The Covid-19 pandemic which arrived like a bolt from the blue served as a rude reminder that we live in awkward times. It led the authors to introspect and understand why challenges motivate us, and how we survive and come out stronger in the process. Hence germinated the idea for this book. The distinction between a cyclic upheaval and a Black Swan event lies only in perspective. What is rare in one lifetime, may be a cyclic event over a longer period of time such as every 200 years. The truth is that we constantly deal with crises in our lives. The consequences of some of these crises are far worse than those posed by the pandemic. T N Hari delves into the surprising conclusions they arrive at and identify five leadership qualities that make people shine even during crises.
I have with me T.N. Hari. Before I speak about his background, I think it’s very illustrious. He’s the only person I know who has worked and exited a unicorn. That’s my first-degree connection to a unicorn. This is something very, very, very important. I know Hari doesn’t care, but for me, it is quite interesting.show more
Hari is the co-founder of the Artha School of Entrepreneurship and has been the head of HR at BigBasket, besides holding many other C-suite positions throughout his illustrious career. He is also an advisor and sounding board to numerous entrepreneurs and startups, and a strategic advisor to Fundamentum, which is a homegrown growth phase VC fund. He has co-authored several books such as “Winning Middle India,” “From Pony to Unicorn,” “Killing a Startup Sustainably,” “Cut the Crap and Charge On,” “Lessons from the Startup Trenches,” “Diversity Beyond Tokenism,” “Why Being Politically Correct Doesn’t Help Anyone,” and “Saying No to Jugaad: The Making of Big Basket.” His session today, though, is based on his book, “Sailing Through a Storm: Making a Crisis Work for You.” Hari, I’m eagerly waiting to hear from you. Please start.
Great. Thank you, Subhanjan. Let me start the session with the idea of a hedonic treadmill. The hedonic treadmill has been nature’s or evolution’s design principle to ensure that human beings don’t experience excessive happiness or unhappiness for extended periods of time. Excessive happiness or unhappiness disappears, and there is a tendency to return to normalcy. This design principle of nature has been very effective for most situations, but I think neither evolution nor nature anticipated the kind of life that one species, Homo sapiens, would be leading in the 21st and 20th centuries. The ups and downs that we go through, the competitive situations we deal with, and how frequently we find ourselves in challenging situations that we struggle to get out of. Some environments are far more dynamic and uncertain than others.
I have been through some of the most uncertain environments, particularly in the world of startups, where I’ve spent about 20 years. While I was working with startups, in 2020, the COVID-19 pandemic happened. At that point in time, I thought this was a global crisis, but different people experienced the COVID-19 crisis in different ways.
But one thing that’s certain is that all of us have gone through multiple crises in our lives. The crises in our lives are only going to become more frequent as we deal with a world that’s becoming more and more unpredictable. I believe we are genuinely at a stage in evolution where if we don’t take the right actions regarding climate change and the environment, humanity may not survive for much longer. Dealing with ups and downs and facing adversity is only going to increase. In this book, through a set of stories, we delve into the lives of people who have managed adversity. We discuss situations where adversity has been transformed into an opportunity, and where most adversities should be seen as opportunities. Instead of recounting multiple stories, what I thought I’d do in this limited time is share the framework with all of you—a framework that can help us become more resilient as we navigate life’s challenges.
The first component of resilience to me is self-awareness. Let me start with a story, which many of you may have heard before, about the Austrian psychiatrist Viktor Frankl. He survived a Nazi concentration camp and subsequently wrote a book titled “Man’s Search for Meaning.” The essence of the book is that those who have a sense of meaning and purpose in life have a much higher probability of surviving adversity or a crisis than those who lack a sense of meaning and purpose. While the concept of meaning and purpose is complex and many people don’t seem to have figured it out even after 50 years of life, I would set that idea aside for now and introduce an even more fundamental concept—self-awareness. Each of us possesses a set of strengths, but often we fail to recognize them. These strengths serve as our anchors in life, guiding us through every stage and helping us overcome challenges. It’s crucial to identify our strengths.
