It is fair to say that the global financial crisis that cost the world more than $20 trillion had its origins in near-term, unsustainable strategies that were pursued by iconic institutions in the financial industry.
What is worrisome is that a larger and more widening pattern of similar attitudes and behavior is spreading across sectors including blue chips like GM, Starbucks, Kodak, HP, Sony, BP and the like.
There is a real need to get to the underlying reasons which are felling iconic brands and businesses at an unprecedented rate. Time after time, we see that management attention and focus is caught up with near-term revenues/profits or pressure to deliver on yearly numbers.
This results in subtle assumptions and mindsets which have taken over the entire firm as incentives are also attached to these near-term targets. Consequently the focus on customer centricity, innovation and sustained profitability often get sidelined and reduced to lip service despite noble intentions of visionary leaders.
Brand and related intangible assets provide a holistic value based rationale to counter the rising tide of short -term behavior.
In fact, the 'brand' in its true avatar provides a cogent counter thesis of wealth creation to the existing paradigm of shareholder value. When the brand from a 'classical marketing' dimension is opened up fully, it verily becomes as a 'trust value exchange for stakeholders' with a profound impact on managing the value in the long-run.
This can be tested objectively and connected to a value creation framework to test 'the fuzzy constant" of long-term value. This calls for a whole scale reexamination of what 'branding' has come to mean as a result of the industrial age marketing paradigm - puffery, perception and image management and spin doctoring.
The Lance Armstrong model of 'brand', as image management driven by performance enhancers (read quarter on quarter results) is simply not sustainable. The core of what brand really represents, the Trust & Social Capital of the firm needs to be firmly reconnected back to long-term wealth creation.
Invoking and preaching about longterm is a far cry from practicing it. Impediments are plentiful and it is perhaps the leadership challenge of our age.
The short-termism of stock market incentives is slowly but surely stealthily invading Indian boardrooms and subtly distorting strategy and governance.
It puts to risk the proud Indian entrepreneurial journey post independence and the vision of having sustainable Indian companies who are exemplars of Next Practice even as the much celebrated shareholder value maximization paradigm lies in tatters.
Indian business leaders should raise their consciousness that they stand at historic crossroads and the choices we make today will define our future for the next 100 years. We will need to wait for the wheels of history to turn in time to take another shot at this leapfrog moment and this is one which we simply cannot afford to miss.
Rather than wasting time building superficial and narcissistic external projections of an ImageBrand, we must choose to raise our collective consciousness to dwell on the SoulBrand that is based on deep introspection and an inner journey to preserve the positive dissonance quotient of our enterprises.
Our leaders will need to marshal every reserve of intellectual honesty to take a good hard look into mirror and chart a less trodden path in keeping with a higher calling.
When future generations look back at us, we must be seen as 'Nation Builders' and beacons to the world rather than pale copies of MNCs.