The Future of Business, the Next Decade!

Moderator Pranjal Sharma, Economic Analyst, Advisor and Author shared the platform with T V Narendran, Managing Director, Tata Steel Ltd and Ronnie Screwvala, co-founder and Chairperson, upGrad, Indian Entrepreneur and Film Producer. We bring you excerpts of this very enlightening conversation.

Pranjal: The next decade of entrepreneurship and business leadership is always fascinating, but I think we are also in such a fast-changing world that sometimes we have to talk about the next 10 minutes of changes because technology is making a huge difference. This conversation is with two very experienced business leaders, T V Narendran Managing Director, Tata Steel Limited, and Ronnie Screwvala, Co-founder and Chairperson of upGrad, also a serial entrepreneur, film producer.

Ronnie you’ve always been an entrepreneur, I think just out of school or college entrepreneurship 30 years ago and entrepreneurship today. What are the key shifts you see?

Ronnie: Well, a couple of fundamental ones. I think when I decided at that stage to become an entrepreneur, the general concept at that time was if you didn’t land yourself a good job, you turn to entrepreneurship. I think that mindset has changed. I think the fact that in the last five to seven years the government has actually evangelised this space, whether it’s with Sstartup India or whatever else, I think it’s brought the conversation to the dining room table in families. And the reason I say that is I think the biggest challenge when you want to be an entrepreneur, the risk and the fear of failure is actually to have the family support. Because without that ecosystem, your ability to succeed is a little restricted. And I think that is still work in progress.

I think the third part is also that in the workforce, and I think you will sort of endorse that more and more companies are looking for entrepreneurs. So, the very aspect of entrepreneurship being linked to even in large organisations where people are looking at professionals being owners and leaders need to be owners as I think made the shift.

I think the only curse and the benefit is this element of fundraising, right? And I call it a curse. I think excess capital corrupts, even reasonably excess capital corrupts, and that actually takes the foundation of what people want to do. I think the beauty about India and the opportunities here is a sense of the right mix of frugality along with taking the right opportunity. And if you mix that up a little bit, which I think happens sometimes the aspiration for funding becomes the end result versus building a business or being an entrepreneur. But without that ecosystem you wouldn’t have too many entrepreneurs. So, it’s a mixed bag, but I think that one would be as much an opportunity and a curse.

Pranjal: But entrepreneurship, you’ve spoken about how you have seen the image and the interest around entrepreneurship for an individual, but entrepreneurship ecosystem in terms of ease of doing business, in terms of being able to create new business models, experiment with new ideas, do you see an excitement there which perhaps has evolved over the last couple of decades?

Ronnie: Yes, I think that’s a positive. I mean, I don’t want to sit here and give the statistics of whether we move from 145 ranking to 63 ranking in ease of doing business. What I do tell a lot of fellow entrepreneurs is watch out. Sometimes being not too easy to do business has its flip side, because if it’s too easy to do business, you get to be a very, very competitive field. America is a land of opportunity. The markets are there, but it’s highly competitive. And I think nine out of 10 entrepreneurs from India would fail in an environment which didn’t have a certain sense of moat. So I think the grass is not greener on the other side. I think it’s good that we’ve progressed in that, but that sense kind of skills people to sort of move forward in spite of some of the challenges and difficulties. And I think therefore I would term it as a positive.

Pranjal: So, Narendran, the creation of steel or invention of steel has changed the world. But today, steel itself is at a very interesting inflexion point. And as you were referring to earlier, is steel going to be obsolete, will steel still be relevant in the next 10 years because you have a lot of discussion about composite materials, you have discussions about lightweighting, even for aeroplanes for example. Where is the industry now and what are the big rethink, which is going on in your company today?

Narendran: Thanks. So let me start by making a pitch for steel. There is 40 times more steel used than any other metal in the world. So, it is like we are a long, long way away from being obsolete for a very simple reason. It’s 55 rupees a kilo, what do you get for 55 rupees a kilo? You don’t get tomatoes, right? So, I think that’s where it is. So having said that, but there are problems to solve because steel accounts for 8% of the carbon footprint in the world because the traditional way of making steel is using coal; coal not just as an energy source but as a reductant to the process. So, you need to find different ways of making steel. The simpler way is to melt steel scrap because steel is the most recyclable metal because you can separate it easily using magnets, et cetera. So, there’s a lot of work going on. On one is recycling steel. The concept of circularity is going to come in a much bigger way in the industry. We have traditionally been a linear value chain.