Many people go through life either not acknowledging what they’re good at because something else seems cooler, or they’ve never given it enough thought. I have personally spent time contemplating my own life anchors. Let me share a few of them with you; this might help you think about your own strengths. For example, some key anchors in my life are curiosity—extreme curiosity. A child-like curiosity has been a core element of my personality. Another anchor is the ability to understand patterns, connect dots, and think clearly in complex situations—being able to explain things effectively. The last anchor is the ability to communicate well, conveying complex ideas in a way that a six-year-old can understand. These three anchors have consistently supported me throughout my life. Everything I have done, including my current endeavors and those in the next 5-10 years, will be aligned with these strengths. Recognizing your strengths can help you navigate adversity more effectively because it’s often your strengths that pull you out of tough situations.
Adversity could be as simple as you just quitting your job and joining a new company, and you’re trying to figure out how to establish my reputation in a new environment? That’s when your strengths will again come to your rescue. I think clearly knowing what your strengths are, what you’re really good at, what have you gained recognition for, what do people come to you for, what is it that you feel like doing again and again? What do you get drawn towards again and again? — are all indications that something is a strength of yours? I think it’s very important to recognize this. I think it was Samuel Johnson who had said that the absurdity of all conduct is the imitation of those we cannot resemble. I think a lot of us have, from time to time, denied who we are, not accepted it honestly, but I think it’s very important to do that. To me, this is one of the most important elements of resilience, being able to build resilience. I’ll come to the second element of resilience, and I call this character. I would distinguish between intellect and character in the following way. Intellect is about knowing what is right, and character is about doing what is right.
There’s a big difference between the two because most of us in most situations almost always know what’s right. It’s the difficulty of doing that which really calls for character. I’ll just illustrate this with some very interesting stories that I have been through personally. I used to work for this company called BigBasket, which was an e-commerce firm in the space of groceries. In 2014, this company was raising money, and e-commerce in India was big time. Tiger Global and Lee Fixel were the people who had bankrolled the entire e-commerce sector in India. Whenever they funded a startup, every competitor would get scared because they would fund that startup so much that they could use cashbacks and discounts to kill the competition. So Lee Fixel was coming to meet the BigBasket team. Within less than 20 minutes of listening to the team, he quickly concluded that our business model sucked. He said, you know what? Your business is asset heavy, which is— you are inventory-led, whereas the business models that will scale are those which are going to be asset light. And asset light really means that if you want to expand from city A to city B, all that you need to do is go and hire a bunch of delivery boys in city B, place them outside a physical store, a large physical supermarket, and take orders and deliver to customers.
Whereas inventory heavy or asset heavy really means you go to city B and set up a large warehouse, procure materials, and then hire people and then do the deliveries. They quickly told us that you guys are hardly going to get any funding. You’re going to see tech companies, which are asset light, that will build the grocery business very differently from what you’re building, and they have the highest chance of success. It was really at that point in time, the Pope and the Church of the investing world telling us that the sun goes round the Earth, you should better accept it. The choice was to either accept it and take funding from Tiger Global or say, “You know what? We know what we are doing”. Our deep understanding of customer insights is what has helped us pick the right business model. That was the truth because the company had answered this question, “Why does a customer shop with BigBasket”? very thoughtfully. The answer was the customer shops with BigBasket because they wanted to avoid a visit to the physical store. It has very deep implications. One implication was that if a customer orders 25 items from you and you deliver 23, and for the remaining two, you force the customer to visit a physical store, the customer can order the remaining 23 also from the physical store.
One insight was that you had to have complete control over inventory and you needed to know what you have. The choice of making this inventory-led model was this insight. The other insight was that if customers ordered fruits and vegetables and you told them, “You know what, we do only dry groceries, for fruits and vegetables and ice creams, you please visit a physical store” — they could buy the dry groceries also from the physical store. It needed character to be able to stick to what is right, which is that your own experiences count for something, whereas somebody who has a bigger reputation who may control all the purse strings may tell you something very different. It needs some guts and courage to be able to tell them, “What you’re saying is not correct, and I think what we are doing, we are sure about it. We’ll stick to what we are doing. We really don’t care about whether you fund us or not because we know that our business model is going to work”. Eventually, that’s pretty much what happened. All the companies with the asset light model died along the way.
