Which business are you in?

I was watching an interview with the Managing Director of a famous Indian company that makes biscuits this morning.  Let us call it X. The MD was talking of Corporate "Sustainable" Responsibility instead of Corporate "Social" Responsibility.  She said that it needs to be understood that the corporate sector is not an NGO. So, what ever be the spend for the society, it must be sustainable.  She talked of how her company had 99% of its products made without using transfats and the addition of a critical ingredient in glucose biscuits (pretty much similar to iodine in salt).  She said that 47% of children below the age of 5 in India are undernourished.

This got me thinking of the story of the three masons who were in a building project. When the first one was asked as to what he was doing, he replied, "I am laying stones".  The second one said, "I am building a wall."  The third one said proudly, "I am building a cathedral."  The third person was very happy with his job while the other two were not.  This is the power of understanding the end objective and how everyone should relate their part of the work to the end objective.

While, it is critical for everyone to understand the vision and the objectives of the company they work for and how they contribute towards it, it is important for leaders to understand, define and articulate the business in which their company is.  So, what business is X company in?  Making of biscuits or in the business of foods?  Somehow, after hearing the MD speak, I thought X was in the business of Nutrition.  I am not sure how the management of X views the business they are in but if they viewed it as Nutrition, their decisions on products, markets, etc. could end up being different.

Likewise, it is critical for every management team to figure out what business their companies are in so that it helps focus on sustainable development of the company and the society in which it exists.  This co-existence is critical for healthy growth of the society and the company.  Very similar to inclusive growth that I had discussed in one of my earlier writings.

Apart from understanding the business they are in and how to position products/services, the management of the company can also identify the real competitors.  This is what people today call "wearing a wide angle lens".  Examples of this are - IPL became the biggest threat to movies - both these versions entertain people for 3 hours and people seem to enjoy IPL more than movies. So, movie producers and distributors decided not to release new movies during the IPL season or atleast go slow on releases.  Movie stars own some of the IPL Franchises.  If IPL was seen as a sports business rather than entertainment, then, the movie stars would not have seen this as competition.  Similarly, one of the biggest competition to business travel is high resolution video conferencing eg. Telepresence of CISCO or Halo of HP. 

It is essential for management executives of companies to wear a wide angle lens and define the business they are in.  This will help bring clarity down the organization and staff can relate to their companies better.