Zombification of leaders - 10 reasons why companies aren't growing ( & 2 ways how they can)

Having nothing better to do on the first day of the year, I accidentally clicked on an article about organizational growth, published by a top management consulting firm ( you’ve guessed which ?? ) & actually ended up reading it, the momentary indiscretion leading me to a long ‘Ahaa!’ moment. Finally, it started making sense why most organizations today are floundering at growth. Because, the ten-step recipe offered for growth in the article was probably the very list of things that I would have recommended companies to avoid, if they aspire to grow.

As goes the Greek legend, Prometheus ( meaning fore-thinker) gave us fire and represents progress of humanity. His brother, Epimetheus ( meaning after-thinker), was who fell for retrospective distortion of fitting theories to stale past events, besides , and who accepted Pandora’s gift. The problem with management consulting firms, noble as they may be in their intentions, is - like Epimethean theorists, they love overfitting unpredictable markets into theories laid down by other Epimethean theorists, wrapping them into long-winding articles citing a ton of ‘market research’ ( read – ‘blah'), which are then read by unsuspecting business readers who, caught up in the frenzy of the disruptive times we are living in, start reading them in airport lounges and hotel rooms ( with sagely expressions on their faces), and also recommending them to others as the precise ‘strategic thinking’ they were all waiting for, and which could fix all their problems, from leadership & parenting to constipation & drinking.

As someone who was fortunate enough to have navigated through most of my professional life in the dust & grime of the real world, working under & learning from leaders who grew from the grassroots instead of excelling in PPT contests, let me try to offer my humble arguments against the ten points the article recommends, meaning no disrespect towards anyone . In the end, I will also mention the essential two points that it missed out & which, if complied to, are self-sufficient to drive growth. In most industries. And markets.

1. ‘Put competitive advantage first. Start with a winning, scalable formula.’ - Really ? Coca Cola began as a pharmaceutical product, Tiffany & Co started off as a stationery store, Raytheon, the first missile guidance system maker, was a refrigerator maker, Nokia was a paper mill ( also into rubber shoes at a certain point ) , while Du Pont was first an explosive manufacturer & Avon ( cosmetics), a door-to-door book seller. Oh yes, Reliance started with Textiles & Apple was about computers only. Most successful organizations have discovered their niche by traversing paths that were more serendipitous than strategically planned . Nobody started with one linear formula. They eventually discovered it somewhere along the way as they trudged through their what. If there was a formula, it would have been bottled & sold by now. Growth needs tinkering, testing, pivoting & adjusting.
2. ‘Make the trend your friend. Prioritize profitable, fast-growing markets’ – Just because your bullet point rhymes well, it need not be true. Besides, this is precisely the Epimethean lecturing I was mentioning earlier. Of course we need profitable, fast-growing markets! Any kid knows that. The ‘where’ is the point. More importantly, the ‘how’. Every time Steve Jobs came out on stage, he was trying to sell us something that was not a trend. When Jack Welch expanded GE’s financial services arm, it was not a trend among industrial conglomerates to do so. Nor was it fashionable to go to ?(then) slow-growing markets like India & China to play offence like what Welch did, rather than sit content with a ‘growing’ US market. Or when Indra Nooyi was expanding into healthier offerings as Pepsi’s growth drivers, she was surely not following trends of spending her budgets on cola commercials & being content with a huge market available for sugared water.
3. ‘Don’t be a laggard. It’s not enough to go with the flow—you need to outgrow your peers’ – Sounds familiar? Do you now see what has led to the downfall of most large organizations in recent years – this race for top line dominance? From telecom to insurance to renewable energy, we have witnessed the perils of this race the world over, especially in emerging markets where the governments too join the race, implementing unstainable regulatory frameworks, pitting the growth-hungry organizations against one another as they all race to the bottom, disrupting themselves every second quarter, trying to fix their bottom line woes by cluelessly firing people & doing financial engineering gimmicks to stay afloat.
4. ‘Turbocharge your core. Focus on growth in your core industry—you can’t win without it.’ – Well, a decade ago, this argument had merit. Not today. With AI dismantling industry after industry, do we even know what our core is going to look like in five years? The organizations that will manage double digit growth over the next decade are the ones who have a ‘core’ that keeps moving. Agility is going to be the biggest ability for winning organizations.
5. ‘Look beyond the core. Nurture growth in adjacent business areas’ – Here, we hear the exact opposite of the previous bit of advice! While I have no argument against this, as I myself pointed out earlier, what needs to be also inserted here is a disclaimer, of potential disasters of non-compatibility. We’ve seen a lot of unnecessary mess in the business world in the past decade where CEOs, taken in by some fancy BS, chose to venture into areas where they suck. Take, for instance, an industrial behemoth that was an undisputed leader in selling black-box technology, decided to get into doing end-to-end projects & bled itself to death. Or an American organization tried to swallow an European giant & choked itself to bankruptcy, thanks to all the cultural mismatch. The list is endless. So yes, look beyond the core by all means, but chew what you can swallow. Cross-pollination, while it looks great on paper, does not always work. With people, and with companies.
6. ‘Grow where you know. Focus on growing where you have an ownership advantage.’ – Seriously ? Apple, McDonalds, Coke, Pepsi & a dozen other names come to mind ! ??
7. ‘Be a local hero. Commit to winning on the home front.’ – Aah, now the globe-conqueror is asked to come back home! Yet another U-turn! What’s more unfortunate is that there are organizations who follow this & dig their own graves. So, for example, you have a large MNC that’s facing headwinds in some parts of the world owing to some contemporary challenges ( say, a political stalemate or a natural calamity like Covid) - Instead of having patience ( or spine) to hold on till the storm passes, its leaders abruptly suspend NPIs , dump innovations & redraw priorities by hunkering together at HQ and fleeing from difficult markets like a bunch of scared kids. Not all investments are sunk costs & running away at the first signs of disaster is not a grownup thing to do. Companies that win, do just the reverse. They step in when the others have fled, and they lay siege on these abandoned markets & keep hunting till they own them.
8. ‘Go global if you can beat local. Expand internationally if you have a transferable advantage.’ – Transferable advantage is an amorphous term that sounds profound but conveys little. The real issue in most new markets is that of gatekeepers. “This won’t work here !”When you go into new markets, this is a statement you’ll often hear. “That’s how customers in (Country name – Fill in the blanks) always do business ! It’s cultural & a deal breaker if not complied !?Totally non-negotiable !” Eager to meet growth targets & to show that?you’re market friendly, you budge. And make compromises. One after the other. The free pilot. The extra warranty. The extended credit. The deep discount. The phased tech transfer. The compromised channel. The endless wining & dining bills that you foot to help your employees conduct a mysterious activity called ‘business development’. Have you ever reflected & realized that these compromises rarely lead to a sustainable biz model, despite your best intentions ? We need to rather ask ourselves if these are genuine market needs or excuses by our own people who invent fictional adversities to make their own life easier ?In my experience, phrases like ‘Cultural nuances’ & ‘Transferable advantages’ are often hiding places for gatekeepers. Not gatekeepers at your customers’ door. But rather the ones guarding your own. And standing between you and the market.
9. ‘Acquire programmatically. Combine healthy organic growth with serial acquisitions’ – Yet another quick-fix formula that contemporary leaders fall for, that of ‘buying’ growth through buy-sell & not staying on to deal with the repercussions of ?faulty inorganic growth. Real growth is still about O-R-G-A-N-I-C growth! Of course, as businesses evolve, there will be consolidations and healthy M&As that will drive inorganic growth as well. However, inorganic growth should be the one-off event instead of becoming the core survival formula as we often see these days. No matter how much you puff your organization’s numbers by juggling portfolios, unless you are also aligning it with strengthening & growing from within, such growth is not sustainable. Inorganic growth, when used as a career ladder for ineffective leaders, quickly leads to political toxicity & crony-culture that corrodes the DNA of the healthiest of outfits. Look up the leaders who deliver consistently & grow faster than competition with no freebie BD revenues. They’re the ones who need to be paraded like heroes .
10. ‘It’s OK to shrink to grow. Ruthlessly prune your portfolio if you need to.’ - In the past twenty years, the last 7-8 in particular, ‘disruption’ has become a guiding star for small, entrepreneurial start-ups and a favored buzzword for large organizations who have hailed it as the link they have been missing in order to stay relevant in an oversupplied marketplace. However, the theory of disruption is perhaps fast falling prey to its own popularity today owing to gross misunderstanding and mis-application, resulting in a lot of unnecessary mess at organizations who seem to be getting nowhere despite their conscious efforts at disrupting themselves. Businesses follow cycles that need to be respected, industries have distinct DNAs that needs to be remembered . By cross breeding leaders & their ideas, you cannot transfer cheat sheets from one organization to another. What worked for a soda company, may not work for an engine manufacturer.