It is going to become a more circular value chain. Secondly, a lot of work is going on hydrogen. Hydrogen is a good substitute for coal. It acts as an energy source and a reductant. The good news is a lot of investments in technology to reinvent the way steel is made, which has traditionally been made in a similar way for the last hundred years. I think that’s the opportunity, but the policy framework needs to be there. Governments need to support it. It’s already happening in Europe quite a bit. Customers need to be willing to pay more for green steel. So there’s a lot of excitement there.

The second thing is we are a process industry. We generate a lot of data. In today’s day and age where technology and data is really going to be the new gold or the new oil, there’s a lot of opportunity because we only capture a fraction of the data that we generate every day, and we only use a fraction of what we capture. So there’s enormous opportunity to drive greater cost efficiencies, better stakeholder experience, better customer experience.

Pranjal: These changes are very fundamental changes because when you talk about a data-driven organisation, then the whole concept and the process of capturing data starts from the unit level and comes up, and then you have to change maybe the structures of the organisation. You have to change the hierarchy of the organisation, the way systems work, which means that your company is probably going through a huge reinvention internally. How much of that is a challenge for you, especially being a legacy company?

Narendran: Absolutely. I think it’s a challenge and an opportunity. So, we’ve been on this journey for the last few years, so you need to spend millions of dollars, having the sensors in different parts of the organisation, different parts of the process. To capture the data you need to create the infrastructure to process it. You need to create the talent. That’s a huge cost. But it’s worth investing in it because that’s how you differentiate yourself.

That’s how you in what is seen as a commoditized industry, create your own space. So I think it’s not something you can avoid. And for us, we’ve been at it for the last seven, eight years. We’ve been recognised as what is called a lighthouse, which means you’re ahead in the manufacturing industry on deploying digital technologies. So, we have been recognised for that and I think it’s a great journey because it’s also a great way for us to attract younger talent, get them excited. They’re no longer excited about walking the shop floor. They want to see how to use data better.

Pranjal: So speaking of talent, and Ronnie, you are best place to speak about that. Today, there is a big debate whether the concept of degrees is even relevant. You enter a degree course and in three years when you exit, the whole world has changed and all that while we were just sitting in classrooms. So there is a lot of thought that should we do away with degrees, are they even relevant anymore? What is your view on this talent in the employer’s perspective for the next decade?

Ronnie: So I think some sense of structured learning is very, very critical. And then nomenclature can evolve over a period of time. And I think even if you look at the classic sense of a management degree and a management degree was in HR and marketing; today it’s on data analytics and business analytics. So that evolution is happening to a certain level. But I do believe that some sense of structured learning is important. The validity of that is the problem. So, I think the big challenge for us is not really whether a degree is relevant or not, it’s the validity of it, which actually means that your concept of wanting to continue to learn and upgrade yourself every three to four years is becoming more.

Pranjal: Today, if a coder goes and says, I’ve been coding for 20 years and I’ve developed this fantastic software, a company can say that I already have a software to create more software. I don’t need you anymore. So, everything that a person has done, even if that person is 30 or 40 in many ways is irrelevant. So how will you convince that person that structured learning is important?

Ronnie: I think the main question is when you’re in some sense of formal education, you take for granted the learning of soft skills. And the reason I say that is because I think 50% of everyone getting ahead today is really about the soft skills, what they don’t teach you in a structured learning. But I think you pick that up if you had none of that. And then if you just walk out into the world and say, I’m going to only learn on the job, you need to actually be very blessed with the aspect that you’re going to be able to pick up that. So I’m a firm believer that you need that Basecamp, but today, seven out of 10, if you don’t link that with employability, then the validity of that is going to be less and less.

Pranjal: Employability, Narendran. Has the concept and the definition changed? I also ask because today the difference between a white-collar worker and a blue-collar worker is disappearing. I am sure you have a lot of data scientists and computer engineers on the shop floor as you were mentioning earlier. In the coming years what will employability look like in the future?

