Innovation for Value Creation: Adapting to Today's Changing Technology
Most of Nitin’s career has been involved with business model changes around disruptive technologies and M&A work in the TMT sector for companies around Silicon Valley. He has developed M&A strategies, conducted commercial/operational/technical due diligence and has assisted with M&A integrations and separations for his clients. He specialises in creating value from emerging technologies and helping his clients prepare and adapt to the next big thing. A veteran with over 1,000 transactions, he specialises in revenue synergies and has also led dozens of cost-focused consolidation M&A deals. His recent work includes helping CEOs, boards, investors and business leaders transform their business models by leveraging disruptive trends and M&A to pivot into new business models, utilising technologies such as SaaS, SDN, blockchain, open source, AI, IoT, AR/VR, drones and voice-enabled devices.
“As a Silicon Valley insider for two decades, it is a fascinating challenge to utilise my business knowledge, network of experts, consulting skills and experience in M&A deals to solve problems at the cutting edge of new technologies”, says Nitin. “I have built an expansive network in Silicon Valley with TMT sector clients who look to me to help them through difficult business changes, serving as both a trusted adviser and personal advocate.”
What are the current key business and technology trends within the TMT sector?
I believe that today we are experiencing the equivalent of tectonic shifts in business that are primarily technology-driven and are impacting the fundamental ways we do business – and these trends extend far beyond the technology sector. These shifts can conflict with each other, making business strategy more difficult to conceptualise and execute today than it was in the past. Some of these shifts are as follows:
- Product to cloud vs. cloud to edge;
- Centralise (SDN/NFV) vs. decentralise (e.g., blockchain);
- Players who monetised voice are now monetising data (e.g., telcos), while those who monetised data are now monetising voice (e.g., Google, Amazon);
- Brick-and-mortar stores to an omni-channel retail economy, or ‘bricks-and clicks’;
- Closed-source to open-source (Android);
- Human to machine (AI);
- Real to virtual (AR/VR); and
- Building traditional enterprises vs. monetising ecosystems.
Each of these shifts is a transformation that presents an opportunity to get ahead of the game.
There are few absolute rules in this new frontier – companies need a data-driven approach to navigate the complexity, uncertainty and ambiguity, which has become profound over the last few years and is not likely to abate.
Traditionally, technology has served to enable or enhance existing business models or to create entirely new ones. More recently, we find ourselves in a place where there is a developed technology, but the ecosystems and business models around it are taking longer to evolve. Take, for instance, blockchain – here we have a viable technology, but it will take a few years to build scalable business models around it and monetise it. CEOs and corporate think tanks must devise new ways of adapting in such a landscape.
I have built an expansive network in Silicon Valley with TMT sector clients who look to me to help them through difficult business changes, serving as both a trusted adviser and personal advocate.
How is FTI positioned to take advantage of these so-called shifts and disruptions in the market?
FTI is configured differently than traditional consulting firms because we have an expert-centric approach to creating value for our clients. Most of our practitioners have deep industry experience, having operated businesses as executives and in consulting for several years, which has created a lot of credibility with clients and other executives. We are also an industry- and sector-oriented firm and taking a profitability view of the business is a highly valued and impactful perspective for our clients. We not only understand the sector, trends and structural shifts, but can also translate those into meaningful operational and tactical outcomes. Our clients tend to hire us for our expertise and experience rather than to simply add leverage to their internal teams. Given the highly sector-focused approach, we tend to formulate points of view on what is coming next, to ensure our clients are well prepared to adapt.
You have quite an amazing M&A background as well. What are key current M&A trends and drivers in the sector?
There is a lot going on in the M&A world. The last two years have been record-breaking, with unprecedented deal activity across industries, geographies, private equity and corporates. While there is some rumbling that M&A is slowing, I think that the big drivers are intact. For one, the US dollar has appreciated significantly against some developing market currencies, and that creates an interesting value discount. The 2017 tax cuts will continue to put more money in the hands of corporates, which will likely fuel M&A activity. The wave around digital business models is not cresting, and companies will acquire or strengthen their capabilities in this space. Incumbents will continue to consolidate to survive and create scale.
