great speech by anand mahindra at NASSCOM summit

feb 18th, 2008

i have a pdf file of this speech but i couldn't locate the original on the eco times website. so i cut and pasted from the pdf here (since blogger, for unfathomable reasons, does not allow pdf attachments), which is not a great idea as it loses all the formatting. so if somebody finds the actual URL, please post it.

anyway, mr mahindra talks in terms of the scriptures, invoking srshti, sthithi and samharam. creative destruction is at the core of hindu innovation and is symbolized by the siva-tandava. the IT industry needs to renew itself and recreate itself in the same manner.

of course mr. mahindra will now be boycotted by the ELM for using hindu metaphors. he should have used the christist idea of people eating christ's alleged body and drinking his alleged blood, they will say. that is the ELM's metaphor for everything, except when they are using the mohammedan idea of 78 virgins.

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Printed from
IT industry has its own Hiranyakashyap to battle
14 Feb, 2008, 1720 hrs IST,Anand Mahindra,
Nasscom Leadership Summit has always been a place for good story-telling
and provocative thoughts. This year, the spark came not from a software
veteran or a BPO moghul, but a captain of an old economy industry. Anand
Mahindra, vice chairman and managing director of Mahindra & Mahindra drew
from mythology to call for game-changing innovation from the IT industry.
One of the tasks we at the Mahindra Group have set ourselves is to aspire to
be recognized as the most customer-centric organization in India, and why not,
in the World!
In order to walk the talk, every time I'm asked to speak at a conference, I have made it a default option to ask
what the audience--my customers--might expect of me.
And so I found myself wondering what this conclave of IT wizards expects from a predominantly right-brained
character like myself. You certainly haven't called me here to deliver a sermon on technology. And I wouldn't
even risk doing that with Nandan (Nilekani) and Kiran (Karnik) sharing the dais!
Of course, I might have been able to do that by getting one of my IT colleagues to write this speech, but then
it would have been comprehensible to you, but incomprehensible to me!
And although the title of this session is 'Building a Knowledge Economy for Growth', I believe that a) All of you
out there have helped build the foundations of a knowledge economy, so again, you don't need me to
pontificate to you about that and b) I think there are some urgent pressures and imperatives the industry has
to deal with at this point.
So, I'm going to talk about something completely different: I will talk about the Trimurti.
Most of the Indians in this audience will know the Trimurti – the trinity in Indian mythology of Brahma the
creator, Vishnu the sustainer and Shiva the destroyer. There is a wonderful depiction of this in stone, just ten
kilometers across the bay, at Elephanta. Both as a businessman, and as someone who tends to see life in
visual images, the Trimurti reminds me of India's IT industry. Think of it.
You people have gone through a stage, where like Brahma, you created something out of nothing. You
created a new and global industry. You created a service sector that is today, a major pillar of our GDP. But
most importantly, you created a perception of a new India, both in the world and in Indian hearts and minds.
CK Prahalad once told me that in universities in America today, there are almost unfairly high expectations
from Indian students, because there is a huge perception that all Indian students are brilliant, outstanding.
You created that perception. And within India, what you created was self-belief. You showed us what Indians
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could do, and now the rest of India believes that Indians can do anything. Brahma created a physical
landscape; you sowed the seeds of a new mental and psychological landscape. In that sense, you are truly
the Brahmas of the age of liberalisation.
But creation is only the first phase. You then have to move on to the next phase of sustaining that creation -
to the realm of Vishnu the preserver. Creation is a one-time affair. Sustaining that creation is obviously a
longer haul, subject to many attacks and crises. Perhaps that is why Vishnu comes not in one, but in ten
incarnations.
Every time there is a new danger, he changes his avatar to a form best suited to meet that danger. At various
times he has come as a fish, as a tortoise, as a dwarf. But his most interesting avatar came when he had to
fight the demon Hiranyakashyap. Hiranyakashyap was a bad guy, who had obtained an amazing boon from
the gods. Neither man nor beast could kill him; he could not be killed by daylight or at nighttime, within his
home or outside it, on the ground or in the sky. All this made him pretty invincible – he went on a rampage,
and only Vishnu could tackle him.
The IT industry today faces challenges every bit as complex as those Hiranyakashyap posed for Vishnu. It is
hit by a macroeconomic tsunami of adverse currency changes, rapidly escalating costs in both salaries and
infrastructure and inadequate talent pools below the tier 1 and 2 institutions.
At the Company level, firms are begin to feel the penalties of poor differentiation and lack of focus (trying to
be all things to all people); and an over-emphasis on high volumes and price competition.
Suddenly, the industry seems to have fallen off its pedestal; You are facing your very own Hiranyakashyap.
It's interesting to see how Vishnu dealt with him. How do you destroy someone who can't be killed by man or
beast, inside or outside, by day or night etc etc. The demon pretty much had all bases covered. So Vishnu
took on the Narasimha avatar to bypass the boon. Narasimha was a hybrid creature, half man half lion, and
therefore neither man nor beast.
He killed Hiranyakashyap at twilight, which is neither day nor night. He killed him in the courtyard, which is
neither inside a house nor outside it. And he killed the demon by placing him across his knee and tearing him
apart, thus circumventing the terms of the boon that he could not be killed either on the ground or in the sky.
Now that's what I call an innovative algorithm!
So what are the lessons for the IT industry in this story? Well, the first thing Vishnu did was to reinvent
himself. It was not the gentle and contemplative Vishnu who fought Hiranyakashyap – it was the fearsome
Narasimha avatar. Vishnu reinvented himself to suit the circumstances. The circumstances have changed
drastically. Reinvent yourselves.
Do I have all the answers on the modes of re-invention? No, obviously not, otherwise I'd be out there filing
patents, although I can suggest two broad approaches.
First, why don't we design business models that challenge traditional industry approaches and then transform
our organizations, people and processes to execute. If we simply keep knocking on the doors of clients with
