Thursday, 1 April 2010

Calling Curtains On The Slowdown

While taking stock of our editorial work for the last financial year what struck the team was that in every single issue, either we or our contributors had brought about the topic of global economic slowdown and its impact. As the economy picks up, it was therefore imperative that we, for one more time, look back at the causes, effects and learning’s from the slowdown, before calling curtains on the recession. We went back to our eminent contributors to understand the impact of the phenomenon, and the almost common refrain across functions and industries was that the slowdown was a necessary evil if not outright good for the economy. The slowdown healed the economy from unrealistic developments and unsustainable bubbles, the weak got bankrupt, and the strong had to come up with better products and more efficient services.

In the Indian context, what has also helped is that the actual effect of the global slowdown on the Indian economy was not as devastating as some in the media made it out to be. We had the luxury to observe and learn from the cause and effects of lapses in regulation, corporate governance and fiscal adventurism in the United States and other developed economies.

For many Indian companies, which were on an exponential growth trajectory, the slowdown helped them take stock and consolidate. While in the heady times of the bull-run, chasing quarterly targets and analyst briefings took centre stage, the slowdown gave leadership the much required breathing space to sit back and take a holistic long-term view. The focus shifted from growth at any cost, to sustainable growth. Corporate governance became more than a buzzword and compliance and ethical business practices gained centre stage. Existing business practices were questioned and in certain cases found redundant or inefficient. Wasteful resources and deadwood were done away with. There were significant efforts in people and leadership development. Both process and people productivity increased by leaps. In the HR space, there was renewed commitment on transparency, communication, employee engagement and empowerment. HR leaders took a strategic view of training and development as an instrument to develop multiple competencies and skills for the future. Large monolithic organisations started the process of transforming themselves into flexible and agile units that are ready to adapt to the unpredictable future.

For a large section of the employees in India, this was their first tryst with a slowdown. They were not here during the last one, and without the benefit of hindsight, they were more focussed on the ‘how to overcome’ rather than the abstract concept of what a recession or a downturn was. An economic downturn became a rough and unconquered terrain, something to be explored, something to be understood, something to be overcome, and something to be conquered in the company of fellow travellers.

Some say, that “The Great Depression” which started in 1929 famously shaped, and in some cases nurtured the “Greatest Generation.” As we slowly but surely emerge out of the slowdown that had shaken the economy, there are signals that the lessons from the downturn may shape the “Greatest Organisations” of corporate India.

No comments:

Post a Comment