25 October 2008

Fail Faster, Succeed Sooner - Financial Crisis

The recent stardom of "Financial Crisis" made to see certain things which I never saw. I had to remind myself that I am a technical guy (but my natural interest in into business). In order to quench my thirst, I decided to read articles that are primarily focussed on business. The credits should go numerous business leaders who write passionately on a daily basis and the faults are mine. BTW, I just now started to think about "ABCD" of business and that is my exposure.
In this article, I am not going to analyze why there is financial crisis and who is responsible for that. I do not have the deep understanding on the financial crisis and without that deep understanding my views not worth to be shared. However, I hear people saying US recession is here round the corner. In case, if US go into a deeper recession, certainly it is going to affect the entire world. The concept of "Decoupling", "India growth story" are simply bluffs and often tactics used by Media for their revenues.

Being a software guy, I would like to bring out an analogy of this crisis to a catastrophic defect in the software. One needs to happier to identify the defect. Only if you find a defect, there are chances to fix. Looking at the financial crisis, many of the large banks are gone without traces and probably we can name the streets, localities and cities in memory of those great banks. I said, great banks but not perfect. Perfection is not possible, perfection is not reality. We need to understand it. These banks might not have understood the risk or taken the risk for granted thinking that it won't affect them. Interestingly and painfully, the situation took a "U" turn. It was like a man standing on a railway line when a train was speeding towards him at 400 MPH. Even if you want to move, you will be finished before you complete your thinking.

During 2000/2001, we had a dotcom burst and myself is a victim of that. It was certainly a slowdown but in dotcom. However, the current crisis is financial sector - includes banks who gives loans for individuals, venture capitalist who fund new projects and banks who give loan to start a business. Because of that, there will be no major new investment thus hindering growth. Growth is the elixir but one needs to have it on a continuously. When growth ceases, the businesses ceases. Once this crisis is over, all the entire world will be a equal playing ground for everyone. If you are a big organization and if you have not regarded small players, it is "OK" now. But after the financial crisis, it will not be "OK". This crisis is a crisis. It is one way of looking at it. Another perspective is to see this as tutor who asked you hefty fee. It must be learning of a century or two. If you just have few years of experience it does not really count. After the crisis, you will be having 120 years of experience and your competition which starts today will be having 100 years of experience. No great difference.

This is right time to be cautious and cautious of not stopping investing - may it be your stocks, your assets, your people, their competencies, looking out other businesses to expand your portfolio, talking to your customers to change business models, talking calculated risks, acquiring small and intelligent players who add values with you, bring in discipline in your strategy, acquiring new talent. We need to just do whatever is needed to grow in steady strides and not like a wild bull. The world now has to be faster in accepting the crisis. The CEOs, policy makers, business leaders and academia needs to jump in and say "The financial world is in Intensive Care Unit". We need to make sure that we "fail faster" so that we will succeed sooner.

Unless we stop telling that we are in slowdown and start telling the ground situation, it is going to be greater and longer pain for organizations, companies and people. It is natural law that good times are longer and bad times are shorter. Because of the theory of relativity (man waiting for a lady and man sitting on a frying pan), our perception visualizes this turmoil as recession of the century and it is going to take months to recover. When we had luxury for so many years, we need to be in tougher times too. When you swim against the tide, your stamina will increase. When you are in tougher times and when you commit serious mistakes, you think better, think like think tank.

So, the message from the crisis is quite clear. "Fail Faster and Succeed Sooner". See you at the other side of crisis - Harmony. If you read this blog by October 2009, this is outdated as you are in good and sweet times.

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