June 20, 2009

Dealing With Status Quo

Last week, I wrote about the entrepreneurial mindset challenging status quo. Challenging status quo and embracing change can take many forms and operate at many levels; but the presence or lack of an entrepreneurial mindset is apparent in the smallest of things or in everyday operating situations.

Here’re two real life examples regarding status quo.

Some years ago, a well known and very experienced Silicon Valley VC was visiting a small and young business in Bangalore that was raising capital for funding its growth in India and overseas. The company was building a high-tech component for the telecom equipment sector. He met the US educated CEO and his team, visited customers and the manufacturing facilities. Everything seemed to be fine with the visit. However, the VC declined to invest. He had noticed that the CEO’s office had typewriters and not computers! He had also noticed and learnt that the CEO’s business card didn’t have an email id, that the secretary took printouts of emails for the CEO to read overnight, respond to by scribbling on the margins and handing over the scribbled upon printouts to the secretary the following morning. In his view, an office that relied on a 100 year old technology like typewriters and which were hardly seen anymore – outside of government offices which aren’t the best examples of innovative or entrepreneurial mindsets – and the way the CEO dealt with email betrayed an unwillingness to change, a comfort with status quo and really reflected the CEO’s own mindset relating to modernization, investments, efficiency, productivity and so on. The company was not able to raise money and is still around, hopefully without typewriters, leading a hand to mouth existence.

A company had ambitious growth plans and so a strong executive team was hired. The company wanted to be run professionally, raise capital and grow aggressively. The executive team shared good chemistry with the CEO and all seemed fine. Then one by one, the newly hired team started leaving. The CEO was simply unwilling to let go of any and all decision making. Every decision had to be taken by him, the minutest details had to be shared with him and he wanted to know everything that was going on. Back seat driving and micro-management were the reasons for the hired team to depart. They felt they weren’t empowered and trusted enough to execute. The CEO was unable to let go, uncomfortable with the new scenario wherein the executives took operating decisions to execute the business plan and he felt left out of the daily action. The CEO, in spite of having an experienced team, felt comfortable only when the company operated in its earlier manner with him in control. The need to balance the CEO’s operating style with the company’s growth plans demonstrated the true extent of his entrepreneurial mindset. Today, the company is still exactly where it was financially several years ago and is unable to hire and retain talented and experienced executives.

Challenging status quo therefore doesn’t necessarily imply doing something radical. It means not only changing the way things have been done but being comfortable with the new ways. Without being comfortable with the new, there’s every danger of the situation regressing to its earlier ways. And that isn’t good for anyone.

In the 19th century, horse drawn carriages were the norm and with burgeoning city populations, city planners used to wonder about ways to deal with the horse dung on city streets. The internal combustion engine put an end to that problem! One cannot operate in the 21st century with a 20th century view of the world. It is necessary to shed or modify old ideas in the light of new signals. These signals come from policies, economies, markets, technologies, regulations, user behaviours and the like and one must, therefore, be receptive to these signals. Interpreting these signals to modify and change for the impending new sets of circumstances is therefore critical.

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings 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.