Strategic Decision Making

The CEO of a textile company has to take a crucial decision on the future direction of his firm, which is struck in a saturated market.

The Company

Sun Textiles is an Indian multinational manufacturing Denims with five sales offices in US, Canada, UK, Philippines and Mumbai serving the marketing needs of the different parts of the world. It has six sprawling manufacturing facilities in India and Mauritius and 7 warehouses in various parts of the world. When the present CEO of Sun Textiles Pankaj Rai took over the management of his family business after graduating from Kellogg, he took a conscious, successful, strategic decision to move away from the traditional textile products like suiting, shirting and sarees to the manufacture of denims. It was an innovative strategic shift because at that time no Indian manufacturers had the capability or vision to make the foray into the world of denim market, which was growing fast when Sun Textiles stepped into it. Since then the company has achieved a phenomenal growth to become the third largest denim manufacturer in the world.

The Present Situation

But today, the situation has reversed. The Denim demand is shrinking internationally. The global market has become saturated. The hectic growth of yester years has waned. The pace of growth is beginning to slow down. There is also a slackening in the morale of the work-force. The excitement and enthusiasm of building a global and world-class company, which fired the imagination of management during the early years of the company is no longer there. The profitability is going down.

Exploring Possibilities

The CEO, Pankaj Rai held a strategic session with his senior managers for discussing how to get out of the present stalemate and charting a future course of action. Rajaram, the Production Manager suggested that the present condition is not a serious problem.

We can recover our profitability and increase our market share by competing on cost-advantage. We have to reduce cost and increase productivity by employing better technology and new manufacturing and management techniques like Lean manufacturing, Sig Sigma, Total Production Management. If we are able to build these technologies into our production and make them work on a sustained basis we cannot only get out of the present stalemate but can also grow profitability. The Purchase Manager Mohanty more or less supported his production peer and added that we can gain further cost advantage by backward integration into cotton cultivation, which can to a certain extent neutralize the uncertainties involved in the fluctuating cotton market. Gopal, the Marketing Manager suggested that we can also think of forward-integration into retailing which is a highly competitive domain but also a growing one with great potential in the future. The Finance Manager, Tarun Das, said if Rajaram was able to achieve a sustained cost-advantage and better productivity, we can tie up with some big companies in denim or textiles in US or Europe and offer them our low cost advantage. The HRD manager, Vimala Devi remarked better productivity or cost-advantage cannot be achieved by technology alone. We must invest more in training and development of our employees and do something to boost their morale and motivation which is at present low. And finally, Megna Bhat, Manager (Technology and Design) murmured in a dissenting note: All these are fine but is to give a new direction what we need is innovation in product development and more investment in R&D.

Pankaj Rai listened carefully and attentively to his manager’s suggestions. But he was not able to come to any definite conclusion. So, as his Guru constantly advised, he kept his mind silent. After a few minutes of silence, a perception emerged in his mind and he formulated it with a deep conviction.

“I think this is an opportunity to go back and rethink our vision and values. We have pursued rather exclusively growth and profitability. Is this the highest purpose of a business organization.”

Pankaj looked around and waited for some response from his managers. But he felt an uncomfortable silence. His deputies shifted uneasily in their chairs looking at each other. Most of them thought that Pankaj’s concluding remark is a little too philosophical and out of context for a strategy session. Pankaj got up from his chair and said with a smile, “Well, my dear comrades we had a good session. But please give a little thought to what I said. We will continue with our discussion and have another session this week.”

The Decision-Journey

Pankaj is a spiritual seeker and the initiate of a spiritual group headed by a living Master. Whenever he has to take a major decision personally or professionally he consulted his Master for guidance. His Master is not an ascetic monk. Before entering into spiritual life and became a guru he was a General Manager of a large public sector bank. So his Master was also corporate savvy and well versed in modern management thinking.

When he met his Master, he narrated to him what happened in the strategy session and pleaded, “Sir, please give me the solution and the decision.” The Master smiled and said,

“You know that it is not my way. If I tell you directly what has to be done and you do it obediently like a slave you will not grow. I will not take the decision for you nor can solve your problem. I will guide you and help you in arriving at the decision or the solution, but you have to discover the decision and solution yourself.”

