This is the best of times and the worst of times for the ecommerce sector in India. Although the sector is rapidly acquiring new customers every day, there are enough instances of funds drying up and companies collapsing. Will it ever change? It will not.
The world has entered a new era of oft-quoted VUAC (volatility, uncertainty, ambiguity and complexity). Add the technological changes, fast pace of adoption of new models and practices; the inherent churn of new businesses and you have a recipe for extreme unpredictability in the ecom sector.
In times of stability, culture plays a vital role in the success of organizations. Most management studies have found ‘Culture’ to be amongst the four most important factors for success. Peter Drucker once said “Culture trumps strategy for breakfast.” In India Tatas manage a global empire of 98 companies with $67bn turnover principally through values and culture. The leaders in the Indian tech sector like Infosys and Wipro also attribute most of their success to their values and culture. Ingvar Kamprad is zealous about the culture in Ikea and so was Sam Walton.
Organizational culture problems can corrode the performance fabric of even established companies. IBM had a serious decline in performance in early 1990s from a dysfunctional culture before Louis Gerstner turned it around.
New companies and new sectors need the right culture even more. It tends to get ignored in the initial stages because it is fuzzy to understand and does not show a visible link to results. This is however a gross mistake to commit.
Culture can give meaning to work and improve the effectiveness of strategy and amplify execution. Culture plays a vital role in attracting talent and retaining people. It can help immensely in making efforts coherent during difficult times.
Developing a culture cannot be divorced from the overall corporate environment and the societal context where the employees get their initiation into what is right, what is best and what is wrong.
Now the question arises: whether there is an appropriate culture for Indian ecommerce companies and start-ups, in the middle of this unprecedented pace of change?
There are many dimensions in culture that are important but the following four seem to be the most critical, specifically in the Indian context:
Long Term Focus
Businesses operating in unstable environments get buffeted by shocks, crises and in many case the organizations are not ready for them. In the initial stages when many of them would not be making profits, it is necessary that everybody’s energies are focused on the big picture and the long-term issues.
Interdepartmental conflicts are a part of organizational reality and in many organizations too much time and energy is spent on such issues. While some of these battles do lead to better outcomes, it can be fatal for new companies in the technology sector. All minor issues which do not really affect the outcome of key priorities have to be ignored. This can be achieved if the leadership constantly communicates the purpose and the big picture to make the team move in one direction.
Tolerance for Failure
Second, since the new environment is unpredictable, it is not possible for anyone to get all decisions right. Failures are part of the game. High tolerance for failure is another imperative. The organization has to instill a way where failures and experimentation are encouraged.
Indian society abhors failure and the onus is on the leader to make it more acceptable by candidly discussing all failures including his own. The failures should be understood in a non-judgmental and analytical way as opportunities for learning.
The pace of change and the inevitability of shocks also makes it necessary to keep modifying the strategy. This leads to a constant churn of initiatives, resources and priorities. The employees need to be made aware of this.
The leadership has to engage everyone through extensive communication as much as possible to prevent people from scattering strategically.
A solid foundation of values but a flexible operating framework enables the organization to adapt to changes in roles, goals and relationships which a constantly evolving strategy requires.
Resilience is another fundamental requirement of the new era and new businesses. This is the culture of being positive and persisting despite setbacks.
Here, the negative events need to be seen for what they actually are. Each issue needs to be seen as a problem to be resolved and has to be approached objectively with as much data, facts and evidence as possible. Breaking down a problem to its essentials leads to a situation where the parts look solvable and this in turn builds confidence and resilience.
Open communication and authentic leadership also help in making people stay positive and optimistic in hard situations.
Asian and Indian value systems have their unique angularities which create innate challenges for new ventures. Organisations with the right cultural framework have the intrinsic strength to ride over the turmoil of new technology businesses.
(About Author : Salil Sahu is responsible for running HSIL, a part of Wadhawan Retail Limited. He has extensive experience in Sales, Marketing, Strategy and General Management and has spent the last 10 years in P&L management. He has worked in Wipro, Heinz, Shaw Wallace and a start-up and has been part of many pioneering initiatives.)