Notes by indian consultant (Ex
MD Deloitte- Roopen Roy)
• Towards the end of 2001, a US
headquartered personal computer (PC)
manufacturing company invited four
consultants from four different companies
to a resort hotel in Penang. I was one of
them. Two others were from strategy
consulting firms. One of them was a
technology analyst
• After breakfast, we were sworn to secrecy.
We signed a non-disclosure agreement
about what was about to be revealed to
us. With much fanfare, the strategy was
presented to us including the underlying
data and projections. I was expecting to
see a movie that I have watched many
times before in “war rooms” and “strategy
sessions”.
• The CEO usually declares an intent to
become the absolute leader in the
business — usually in a year — distant
enough to ensure that he would not be
around. This is followed by thunders of
claps from sycophants in the room
• However, in this meeting, nothing like that happened.
The CEO asked the following question: “Tell me which of
my competitors are smarter and who has the best
chance of destroying my business.” The partner of
strategy firm A had come prepared. He presented a
SWOT analysis of the company, described the changing
technology landscape, the consolidation taking place in
the industry (a mega-merger had just happened) and
predicted a winner. Not only did he predict the winner
(which was not the company that invited us), but he also
explained
why.
• As per the second strategy, firm B’s partner
disagreed with firm A and said that if our host
CEO did certain things right, he would emerge
as the undisputed leader. The techie came on
third and much of what he said I did not
understand. He was not exactly incoherent. He
talked about semi-conductors, advanced chip
design,
monitor
resolution
and
lean
manufacturing
using
technical
jargon.
• I was the tail-ender. I told the CEO that his
country manager had briefed me as follows: I
was to comment on some thinking of the
company about its future — I had no canned
presentation or ready-mix solutions. But why had
I agreed to come? To tell a story about our
mythology; a story that struck me when I was a
child and has stayed with me. It is a story worth
remembering when designing a business
strategy
—
about
king
Kansa.
•
•
It was divulged to king Kansa in a divine prophecy that the eighth
child of his sister Devaki would be his terminator. Kansa flew in rage.
He could not kill his sister. Therefore, he held Devaki and her husband
Vasudeva captive. The paranoid Kansa murdered the seven children of
Devaki.
Enter Lord Vishnu. He ordered the Yogamaya (the goddess of illusion)
to step in, who created a trance. As the prison guards slept, the babies
were switched. When Kansa came to kill the purported eighth child of
Devaki, the child sprang to the sky (it was Yogamaya in disguise) in
her fearsome form repeating the divine oracle: “He who will destroy
you is growing up in Gokul.” Thinking of his nemesis, Kansa trembled
in panic. The eighth baby, foster-parented by a cowherd couple in
Gokul, was none other than Lord Krishna who fulfilled the divine
prediction by slaying Kansa.
• The CEO politely nodded as if to say, “Nice story buddy,
but what has it got to do with my company?”
• So I went straight to the point and said, “Show me the
little Krishna who is not on your chart.” The gurus in the
room said, “By global market share, we have everyone
on the chart!” No they did not. Who was the cheapest
cost producer, or someone who was a leader in a
specific geography, however small? Or who was growing
the fastest? Someone who was growing in Gokul and
you could not find him because you were looking in the
wrong
places?
• After much prodding, the chief strategy officer
conceded that there was one company in China
called Legend. But they produced shoddy
computers for the local market. Their brand was
pathetic. They did not have a strong North
American presence. How will they hire top
talent? How will they develop R&D? I had to
respond, “They can do all that with money —
often
other
peoples’
money”.
• The crux of the matter is that many
businesses ignore a growing competitor at
their peril. I had a gut feel that this
company was falling into that trap. I must
confess that back in 2001, I did not have a
notion of the dramatic events that were to
follow. In April 2003, Legend publicly
announced its new name, Lenovo — a
portmanteu of ‘le’ (from Legend) and
‘novo’, Latin for new.
• By the end of 2003, Lenovo had spent a
total of 200 million RMB on rebranding.
The company acquired IBM’s personal
computer business in 2005. It hired
William Amelio as its CEO from Dell and
set up its R&D centre in Raleigh, North
Carolina. The rest as they say is history.
According to the latest IDC report, Lenovo
holds on firmly to its top position among
PC vendors
• Is history going to repeat itself in the mobile
telephony handsets market? Today —among
many challengers — the leaders are Samsung
and Apple. Known as the Chinese Apple,
Xiaomi, which literally means a little grain of rice,
was founded in June 2010. The founder picked
the name from the saying, “A single grain of rice
of a Buddhist is as great as a mountain.” Xiaomi
is busy disrupting the mobile business just as
Dell had done for PCs. It sells online and has a
superb
supply
chain.
• Indian brands such as Micromax, Karbonn and
Lava combined are out-selling Samsung in
India. Lumia Windows phones from Microsoft
are the new kids on the block. So will the current
leaders re-invent themselves? Or will they be
disrupted by upstart start-ups in the game? Will
they make the Kansa blunder or prevent the
arrival of the new dark lord who might be their
slayer through innovation and creativity? The
jury is out.
•