Sunday, January 26, 2014

Technological Power as a Marker for Competitive Analysis: A Conceptual and Analytical Framework

In the previous blog (, I have postulated that competitor analysis is best carried out in terms of technological power of a firm, expressed through the fluidic ability and adaptive agility of new technology. Unlike the traditional strategy theory of the 1980s, which positioned technology as a core competence and collaborative factor, it would now be more relevant to view all technology that is outside of a firm’s intellectual ownership or commercial access as being a potentially competitive force against the firm. Technology, being an embedded invisible platform, is too abstract to identify a priori in terms of commercial potential and feasibility. While Porter’s Five Forces theory considers technology as a competitive force, it depends on a physical surrogate (ie., substitute products) for identification. A relevant approach in the new age would be to analyze competition in terms of technology share, ahead of substitute products coming up commercially. This blog post proposes a conceptual and analytical framework to understand and quantify technological competencies of a firm, in an industry context.

Technology, in the context of blog post, includes science. Technology represents both product and process technologies, and at every level of a product or service value chain. For example, in the case of processed foods such as corn flakes, technology represents the complete spectrum from corn cultivation, including soil and seed development, through flake manufacture, including packaging, to customer delivery, including logistics, distribution and retailing. The technologically optimal firm is the one that deploys the best of technologies across this full corn value chain. The highest technological power is derived when each part of the corn value chain deploys the leading edge technologies. Very often, internal strategists and external analysts miss this point and assess technology only from the end-product or consumer point perspective which leads to quite a high level of lag in holistic development of the total technological value chain. Many times, technological solutions are developed in parts to meet specific needs but probably more would be gained if each such challenge is leveraged to address the total value chain.
Parts are more than the whole
The much used saying of management is that the whole must always be greater than sum of the parts, reflecting the principle of synergy. In respect of technology the sum of parts can be more than the sum of the parts only if the full potential of each part is exploited at each challenge. Let us take the case of introduction of non-asbestos gasket in automobiles as a response to regulatory and environmental concerns on the use of asbestos. Most automobile companies took up the issue as an individual fix of replacing the asbestos gaskets by non-asbestos gaskets, mostly as an initiative of component manufacturers. Some manufacturers simply made gasket to gasket replacement while some considered the finer aspects of change in gasket thickness vis-à-vis cylinder block and cylinder head clearance, to redesign key components. However, a few wise automobile companies considered the total challenge of increasing the fuel efficiency and reducing the environmental impact, not merely through non-asbestos gaskets but essentially through a series of measures from micro-mixing of fuel to catalytic converters in exhausts.  
Another fine example of total technological value chain approach would be to reduce the cost of an automobile. The results of a cost reduction exercise can be astounding if the exercise is taken up in a larger format. Weight reduction of each component can reduce the overall material consumption and reduce costs. It also can reduce frictional losses of the engine and also lead to better power to weight ratios. It can also enhance the load carrying capacity for a similar form factor. There is, therefore, merit in approaching any particular technological problem through a broader technological spectrum. If breakfast cereal makers approach the challenge of healthy foods from a perspective broader than just reducing salt, sugar and preservative content across the board but customize them in terms of age needs and nutritional requirements product development would be more comprehensive. This requires defining the technology value chain in terms of agro-biology; aligning crops and food processing with human physiology and disease pathology. A broader definition of technological power in the manners described is easier said than achieved.
Refocus versus defocus