our traditional offshoring options, we'll meet the fate of hearing aid salespersons: our best customers won't
hear the doobell!
For example, software-on-demand and open source models changed the rules of the software game. Can we
not try to change the rules of the game this time around? Why didn't we invent Zoom technology or
Virtualisation? Thus far, India's brand of innovation has been identified with the IT industry, but is it truly
innovative. Is it really game changing? Ironically, you can now look to the old smokestack industries for
inspiration.
A few weeks ago, an Indian car company made a game-changing move. Maybe the Nano will ultimately not
retail for a hundred thousand rupees. Maybe it won't have great margins, or replace as many motorcycles as
it would like to, but it was a game changing move; it fired a shot that was heard around the world. Can the IT
world make any such claim?
There was an old saying, apparently adopted by the IT industry, that the secret of success is to jump every
time opportunity knocks. And how do you know when opportunity knocks? You don't, you just keep jumping!
So when are we going to stop simply jumping every time a client seems to sneeze, and actually create
products and IP that become their own opportunities?
Let's look at new areas where India may have natural advantage. I remember C.K Prahlad telling us that we
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didn't realize how important it was to leverage emerging innovation ecosystems in our country. He gave us
the example of how, due to a fortunate coincidence, India's IT and automotive industries were situated in
roughly the same geographic clusters. So why wasn't, according to Michael Porter's competitive theories, a
world beating automotive telematics industry taking shape here.
Why aren't IT companies using the massive potential of India's soft power, the film and TV business to exploit
technological dominance of what Telco's call the 'last mile' but is actually the 'first mile' in the brave new
interactive world?
Secondly, why don't we try to focus on a vertical industry (e.g., telecom) or horizontal domain (e.g., supply
chain management) selecting the key dimensions of competitive differentiation – product vs. service, breadth
vs. depth, speed of delivery, customer service responsiveness, fixed or outcome-based pricing, proprietary
technology or intellectual property, and so on.
And let's be prepared to make hard decisions along the way – change people who don't fit, walk away from
businesses that doesn't fit.
It's essential, while attempting this, however, to recognize that focus, differentiation and brand building require
time and investment. Selling value or doing business differently than the norm tends to elongate sales cycles,
which tends to put pressure on cash flow and we need to resist the temptation to broaden our offerings or
slash prices just to win the business and keep people busy.
Along with re-invention, during the course of reinventing himself, Vishnu figured out the loopholes in the boon,
and regrouped his physical and mental aspects to take advantage of these loopholes. That's something the IT
industry can do as well. Its often been pointed out that in the Chinese word for crisis is also the Chinese word
for opportunity I love that mindset. I truly believe that the adverse rate of the dollar can be viewed as the glass
half empty or the glass half full. Sure it affects margins. But it's also a chance to take advantage of the
loophole and buy yourselves what you don't have, so that you can regroup your structure to meet the
challenge.
To me the fact that our currency is more valuable and our price earnings ratios are still higher than average,
means that we can acquire the front-ends and the large IT businesses that we never thought we could before.
And the bigger the better. If people are egging us on to leapfrog, then they should also cheer as you bid for
companies that seem bigger fish than you. It's happening all the time today in the manufacturing sector—Tata
Corus being the stellar example—and we at Mahindra, while starting from scratch, have inorganically
compiled together a portfolio of acquisitions that make us the fourth largest steel forging company in the world
today.
This is not without historical precedent. If you look at Japan and South Korea, both of them went through a
phase of enduring the worlds' skepticism, then painstakingly building strong and competent domestic
businesses, and then on the back of global liquidity support and strong price earnings ratios, compressing
time by acquiring global firms and their customer credibility.
In effect, by acquiring the strengths and skill sets you need, you will regroup your profile and create a new
entity, which can vanquish your challenges as effectively as Vishnu vanquished Hiranyakashyap.
And finally, while reinventing yourselves, you will have to bring in some of the aspects of the third element of
the Trimurti – that of Shiva the destroyer.
Destroy for example the premise that cost arbitrage is the way to go. Recognize that the low cost, high
volume offshore outsourcing battle has already been fought and won. Often, when strategic frames grow
rigid, companies, like countries, tend to keep fighting the LAST war. If you are not already on the winners list,
you need to think of other ways to compete on value and differentiation, rather than price and scale.
Destroy the premise that success comes only from size, and desist from comparisons with other Indian
companies. There are still many IT companies in India who define success as "we want to be one of the top
ten Indian IT companies". Why not, for example, "we want to be the world's #1 banking back office solutions
provider"?
And lastly, perhaps the time has come to destroy the notion that the world may be your oyster but India is not.
There is a huge domestic market in middle class and corporate India that has not been plumbed. Even selling
to the bottom of the pyramid is profitable today. But it needs a creative destruction of the current mindset and
a re-think on many of the assumptions we hold dear.
So, in conclusion, perhaps there really isn't that much distance between avatars in the mythological sense
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and avatars in the technology sense. Perhaps they are both symbolic expressions of the same reality. In their
different ways, they both underline the same message – that it is necessary in any situation to reinvent,
regroup and re-think our way out of whatever challenges confront us.
I'd like to close with one of my favourite quotes—such a favourite, that I can't even remember where I first
read it:
My father thought the world would be same;
My children, however, wake up EVERY day thinking the world will be different.
Let's begin emulating our children. Time to wake up and make the world different.
(Anand Mahindra's speech at Nasscom Leadership Summit on February 13 th , 2008)
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