August 22, 2005

Business Equity, reflections on ...

The corporate landscape, which the Economic Times has been mapping faithfully for the past quarter of a century, has been changing over time. This is, perhaps, a reflection of the tectonics of globalisation but if we look closely, certain underlying patterns become evident. We will classify these patterns in terms of “equity” and see how ET, over the years, has related to these.
The Merriam-Webster Online Dictionary [the only one that I could quickly access from my internet connected laptop!] defines equity as the money value of a property or of an interest in a property in excess of claims or liens against it. Used loosely, it measures certain qualities that impart value to an entity. So what is that intangible that adds value to a business ?
1960s - Financial Equity : This was the trader’s world. Access to capital was the primary ingredient for the success of a business enterprise. This was the age of the “general order supplier” or whatever equivalent name you would choose to use. This was the pre-ET (antediluvian ?) era.
1970s – Political Equity : With socialism or rather babudom sweeping through India, know-who was more important than know-how. Since the government dictated nearly everything that a business could or should do, connections in high places was the only route to success. In this era of gloom, the Economic Times was born and predictably enough its main focus was on tracking government policies and decisions together with the macro economic factors that these had an impact on.
1980s – Process Equity : With the first winds of change starting to blow through the desolate landscape, India woke up to the need for efficiency in business practices. The primary focus was of course on manufacturing processes. Advanced manufacturing techniques – purchased from the “developed” world, were seen as the keys to success. So much so that we even imported the technology for making potato chips from Norway (or somewhere equally exotic!!). This process equity was further bolstered by investments in quality systems leading to the hype and hoopla of ISO-9000. The Economic Times dutifully changed its focus to keep a close tab on interesting corporate houses.
1990s – Brand Equity: CNN (or rather its compelling coverage of Saddam Hussein’s adventures) opened India’s eyes to the immense potential satellite television. Suddenly we realised that there was a world beyond Dookhdarshan. Organisations could now reach out and touch the customer and the medium became more important than the message, the package became more important than the product. Success now depended on advertising and corporate communications. Brand equity became an integral part of the Economic Times.
2000s – Knowledge Equity : The closing years of the twentieth century has seen a surge of what is known as the knowledge economy. There is some confusion about the usage of the term knowledge – were the artisans and engineers lacking in knowledge ? Certainly not. But this is knowledge of a different sort. Businesses today can thrive and grow only if they can have a clear idea of nationwide (global ?) inventory topology [Supply Chain Management], precise customer demographics [Client Relationship Management] or price-performance characteristics of suppliers [eProcurement]. All this data was always available and waiting. It needed the magic of digital connectivity – the internet though not necessarily the world wide web – to turn transform this data, first into information that could be processed, next into knowledge that could be leveraged and then perhaps into wisdom that would become a part of the corporate culture. The focus today is on how to manage this knowledge, efficiently and effectively, irrespective of the organisation or the business area.
Quo Vadis ? Where are we headed ? When we peep into the womb of futurity, the corporate landscape looks fluid and chaotic. Faster, sooner and smarter may not be the best mantra in life but then nobody claims that the good is always is always successful (consider Laloo and Jayalalitha). To be successful, organisations must anticipate and adapt to this changing scenario. Is this an echo of Darwin’s theory of natural selection ? The sense of déjà vu is complete if we remember that since the birth of the Economic Times, the wheel has turned a quarter, but the hub remains the same.
article written for the silver jubilee of the Economic Times and never published.

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