- Clean energy will attract $300 billion dollars of investment in India in the next 10 years
- EVs and clean energy together will be the single biggest transformation in the next 20 years.
We are living through the deadliest pandemic of this century. These are unprecedented times, not only for an individual but for businesses as well. The big question is how does one ensure growth at a time when even surviving is difficult?
In an exclusive fireside chat organized by The Blue Circle on ‘Growing Despite Setbacks’, Manoj Kohli, Country Head, SoftBank India, and Srikant Sastri, co-founder, Crayon Data, Chairman, IIM Calcutta Innovation Park and I3G advisory network, discussed how to mitigate through disruptive times, learnings from Kohli’s experience at Airtel and the future of investment landscape in India.
How to Grow During Difficult Times
The world has witnessed a number of setbacks in the last 4-5 months. Be it the oil industry shock, lockdown issues, migration of labourers, protest for the death of a black citizen, and many more. Each country has its own roadblocks but good leadership teams are still winning.
“Many companies are more than 100% of the pre-COVID days already which means they are doing something different, they are doing something great,” said Kohli.
He discussed five qualities that can help a company mitigate through the crisis.
First is changing the business model very swiftly to acclimatise to the new environmental conditions. He however cautioned that changing the strategic direction according to the new consumer behaviour could be a tricky job since his digital behaviour is changing faster than ever.
“When we built the network of airtel in more than 5 lakh villages, I could have never dreamt then that a small-town housewife could buy a phone. Today she is shopping online! Leadership teams have to catch this behavior.”
Second, innovating through experimentation, trying new ideas and accepting the fact that there will be failures.
Next is Frugality. “I think that’s huge learning in the last 3-4 months that customers will not pay for wastage,” pointed Kohli.
Fourth important point he shared is the financial fitness of the company. A firm should be profitable per unit, have positive cash flows, and low debt so that it is sustainable in such times of crisis.
Last but not the least is the high performance working culture. It is the people who make the company and the future, who overcome all the current and new obstacles and turn uncertainty into certainty. Talent is the most important asset and high-performance culture will make the talented stay.
Learnings from Airtel Experience
Under Kohli’s 13 year stewardship, Airtel grew 100 times between 2002 and 2015 to be the No.3 telco in the world with over 380m customers. This was the time when the telecom industry suffered setback after setback.
Kohli spoke about 2002 when Airtel was a loss-making company, the smallest of the other players in the segment.
As a new company, they understood that they needed to create a new model because the existing model was meant only for large corporations with billion-dollar funding or cash flows.
“So we changed the business model in 2002-03 and made it into the first outsourcing, most distinct model across telecom,” said Kohli. People raised questions about their survival but they passed and that was a huge conviction of a new business model in an established business in 200 countries.
“The next issue was brand, so Airtel focussed on building a brand that is admired by the consumer. It got close to the hearts of the people of India. And, not only India but people from 20 other countries where we have Airtel today.”
The most important, India’s rural markets. There are 650,000 villages in India and Airtel aimed to reach every village. It managed to get to more than 550,000 villages but the rural market demanded a new business model! A new way of thinking and distribution. It had to be offline through towers and 24/7 diesel generators were needed since there was no power.
“We got into towns that did not have roads, power but Airtel,” said Kohli.
Kohli said that they had the passion to win and clarity of mind for the mission. “The passion to win was across thousands of employees, the slogan was win every day,” he added.
Kohli stresses that the leadership teams that are able to find stability will surely win – Stability with regard to the office culture, ethos, work, treating people with respect.
Future of Investments in India Post COVID
Kohli says all the business can become attractive but the business model has to be profitable and viable.
“My focus has been 80% topline and 20% opex because if opex is wrong or high and there is some wastage, that can be corrected very fast,” said Kohli.
He advised focussing on getting the customer offering, product, and service right and then revenues right. It is important because if revenues are right, then getting the cost structure, efficiency, productivity doesn’t take much time.
“So, this is my priority – structure, customer product and service, revenues, and then opex,” said Kohli.
Additionally, building a team that has domain knowledge and expertise in that particular area is equally important. These are the factors that investors are looking at.
Small health clinics
When asked about investment in small health clinics, he said that it has a great future because a consumer loves to go to a small or medium-sized clinic as it has a personal touch.
However, clinics and small hospitals have to earn reasonable returns so that they can invest in modern types of equipment and technology. And if they can maintain hygiene and great technology, such clinics will do really well. Another important aspect of this is the continuity of doctors because the faith of patients is linked to it.
“If hospitals can tick all these boxes, it is a great business model,” suggested Kohli.
He believes that education has the potential to grow in the coming future. Education needs to change globally since it has remained almost the same for decades. Education has to be made digital in a structured, standard, and exciting form. There has to be a standard coursework and within that teachers or coaches have to create excitement so that students should love it.
“I have seen digital teaching, it is conducted in a boring way. You can bring excitement into standard teaching by case studies, stories,” recommended Kohli. So the quality of the teacher has to enhance and training has to take place in digital teaching.
Clean Energy and e-Mobility
The area that Kohli considers has the greatest potential is clean energy and Electric Vehicles.
“Clean energy itself will attract $300 billion dollars of investment in India in the next 10 years,” said Kohli.
“The business has four parts to it- solar, wind, hybrid, and storage battery. Each of these businesses is great. For solar, India has great sunshine, wind in the coastal areas such as Gujarat and Tamil Nadu is excellent, now the offshore wind projects are also starting. Storage batteries, at present, are expensive but in the next 3-4 years, the price is expected to come down.”
About investment in smaller towns, Manoj shared that SoftBank encourages every portfolio company to go deep into the market. Small and medium towns are very large in terms of population and demand and considering today’s situation, sub-urban and rural towns have a lot of cash by DBTs, good crops, and high MSPs by the government.
Manoj said he has always believed in a 3H approach – honesty, hard work, and humility. This is the foundation of success and beyond that, there are two more important things. One is constant learning, and the other is balance. He advised reading and learning every day while being brutal about unlearning obsolete ideas and adopting innovation and technology.
“Careers are not defined in weeks or months, they are measured in decades and therefore a balance between personal and professional life is of utmost importance,” said Kohli. “Be with friends, laugh, and stay positive.” He stressed on giving an hour to fitness and yoga every day.
“It is important that you keep yourself grounded during success, not get depressed with failures and tell yourself that you will come back,” concluded Kohli.
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