Indian conglomerates grow horizontally. World leaders are built vertically. Nature intelligence allows for both.
The MegaSpheres paradigm of the IIT Alumni Council provides a completely new way of looking at business strategy by seeing it from the twin lens of purpose and consequences. This is radically different from any other widely used strategy model. Business strategy models typically come from the work of the large consultancy majors. But the canvas on which they drew these models is no longer relevant or existent. And therefore those models have lost relevance. So entire theories from the “core competency theory” to “early adaptor” to “7S management audit” are all irrelevant.
In fact in the ai age – both capitalism and the conglomerate model are under attack – and are soon losing relevance.
Bloomberg got it right in their article on the subject:
They smartly picked up some of my posts on the Indian conglomerates and worded it better than I did. But when we put their article to “Ai scrutiny”, it failed the nature intelligence test.
Prakriti Prerna Foundation in the Umariya forests of Bandhavgarh has shown us that when a banyan tree is allowed to grow unhindered, smaller trees grow under it. As the banyan tree grows larger and its leaves become larger, an entire ecosystem spawns below them. And then this entire ecosystem becomes really resilient and invasive species like Lantana cannot kill it.
This is exactly what happened in past decades when a mother unit like Maruti spawned an entire ecosystem of ancillaries and vendors – such that collectively they were invincible. L&T did the same for heavy engineering. Tata motors was similar. Reliance did the same in refining and petrochemicals. Birlas di this in cement and metals. That is how they became invincible.
And then they all lost the plot.
They tried to grow by wheeling dealing, subsidy racketeering, stock market story telling and plain and simple fraud. The dead half of Reliance personified everything that business should not be. L&T is following rapidly in their footsteps. Tatas were never far behind. The strategy is to get into anything and everything. Become an actor in all. And a master of none.
Most important, they don’t spawn ecosystems. They create rackets. Where are the ancillaries and vendors of all the unrelated, zero competence industries that these companies have got into. Often dismantling and ruining ecosystems built over decades. Like L&T getting out of switchgear. Or Tata getting reduced to “India washing” imported Airbus planes or making Apple iPhones with negative value addition.
The conglomerates are into all kinds of illicit relationships with all kinds of bad actors. One conglomerate claims to be a partner of Nvidia. Another claims to have BigTechs in their captable. Yet another is using a BigTech as partner to get land allotted for a data centre.
This doesn’t go to good places.
And won’t.
The ecosystem test is a good one.