Now, the two key elements that our experts missed while talking of growth.

1. Growing People - - An annual practice at one of my ex-organizations was a 3-day ‘Policy Deployment’ in February. Besides target thrash-outs, it also involved partying in the evenings & an award ceremony on the last night. But what we’d really look forward to being the growth announcements. Every year, approximately 20% of the population were given elevated responsibilities with new titles & higher bands. While it threw up temporary spikes of envy, things quickly normalized & the new structure settled down. Reflecting today, I realize that this was perhaps the greatest contributor to the 75-year-old market leader hitting double digit growth every year. If you look at failing orgs, they don’t understand the importance of growing people. They punish & reward (if at all) in private. They might still make some rare examples of the sticks but fear showcasing rewards, lest they invite a mutiny. They discourage inter-band job changes & hire within bands, incentivizing entry barriers & band-bureaucracy. Growth drives us. Even someone else’s growth. It sows aspirations instead of showing ceilings.?When people grow or aspire to – the business grows. When business grows, organizations grow. When organizations grow, the eco system grows. When the eco system grows, more people grow & break free of monkey bands. Like Mr. Jack Welch said – As a leader, your success is all about growing others.
2. Growing a P&L ( the Indian way) - To put it more simply, let me use the ‘galla’ analogy – the roots where I learnt my first P&L lessons. ‘Galla’ means cash box in Hindi & is the 1st yardstick for small biz owners in India to assess the health of their enterprise. Some key questions – “Is it that we’re not selling enough, or that we’re not charging enough ? Did yesterday’s higher galla borrow from today’s ? Is it that we’re selling to wrong customers or selling the wrong products ? Is it that we’re not manufacturing or sourcing efficiently enough ? Are our credit lines?high or shipping cycles bad ? Are we missing execution deadlines ? Are we not collecting enough ? Is our salesperson not knowledgeable? Or motivated? Or both??Is it a quality gap, a skill gap or a reputational issue ? Are we competing with wrong people or is our competition doing something right that you are missing ? How’s the offtake of our top 10 customers? Is someone?dipping into the galla for superfluous expenses?..” So on. ?The problem as we grow bigger, is that we stop asking ourselves these basic questions. We equate strategy with results, efforts with efficiency & status quo to be consistency. It’s not a strategy contest. Nor an effort contest or a status quo contest. It’s?basics . And a results contest. Eventually leading a P&L is about taking your business from Point A to Point B. With your team. Profitably. Happily.

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