Leading the Business World Profession @ 100

License Raj economy

If we look back 50 years, India was a closed economy when import tariffs were extremely high. A license was required to invest in new capacities and initiate an industrial activity. The licenses were granted for setting up factories in remote areas. Most of the times, licenses were granted to State Industrial Development Corporations, and the private sector had to partner with them.

India was a resource-constrained economy, and therefore, the government stepped in to control prices.

Even for a basic product like cement, the Bureau of Industrial Cost and Prices decided the price at which cement could be sold. There was a common wage board to negotiate and finalise wages in the cement industry. Since the output prices were controlled, the success of any venture depended on the highest operational efficiency and controlling costs.

Our profession played an important role in guiding the industry in navigating successfully through these difficult times with their analytical skills and deep understanding of the entire business processes and cost and value drivers.

The shortage of foreign exchange compelled the industry to look for avenues of indigenisation of machinery and spare parts within the country. All these localisation initiatives, the outcome of necessity, have become a foundation for the future growth of the economy. The industry today is recognised for frugal engineering, not as a substitute for low-quality products, but for cutting edge technology products as demonstrated in the launch of Chandrayaan at a fraction of the cost as compared to the Western world.

Being a capital-starved country, the availability of capital and its cost were another challenge. This led to a very sharp focus on improving the working capital cycle to improve return on investment. Again, the profession played a very important role in guiding the management in achieving this objective. Today, these have become a fundamental strength of the Indian corporate world in consistently reporting better Return On Investment (ROI) compared to their peers all over the world.

The liberalisation phase

The times changed dramatically in the early 1990s with the liberalisation of the Indian economy. We saw competition from the Western world and a sharp increase in service activities, particularly in fields such as IT, banking, financial services, etc. With growing affluence, the consumption rose, and the consumer product companies started doing extremely well. During this phase, the profession reoriented itself and built competencies to compete effectively with the Western world and also partner with the corporate world in developing robust systems and practices to succeed in a competitive world and a service-oriented economy.

The major changes during this period were a thrust on business development, product and application development, marketing, and developing a sales network to serve the rising aspirations of the fast-growing economy of India. The fast growth also brought about challenges in terms of realigning the entire supply chain, increasing working capital needs, taxation across multiple geographies, each having its own tax laws.

During this period, the profession contributed significantly to the success of businesses with their ability to deal with a vast amount of complexities, develope newer avenues of financing and lead the efforts at mechanisation of all business processes with the integration of Information Technology. The organisation also accelerated the use of technology to improve the speed and efficiency of operations.

"The process of automation, mechanisation, and digitisation started in earnest, and every single industry underwent a significant change in how they did business in an interconnected world."

The Globalised world

The pace of globalisation picked up around the year 2000. The Indian IT sector and professionals started earning global recognition by playing a vital role in overcoming the Y2K scare through their programming skills and technical prowess.

The initial phase of liberalisation saw foreign companies entering India, followed by many large Indian corporates venturing outside India and setting up their global footprints in diverse sectors like IT, pharma, auto, metals, etc.

The process of automation, mechanisation, and digitisation started in earnest, and every single industry underwent a significant change in how they did business in an interconnected world.

This called for the profession to reorient its thinking. While earlier the thrust was on improving operational efficiencies and managing the regulatory environment, now the focus was on ensuring profitable growth by developing a deeper understanding of the industrial landscape, not only in India but globally. It became imperative to deepen the understanding of the cost drivers and value creation across the global value chain. In-depth analysis and global peer benchmarking became inevitable, and partnering with the business leaders in formulating and implementing strategies for success became a key expectation from the profession. The size of many of our large corporate houses, and their successful presence across multiple geographies is a testimony to the extremely sound base of financial management and strategic thinking that the profession provided during this dynamic business environment. This also paved the way for financial professionals to move to the top echelons of business as CEOs of large corporations, as well as assuming an important role as advisors to industry in multiple fields.

Riding the ups and downs of the world economy

Lest it appear that the world economy cruised through all these phases in a linear growth phase, lets also reflect on the major turbulence it faced multiple times, be it the Latin American credit crisis in 1980s with a sharp meltdown of stock market or the 1997 Taquila crisis which started in Mexico and SEA, and then engulfed the entire world economy, or the more recent GFC in 2008, and then of course the world facing the worst pandemic of Covid in 2020. The sharp swings in forex rates, for example, the Thai Bhat depreciating against the USD from 20 in 1980 to 25 in 1990, 40 in 2000, and again appreciating to 31 in 2010, or the Indian Rupee's steady depreciation from 6.61 in 1980 to 17 in 1990, 44 in 2000, and 86 at present, necessitate a dynamic response in business strategy and operational management. In the meanwhile, China emerged as a major player in the world economy and offered products at almost unmatchable prices.

These required every industry to constantly re-evolve its business strategy, product portfolio, operational strategy and change its business processes to stay relevant.

The profession had to step up its own way of working, change the business processes in line with the changing requirements, and help businesses navigate these turbulent times through a combination of strategies like moving up the value chain, optimising costs and enforcing strong discipline in operations and financial management. In some way, each of these crises forced businesses to become more efficient.

