The Corporate Maturity Cycle
The Corporate Maturity Cycle
I was struck by the level of naivete displayed by media commentators and others in the aftermath of Prime Minister Modi's recent visit to the United States and the several topics on the agenda that were discussed and will likely materialize, particularly relating to commercial items that will impact Indian companies, both state-owned and in the private sector.
The one that stood out was the "transfer of technology" relating to jet engines for fighter aircraft by GE Aerospace. There were two sides to the commentary: one that maintained that the 80% transfer was historic and likely to transform the Indian aerospace industry while the other skeptically noted that this may not materialize - just as with the civil nuclear deal that both countries signed almost two decades ago. Nothing seems to have transpired from the deal and no one talks about it much today.
So it may be important to understand where and how the wheels could come unstuck. This is an attempt to understand how complex issues could be impacted by the respective maturity levels of the protagonists and how they leverage such maturity.
A Maturity S-curve
A "Corporate Maturity Cycle" may be understood in the form of a flat "S-curve" that describes a temporal ascendance in maturity by any organization. These translate to managerial maturity in awareness levels, comprehensive understanding of the issues, planning for and practice of concepts and routines that are well assimilated internally, acquisition of knowledge in areas considered deficient, and leverage of all of these at appropriate times in the organization's own selfish interests. In short, these may be described by the acronym "AUPAL" for Awareness, Understanding, Practice, Acquisition, and Leverage. Let's examine how these come together.
9 Domains of Maturity
Maturity may be classified broadly under the following heads:
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All of the above would require their own specific characteristics for AUPAL. While managerial maturity would require a firm grasp of both internal levels of maturity in all domains at a high level and external constraints and opportunities, legal maturity would entail understanding of issues relating to organizational, financial, commercial, technology, and partnerships in their legal domains. Similarly, financial maturity would call for growing expertise in capital structure, cap tables, M&A, deal structure, etc. Technology and manufacturing could call for a firm understanding of current expertise, deficiencies, and how and where gaps could be filled, perhaps by revving up on R&D in specific areas. Customer or partner engagement would entail expertise in marketing and sales in terms of customer acquisition, retention, and growth and in the sphere of business and vendor development and the various possibilities that open up by leveraging technology. Finally, future vision today is vital in anticipating the evolving nature of the marketplace, customer aspirations, who and where current and future competitors arise from, and to maintain stealth and growth. Opportunities arise when incumbents are held back by historic compulsions - the evidence on this is exhaustive - and new competition that is not quite visible from spaces that are likely to be ignored or dismissed.
In any case, one cannot doubt that whichever way maturity is measured, the Americans play at the top of the game. They have been there for a very long time and practiced it countless times; there may be hubris but the outcomes are more likely to be felt by the other side that has inadequacies that would allow them to be "eaten up for breakfast" - ie, make costly mistakes that are impossible to reverse. The reason why, in my opinion, Israel is so successful with their disparate technology ventures - from defense to communications to cyber to medical - is because, small as they are, they have assembled a level of maturity across the various domains that gives them the ability to play toe-to-toe with their partners. India needs to get there.
Some of the large private sector companies are increasingly active in the zone as they continue to amass the requisite maturity. We observe that in the increasingly large deal sizes and the confidence with which they pursue acquisitions or partnerships with companies abroad. PSUs, on the other hand by definition, are immature players whose bureaucracy and political crosstalk thwart any progress towards meaningful assertion and leverage of areas in which they hold valuable cards. Besides, they are woefully behind on most others - a reason, possibly, why practically none of them have developed into leaders of international repute. As for startup ventures, these are led down a garden path and often clueless about where and how they could come to assume critical tools to aid explosive growth. Right now, most of them - at least the funded ones - appear to be focused on valuation that is artificially driven.
There are various maturity models for enterprise and disciplines that have been in existence for some time: for example, the Capability Maturity Model, Agile ISO Maturity Model, Corporate Lifecycle Model, 5-Level Organization Maturity, PMI's project management maturity model, Business Process Maturity Model....and many more. The AUPAL model is shown as a high-level, descriptive, holistic framework that could contain a specific enterprise-level model within it.
Let me know what you think.
References
Well-written.