Thursday, March 24, 2011

16/100: The Change Imperative

The business I am in is facing the full force of change. The immigration laws are changing, forcing us to rethink our business model; the university funding is changing, opening new opportunities for us.

I have been here before, indeed. I started my career as a Systems Administrator managing Unix systems, in 1993, just before the advent of Windows. Then, I moved onto another company in a job setting up their private network, in 1995, just before Internet became commercially available in India. And then, we rode on the Dotcom sentiments and ran a Certification Training company in 1999, just before plane-loads of software programmers started returning to India.

From these experiences, and others that I studied, I know that the best option available for a small business is to change with the environment. The greatest advantage of smallness is nimbleness, and one must take full advantage of this. The worst thing one can do is to sink in denial; but that's exactly what most small businesses do when times change.

Someone I know insists that small businesses don't think. In a way, he is right: In the cash-is-king environment of a small business, there is very little time for elaborate thinking. But, then, he is wrong in some ways, too. Elaborate brainstorming exercise and expensive strategic planning getaways do not necessarily mean better thinking. Besides, thinking-doing gap is usually much smaller in small businesses than in big ones. I would contend that the small businesses think differently. They do not have the luxury of elaborate research and extensive data, hence they depend much more human instincts in making decisions. Going by this, they are likely to be more adaptable at crunch times like this, when most research is meaningless and there is almost no usable data available for forecasting.

However, sweeping environmental changes often catch the small businesses blind. Their nimbleness become useless, and despite their gut instinct and action orientation, they can't do anything. This is because their decision mechanism, so effective in face of 'regular' uncertainties, are completely useless in the face of paradigm shifts - because they are grounded in the past.

Any experience-based decision making is bound to be grounded in the past. Indeed, you can't experience the future. However, the key ability to extrapolate past into future is to be able to reflect and act, something that is hindered, not helped, by the action oriented setting of a small business.

However, at times like this, not just in the particular industry I am involved in but almost everywhere, the importance of reflective action can't be overstated. It is only by standing back, one can see the true nature of the challenge and the other opportunities which arise at the same time. This isn't just an overtly optimistic statement: It is quite obvious that technology in particular always create new opportunities by changing the rules of the game. But, other things, like the shifting political and economic environment, do the same thing as well.

In our industry, right now, the two shifts are happening simultaneously. Led by political imperatives, a misguided policy is being framed which will weaken Britain's competitive standing in the international education market. The Tory government, indulgent on political point scoring on Labour's immigration system, forgot that the expansion of student numbers in Britain are primarily demand-led. There was no Indian middle class twelve years back when they were last in power: It is incoherent to say that the migrant student numbers should go back to what it was a decade ago. But, at the same time, the British education market is going through a deep shift: The university education is about to become expensive, and the job prospects, after such courses, more uncertain. It is likely that more British teenagers now will decide against going to the university, or seek to go to universities elsewhere in Europe. An opportunity is therefore, opening up, for offering meaningful education in a different format.

Reflective action can tell us how to progress now. Indeed, the key thing is the commitment to progress. However much business books tell us, cut-and-run isn't often an option for a small business owner. This is because, even if it makes abundant economic sense, the emotional capital invested in a business is huge for the owner, and therefore, that's possibly the last option for even the most dispassionate. And reflecting is anyway an easier option than closing down, and hence worth a try.

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