Whenever major shifts in strategic perspectives and technological platforms take place, rather than address the shifts appropriately, such shifts are addressed stylistically than substantively. The former would hypothesize that automobile industry will in future be redefined as global navigation industry or dairy product industry be redefined as probiotics industry. Dramatic though it may seem and worthy of publication in HBRs, such presumptive portrayals of industry shifts represents defocus rather than refocus. The reason is that the core objectives of products do not disappear merely because of convergence of other functionalities. An automobile will never cease to be an automobile just because of the integration of leading edge electronics and global navigation technologies. A dairy product manufacturer cannot afford to redefine itself a dairy company or as a probiotics company just because dairy biotechnology has developed to let dairy products work as gastro-intestinal medicines. Google may not cease to be an Internet company even if it masters the driverless or self-driving car technology.
Extension and deepening of product capabilities by firms based on new technological capabilities needs to be distinguished from deliberate moves by companies from one industry to another (as was the case with Nokia, for example). For every firm which desires to be competitive, the passion must be not in terms of reinventing its industry roots but in terms of vitalizing and expanding the spectrum of technologies that can be embedded in its core products. As the simultaneous efforts by Google at one end and Toyota at the other end show, one may utilize each other’s products or capabilities but driverless car as a technological concept transcends companies. The same was applicable to robots whether developed by Honda or Sony; a robot is robot. The key point to note is that while it is the power of technology that redefines product capabilities it is the access to technology across the total technological value chain that redefines a firm’s capabilities. It is important firms to appreciate that while technologies can be integrated in a variety of ways two are the most important ones; each affording different opportunity - challenge profiles and different risk - reward profiles for different firms.  
Assessing and accessing 
It is easy to overdo the technology angle as much as under-do. There is a significant difference between technology cycle and product cycle. The first payoff for technology is in terms of a product embedding the technology. The payoffs for technology and product thereafter occur in layers, first in terms of sales, then in terms of profits and finally in terms of payback on investments. Depending on the industry, the payoffs from the first investment in technology to the final back could take anywhere between five to twenty years. Clearly, the volume base of new technology products determine where the payback needle would settle. We discussed earlier that the total technological power of a product is a sum of the parts. However, a technological value chain tends to be only as strong as its weakest link. A high performance formula car, for example, cannot survive on normal on-road tyre technology. In terms of quantification, a more powerful expression would be a multiplication of the technological indices of the individual parts of the total technology value chain. A firm would do well to completely define the technological value chain of its product, objectively index each part’s technological power and multiply all the indices to arrive at the total technological power of the product. Such analysis also lets the firm analyze the vulnerabilities across parts and measure the sensitivity to enhancements.
Clearly, it is a strategic necessity to ensure the full complement of technologies. That said, it is neither commercially appropriate nor practically feasible for firms to develop technologies across the total chain organically. What must be done, however, is to develop a few core technologies organically and access the best of technologies for all the rest. Accessing technologies in strategic partnership with firms ensures total coverage of the technology value chain. This requires creation of competencies in the firm to constantly scan the intellectual property landscape and hone in on the best alliances and licensing arrangements. Such competencies should include ability to continuously phase in new technologies across the value chain. Three dimensions are proposed to quantify this capability. The first is the ability to commercially upscale or downscale new technologies across the value chain. The second is the ability to upscale or downscale technologies to other products in the same design family. The third is the ability to embed the technologies of one product into other significantly different products.
Posted by Dr CB Rao on January 26, 2014

