News & Views

 

It is not entirely unusual for businesses to take a pause every now and then and contemplate their next big move. To get into a huddle to identify newer opportunities in markets previously unexplored. To look for the next moonshot. Conducted with keeping the organisation’s long-term interests in mind, such exercises often reveal a business’ willingness to step out of the comfort zone and look beyond that which already exists and bet on ideas which may go on to determine its next phase of growth.

On December 21, 2018, a large gathering of some 300 plus senior managers from across businesses and ICs attempted to do just that. Zero in on ideas that the company could possibly adopt and grow into meaningful enterprises. Titled Perspective Plan 2026, the event offered a glimpse into the future of L&T.

Mr. P.R. Kothari, Advisor to Group Chairman and CEO & MD, kicked off the day’s proceedings noting that it wasn’t a strategic planning exercise. Rather, the purpose of the gathering was to identify a set of growth initiatives which the company could undertake going forward. “The idea is to look at whether we can identify the next billion-dollar opportunity besides initiatives which can help us reduce wastage, improve profitability and accelerate the process of value creation,” said Mr. Kothari.

The 2026 deadline had been set keeping in view the pace at which technologies continue to disrupt traditional businesses. Mr. Kothari added that technology, particularly digitalisation had emerged as both a challenge as well as an opportunity for businesses and any ideation around future avenues of growth will have to account for the same without fail.

Group Chairman Mr. A.M. Naik who is often regarded as the architect of L&T’s successes of the last 20-25 years, spoke with characteristic candour. According to him, talent held the key when it came to exercises like perspective planning and finding future success. “We need domain experts, talent in the execution stream, design engineering and product areas. We will need young leaders who will be able to take these ideas and see them through to fruition,” said Mr. Naik.

As for the process of ideation, Mr. Naik advised caution and recommended that participants weigh their suggestions in terms of need, business relevance, and feasibility before submitting them. “We have to be certain that the ideas we propose are implementable and show results within the prescribed timeframe of 5-6 years.” For successful execution of ideas that get shortlisted he also recommended creating sperate cells, letting them operate freely and grow independently over time.

Perspective Plan 2026 wasn’t just an event featuring business leaders from within L&T but also thought leaders from outside. Leaders such as Mr. Anant Maheshwari, President of Microsoft India and Mr. Anand Mahindra, Chairman of Mahindra Group who graced the occasion and shared their views with those in the audience.

Mr. Maheshwari spoke at length about how Microsoft’s focus on cloud enabled the tech giant move out of the stasis it had descended into. He noted that the unparalleled success of Microsoft as the world’s foremost software maker had over the years turned it complacent towards innovation. Its inability to keep pace with the growth of the Internet and the advent of mobility were a result of this complacency and if not for Microsoft Chief Satya Nadela the company would probably have continued to languish and remain in the same state of inertia. “Microsoft’s shift to cloud reflected a change wherein we began to move closer to where the world was headed. We began listening to our customers and meeting their needs,” said Mr. Maheshwari.

Mr. Maheshwari also talked about things like Artificial Intelligence (AI) and Machine Learning and Internet of Things (IoT) as the defining technology trends for the coming years.

Mahindra Group Chairman Mr. Anand Mahindra spent his time talking to the audience about entrepreneurship and how L&T has always had it in its genes. “L&T at its core was an entrepreneurial experiment. It was the original start-up story of India,” noted Mr. Mahindra.

Mr. Mahindra’s session was an interactive one where he quizzed the audience about the traits of an entrepreneur and what separated the straightjacketed professionals from free enterprise start-up guys. The Q&A eventually led him to clarify that the difference is often in the organisational set-up, business structures and the degree to which individuals are empowered. “The most effective way to foster entrepreneurship at large, old-economy businesses, is defining the business’ core purpose,” he said. Mr. Mahindra emphasized repeatedly that as a brand L&T stands for positive change and its scope is expansive enough to offer plenty of meaning to those working for it.

Before the participants could formally begin with the idea generation exercise, L&T CFO Mr. R. Shankar Raman offered a detailed perspective on what the markets expected from L&T and how the ideas that L&T would choose to work on needed to be in sync with investor expectations. He noted that the continued investor confidence in L&T was essentially a reflection of its promise and ability to make strategic investments yield value and the participants needed to factor that when proposing entry in any new business or market.

