January 26, 2007

Speed! - By Sanjay Anandaram

At an event last week, I learnt that Nokia produces about 25million cell phones in its factory in Sriperumbadur. This by itself was not amazing but the fact that Nokia went from receiving barren land to setting up a factory to creating a supporting network of suppliers and vendors to rolling out its first phones in 23 weeks i.e. in less than 6 months. Contrast this with the situation in many public projects where large sums of money are spent with nothing to show even after 23 years, let alone 23 weeks! For example, the Bangalore International Airport was first conceived in 1991, the MOU was signed in 1999, the construction work commenced in 2005 and the first phase is expected to be thrown open to the public (fingers crossed!) in April 2008, a good 17 years after project conception! Naturally, costs of constructing not just the airport but also related infrastructure like approach roads have escalated, technology has changed dramatically, and estimates of passenger traffic have had to be revised leading to the ongoing re-design of the airport itself!

There are many other examples of speed (and the lack of it) in other areas as well. There are well documented cases from across the world where speed of ideation, of policy making, of execution, of change, and indeed in all aspects of execution and operations, have contributed enormously to the success of projects. For example, the speed with which mega refinery projects are set up by the Reliance Group and the speed with which the Bharti group executes on its telecom plans are legendary. Not surprisingly, both these companies are lead by entrepreneurial leaders. Of the advantages enjoyed by startups and entrepreneurs against large incumbents speed is particularly interesting. It is interesting because the very form, structure and the mindset in the startup and of the entrepreneur is demonstrated by speed. The larger and well established incumbents have greater resources, greater market presence, and greater technological capabilities and yet are routinely taken unawares by the sheer speed inherent in entrepreneurial mindsets and by startups.

That speed provides competitive advantage is a well-known and fairly obvious management mantra. Yet infusing “speed” into a project does not happen by chance. It comes about through an organization’s ability and capability for entrepreneurial thinking, which in turn can be summed up as risk taking ability, delegation, empowerment, speedy & flexible decision making processes, collaboration within and without organizations, and high caliber teams. However to be able to develop entrepreneurial thinking, an entrepreneurial culture needs to exist in the company. One that fosters the need to anticipate market, business and technology trends, a culture that encourages agility, experimentation and engenders innovation.

“Justice delayed is justice denied” is an oft-quoted maxim that too deals with the need for speed. Sounds simple and obvious, yet not many have succeeded in creating such thinking in organizations especially governmental ones. I would imagine that if government projects are cleared quickly, executed quickly, then even the incentives (official and unofficial) would flow quickly to the stakeholders. In addition, more projects would get executed per unit time thanks to speed leading to ever more incentives flowing rapidly through the system. Yet, we don’t see the need for speed in government and public delivery of services. And the reasons for this are that the structure of government is such that it discourages entrepreneurial thinking. The more centralized the government, the more cumbersome the decision making processes, the more insular the organizational groups, the less is the entrepreneurial thinking. Obviously, issues of incentives, transparency and accountability are critical but, in my opinion, less important than the need for speedy entrepreneurial thinking in government. A look at even the projects relating to national security also bring out the need for such thinking – the projects relating to the Nuclear Submarine (launched in 1975), Light Combat Aircraft (LCA, launched in 1983) and the Main Battle Tank (MBT, launched in 1974) are cases in point.

China has clearly grasped the opportunities provided by the 21st century world. Do we too want to grasp it in this century or will our lack of appreciation of entrepreneurial thinking and speed force us to postpone this deadline too?

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at sanjay@jumpstartup.net. The views expressed here are his own.