating in. It may not have the highest numbers but has the highest profits," informed Aulbur.
His next point of advice was towards alignment. In a conglomeration of countries and cultures, ensuring people understand the company and its value proposition is critical.
Leadership and courage, and the capacity to take calls on what to do and what not to do is another lever that companies must focus on.
Finally, agility and serendipity also has a role to play. "Napoleon was asked what kind of a general do he want, and he replied, 'I want a lucky one'. It does not hurt to be lucky provided that you know," Aulbur said.
Aulbur reiterated that companies will need to continue to excel along these six levers to succeed in India and in global markets.