Pankaj said, “Yes, I know, you always make me work. But now guide me.” After a pause, Master spoke:

“I think the perception you received in silence is right in principle. Your managers are thinking in traditional copybook style. But since you remained silent and detached you are able to raise beyond this traditional thinking to something new and higher. This doesn’t mean what your managers said are irrelevant.

All that has to be done if your company has to remain at the competitive edge. But if you want to give a new direction to the company something more is needed. And that something more you got it right in essence. Now you have to work-out the details with your managers.”

Pankaj said, “But first with you Sir. When I articulated my perception to my managers, they blinked as if I am telling something outlandish.” The Master laughed and said, “But you can’t successfully implement your vision without the active and willing participation of your executives. You have to involve them in every step of the decision-making process.” “Yes, I agree,” said Pankaj. “But first of all I need more clarity and conviction and need some guidance from you on how to proceed further. But one thing I felt strongly is that growth and profitability will not be the main guiding values of the future. Am I right in this decision?”

“Yes, I think you are right”, said the Master, “But you should not renounce them altogether. A business organization, which doesn’t earn profit, cannot survive. Similarly growth is an evolutionary necessity. Anything which doesn’t grow tends to disintegrate. But there is a limit to growth at a single level. When the growth at a particular level reaches the saturation point, we have to shift the growth to a deeper and higher level. I think your company is precisely at this transitional stage, what Andy Grove of Intel described as the ‘Inflection Point’. Until now your company has pursued quantitative growth in terms of increasing market-share and profitability with the vision of becoming a leading global player in the denim industry. But now you have to rethink your vision and strategy in terms of a more qualitative growth.”

“But what do you mean by qualitative growth,” asked Pankaj.

“Find it out through a combination of thinking and silent meditation,” said the Master. “But Sir” asked Pankaj, “why do you want me to think again. You have told me many times, nothing much can be achieved by thinking and the true answer comes only in silence.” The Master clarified:

“But a dull and tamasic mind which refuses to think because of mental laziness can never receive intuition. Please don’t think silencing the mind as some sort of an easy technique for getting quick results. To achieve mastery in intuitive decision-making requires hard work and a long and difficult inner discipline. The mind should be pure and free from all personal ambitions, desires, preferences, anxiety and eagerness, entirely passive to what comes from within and above. It must also be living, alert, observant and at its highest potential. Contemplative thinking on the problem or issue keeps the mind alive and acts as an invitation to intuition. In the Indian Jnana Yoga tradition, sravana and manana, which means mental dwelling on the idea is an initial preparation to the next stage of nididhyasana, concentrated meditation in silence. So do some contemplative thinking on the initial intuition and what we have discussed so far and then practice mental silence on the lines which I have taught you.”

Pankaj asked, “On what lines you want me to think?”

“As I said earlier, think in terms of quality. Think in terms of the larger whole of which your organization is a part. Think in terms of your stakeholders like the customers, employees, suppliers and the community and what your organization can do for the well-being and progress of this larger community. Think also about the present condition of humanity and the world and in what way your organization can contribute for the evolutionary progress of the world. Do this wide and self-transcending thinking and it will make your mind receptive to the higher forces. After you have done this thinking remain silent and the answer will come.” replied the Master.

Arriving at the New Vision and Strategy

After his meeting with the Master, Pankaj drove to his favourite hotel and took a quiet corner. He contemplated on the illuminating discussion he had with his master. But nothing concrete emerged from the meditation. At home in the night, as he does everyday, he sat in silent meditation for an hour.

When he was about to come out of his meditation, again a clear perception dropped from above. He allowed it to sink down into his mind. After a few minutes he got up, took up a pad and wrote down the perception which defined the new vision.”

“To provide a qualitatively superior life, experience and growth opportunities to the employees, customer and community.”

Pankaj looked at the new vision and smiled. Yes, not to become a Ford or Bill Gates or to become a global player or to be one or two in market-share which is the formula of Jack Welch. Something less ambitious and more humble, but also more elevating and also morally, spiritually satisfying. Pankaj closed his eyes again and sat still in silence. After a few minutes some more perceptions emerged related to the principles to strategy, which he wrote them down.