Mr. Shankar Raman pitched for a highly selective, yet aggressive incubation process noting that it is prudent to work with fewer ideas and placing bets on the most interesting ones rather than spreading the resources too thin by working with too many. He ended his talk by reminding the audience to continue to nurture young leadership, institutionalize risk management, embrace digitalisation and focus on governance as a set of non-negotiables.

Over the course of next 2-3 hours, the participants engaged in an intense exercise that involved deliberating on several mega trends and identifying potential opportunities and business ideas from those. A team affair, participants sat in “max-mix” groups where people from diverse set of functions, roles, and businesses of L&T worked together. This was done to ensure that discussions and ideas weren’t limited in their scope. Each table was required to shortlist one business opportunity and submit it along with a detailed explanation. Participants were expected to talk about the underlying trends supporting their proposal, whether it could actually be a billion-dollar idea by 2026 while also assessing it from the view point of synergy and competence.

A list of 30-odd ideas was uploaded on a mobile app for everyone to see. Participants were then asked to rank their top five most important opportunities to arrive at the most relevant ideas for the company.

The latter half of the day witnessed a series of intense talks delivered by consultants who L&T engages with frequently for its strategic requirements. Mr. Sri Rajan from Bain, Mr. Noshir Kaka of McKinsey and Dr. Ram Charan, the high-profile Indian-American consultant known to have worked closely with some of the top CEOs in the world, enlightened the participants about a number of relevant themes as they went about the process of identifying disruptive trends and capitalising on newer business opportunities.

Before the audience could hear the views of Mr. S.N. Subrahmanyan, CEO & MD, L&T, on the day’s proceedings, Mr. Anup Sahay, Head - Corporate Strategy & Special Initiatives, took to the stage to familiarise the attendees with the process employed to arrive at the Perspective Plan 2026. Mr. Sahay noted that as part of an exercise prior to Perspective Plan 2026, a couple of ideas had already been identified and two dedicated teams had already begun work on those. As for the ideas generated on the day, he said that the Corporate Strategy team would investigate the potential of each in the coming weeks and months and work closely with concerned businesses and teams to take them further.

An articulate, impassioned address by Mr. S.N. Subrahmanyan towards the day’s end was the high-point of Perspective Plan 2026. After the day-long exercise that had drained the wits of the participants, Mr. Subrahmanyan’s speech was just right boost they needed to lift up their spirits. Mr. Subrahmanyan, who had played a vital role in orchestrating the initiative, touched upon a number of themes affecting the shape of business. He began by acknowledging the work of his predecessors, chiefly Mr. Naik for having guided L&T to its current heights. Offering a detailed overview of the Group’s performance and the available prospects, he laid out the strengths and weaknesses of L&T’s core businesses. Noting that while there was little that one could do about the larger economic and geopolitical trends affecting global trade, performance was still the single biggest determinant of business success and that there was no substitute for it.

Like Mr. Naik and other speakers before him Mr. Subrahmanyan too underlined the need to spot talent at a young age and nurture youngsters for future leadership roles. He also lamented the lack of right skills in the market for a world that was turning increasingly digital. Turning to the main agenda of the day, he recalled themes like cyber security, geospatial, virtual and augmented reality, artificial intelligence, digital and IoT, smart infrastructure, and platform-centric approaches in the field of finance, education, and healthcare. Mr. Subrahmanyan hoped that some of the themes could be turned into businesses that are able to bring in some additional valuation for the organisation in the next 5-6 years.

He even spoke about creating an Innovation Fund which would finance worthy ideas at an early stage. Towards the end, Mr. Subrahmanyan called upon everyone in room to keep their innovative spirits alive and continue to look for opportunities that can be exploited for future growth of the company.

Ms. Akshata Vichare, DGM - Corporate Strategy & Change Management who had compered the event, delivered a vote of thanks bringing to end the formal part of the day’s proceedings. The program continued till late in the evening with live entertainment and a fellowship dinner before drawing to a close.