Saturday, January 18, 2014

Technology Fluidics and Adaptive Agility: Markers for Competitor Analysis in the New Age

Competitor analysis is a key aspect of developing strategy for any firm. The subject has received considerable attention with the theory of competitive strategy propounded by Michael Porter. Definition of competition and competitors has acquired a new abstractness and challenge in the increasingly technology-driven world. The commonly used markers of competition of a firm, for example, are in terms of revenues, profits, growth, products or services, regions or markets and investments. Each of these can be assessed in terms of relative industry ranking, the most important one amongst them being relative industry market share. However, the breadth and depth of an understanding of competitors can be far greater in terms of comparative absolute and ratio analysis. In fact, analysis of each item of an income statement or balance sheet, on an item to item basis, can provide significant inputs to sharpening the competitive strategy of a firm. There is a strong view, however, that financial analysis of competition is of limited value, and real insights can be gleaned from a detailed product-market analysis of competition.

For a firm, traditionally the marketing department provides information on competitors’ new product launches and marketing moves. Similarly, the strategy department undertakes a financial analysis of competitors. Rarely, the research and development (R&D) departments are involved in regular competitor analysis. In matter of fact, there is a new dictum that neither launches nor performance offers sufficient understanding of competitor activity. Product pipeline and market canvas, as drivers of future performance, are perhaps more relevant. With increasing tracking of product and market development activities, and voluntary disclosures by firms to acquire anticipatory customer interest, analysis of future products and markets is more feasible today than it was a few years ago. An automobile maker, for example, has a preview of the concept cars proposed by its competitors, years ahead through international automobile exhibitions. Proliferation of the specialist magazines dedicated to specific product lines has enhanced such transparency even further.  The same applies to entry into new markets and regions as well.
Defining competition
Competition is usually defined in terms of industry players, industry being defined in terms of a type of product or service; for example, automobile industry, consumer durables industry, power industry, and so on. This carries with it the interesting and intriguing facet of industry boundary, which is interplay of technology shifts, consumer needs and player positions. The apparently simple way is to define an industry is in terms of its customers (product or service users) rather than a broad function (need fulfillment), recognizing that the same users can be catered to by different products or services. For example, bus industry and car industry are different because they cater to different users, even though all the users are individuals seeking transportation. Overlaps in industry definition are unavoidable on several dimensions. At one level, two wheeler industry and low cost car industry could be competing with each other, the level of competition depending on the product price or its life cycle operational cost. At another level, they can never be competitors as the products cannot be designed, manufactured or delivered using the same or similar infrastructure. Given this complexity, it may be appropriate to define the industry in three ways (besides the firm as a player); in terms of a product at a basic level, in terms of technology at a delivery level and in terms of functionality at a gross level.  
Typically, in a sunrise industry which is built by, and around, the innovator who would also be a monopolist, the word competition hardly exists in the minds of many players. This is actually a false sense of security; for, competition even in sunrise monopolist industries surfaces sooner or later. Competition emerges not necessarily in terms of followers offering the same products or services but also in terms of new players offering alternate products or services (or additional ones) that make the innovator product or service less preferred or simply less competitive. The movement of external memory from floppy disk, through CD and DVD to flash memory is an example.  It emerges from the above discussion that competition, in the contemporary and futuristic environments, tends to be more abstract and more ubiquitous than ever, with competitive triggers emerging from diverse sources and translating into multiple forms. The traditional form of competitor analysis limited to an industry or sub-industry and a few players is hardly of sufficiency nowadays. Google as an Internet giant, pioneering products of futuristic technologies such as driverless cars, vision glasses that act as computers and cameras or contact lenses that act as continuous diagnostic devices, is a perfect example. This brings us to the question of technology as the central driver of competition; technology that can manifest itself in terms of any component or subsystem, and can be embedded in a restructured product.
Disruptive competition
