HT Article dt. 22-Jul-2019
There is a fabulous book called ‘Maverick’ by Ricardo Semler. There is a nice quote by the author in the book which says ‘only two things grow for the sake of growth: businesses and tumors’.
The last decade has seen just too many businesses going up extremely fast and falling down faster. These ‘rocket’ entrepreneurs, new & old, big & small, are in extreme hurry and talk about exponential growth & million dollar revenues in a short time. However, many of these entrepreneurs are now fighting debts, facing bankruptcies, already acquired by others, relaxing in jail or ‘holidaying’ abroad forcefully!
We have been hosting an entrepreneurial event called The Senate Talk Show over the last four & half years. By virtue of this event, we have had the privilege to interview (so far) twenty successful business leaders from Pune, leading organizations like Thermax, Symbiosis, KPIT, Cybage, Zensar, Sakal Media Group, Panchsheel, Magarpatta City, Chitale Bandhu, Vishwakarma Group and so on. There was a remarkable similarity in the fundamental business principles that each of these leaders followed while they led their organizations. To quote a few of them:
- All of them believe in ‘slow & steady’ growth. They shunned rapid growth characterized by growth spurts. They understand that businesses have to experiment but it cannot be with ‘spikes and valleys’. Their approach towards growth remarkably matches the ‘20 Miles March’ principle explained by business authors Jim Collins and Morten T. Hansen in their bestseller ‘Great by Choice’.
- They believe in ‘evolving’ and not ‘exploding’. They prefer organic growth to inorganic one. They feel that if there is a need to acquire to fill up gaps or acquire skills, it’s fine. Acquiring companies for ego is not acceptable.
- Most of these leaders avoid debt as much as possible. Despite the size of their balance sheets, some of them even have a zero debt balance sheet. They broadly do not like borrowing and would borrow only when really required.
- They all held ethics & values in business to be of paramount importance and made umpteen tradeoffs to safeguard them even if it meant significant loss to their organization.
In business, it is important to distinguish between ‘good growth’ and ‘bad growth’. Good growth is profitable (both the top & bottom lines should grow consistently), organic, differentiated, capital efficient and sustainable. It may not turn in the best numbers in the industry when measured over any short-term period, but the cumulative performance over a longer period is very good. Good growth also strengthens the company’s DNA by creating new competencies & strengths.
On the other hand, bad growth is growth for its own sake. It is profitless, wasteful of capital, reckless & erratic. This kind of growth has been the undoing of many business leaders obsessed with the drive for size.
The commonality of the business principles across these leaders from Pune matches the very DNA of a puneite. While a Puneite would come across as a conservative, risk averse individual to outsiders, if balanced with a right level of ambition, this same DNA helps build a strong, sustainable, profitable organization which is there for the long haul. They pursue good growth rather than bad growth. On the other hand, many ‘rocket’ entrepreneurs after a small & tiring sprint end up into nothing if not a disaster.
ONE CHANGE THAT I WANT TO SEE IN PUNE
I recently attended a business conference hosted by Entrepreneur India in Delhi. The event concluded with an entrepreneurial awards ceremony. While so many awards were given out to successful organizations across India, there was not a single awardee from Pune! While the DNA of a Puneite keeps him well grounded in business, it also prevents very large brands emerging from Pune. Manufacturing, automobile, engineering and IT have traditionally been Pune’s stronghold. However, we do not see any new age brands, like OLA, OYO, Paytm, Swiggy and so on, coming from Pune.
While the DNA of Pune and Puneites may not (& need not) change, Pune majorly lacks the startup ecosystem that cities like Bangalore, Mumbai & Delhi have. There are industry bodies and organizations fostering entrepreneurship, but their cumulative impact is far from what it should be to produce a meaningful impact.
MY EARLIEST MEMORIES OF PUNE
We all remember Pune as a calm, laid back city. Some even called it ‘retired’ city! There are umpteen jokes around the practice (though not followed now) of pulling down shutters of retail establishments for a few hours in the afternoon for a siesta!