9 mantras to succeed in the digital era: D Shiva Kumar, CEO, PepsiCo India

New digital technologies like social media, mobile, cloud, and analytics are riding high on the economic landscape. With this, every industry is facing a bewildering array of new opportunities to transform its customer engagement, internal operations, and even its business model by going digital. The recently held DQ LIVE conference on the theme ‘Building and Driving Digital Enterprise’ focused on building digital innovations and driving enterprise-wide transformation. In the conference, D Shiva Kumar, Chairman and CEO, PepsiCo India talked about his digital mantras, today’s digital wave, and prerequisite of creating an enterprise-wide digital strategy. Excerpts

Digital is a huge force. The first set of digital products, ie, television and durable products,

came out of analog age. And today’s digital world is a combination of smartphones, apps and the Internet. A smartphone monitors everything you do—one chooses an app as per their passion or interest, and on the Internet one logs on to what they want. In a nutshell, the digital world has gone deeply personal. At the same time, it is causing a paradigm shift across industries.

#1 Scale No Longer Guarantees Success: The digital world is disrupting every industry. In emerging markets, this year tablets will outsell laptops globally—the category created seven years ago will outpace laptops. In a way,digital is having a dramatic impact on the companies and their longevity. In 1960s, the average age of an S&P 500 company was 50 years, but in 2015, the average age of an S&P 500 company is 12 years. It means that scale is no longer an antidote to success.

#2 Legacy Hurts in a Digital World: The more legacy your company has, the more you hang on to the past, and the less likely you are to succeed. Legacy is good but hurts the business in a digital world. All this can have serious implications on a large company which has built up a series of infrastructure over the years to serve the customers.

#3 Win-Win for Small and Large Companies: Digital helps both small as well as large companies in grabbing opportunities. A small company has a lot of agility but it has no scale. On the other hand, a big company has scale but low agility. The biggest advantage for a small company is agility. If the customer orders are not coming and money is not flowing, a small company would instantly change its strategy. With digital, the computing cost, storage cost, office cost, etc, have gone down. So, thanks to the digital world—a small company can have everything that a large company has. On the other hand, digital helps a large company maintain its scaled business by optimizing existing processes and making them more efficient.

#4 Digital Nurtures Entrepreneurship: The high investment of starting a business has collapsed. Everybody with an idea is an entrepreneur in a digital world. To start a company one requires very little infrastructure cost. Earlier, the biggest problem was getting an office, phone connection, computers, servers, etc. Digital has made the barriers to entry as well as barriers to exit very minimal.

#5 Digital Makes Companies Transparent: A transparent world gives everybody a fair chance. Similarly, a digital strategy at buying level will make everything so transparent that nobody in the company will be accused of favoritism, taking money, etc. Likewise, in the supply chain procurement system, digital can do wonders.

#6 Digital is Democratic: A digital strategy in the company helps you in getting opinion from every single person who matters to you—every person who’s buying your product and wants to give you feedback. On the other hand, the companies should also need to accept the criticism/ feedback in a positive way.

#7 Digital Involves Humility: One of the biggest challenges companies face today is to know what their customers are saying about them, what they think about their new strategy, the new advertisement, the new initiative, etc. Digital keeps a company humble if it listens to its customers as it gets positive as well as negative feedback each and every day. It helps a company know the needs, wants, and desires of its customers. Social listening makes the company far humbler, and a humbler company responds much better while the probability of an arrogant company to respond in the market is pretty less.

#8 Digital Means Distributed Leadership: In today’s digital world the need is for shared or distributed leadership. Knowledge in a digital company rests across the company and not with a few people. Any company which aims to be digital must have distributed leadership as opposed to a single unidimensional leadership style.

#9 Digital has a Massive Hard Disk: Being in a digital world, everything you say has a far and wide reach. So as a leader, whatever you post be careful of what you are posting. Because what you post today might not stand the test of time five years from now. Digital has a massive hard disk and as a leader you need to be cognizant of this.

Though going digital means opportunities galore, but these need to be carefully implemented. A digital system can hurt the company when the employees are not aligned to what you do. The real challenge is of how to use it; if used wrongly digital can misalign customers. Another challenge in a digital company is that every news and data is public. So the company needs to create a line between what’s going to be public and what’s not.

Thirdly, digital makes leaders think of public and private opinions. But in India, people don’t separate your private views from the public. And everything you put out will be

taken as a personal view.

The world is changing very quickly. And the true premium an enterprise today has is talent. Just having a digital strategy will no longer guarantee success in a digital world. If digital strategy or digital infrastructure is a great enabler, then the absence of the right talent can lead to its misuse. Organizations need to couple digital with a very strong talent strategy. It’s talent that makes the difference. And that’s what the leadership should be doing in a digital world.