Competition tends to be an endless continuum. The case of the watch industry is an interesting one. The initial threat for the handmade, hand-wound watches was the self-winding automatic movement. The introduction of quartz automatic movement provided the first serious competition based on the discontinuity of technology. The emergence of electronic movements posed the next serious threat. The watch industry weathered the storm by reinforcing the handmade quality to retain the watch as a fashion accessory while simultaneously integrating the electronics and perpetual kinetics to provide contemporary timekeeping perfection. The emergence of cellular phone with its time display made watches redundant for certain sections of the population but the recent emergence of smart watches aligned and locked into cellular phones is poised to bring watches onto a new plane. At this stage clearly, hand or machine made electronic watches and machine made, mobile phone mated smart phones are at two ends. It is conceivable that the watch industry would once again reinvent itself by integrating cellular smartness in its artful designs so that the future watches are communication smart with fashionable art.  Even more profound has been the competitive landscape in the handheld camera industry, from camera film to digital photography of varied sorts, and digital camera technology getting embedded in cellular phones for instant transmission and cellular technologies getting embedded in digital cameras.    
The forces of competition, of course, engulf different industries in different manners. The devices in the traditional category of largely mechanical or electrical devices (for example, automobiles or machine tools) are slow to get disruptive competition. The competitive landscape for the firms dealing with this class is easily tracked through conventional product-market share analysis of individual players. The class of electro-mechanical devices (for example, photocopiers, scanners or diagnostic devices) is prone to periodic bursts of disruptive competition. The competitive landscape for the firms dealing with the class is tackled though product-technology based analysis. The pure electronic devices (computers, smart phones, tablets etc.,) characteristically live in a technical environment of continuous disruptions in technology on one hand as well as continuous convergence and divergence of product functionalities on the other. This class of products also has the additional facet of different operating systems that determine the internal and external efficiencies of such devices. The competitor analysis for this class of products is indeed complex, and needs to be sliced on several dimensions, based on form factor, predominant product characteristic or operating system, for example. Given the agility with which product characteristics move based on multiple technological platforms, competitor analysis for manufacturers of this class needs to focus on the overall technical power of such firms, and the overall synergy of constituent product groups.
Technology fluidics  
The domain of strategy has mobility barriers as an interesting concept for determining competition. The theory classifies firms into strategic groups, and firms’ ability to move across strategic groups in response to internal and external factors is said to be based on mobility barriers across groups. Mobility barriers, themselves, are linked to scale and scope related to investments. If mobility barriers are low, firms are tempted to compete in multiple product-market segments, enhancing competitive intensity. Even more fundamental, perhaps, is the fluidic ability and adaptive agility of technologies to be deployed on multiple classes of products. For example, if flexible touch screen technology can be adapted to a huge range of screen sizes, say from 6 inches to 120 inches (diagonal) it could result in a massive transformation in display capabilities of an entire range of electronic devices. Use of Xenon flash or point and shoot SLR/DSLR technologies in camera phones and video recorders is an example. Use of sensors in any equipment from vacuum cleaners to assembly lines and from machining centers to robots is another example. The more is the discovery of platform technologies like nanotechnology, the greater would be the potential application across products and industries.
The fluidic ability and adaptive agility of any new technology is measured on two dimensions. The first is the months taken to commercially upscale or downscale any new technology to other devices in the same design family. The second is the months taken to embed the technology of one device into significantly different device. Traditional strategy theory has positioned technology as a core competence and collaborative factor. The more relevant theory would be to view all technology that is outside of a firm’s intellectual ownership or commercial access as being a potentially competitive force. Technology, being an embedded invisible platform, is abstract to identify in terms of commercial potential and feasibility. While Porter’s Five Forces theory considers technology as a competitive force, it really depends on a physical surrogate (ie., substitute products) for identification. This approach would be too late a stage approach for competitive analysis. The more relevant approach is to analyze competition in terms of technology share. An insightful understanding of technological competencies of a firm constitutes the marker for competitor analysis. A forthcoming blog post of the author will propose a conceptual and analytical framework to understand and potentially quantify technological competencies of a firm, in an industry context.
Posted by Dr CB Rao on January 19, 2014