The only one that survived also quickly pivoted to an inventory-led model. Just quickly, one more example of character. Amazon, as a company, used to come to BigBasket from time to time to make a strategic investment or take a stake. Every time they would come and do some due diligence, they would carry away data and try to build a business on their own. So we figured out that that’s not going to work— Amazon wasn’t very serious about a strategic alliance at all. We were looking for a partner who had some deep pockets as well as access to world markets as well as knew the grocery space well, and we began talking to Alibaba. When we had reached a stage when everything was almost certain, the valuation was arrived at, that’s when Amazon came running, saying that, you know what? We really want to do this deal with you. They offered a valuation which was significantly higher than what Alibaba had offered us. When Alibaba came to know about this, they came to the BigBasket team and asked us— this is what we are hearing. Is this true? The response of the team was amazing, which is that this is not the way we do business.
You came to us when we needed you, and you stuck by us. We are going to stick by you. We are not going to just get tempted by a much higher valuation that a company is offering, which never wanted to do a deal with us in the first place, honestly. This is, to me, also a sign of character, which is building trust, building a reputation. Sometimes building trust and reputation calls for taking short-term hits, and that is what eventually pays you in the long run. It may or may not pay, but your reputation certainly gets built. I think reputation, building trust, trustworthy relationships are very important elements of character, and that’s an important element of resilience. One little bit about the other components of resilience is to me, uncluttered thinking. One story here again, the German military believes that all generals can be classified into four categories based on their intellect and willingness to work hard. On the X-axis, generals could be either stupid or smart. On the Y-axis, could be hardworking or lazy. As per them, counter-intuitively the best field commanders, the generals who make for the best field commanders in a war situation, are the lazy and smart guys.
“Lazy” is a bit metaphorical here, not to be taken literally. The reason is that those who are smart and lazy really focus on doing the three, four things that matter in any situation. They’re able to royally ignore the five or six things that don’t really matter. Intelligent people are often confused. They would identify the 10 things that drive a particular outcome, are relevant to a particular outcome, and they focus equally on all those 10, whereas the uncluttered thinkers are able to figure out the two things that really drive the situation. The remaining eight have only a marginal impact on the outcome, and they focus disproportionately on the two things that really matter. This, to me, is an element of uncluttered thinking— being able to cut through the smoke and noise, being able to prioritize, being able to figure out what the two or three most important things to do, and spending a disproportionate amount of energy on those. Because uncluttered thinking is what will get you out of a hole again. Because you then need to figure out what the problem you’re dealing with is. Why are you where you are? How do you get out?
You can only look at all the variables and then figure out what are the two things that I need to do to get out of this. So uncluttered thinking is going to help you make quick decisions, will ensure that you work very smartly, will ensure that you don’t get burnt out within a minimal amount of time. You’re able to solve the most complex problems. You’re able to make the right assumptions, you’re able to make the right approximations. All of these really matter a lot in terms of being able to deal with ups and downs and adversity. This probably is largely it. One example I’ll just give you from history, and there are plenty of these examples in the book. Now, in 1453, the Ottoman Turks ran through Constantinople and took Constantinople. After that, all the trade routes via land between Europe and India were cut off. India was important both as a market and a source of materials for Europe. Therefore, after 1453, they began an intense search for alternate routes to India. That’s how Columbus discovered America. Vasco Da Gama, came via the Cape of Good Hope into India. Magellan sailed around the world. It led to this exploration.
