Edward de Bono's gift to the world, lateral or nonlinear thinking can help you conjure creative solutions to emerge a winner in an increasingly complex world

RELIANCE: STRATEGIES FOR SUCCESS

Dhirubhai Ambani evokes strong reactions from people but nobody can be indifferent to his achievements. To the many happy shareholders of Reliance, he is good enough to deserve the Bharat Ratna and at the other extreme he is vehemently reviled for his business methods. On being criticized on his modus operandi of openly using political influence for corporate gain, Dhirubhai has repeatedly asserted: ''That is only a minor element of our work. Why not focus on the major portion related to implementation, where so many organizations goof up?'' He adds: ''I give least importance to number one. I was nothing but a small merchant but I reached this level here. I consider myself fortunate to be in this position, but I have no pride. I am as I was.''

Reliance is globally admired for its rapid and time-bound implementation methods and those are where lateral thinking is employed to the maximum.

Reliance executives are constantly encouraged to think out-of-the-box, rather than traditionally or sequentially. The top bosses themselves have this tremendous ability to think laterally and look at business as a series of processes as illustrated by their quotes: ''The leadership of Reliance Industries has always shunned incremental thinking,'' says Anil Ambani, MD of the Reliance group. Older brother Mukesh Ambani says: ''We work in concentric circles, rather than in straight ranks, but there's always a center of accountability. We don't believe in core competence. We believe in building competence around processes and people to create value.''

Dhirubhai adds: ''The world is a series of orbits hierarchically stacked up with peons and clerks at the bottom and leading industrialists and politicians at the top. To be successful, you must break out of your orbit and enter the one above. After a spin in that orbit, you must break into the next one and so on till you reach the top.''

To keep moving in an upward spiral, Dhirubhai has liberally used lateral thinking, far more than any other industrialist, as revealed in Gita Piramal's book, Business Maharajas, among other sources.

RELIANCE FIRSTS

Dhirubhai was the first Indian industrialist to cater to the needs of the small investor. This was more by default rather than design because of his inability to fund his operations initially, yet it was a major deviation from the established practice of raising money from financial institutions. He introduced the equity cult in small towns in India. He is also recognized as having single-handedly revitalized the Indian capital market, by focusing on capital appreciation instead of dividend, which was the norm. Apart from his macro strategy, his tactics also reveal lateral disposition. When the bear syndicate connived to hammer down his share prices, Reliance bought all of its own shares and demanded delivery by creating a 'friends of Reliance' association to buy those shares that the management technically could not. The consequent furor and shutdown of the stock market brought him in the national limelight. He also pioneered the conversion of convertible debenture into shares. This was so successful that it was oversubscribed six times once and prompted him to use the idea to convert non-convertible debentures.

Dhirubhai was the first industrialist in India to build factories comparable to the best in the world. Then, in a prime example of turning the situation on its head, he created capacity ahead of actual demand. Working on the premise that supply creates its own demand, he would sometimes plan a plant with a capacity of almost five times the actual or projected demand running into thousands of tons. Reliance is known to have accepted tenders that were 250 per cent higher than the lowest bid because the contractor delivered on time or flew somebody abroad to buy a critical component.

Against conventional wisdom, Reliance started manufacturing synthetic fabrics on a huge scale, realizing that the poor got more value for money as polyesters implied an image boost. Facing opposition from traditional cloth merchants whose loyalty lay with the older mills, he ignored the established wholesale trade, created his own exclusive showrooms, explored markets and selected agents from non-textile backgrounds. Finally, Reliance achieved the impossible by building a cryogenic terminal to transport ethylene in deep seas when conventional methods failed, the first time this was tried in India.

INNOVATIONS GALORE

At a time when India's equity market was in the bear phase, Reliance was the first group to tap the overseas debt market with long-term debt, including the 100-year Yankee bond. It was also the first Indian corporation to make a GDR issue and the first to get Moody's and S&P ratings. Reliance was a zero tax company for several years because its continuous tax credits helped it to offset its profits. When the finance minister imposed a compulsory corporate tax of 30 per cent, Reliance capitalized their total debt for the entire contracted term of debt. They argued that interest accrues from the date of availing a loan until its repayment, and that all loans would be repaid on their due dates. This enabled them to retain their zero tax status.

The Reliance website is replete with examples of lateral thinking even in micro management. The company uses unconventional methods to get a job done especially when customer satisfaction is involved. Employees have disguised themselves to directly deliver an important consignment to a customer. Reliance has reached out to their client's customers to create broader loyalty bases. Anil and Mukesh Ambani directly approach their lower level staff without going through the departmental heads. They have tied up with a management institute to teach trainees in six months what they learn in MBA courses in two years. The Ambanis look at initiative and individual potential rather than paper qualifications.

Now you know the secret behind the biggest success story, post-Independence, in India's corporate world.