Sunday, January 12, 2014

Management & Leadership (M&L) at the Cost of Science & Technology (S&T): Time for the Former to Cease Piggybacking and Commence Standing Alone

From being a staid domain a few decades ago to becoming a fancied domain, management & leadership (M&L) have emerged as gateways to career progress and organizational ascendancy, even to scientists and technologists. Despite any number of achievements in science & technology (S&T), such as the successful launch of indigenous cryogenic space rocket by the Indian Space Research Organization (ISRO) and the national pride and international recognition such scientific and technological achievements bring to India, there is no let up in the preference for management and leadership courses, both in pre-career and in in-career stages. While the educational and course preferences tend to be a matter of supply and demand as well as job potential, an emerging economy such as India cannot afford to leave the knowledge dynamics entirely to market fancies. A nation will have a true meritocracy when domains are geared to continuously develop new knowledge, and to continuously expand the body of the overall knowledge base, in the process integrating the new knowledge and making the existing knowledge contemporaneously relevant.

 The craze of sorts for M&L, which essentially meant students and professionals moving away from further specialization in S&T courses (at post-graduate or research levels) to M&L courses (at post-graduate or fellow levels), has made advanced countries lose their some of the competitive edge.  It has prompted some of such countries to welcome overseas students and professionals from S&T streams into their nations. Emerging countries such as India and China benefitted from the importance given to S&T in their curricula. Amongst all the Asian countries, including China, Japan and Korea, only India has favored the growth of M&L streams to a great extent, essentially as an offshoot of adopting the Western education model. While this need not be disparaged, movement of top-flight talent from S&T to M&L needs to be discouraged. S&T, rightly so, have higher entry barriers for learning and mastery, compared to M&L. Lower entry barriers to learning coupled with higher job opportunities could lead to distortions in India’s talent pool and industrial endeavors, particularly at a time India requires the ultimate push to become an economic superpower.  To restore S&T to pride of place, the proud facets of being an S&T professional need to be understood by students and educational institutions, and recognized and rewarded by industrial organizations.
Touchstone of solidity
Any knowledge domain that raises expectations has to eventually live up to the expectations of contributions to society in terms of the domain knowledge and its technological applicability.  S&T undoubtedly qualifies as a critical knowledge domain under this criterion. The body of knowledge under S&T continually grows, oftentimes in exponential spurts, transforming society and quality of life. The S&T knowledge is an eclectic combination of principles, laws, logic and mathematics, leading to quantification of physical, chemical and biological models.  There is a true and sustainable correlation between publications, patents, theory and practice in S&T, making them truly holistic knowledge domains. Science creates theory out of experiments and uses experiments to validate theory. Technology applies science to design, manufacture and deliver products or services.  In contrast, the body of knowledge under M&L seems to increase at best once in a decade, and the total body of knowledge of the last several decades of organized M&L can be summarized under a handful of concepts. The M&L knowledge is predominantly based on behaviors and couched in linguistic expressions. The real expansion of knowledge in M&L, which is very low relative to S&T, is magnified by rather creative expressions and sporadic case analyses; very little is based on statistically representative research. Management creates repetitive theories on age old principles like planning, organizing, staffing, directing, coordination, controlling and budgeting. Leadership looks at personalities to weave modeling theories around stylistic syndromes.
S&T requires M&L for optimized commercialization but not necessarily always. Without S&T, however, M&L is completely superfluous; in fact, M&L is purposeless without S&T. Whether companies that wade through financial management or countries that are resurrected after economic collapse, they are dependent on science and technology. If New Delhi’s T3 airport of yesterday or Mumbai’s T2 airport of today received rave reviews, despite managerial delays, the technological concept and execution grandeur are responsible in no small measure. It is somewhat of a misrepresentation that S&T and M&L are distinct, and it is an even more of misrepresentation that S&T requires M&L to optimize itself. S&T approach which is based on review of current knowledge, logic of new hypothesis and validation through experiments has the basic managerial principles integral to the approach. S&T, once established, accepts no ambiguity. The basic principles of S&T whether it is the Periodic Table of Elements, the Boyle’s Law or the Iron-Carbon Diagram, do not change over time. S&T is absolute in a universal sense. A deep sense of review and a tremendous level of experimentation make the principles rock-solid. In contrast, all M&L principles are contextually flexible and iteratively reversible and merely firm-specific or person-influenced (for example, integration is good for some, integration is bad for some; conglomeration is good in the 1950s, bad in the 1980s, again great in 2010s, and so on).
Linear versus circular
