By Hiren Shah August 2001 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 SUCCESSDhirubhai 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. There is a story of a salesman in America who became a multimillionaire selling life insurance. On being asked about the secret of his success, he answered that he told his clients he was there to buy life insurance for them rather than sell it. He did this to pre-empt the instinctual American skepticism and abhorrence of salesmen. In Canada, Ron Barbaro, chief executive of the Prudential Insurance Company, made one of the most innovative changes in life insurance. He introduced a system where a person diagnosed with a terminal disease could be paid off during his lifetime to enable him to afford his treatment. This was the most revolutionary and successful idea in life insurance in 120 years. Barbaro used the methods of Edward de Bono, whose name has become synonymous with lateral thinking. A Ph.D. in psychology, de Bono has held high academic positions at Oxford, Cambridge and Harvard universities. He has written over 40 books translated into 25 languages and has also made two television series aired around the world. He is the author of the famous ‘coRT’ thinking program used internationally to directly teach thinking in schools. Examples of applications of lateral or nonlinear thinking abound in several fields. In cricket, Kerry Packer introduced day/night matches and colorful balls and clothing, a departure from tradition that became so successful, the whole world of cricket adopted it. Australia recently experimented with two different captains for the Test and one-day matches. Lateral thinking is a step-by-step method of creative thinking with prescribed techniques that can be used consciously. According to de Bono, intelligence is a potential and thinking is a skill to use that potential. He adds that thinking is no substitute for information but information may be a substitute for thinking. While information is swamping us, the need is for appropriate thinking techniques to avoid being weighed down by excessive information. Just as the skill of the driver determines how a car is used, thinking determines how intelligence is used. One may be a good thinker without being an intellectual and vice-versa. There is a spiritual dimension to lateral thinking that has more to do with perception than logic. Good conduct that arises from right thoughts and perceptions is as important as meditation and spiritual practices. De Bono compares cleverness to a sharp focus camera and wisdom to a wide-angled lens and wisdom depends heavily upon perception. Nearly all systems of meditation aim at purity of heart and mind to refine perceptions for sound judgment. Philosophy, literally ‘love for wisdom’, is also a means of spirituality. Wisdom to a large extent involves correction of perception by experience when one considers the dictum, ‘knowledge comes but wisdom lingers’. Focusing directly on ‘thinking’ sharpens perceptions and lateral thinking is one of the best means to achieve that objective. In the introduction to his book Serious Creativity Using the Powers of Lateral Thinking, de Bono states that human perception works as a self-organizing information system. A SKILL THAT CAN BE LEARNT There is a misleading belief that creativity belongs to the world of art and is a matter of talent and chance and nothing can be consciously done about it. Lateral thinking is specifically concerned with changing preconceived notions to bring out new ideas and can be acquired and practiced as a skill. It is a special information handling process like mathematics, logical analysis or computer simulation. Thinki
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