Narendran: So traditionally in India, I think we’ve had a kind of focus on degrees more than vocational skills. I think we need to correct that quite a bit. If you see a lot of the developed world, if you look at Europe, you look at Australia, there’s a lot of respect and dignity for vocational skills, which I think we need to inculcate more in India, need to start with the school system and take it on from there. Somebody once told me that the only two professions in India where you get paid more for skills than education is entertainment and sports. And even if I look at manufacturing, et cetera, when you hire an engineer, you would ask, which college are you from? But when you hire a welder or somebody to do some work in the plant, you’re not necessarily looking at how that person was trained.

What is the certificate, what is the premium you would pay for a good skilling institute? So, I think that’s going to change. Second thing is legacy industries like ours will always struggle to get the best of talent. We used to get the best of talent earlier. Now we have to make the best out of what we get. And I think there are great organisations, and more recently we’ve all talked about ISRO, the kind of processes that they have to develop people and to really make them world-class scientists is something I think a lot of us in the private sector need to learn from.

Pranjal: So instead of an engineer, you might have a data scientist without an engineering background.

Narendran: Absolutely. So, there are two ways to look at it. You would have a data scientist, you would also try and make data scientists out of the people you have.

Pranjal: So, when somebody comes to upGrad, Ronnie, what is the biggest expectation they have? Will I get a job? Will I get a promotion?

Ronnie: First is actually they’re stuck in their career. So, there’s a certain sense of counselling. The question is am I a little burnt out or am I at a cross section? Second am I going to be outdated? So, what do I need to do to upgrade? So, a third of them, I think our people are looking to say, I’d want to be less irrelevant. And that happens now, not at an age group of 45, but even at 35. Even at 35 people having at the crossroad of saying, am I going to be irrelevant in three to four years? So that’s one element. And then there’s a second element that says, I want to turbocharge my career. And today I think it’s no longer about organisation saying the bottom 15% are the question mark, I would say if you’re not at the top 50 percentile of your company, you can’t take your job for granted. So, when you look at that ratio that’s moved from 85/15 to 50/50, I think the pressure on the younger generation is more.

Pranjal: But add here what Narendran said, it’s also not about top and bottom anymore, Ronnie. It’s also about completely new set of work opportunities emerging.

Ronnie: Which is why the 50/50 has come about because the relevance of where you need to be is being analysed, not just how well you’ve performed over the last three years in your specific job.

Pranjal: Do you see that happening in Tata Steel, a lot of lateral movement?

Narendran: Absolutely. I think we do that as a process of development. We move people. You could either move vertically, you could be a specialist if that’s your passion, you could go vertically or you could move horizontally and you need to create those opportunities because honestly, if I look at it from the Indian system point of view, not everyone who’s an engineer wanted to become an engineer. Not everyone who’s a doctor wanted to become a doctor. So, you discover your own passions as you go out there and sometimes you make switches. I just met somebody out there who’s a doctor who’s in the civil services.

Pranjal: So, I’m going to switch gears here, not to make this a completely HR discussion. And there are very big shifts which are happening across the world. And some of, in my new book I have talked about are the forces of sustainability, emerging technology and social impact, having a huge $25 trillion disruption of revenue models across the world. Sustainability is at the core and linked to it is social impact, which all three forces were acting separately, but suddenly they have come together, especially in the post covid world. Instances like in the UK where you worked with the government to have a fundamental transition of manufacturing from old technologies to green manufacturing. Is that going to be now the focus for nearly everybody in the manufacturing sector that make that transition as fast and as efficiently as possible?

Narendran: Yeah, absolutely. I think Europe in some sense is leading the way because of policy framework. The infrastructure which is being set up is supporting this transition. So, there’s a cost of not transforming, but I think there’s a lot to learn from that journey and we are doing it across other locations as well. I think the value pools will shift in this transition. What drove competitiveness will shift, because if I look at steel, typically you set up steel plants where there was coal and iron-ore. Now we would set up where there’s energy available, cheap or hydrogen available cheap. Industry by itself cannot do this transition. So you need the industry to put in money. Governments will put in money, and customers also should be willing to put in money where the mouth is.