Science and technology have a linear (and exponential) development track. Each S&T development builds on the past for a new future, rather than revert to the past. Management and leadership, in contrast, are steeped in rediscovery.  From time to time, old M&L concepts are simply refurbished and repositioned, from time to time. The flight of talent to such refurbishment and repositioning of management and leadership instead of staying with science and technology is a matter of concern. Having attracted such S&T talent, the inability of the M&L domains to become linear and exponential in genuine knowledge accretion is a matter of greater concern. The question that dispassionate analysts face is whether M&L streams contribute materially relevant value or just add some transient flamboyance to basic S&T. The first two decades of independent India had no institutes of management or even business management courses, yet the country saw significant industrialization. The best of India’s talent went into the graduate engineer schemes of technological giants. The strength of these industrial undertakings today is based on these talented scientific and engineering corps which grew the companies and grew with the companies. Officers of the Indian Administrative Services were some of the best managers and leaders then. One would like to see better value addition from the proliferation of M&L streams.
This phenomenon of early stage fundamental development on the base of science and technology is common to technology leaders of America, Inc as also to several Asian countries, such as Japan, Korea and China. From the early Toyota Production System that originated on the automobile shop floor to the Minimalist Design Philosophy that emerged from classy electronic devices, it is science and technology of design, manufacture and delivery that has been presumptively positioned as management and leadership models. From time to time, newer phraseology such as lean, six-sigma is used to reposition the philosophy of ‘minimal input-maximal value’ that is inherent at each level of S&T through the ages. Even the interpersonal facets of M&L are just simple principles of balanced living that are ingrained in the spiritual and philosophical treatises of various religions from times immemorial. The relative paucity of new M&L thoughts is due to the limited nature of enquiry, which is confined to the four types of human-machine interfaces; human-machine, machine-machine, human-machine and human-human. S&T, on the other hand, is in an endless pursuit of seemingly inexplicable and indeterminate natural phenomena, in terms of physical, chemical and biological models of the universe. The greater the talent concentration on S&T, as opposed to M&L, the greater could be the value generation and wealth creation in a nation through the unraveling of the natural mysteries and discovery, and subsequent perfection of solutions for them.
Rediscovering M&L  
To be fundamentally value-accretive and practically effective, M&L have to be considered as subservient adjuncts to S&T domains rather than as substitute or revisionist superior domains. The key M&L learning factors need to be integrated into S&T curricula. As part of several decades of practical experience, the author of the blog post has had the occasion to interact with hundreds of management graduates, managers and leaders employed in industry or services sectors; not one has admitted to have implemented the courses taught in the two year management programs, be it, for example, advanced statistics, operations research, portfolio theory, signaling theory, reliability models, and the like. Given that the engineering degree program in India is of four years durations, it makes little sense to unlearn the core S&T and spend another two years in learning fancied M&L, most of which it is never applied in any case. Given that good management and leadership is an integral part of science and technology, it would make better sense to integrate certain core management and leadership subjects, not exceeding eight in number (one in each of the eight semesters), as part of S&T domain learning. These could be statistics, economics, accounting and finance as the four core subjects, and operations, marketing, strategy   and responsibility as the four application subjects.    
Those who are committed to M&L as their life’s passion must be prepared to go through the full five year professional certification programs in management and leadership, as economists, mathematicians and accountants go through. Only then, the exponents of management and leadership, whether in academics or industry, will be challenged to develop and grow as a self-sustaining discipline rather than as a discipline that piggybacks on other disciplines, and unwittingly makes the core disciplines ignored. M&L as a stand-alone discipline will have its own research and self-development paradigms, to be relevant to the nation as a separate knowledge continuum. This, coupled with the earlier proposed strategy of graduate and post-graduate S&T programs being self-sufficient with their basic M&L knowledge, would ensure that the investments made in S&T are preserved and flight of talent from S&T is avoided. Many institutes and universities making hay on capstan management programs will be disappointed with this approach but India, as an emerging nation, will immensely benefit from S&T investments, in both education and industry, fulfilling their potential. Probably, the famed IIMs can take the lead by stopping piggybacking on the IITs for the core talent with their two year MBA programs, and start standing alone in the fields of management and leadership through new five year integrated MBA programs.
Posted by Dr CB Rao on January 12, 2014