The digitised, technology-driven world

Today, we are at the cusp of another technological revolution. Technology has become all pervasive in our lives, and every aspect, including business processes, is getting digitised. It is heartening to see India at the forefront of these initiatives of digitisation. According to the latest Reserve Bank data, India's share in global digital payments has reached 48.5%, largely driven by UPI.

The new world of AI and AGI

The entire world is now talking about Artificial Intelligence (AI) and Machine Learning (ML).

Businesses have started leveraging the same to expand their reach to customers, serving them faster and more effectively, and improving the efficiency of their operations. In our profession, AI enables faster work and response in multiple ways, be it through a detailed granular analysis vs competition, or a much wider coverage in audit with accuracy and speed, and identify discontinuities to understand the deviations from trends and the reasons behind the same, and use these insights for process improvements and course correction. In fact, more and more professionals have started becoming business partners, playing a key role in the transformation and success of the organisation. The deep understanding of the interplay of economic trends and their impact on different businesses and how the organisation processes can be contemporised with technology has helped professionals emerge as preferred business partners.

AGI is likely to have an impact on the world that is, as yet, incomprehensible. The challenge before us is the dramatic pace of developments in technology. The jury is still out on how these will impact the way we live, think, and work, but a paradigm shift is on the horizons.

These developments, combined with robotics and quantum computing, are likely to cause a dramatic shift in the world.

"The deep understanding of the interplay of economic trends and their impact on different businesses and how the organisation processes can be contemporised with technology has helped professionals emerge as the preferred business partners."

The challenge before every profession, is to anticipate how these technologies are likely to evolve and their impact on the economy, different industries, and their business processes, and proactively prepare for multiple scenarios. While developing these technologies itself is a challenge, where the USA and China have taken a lead, the real opportunity is in being able to visualise their impact on the economy and the business at a macro level and on a particular industry at the micro level, in order to develop appropriate strategies. For the first time, this presents the profession with a unique challenge in its professional journey as it will be compelled to step out of its comfort zone. The conventional boundaries between different knowledge and competency streams are getting blurred and the competencies and skills required for success in the future are going to be vastly different.

Excellence in basic discipline will no longer suffice. Success will depend upon developing a broader vision, the ability to look at the bigger picture, developing a foresight into likely changes and how they will impact the economy and businesses by connecting different dots and formulate strategies accordingly. This will require a high level of versatility of knowledge with tremendous curiosity and an innovative mindset with creative thinking to turn disruptions into a competitive advantage.

This essentially means that the softer aspects such as sharp observation, developing insights and perceptive thinking will become more important. This is in sharp contrast to the earlier emphasis on analytical skills, which were based on data. The perceptive ability will require the capability to see what is not visible, a sort of intuitive insight.

"Excellence in basic discipline will no longer suffice. Success will depend upon developing a broader vision, the ability to look at the bigger picture, developing a foresight into likely changes and how they will impact the economy and businesses by connecting different dots and accordingly formulate the strategies."

Besides a passion to ride the wave of change, this will require the ability to take high risks with confidence and persistence. Experimentation, re-experimentation, and finding the success formula with speed will be essential, along with the agility to quickly decide what works and move forward rapidly and swiftly drop what does not work.

The challenges would be so humongous that it would become difficult for individual organisations to succeed on their own, and therefore, collaboration to expand the horizons of thinking will be a key source of success that will require developing a strong network across multiple industries, as collaboration must span both businesses and industries.

One will have to reinvent oneself regularly, learning from mistakes, doubling down on success, developing a high level of resilience and confidence, while having the humility to create the necessary networks and coalitions, and accept the fact that success depends upon teamwork across multiple industries.

This essentially means possessing a very high level of emotional intelligence besides technical expertise, a deep understanding of human behaviour, and the ability to communicate complex matters in a simple language with a sharp narrative and value proposition, and intellectual integrity to use technological innovations with ethics for the larger good of humanity.

The added dimension of geopolitics

We are seeing the conflict between major economies in their quest for future dominance of the world. This is playing out through different means like export/import curbs, tariffs, and other more subtle means. These developments will have a significant impact on economies and multiple industries, be it the hi-tech areas of communications, semiconductors, defence, or more traditional sectors like textiles and chemicals. Every profession will have to develop an understanding of the underlying realities of geopolitics, some of which have their origin in centuries-long history, anticipate how the situation may evolve in the future, and be prepared for multiple outcomes, and develop organisational resilience and agility to quickly adapt to the changing situation. The changes are going to impact every aspect of the economy, be it agriculture, manufacturing, or services.

Anticipating and winning in the new, dynamic, ever-changing world

The only certainty is that change is already upon us. As we look to the future with confidence, envisioning India becoming at least the third-largest, and possibly the second-largest economy by the time the profession turns 100, the journey ahead will present both challenges and opportunities. To navigate this path, the profession must continuously challenge and reorient itself, moving beyond traditional roles to become tech-savvy, creative, agile, and visionary. It must evolve into a thought leader capable of building impactful partnerships and coalitions, advancing with confidence, agility, and humility.