Ronnie: I just want to add now maybe I’m a little outside on this because I’ve been in sectors where this is not the centre stage for it because we’re in service. But just as an outside I would say we need to be careful about the fact that if it’s too much of a push, I think people are going to set themselves high targets because that’s what they need to articulate and then they’re going to pull back because it’s always 10 years later.

Pranjal: But the fascinating thing about if you talk about trends of the next decade is competition. And you referred to it earlier, but Ronnie is a great example of it. Competition for any sector and any company will come and can come from somebody who’s not in the sector at all. You entered the education sector, Ronnie, and I’m sure you upset a lot of people and several other companies. Do you see that as a very significant shift that the medical variables we have, they came from tech sector. So the medical devices industry is competing with a bunch of people who have no experience or legacy in healthcare. How much of that is going to disrupt business models?

Ronnie: So, I would look at competition in two ways because I think I’ve come from non legacy businesses and whether it’s been in media or now in education. Because of the simple reason that there are no precedents there and actually you are market making. So I think my entire career and life has been one where one has looked at how to market make, and therefore you do need a certain sense of competition because I’ve seen you cannot open a market or a sector with one or two players. It doesn’t happen. The credibility actually goes down. The trust is not there. The awareness is not there and you need to walk the extra mile all the time. So, competitiveness in a certain sense is very good. The second part is today I think everyone overestimates again, your total addressable market and who’s your competition? I think people are missing that. The real competition is going to come from the smaller players as you have mentioned.

So, I may have a large educational distinct, but somebody will just focus on data science and build a hundred crore business while we are trying to make this into a thousand crore business. So, I think for greenfield things, which is what the new economies are today, we should not be unwelcome about competition because the big challenge is to open the market for which you need multiple players, multiple noises, multiple credibility in a competitive field. India is a price sensitive market in the first place. I mean there’s no running away from that. If you can get your moat, I don’t think competition is going to be able to do that. If you know your business segregation, you can actually make it a very different element.

Pranjal: In an earlier world, we would all go to a clinic and the clinic would have these certain devices, check your body parameters. Most of that is now on your watch. You put your thumb on a screen of a phone and you get your blood pressure, et cetera. So, the companies that were manufacturing that have to reinvent themselves. So, Narendran, do you feel that same because I asked you this in the beginning, 55 rupees a kilo of steel is still very worth it. But what if somebody comes up with a composite material, which is 30 rupees, a kilo? What do you do then?

Narendran: So, I think the value pools will keep shifting and you need to really look at raise a value pool and where are the opportunities, right? So, talking of composites. So, Tata Steel is also hedging its bet on other materials. So, we are into fibre reinforce polymers, we are into composites, ceramics, so on and so forth. So, there the whole hypothesis about leveraging the relationships that you have in customer segments to be agnostic to materials to say that, okay, I sell steel to somebody, but I know what are the materials that they need and where is it that we can bring value. So, it’s looking at can we shift from capital intensive to more knowledge intensive materials? That’s an opportunity. Secondly, you have relationships with customers and you can see that how else can you unlock value? How can you provide solutions?  So, I think value keeps shifting.

Pranjal: And which is a big deal for, I mean it’s more than a hundred year old company. For them to completely leave their legacy and become a technology, energy technology company is a huge shift.

Ronnie: But see, I think there will be the Nokias and there will be the Blackberries that didn’t reinvent themselves and maybe a Xerox here and there. But to your question on the testing part, and therefore people to reinvent, I think you have to look at it with a cup half empty and see what the opportunities are there. Because now more and more people are testing and aware of everything they want to do, which means the entire market has opened up. Because the more you test, the more you’re hyper, the more you’re hyper. You want to get more tests. And actually those medical facilities and those medical companies have grown in market share because everyone has now become more aware. If a hundred million people were aware, a billion people are now aware. So, 900 million people are monitoring themselves without going once in 10 years to a doctor. So, I think we have to look at the cup half full and half empty, and there’s opportunity there.

Pranjal: 10 years later, where do you see Tata Steel?

