April 06, 2007

The Indian Hockey Team Vs. Hockey Stick Growth - By Sanjay Anandaram

India’s performance in the current ICC cricket World Cup throws up several important lessons for entrepreneurs. The most notable of these is the criticality of planning. Not for the next few games but for the next several years. And in turn, this planning requires the ability to see trends, visualize how these trends evolve over time and consequently impact the venture, if not now, then in the foreseeable future. Let me explain.

From a leisurely 5-day game with a rest day in-between, the game is today being played in a rapid 20-20 format. Fielding, that used to be at best equivalent to a stroll in the park, now requires supreme athleticism and anticipation. Technology that used to be non-existent has now become an integral part of the game. From a gentleman’s game it has become a multi-billion dollar brutally competitive (and I’m not talking of just the BCCI elections!) sport with intense pressure from various quarters. From playing a few days a year to playing around the year. Where multiple players are groomed for every position rather than have positions of sinecure based on reputation. And so on. These throw up challenges of planning to those at the helm of the game to ensure that the performance of the team remains consistently high. To do effective planning, there must be the ability to visualize the impending changes and make the requisite changes. Changes that are systemic and organizational. It is obvious that the Indian cricket system has a 19th century mindset in the 21st century.

As the CEO of a startup venture it will be suicidal to have a similar mindset! Therefore, you must plan on how the market and customers are likely to behave in the coming years but also look at competition, the impact of technology on your company and its products, the challenges of attracting, grooming and retaining talent, and consequently what changes need to be made within your company to take best advantage of the situation. Changes include issues like transparency, accountability, empowerment, clear and consistent communication, creating a non-political environment, valuing professionalism, understanding that loyalty and competence are not substitutes, setting up systems to track and reward performance while driving efficiency. Investments in technology and training are necessary. Having the right person on the bus (as Jim Collins so eloquently describes in his book Good to Great) is of paramount importance. Having the right people in the right jobs has a cascading impact on the organization’s competence and abilities. Because as the old saying goes, “First grade people hire first grade people. Second grade people hire third grade people”. Over time, without a meritocracy, only the third grade people are left behind. One look at the Indian system of sports (among other areas) is enough to convince anyone that all of the above are conspicuously absent.

A look at the tragic decline (demise?) of Indian hockey is illustrative of what happens when ignorance of trends in the game converges with corruption, politics, and incompetence.

On the other hand, as the CEO of your venture, there’s another important learning from the world of cricket. How does one create a large number of maniacally obsessed fanatic customers who will keep buying your products in ever larger numbers independent of the quality of their performance such that you generate incredibly high cash surpluses year on year? This too requires a great degree of understanding of the psyche of your customers, of the need to keep them constantly entertained with events, of the need to keep the PR and media machines grinding away, of the need to keep attracting after newer market segments (e.g. children) with newer gimmicks and so on.
In this light, it is important to keep in mind US President Abraham Lincoln’s famous comment to a visitor to the White House in 1865: "If you once forfeit the confidence of your fellow citizens, you can never regain their respect and esteem. It is true that you may fool all of the people some of the time; you can even fool some of the people all of the time; but you can’t fool all of the people all of the time."
And we all know what happened to Indian hockey (and all other team sports) over the past 50 years.

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.