Sunday, January 5, 2014

The Hare as a Tortoise: A Leadership Sine Qua Non, Not an Oxymoron

Nature, in its broadest sweep, and Life, in its microcosmic splendor, are two of the most powerful and amazing creations of God. The human race has distinguished itself in this creative canvas as the one driven by its ability to think, analyze and execute, in summary developing itself and the society continuously. Long before management and leadership became domains of learning, human beings intrinsically and intuitively became self-driven in the game of positive evolution, going beyond (probably not completely though) the Darwinian thesis of the Survival of the Fittest. Arts, Science and Technology have been the first domains of organized knowledge building while Management and Leadership have been more recent additions, all of them making the human race a differentiated species. The domain of Arts remains as the eternal aesthetic aspect of knowledge while science and technology are the two unstoppable drivers of socio-economic development. Management and leadership, in contrast, have emerged as stylistic rather than substantial domains.    

It is typical that science and technology are experimentally learnt, and management and leadership are experientially learnt. Life and nature have been the greatest models of learning and development as well as challenge and opportunity for science and technology. Whether it is the airplane that mimicked the bird or the robot that mimics the human being and whether it is synthetic life or artificial intelligence, products of science and technology are invariably developed by emulating life. In contrast, management and leadership seem to learn or unlearn little from the nature and biological forms of life, save some references to the cheetahs for competitive spirit, and ostriches for needing to be open. Interestingly, the ancient Indian wisdom has Panchatatra that teaches several lessons of management and leadership through tales of the animal kingdom. This blog post considers one of the most interesting parables of all times, the hare and tortoise story (of ‘slow and steady winning the race’) to develop some contemporaneous management and leadership insights.
Fast, smart or wise?
In the increasingly competitive world, speed and “time to…” are considered the critical facets of competitive advantage. Successful industrialists who build new generation brands, firms and conglomerates in short frames of time, encourage the thesis that time is the most important resource, even compared to costs; the thesis implies that cost overruns could be recovered but time overruns would never be. Fast growth usually focuses on only one dimension of growth, for example revenues, market share or profit. Unidirectional fast growth does more harm than good in the long run. Fast growth often entails saturated deployment of resources which could be questionable in the long run. Smart growth attempts more balanced growth, for example revenues with profitability or market share with profit share. Smart growth, in contrasts, often entails judicious deployment of resources, including integration of differentiated and niche strategies within mass generic strategies. Smart growth impresses with intellectual prowess and commercial cleverness.
Wise growth, on the other hand, focuses on sustainability while leveraging smartness. Leaders who believe in wise growth consider the race for competitiveness as a marathon rather than as a sprint. Wise leaders are sensitive to the environment and society as much as to their teams and themselves. They have a balanced view of all things that are relevant and appropriate; science and technology with management and leadership, the past with the future, entity performance with social good. They are able to integrate values and ethics seamlessly with commercial considerations and appreciate the subtle as opposed to gross; for example, differentiate between equity and equality. Typically, wise growth involves moving to, rather than jumping to conclusions. This is dependent on introspection and reflection as a trait as much as conceptualization and analysis.
The proverbial hare and tortoise story has relevance in these three shades of growth. Managers and leaders who drive growth, often reckless, are like hares who push themselves, and their firms, into unacceptable positions. Managers and leaders who constantly look for niche and expertise are like tortoises that are dependent on bumbling hares or others’ harebrained ideas; their success tends to be based on relativity of smartness. Managers and leaders who ensure sustainability in their firms, in every dimension of their performance, are like hares which act as tortoises, combining speed with sensitivity and fastness with smartness; they tend to be wise leaders. Hares and tortoises have certain characteristics that make them what they are; a corporate hare and tortoise analogy requires a combination of the characteristics of hares and tortoises.             
Hares and tortoises