Narendran: So, I think there are two things. One is like Ronnie said, there’s growth. I mean, if I look at the Indian steel industry, we are the second largest in the world, but China is eight times larger than us. That’s the opportunity, particularly given that the focus is on infrastructure. So, there is a need for us to grow in what we are good at or what we’ve been doing for a hundred years, but we also need to plant seeds for the future. We are also into recycling. We are constantly planting seeds.

Pranjal: Typically, people from 50 to 75 age group feel that especially CEOs would say that they live by the tyranny of the quarterly results. I have to focus on my quarterly results. How many business leaders are thinking about the next 5 years, forget about a decade.

Narendran: I think you have to balance the short term and the long term. If you don’t focus on the short term, you anyways don’t have a long term. Particularly for organizations like ours which are multi-generational you really need to think of what you are leaving behind for the next generation.

Pranjal: You think there is an upGrad required for CEOs and CXOs?

Ronnie: Five years back, if I was interviewing candidates, I would look for people who can solve problems. I think today I’m looking for people who can spot problems before they can solve them, because actually the people who can spot problems and avoid them are more priceless than the people who can solve problems. So I think the world is getting tighter.

Pranjal: Do you agree?

Narendran: Absolutely. And I think there’s a lot to learn from the younger demographic in our organisations. And I think leaders need to create opportunities to engage with them. Because for instance, when we were early in the digital transformation, we did a lot of reverse mentoring. So, where people below 30 were mentoring the leaders who were over 50.

Ronnie: I would recommend every CEO has a Chief of Staff at 25 years, 28 years, and 32 years. And build those three different ones with three different perspectives in life. And one could be more leaning on technology, one is more consumer, one is more product because you need a little bit of depth. And I think that the office today needs to be defined even at the corner office in a very different way.

Pranjal: I heard that L&T has a set of executive assistants across all businesses, and there’s one for each, about 80 people who are doing this. So it’s interesting that some of the conglomerates and CEOs are looking at that, one of course to keep track of what’s going on, but create the new generation leaders as well.

Ronnie: Because you’re not looking for gossip, you’re not looking at somebody to go out and check. You’re looking for insights. I think today more than ever, the value of having insights is 10 times more important than what it was before. And to have somebody with a completely neutral perspective giving you insights, which your normal executive team may or may not volunteer to give. And even if it’s an open culture, they may not look at it that way. I think it’s quite disruptive.

Pranjal: If I were to request of you to give us three big shifts that we have to prepare for business in the next decade, not just Indian, because I think one of the big trends that we have not addressed perhaps, is that a lot of Indian companies, mid-level Indian companies have very global ambitions. So, it’s not about business in India, but business from India.

Ronnie: Well, before I start with that, I think I would caveat that all the three big shifts will actually shift. If you start here 18 months from now in the first place, and we don’t believe in that, then that’s a problem because it has to get, revalidated would be my first caveat before I said that. But if you look at the present buzzword of say, artificial intelligence, I mean to me, besides the fact that there is a little bit of over hype in the context, but it is in my opinion, a GDP changing factor. I think countries can go up and down in GDP if you can take this one. And I think India’s got a huge opportunity because if the AI sector is going to be a 15-$20 trillion industry in the next 10 years, that’s a combination of the top, some of the top economies in the world.

So, I think that’s a massive opportunity. Second, I think is the consumer. I think less and less, I’m finding people being more in touch with being the consumer because there’s a certain legacy with how you interpret the consumer. But I think that’s changing so rapidly. We are more concerned about technology and artificial intelligence than actually what the consumer is changing, what the wallet share of the consumer is changing. And if you can keep a track on that, and maybe in the service sector it’s different in the steel sector will be different because that’s much more a different institutional consumption. But in very best sectors, if you can follow wallet share and you can follow the consumer and especially the younger demographic, you’re going to be able to look at that in a very different manner and not get intimidated by technology. That would be the second and third one. Yeah, I am in a sector where I think lifelong learning is here to stay, and I think the sooner we accept it, the sooner we think there’s an urgency for it and not a casual need for it.


Ronnie Screwvala, co-founder and Chairperson, upGrad, Indian Entrepreneur and Film Producer.

T V Narendran is currently the global CEO and Managing Director of Tata Steel, one of the largest steel producers in the world. He is the current President of Confederation of Indian Industry.

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