AdAsia 2011: Ram Charan decodes the uncertainty of the new market

In his keynote address, the management guru elaborates the four forces that are shaking the corporate world

BestMediaInfo Bureau | Delhi | November 2, 2011

After the enthralling opening ceremony, AdAsia 2011 went straight into business with a keynote address by management guru Ram Charan, who has authored many books and is a sought after speaker and business advisor. Keeping in tune with the theme of this year's AdAsia, 'Uncertainty is the new certainty', he analysed what was causing this uncertainty in today's business environment.

Charan acknowledged that he was present in a gathering comprising the most creative and innovative minds, and though creativity was much sought after in the ad world, it is also the cause of uncertainty. However, this uncertainty, whether as a result of creativity or other reasons, is very different from the uncertainties that one has seen in the past. The need of the hour is how to change this uncertainty into prosperity.

Charan cited the example of Apple, pointing out that this company which had become almost broke in the 1990s has turned around to have the maximum market capitalisation.

According to Charan, there are three changes or rather “forces” that were causing change in the business ecosystem. All these forces were global in nature, manmade and outside the organisation.

The very first change is the digitalisation that has taken place. Consumers today are liberalised and marketers too have given more power to the consumer. It is this change that is causing the social and marketing change. Furthermore, this change is leading to a change of business models and also changing the business allocation. Consumer segmentation is changing very fast. In the past there had been companies like AOL and Yahoo but today, the shelf life of companies has become shorter. To fight this and to understand the new age customer and the new segmentation, it is very important for senior managers to understand their customers. For that they will have to know the ground reality and will have to visit the markets themselves.

Charan said the world is divided into two parts -- above the line and below the line. The above the line consists of Korea, Russia, Japan, the USA, Canada, Western and Eastern Europe. On the other hand, below the line consists of Mexico, Brazil, Middle East, Sahara, South Africa, Turkey, China, India, Indonesia and Australia. He said, “The markets of the future are the ones that are in the below the line as the momentum is in those markets.” So, investments and FDI will move from above the line to below the line markets.

The third important factor is that there will be a lot of companies from among the below the line countries which will try and establish themselves in the upper sphere. This trend was seen even earlier when the Japanese and German companies in the 1970s and 1980s had tried to acquire American companies and establish themselves. However, they failed to make any impact. A few Indian companies such as the Tata Group and Aditya Birla Group have tried to do the same. So, when going into a new market one should go with a 'deliberate strategy' and not just for global exposure.

Lastly, the management guru said that companies should work towards getting the right talent for their companies. Charan elaborated this view saying, “Businesses are made by leaders and if there are no real leaders, then one needs to create them with the right talent. It's very important to find talent and if one cannot find the right people, then train them to brace up to the challenge.” He also pointed out that talent goes only where there is opportunity, so one must keep making opportunities.

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