‘Disrupting The Disruptor Will Be The New Order In Market Place’

Suman K Jha Oct 28, 2016

N. V. ‘Tiger’ Tyagarajan, president and CEO, Genpact, in an exclusive conversation with BW Businessworld talks about the future of IT, workplace, organisational headquarter, startups and disruption. Edited excerpts:

How do you think IT is reshaping as it absorbs, assimilates and adapts to changes like artificial intelligence and machine learning?
First, I think the biggest change is building the ability to help customers change, a capability that all technology partners, providers, process and analytic partners/providers must have. So if you look at Genpact 3-4 years back compared to what it is today, one of the big changes we have is a strong group and a significant revenue, which we call transformational, where it’s a combination of consulting work, re-engineering and redesign of process, helping clients implement digital into their middle and back office, analytical services. And if you combine all, that is more than 20 per cent of our business, and it is growing significantly faster than the growth of the company. That’s different, and I think it’s important for companies to be like that, because clients want help and partnership is driving transformation and change.

Second, the industry is going to change the nature of the work itself. Simple work is going to get replaced by automation, digitisation, machine learning, artificial intelligence, and a whole range of digital tools and technologies. And that will reduce the amount of simple work. And, by definition, complex work will increase, implementing digital tools will increase, doing more analytics and data services will increase, consulting and transformational work will increase. The kind of work that requires deep understanding of an industry, understanding of how you can use data to drive a competitive advantage for your clients, all of that will increase. And, therefore, the nature of people, skills acquired, the value of work will be delivered, all of that will change the industry.

What will your future workplace look like? You argue that there will be no headquarters. So how will your future workplace and organisation, which is a global organisation, look like?
I actually think progressive, technology-driven, global organisations today should not necessarily think about headquarters as being relevant. So we at Genpact actually took the step of saying we don’t have a headquarters some five years back. We think the world is far more global than it’s ever been, and that journey will continue. The world is far more technology-driven than it’s ever been, and that, obviously, will accelerate. Digital data and so on will be distributed and democratised. Decisions will be more real-time out in the field, and have to be taken much closer to customers in general in every industry, including our industry. So by definition, therefore, the notion of one single place — it doesn’t matter where it is in the world — where people sit together and take decisions and run the company is, I think, old school. So it’s not about the future; it’s about today. Clearly some organisations will do it earlier and others later. We just decided to do it very early because we think we should be one of the leaders in that because we are a nimble, young, agile and change-oriented company.

India is becoming another startup hub. So what should new entrepreneurs keep in mind, while coming up with good startups?
So I think India is becoming — or has been, actually — a hotbed for startups. It will just, I think, continue to increase and accelerate as more opportunities get thrown up to try new ideas, innovate more, and test them out and experiment. So clearly one of the things that encourages startups is having an ecosystem that supports them, having people who have experience in venture capital, in angel investing, technology parks where infrastructure is provided, where it’s seamless, all of that. But for a startup, it’s also about taking risks. But the other advantage that presents itself today is that the nature of technology itself has become such that it is now possible to experiment more. Particularly, you’re not talking about a space — you’re not going to have pharmaceutical or drug discovery. It goes along the cycle. In the technology space, it is possible to actually experiment more. It’s okay if some of those fail; it’s okay to learn from those failures, the work of those past failures, and move on to the next experiment. The more entrepreneurs and start-up people think like that, and the more they actually do that, the more you will have successes coming out of that. And then there’s a whole ecosystem of people willing to fund those activities because, obviously, the successful ones become very successful. Over the last 20/25 years, there’s been a big journey where any entrepreneur, any startup person, particularly in the technology world and in the services world, etc., should think about their market as the globe, not just the narrow markets that they’re focused on. And the minute you think that way, the opportunity is huge. So as you think about startup ventures, think about how they build something and serve the marketplace. You should always keep in mind that, while they start in a particular market — it doesn’t matter which one — there’s an opportunity to actually find a way to make it more global, so they can access a bigger market. And technology allowed me to do that without having to be physically present in every market.