Hares are adorable little animals of the animal world. Hares are similar to their cousins the rabbits, but carry several important differences. While rabbits dig burrows, hares do not, living instead on the open ground. This is reflected in their stronger build, as running from predators is their only way to safety. They can approach speeds of over 70 kmph for short bursts, significantly faster than most other animals. Hares have strong hind legs which support such bursts of high speed. Another characteristic feature is the largeness of the hare's ears which help the hare hear or sense a predator coming from a mile away. This enables the hares, which are vulnerable, to survive the dangerous competitiveness of the animal world by darting away. Hares with their irrepressible impatience and instinctive speed are quintessential representatives of certain entrepreneurial, managerial and leadership behaviors.
The tortoises, in contrast, are the antithesis of the anticipated managerial behavior. They are rugged, slow and somewhat uncouth. They are, however, blessed with the hardest protective shell and have the ability to hide their vulnerable limbs within its protective shell when danger is sensed. Some biologists hypothesize that slow lives lead to long lives as exemplified by tortoises. Turtles and tortoises are considered harbingers of good luck. The hare and tortoise story imbues certain wisdom to the tortoise of making steady but slow progress to the winning post in contrast to the hare which sprinted off to a great start only to doze off with a false sense of invincibility vis-à-vis the slow tortoise. In today’s world of hyper-competition, hyper-fast harebrained strategizing and execution may act counter to right timing and right scoping while tortoise-like super-slow approach may be equally unhelpful.
Hare as tortoise
For the corporate world, the story of hare and tortoise can only be a simile and not a model. A firm, to be a wise firm (and a manager or a leader to be a wise one) needs to be able to combine the virtues of hare and tortoise and eschew their weaknesses.  Like a hare, a firm needs to be fast and nimble but cannot afford to be harebrained and complacent. Like a tortoise, a firm needs to be slow and steady but cannot afford to be shell-shocked and cocooned in the face of competition. A hare can modify its emotional behavior to that of a tortoise but a tortoise would find it difficult to be physically capable as a hare. A combination that has the physical prowess and agility of a hare (with none of its randomness) and the emotional steadiness of a tortoise (with little of its laziness) could be a wise combination.  
Wisdom in a corporate sense is difficult but not impossible to define and practice. The famous philosopher Aristotle called wisdom the master virtue. He defined it as ‘figuring out the right way to do the right thing in a particular circumstance, with a particular person at a particular time’. The Bhagavad Gita, India’s Hindu religious theological treatise, says that wise leaders understand how to balance the extremes and act from a state of equanimity. The Gita also imbues wisdom to tortoise saying ‘just as a tortoise draws in its limbs, the wise can draw their senses in at will’. Wisdom requires a firm and a leader to be smart on five dimensions in which its organization is anchored. These are people, function, region, product and business. A wise leader is people-smart, function-smart, region-smart, product-smart and business-smart. These five dimensions of smartness cannot be delegated to other leaders; instead they must be an integral part of wise leadership.
‘Hartoise’, a professional sine qua non    
It may be an oxymoron to say that hare and tortoise can coexist as one being. However, from a professional viewpoint, the good points of both the animals need to be assimilated and the unhelpful points eschewed as part of wise leadership. As a hare, a leader or a firm needs to be fast, nimble and quick on the uptake. At the same time, unlike a hare, they can ill afford to be harebrained and random. As a tortoise, a leader or a firm needs to be shock-proof and competition-proof. At the same time, unlike a tortoise, they can ill afford to be withdrawn and meditative when action is required.  Like hare and tortoise, the leader and the firm need to be alert to predatory competition but unlike a hare they should not be running away from competition; rather like a tortoise, they should be having a protective shell against competition. The protective shell is typically made up of perfection in products and processes as much as in people and culture.
Planning in a slow and steady fashion like a tortoise, and executing on a predetermined path like a hare could be a wise characteristic of a 'hartoise'. Reflection on every situation, inflexion at every challenge and acceleration at every opportunity helps leaders and firms to be fast, smart and wise in the totality. The foundation for wise leadership is contextual sensitivity. It appreciates that fastness and smartness have their utility but also have their limits too. Understanding, reflecting and leveraging on the challenges and opportunities that people, functions, regions, products and businesses offer and responding appropriately either as a hare with speed and focus, or as a tortoise with poise and smartness would be a touchstone of wise leadership. Fast and smart or slow and steady as required would be the right ‘hare as tortoise’ analogy for leaders and firms targeting sustainable success.
Posted by Dr CB Rao on January 5, 2014