Sunday, September 1, 2019

NOTHING IS WRONG WITH INDIAN GDP... ITS WRONG WITH CONSULTANTS AND ADVISORS


Indian economy has plummeted to 5% and that has become a matter of concern for the neoclassical economist. Well, every market player is an economist and every management consultant becomes an expert adviser in these times. Well, Indian economic growth of 5% was sufficient enough. The GDP number seems to be low since the same so-called management consultants and economist have made robust growth projection based on which they corporate took the decision making.

Now why I said that 5% GDP growth is enough since the period between April to June 2019 was an election month and all investments and consumption decision was under hold. Then how one can expect growth in this period. 2ndly when the investments and consumption were getting slower post the NBFC crisis then how one can expect to make decisions about spending. Unless a fully-fledged government comes into place corporate decision making always remains a slow strategy framework.

Hence all those economists and management consultants’ calculations were based on baseless factors. Growth revival of an economy cannot happen unless the people on the street have faith in the consumption and his monthly salary intake. One should be thankful for the Indian economy that a 5% growth was achievable when the Trade war has turned the table of Global growth into a recession phase.  

Now let’s comes to these people who made the prediction of GDP to 6% and 6.5%. Well, Post-recession of 2008 and technological advancement have simply made the neoclassical economic theories redundant. Same story rather worst situation is of all those management consultants who have not kept par with the evolving academic theories and still living in the traditional management theories.

Indian GDP will suffer more if the Indian corporate house don’t change their ears and mouth about the strategic cost management and resource utilization.  The myopic vision of management consultants and lack of understanding about technological advancement  followed with identification of change of pattern is the key supporter for the Indian corporate houses.

Corporate defaults or bankruptcy is happening? Why day by day business is becoming unsustainable? What makes the business fragile and weak? Why diversification of business verticals is not generating profits? Why I have sale a business which did not turn out to be cash cow after a few years. Where all these did go wrong? Well above all these did 2008 recession happens and business just collapsed. Well, advised by these traditional management consultants who could imagine or predict the changes. Identification of the revolution of changes and acting upon the same is critical survive.


The decline of Indian GDP is also linked to these above points. Did Indian corporate is making a sustainable business model with efficient identification of changes. 

Just as technological advancement has happened the same story is applicable for economics and management. Strategic cost management based on technology has changed dramatically. Traditional cost management strategies are redundant in the times of Exponential disruption based growth.

We are witnessing many corporate failures in India and more are about to come. What is the recipe which went wrong for these corporations in their decision-making process? Well, the management advisors went wrong in guiding the top management. Short cuts in business development followed with myopic thought process on profits and most importantly they lacked sustainable business model designs.

Sustainable business is the only way to save from any shortcomings. Every 10 years the global economy will face recession trends if business and strategy are based on short term myopic vision. Most of the senior management people don’t have a sustainable business model. ROI is the least focus whereas profit remains the main target. Why don't we discuss ROI and not profit? This is the place where we lack.

Cutting down cost and expanding business is one of the greatest recipes of the short term based business models and revenue models. Resource allocation has been left behind and cost-cutting is the oxygen we breathe. We love those management consultants who share insights or avenues of cutting down cost but what about resource utilization and optimization. Cutting down cost cannot expand the business. It is just a chapter of a book of cost management.

When we speak about sustainable business model we mean resource allocation, replacement and adoption of technology, aligning with long term industry dynamics and the identification of the patterns of change to take forward the sustainable business model.

Lack of decision making and not acting promptly will cost the Indian corporate in the long term.  Any Industry which does not make a change in its management consultants theories then there is no doubt they will suffer.

But what is wrong with these management consultants and neoclassical economist? They are simply lacking the education of the new management theories which are evolving either from college research labs or from the global failures. Yes, failures teach us where we went wrong. 2008 recession and still the slow growth is a big lesson. Sustainable business model within verticals will be key success mantra.

We have heard that many corporate sells no core business. Well, nothing is noncore if you have enough technical knowhow to run the show. It’s the management and the consultants who run the show and their lack of education kills the business.

Without expansion one cannot grow. Focusing on one business should have given birth to Jio mobile connection. It’s the management of the diversification which leads to success. One business might go down but others will save. It is just like product mix where you do business mix. Now this theory was not given in any book. Business mix efficiently carried out can create a sustainable business model.
Today the one business which you run may not be sustainable in the long term. Then, in
that case, you think what should be doing?

Well about the management consultants –if they were so smart they should have become billionaires.  We need those economist and management consultant who can predict the change and develop theories of management of a business. We don’t want traditional knowledge since they are not written POST recession of 2008.

Indian GDP will grow in the coming months based on the faith of the people of the street. Faith is very important to run an economy and business.

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