Had it not been for the Ottoman Turks blocking the trade routes, probably these alternate trade routes may not have been discovered for another hundred years. So every particular adversity, every particular problem is always an opportunity in disguise. If you take 1973 and 1979, and the oil crisis, when the OPEC countries decided to step up the prices of oil by almost 400%, it led to a sudden emphasis on alternate forms of energy. Solar energy got a big boost. France went down the path of nuclear energy. Almost 80% of French power today is generated using nuclear energy. They were dependent on fossil fuels before that. In some ways, every crisis is an opportunity. The ability to bounce back is in always seeing things from this perspective, not getting bogged down by fear, bogged down by an irrational feeling that things are going to get worse, seeing things in a positive light and dealing with them. I would just pause here. I think I’ve done my 20-odd minutes. We can have some questions if there are any.
Yeah, we already have something, so, Hari, you can dive right in.
Yeah, the pandemic had both positive and negative effects, more negative effects, I would say. But it also helped create certain new businesses. For example, online businesses, e-commerce companies in India during the pandemic grew at a much faster rate than pre or post-pandemic. So a company like BigBasket achieved in three months in terms of revenue and growth what would have taken probably three years in normal circumstances. Several EdTech companies, education technology companies, got built during the pandemic. It’s a different matter that most of them did end up collapsing because they never really had a great product-market fit and the solutions were never really talked about from a customer perspective. They thought that this pandemic and online thing would continue forever. I think it did help accelerate certain trends, especially the digital trend.
Do we have some more? Okay, that’s another one.
I think I may not be able to say whether there are any tactical go-to’s that could help in adversity. Eventually, I think it boils down to a few things, which I talked about, which have largely got to do with leadership. But I think agility, responding to a particular situation or a problem through a combination of thinking fast and thinking slow, they’re all good sets of tools or go-to’s for dealing with adversity. Clear thinking and all of that.
Yeah, this is an interesting question, which is I think everyone really talks about things changing very rapidly. I think I’ve been hearing this ever since I was a college student. But it’s equally important to understand what is not changing because a lot of good ideas, which are fundamentally sound, actually do endure. I think we don’t probably spend enough time on things that have endured. In terms of learning from history, I think it was the American author, Kurt Vonnegut, who had said that history is just merely a set of surprises. It can only prepare us to be surprised yet again. I think while most of us read history, very few of us learn from history, and I’m not talking about individuals, I’m talking about nations and talking about societies, it’s very difficult to learn from history because it’s a different generation.
Every generation in some ways is entitled to make its own mistakes. Lessons from history are too disconnected from the present to be able to make rational decisions collectively. I think it’s inevitable that despite history offering lessons, society will end up reinventing the wheel often and sometimes not being able to solve the problem at all.
Okay, do we have any more? Okay, that’s it. So, Hari, thank you so much. I think this was so smooth in terms of how you knitted it all together. And it was very interesting, I didn’t miss a deck or whatever. I think it was more like listening to a story that was being told, and that was great. I really appreciate your taking the time and spending your evening with us. I hope that we’ll be able to… I mean, you have five more books, so I think unless you’re planning a new book now. Are you working on a new book?
Not anything at the moment.
Okay. We still have a lot to go in terms of books before we run out of them, as far as you are concerned. We’ll be coming back to you again soon. Thank you so much. I really appreciate you coming to the show.
Thank you, Subhanjan. Thank you for having me, Subhanjan.
We’ll be back soon. Stick around. Thank you, guys.show less
T.N. Hari is the Co-Founder of the Artha School of Entrepreneurship and has been the Head of HR at BigBasket, besides holding many other C-suite positions along his illustrious career. He is also an advisor and sounding board to numerous young entrepreneurs and startups, and a Strategic Advisor at ‘Fundamentum’, which is a homegrown growth phase VC fund. He has co-authored several books such as “Winning Middle India”, “From Pony to Unicorn – Scaling a Startup Sustainably”, “Cut the Crap and Jargon – Lessons from the Startup Trenches”, “Diversity Beyond Tokensim – Why Being Politically Correct Doesn’t Help Anyone”, and “Saying No To Jugaad, The Making of BigBasket”.