The Indian government is doing a lot to promote the startup ecosystem. But what more can India do? What more can India do to promote the startup ecosystem in the country?
So I would say a lot is being done but, obviously, there’s a lot more of the same that should be done. So whether it is providing infrastructure, power, real estate, facilities, the reality is that one of the challenges India has always had is the ease with which you can wake up in the morning and say, I want to set up a business and, in about 48 hours, I get my business going. The more the government and everyone else enable that, the more you actually make it easy for ideas to be experimented with. If, on the other hand, you have an idea, you are ready to start working on it, but you struggle with ranging from licences to approvals to real estate to electricity to telecom and so on and so forth, all that is a waste of time. And these days, the cycle time of anything is very important. I think the one general message that digital is teaching the world is the importance of cycle time. One of the ways to think about digital and automation is can you make everything, their cycle time, become zero, which means everything is real time. In a world where a lot of things are becoming real time, I think that one way to think about it conceptually is that governments, etc., whatever they do they should continue to do, but they should find a way to do it 1000 times faster than it’s ever been done before, whether it’s approvals or it licenses or facilities, etc.

The other topic, which is obviously a big topic whenever you talk about entrepreneurship, startups and technology and so on, is talent. Clearly India has a very large raw material population that can be leveraged. The reality is that it is raw material. It’s not yet ready and formed, and how do you continue to invest in education, across a range of education from primary to secondary to higher education, colleges? How you do that in a manner where it is not as expensive as it sometime is? More and more user technology and education that then makes it more democratic, more widely available at a lower cost. How do you encourage companies to actually drive new learning around new technologies and skills into their employee base? I think the whole subject of education is the other one that has a real opportunity to drive deep focus investments. And that will help the economy, and that will help the country. And that’s true not just for India.
If you were to flip the conversation to a highly developed economy like the US, it’s equally true, if not even more true, there as work forces need to be reskilled, retrained.

The challenge of training and education is true in developing economies like India, for one set of reasons, and is equally challenging and for a different set of reasons, but the author is the same. You’ve got to retrain, you’ve got to reskill, you’ve got to teach people. You’ve got to excite people around training, make it easily available and inexpensive.

Now how do you think disruption will affect the new entrepreneurs and existing businesses?
New entrepreneurs obviously are actually part of the ecosystem that disrupts other people. One of the advantages that the business environment provides today is for anyone to have an idea and actually find a way to take it to market to test it. And the more that people have the capability of bringing ideas to market an fruition and testing, and the more that you can do that fast, with very short cycle time, the more you have experiments. Lots of them will fail. Success — and, when you have success, it typically disrupts and changes an old way of doing things. So, by definition, the more you have startups, the more it challenges the balanced status quo. And the more it challenges legacy and old ways of doing things and running businesses. And that throws up the mirror image. So that’s good for start-ups, that’s good for all businesses.

The mirror image challenge is that it’s potentially bad for companies that have established business models that are working really well, and have been working well in the past. The danger, the danger is those companies that are actually thriving on current business models is they get complacent. It’s a great business model, it’s worked for the last 30 years, and they’ve had a great run. If they get complacent, then I would argue there’s a very high probability that somebody is going to disrupt them.

So to actually have to live in a world of constant paranoia is a good thing in today’s world. And you always have to assume that there are 10 people in the world who are constantly thinking about destroying your business with a new business model. And the best way to even that is not defence. The best way to deal with that is offense, and the best offense is you become the 11th such person who’s also thinking about destroying your own business with a new business model.

Do you think disrupting the disruptor will be the order of things to come?
So your question is if you think Uber has disrupted the market place for taxis and rental cars and the way people use automobiles to transport themselves. The question is, is someone else going to disrupt Uber? Absolutely yes. And it’s extremely dangerous for any “disruptor”, who’s actually created a new business model to assume that their business model is going to be the only business model. If they’re not careful, then someone else is going to come up with a new one and that will disrupt them. And I think it is a given fact that the cycle of this disruption is becoming shorter and shorter. There used to be a time, when you find a successful business model, you can be rest assured that, for many years, that model was working. Now that has started — that clearly has started — shortening many years back, and it will become shorter and shorter because of the fact that you can test new things and launch new things faster and faster. You don’t need to invent everything new. There’s a lot of technology that’s getting invented in any case. You need to just integrate them and match them up differently to produce and solve a different problem in a different way. So the fact that Uber is testing even before they completely capture the current business model. Obviously they continue to grow in the current business model, but they are already testing driverless cars. That tells you that what they are doing is absolutely right, which is, they’re saying driverless cars could disrupt my business, so I’m going to do it myself. I’m going to start testing.