Employee Development: main focus on empowerment, creativity, well-being and providing as much opportunities as possible for the inner and outer growth of employees.

Customer Satisfaction: relationship marketing; identify the most profitable customers and make them partners of the company; develop a close, intimate, personal and trustworthy relationship with them; serve them selflessly and try to exceed their expectations.

Community Development: identify projects which will have a maximum impact on the wellbeing and process of the community; make community development an integral part of the company’s strategy; use the resources, talent and expertise of the company to accelerate the economic, social and cultural development of the community.

The Process of Implementation

Pankaj took a printout of his new vision and strategy and showed it to his Master. After going through it the Master said, “Yes, I think you have got it right.” Pankaj expressed some of his doubts which rose in his mind later, which slightly undermined his initial conviction. He said, “But Sir, I find there is nothing new in it. These things are around in the current management thinking. What is the need of intuition and all these exercises to know what is already there?” The Master replied, “you should not allow such doubts to cloud your initial conviction. A true intuition indicates what is True and not always or necessarily what is New. Has it given you the right direction to the future growth of the company with a certain inner conviction of truth? If the answer is Yes then you have to follow the truth of your conviction.”

Pankaj nodded his head in agreement. After a pause, Pankaj said a little wearily, “Next comes the most difficult task. I have to convince my managers who have to implement the vision. How to proceed with it?” “You must have a very frank discussion with your managers.” replied the Master.

“But how to begin” asked Pankaj. “Begin with a short meeting, present your vision to them and tell them I would like to have a very frank discussion with them individually and collectively. Tell them to think over the new vision give them one or two weeks time and then sit with each manager individually because they will be more frank with you in private discussion than in public meetings. Have as many meetings as possible with each manager and a frank discussion. Listen patiently and attentively to all their concerns, objections, apprehensions, answer them and try to convince them. When you go through this process you will know who are in tune with your vision and who are not. Those who are totally out of tune or against your vision may have to leave the organization. Give them a warm and golden handshake. Ultimately you have to create a management team totally committed to your vision.” replied the Master.

Pankaj sighed and said, “Difficult and tiring work but as you said that day, very much necessary. At the organizational level, what needs to be done?”

“You have to create an enabling environment” said the Master, “a supportive culture which promotes, encourages and rewards every thought, feeling, behaviour, action which expresses creatively your new vision and values in the outer life of the organization. The main task here is to create a motivation strategy and performance management system which felicitates the creative self-expression of the new vision and values in the organization.”

Exercise Questions

Q.1 You are the CEO of a medium sized pharmacy company, making non-patented, low-tech drugs with reverse-engineering skills. Now you want to steer the company forward towards its next step in evolution. Prepare a vision statement and a strategy plan for the company.

Q.2 You are the CEO of a large, profitable electrical goods manufacturer. You have found that the company has reached the saturation point in terms of outer material growth. You want to give a higher direction to the company in the mental, moral, and spiritual realms. Sketch-out a path for understanding precisely the present mental, moral, and psychological condition of your organization.

Q.3 You are the owner of a medium-sized food-processing factory in a village. Formulate a CSR strategy for leveraging the skills and competencies available within your organization for developing the village community around your company.

Role of Reason in Intuitive Decision Making

Reason has a dual role in Intuitive Decision Making.

Before arriving at the decision, holistic thinking or various possibilities, trying to understand the consequences of each possibility and assess which of the possibility can create the highest value or the maximum well-being for all stakeholders, especially the employee, customer, society and the environment, creates a favorable inner environment in the mind for receiving the holistic intuition.

After arriving at the decision, Reason has to be used for implementing and organizing the decision or the idea and in convincing and persuading others to accept the intuitive idea.

What is a Right Decision?

Right decision means from an integral perspective:

bullet It has to be commercially successful.
bullet Socially responsible.
bullet Environmentally sustainable.
bullet Serve customer needs.
bullet Maximize human well-being.
bullet Lead to the higher evolution of the individual and collectivity.

M.S. Srinivasan

The author is a Research Associate at Sri Aurobindo Society and on the editorial board of Fourth Dimension Inc. His major areas of interest are Management and Indian Culture.

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