All these trends have put pressure on internal M&A teams and external advisers to create more value and to do it quickly. M&A integration has gone through a lot of change, and many professionals have still not adapted to the structural integration aspects and approach it ‘function-by-function’, limiting their ability to create value. There are several industries and sectors where the M&A wave is just starting – the scaling of technologies such as blockchain and AR/VR will attract preemptive strikes from bigger players. Private equity firms continue to be aggressive and are developing some unique strategies for deploying capital and creating value. When you consider all of these trends, I don’t think that M&A activity in the sector will slow down appreciably anytime soon.
The last two years have been record-breaking, with unprecedented deal activity across industries, geographies, private equity and corporates.
How do you go about keeping up with all the trends in the market while continuing to build skills and reinvent yourself?
This is an important aspect that has become critical if you want to stay current, relevant and excel. Learning patterns, adapting and creating value for the entire ecosystem around you is vital when working within this field. Gone are the days when one could read a few books or attend a couple of training sessions to grasp a new subject. Our clients are very smart people and they have access to a vast collection of materials and resources.
The way I have adapted is by learning from my network. For example, I learned about autonomous driving by speaking with approximately 50 companies across the value chain. By the time I spoke with a couple of dozen players, I started seeing patterns and trends that they were not able to see individually, such as partnership opportunities, M&A opportunities, market needs and disruptive trends.
After you’ve networked, it’s about building insights and getting into more details through targeted discussions around specific areas of autonomous driving. Clients value market insights and trends from external sources as validating. I did something similar with blockchain and IoT previously. One can always dress up their credibility with technical credentials, but this is usually less effective than learning from the field and building insights and skills from it. People are also curious about what others are thinking and doing, hence forming a cohesive, defensible, fact-based point of view often goes a long way.
Gone are the days when one could read a few books or attend a couple of training sessions to grasp a new subject.
It is widely believed that you are one of the most connected C-Level Executives in the TMT sector. How have you built such an impressive network?
Great networks are always built over time. It is easy to make connections, but it’s a lot harder to maintain them. I like connecting with people in general and I like exchanging ideas and facilitating with them – be it making introductions, sharing insights, learning from them, advising them or being helpful otherwise. Not all meetings have to be about getting something out of them – be genuine, take interest, help if you can and I guarantee that will deepen your relationships with them. I always tell people that if your relationships are strictly an outcome of your business, then something is not right, but if your business comes to you as a byproduct of your relationships, then you are doing it right. Remember, it is about the quality and strength of your network – not the numbers. It takes a lot of commitment to genuinely foster and maintain a network as it gets bigger. Your network is like a living organism and it needs to be nurtured in order to strengthen and grow. There is not one magical formula for this; everyone has different styles, but it is important to know what works best for you. The crucial element is to put yourself out there in the field.
You have received multiple awards for pioneering new approaches in M&A – please tell us about them.
The most important outcome is to innovate and adapt – awards are only a byproduct of that but, of course, serve as a validation and recognition of your contributions. Some of my work that has been externally recognised is creating a new framework for delivering revenue synergies in M&A, a new approach to managing M&A from strategy through integration by utilising Wargames - a new and unique way to assess blockchain and understand how to unlock its business model value. Additionally, I am currently working on building a new approach to assess and integrate platforms, which requires a different approach from integrating products or processes. When it comes to platforms, the bulk of value created is outside the company and delivered through network effects. Stay tuned for more on this topic.
How does one go about generating new business in today’s world? Has the approach to sales changed?
I think the best way to sell nowadays is to be visible in the right places, share insights and experiences to create a ‘pull effect’. You can no longer just show up and talk about the services your firm offers and wait for the client to bite on something relevant. More specifically, today’s clients judge your expertise by how well you understand their business, trends and context apart from your technical or functional area.
Today’s clients judge your expertise by how well you understand their business, trends and context apart from your technical or functional area.
My field is highly relationship-driven – the deeper you know your topic, the more amplification you will get from the network or relationships in order to get referrals. We don’t live in an age of long attention spans. If you meet the CEO of a company in the elevator, speak about business issues relevant to him. If what you’re saying resonates, you’ll have plenty of opportunities later to talk about how great your firm is.
You also sit on boards of multiple companies – can you tell us about them? How do you choose the companies that you join?
Foremost, I need to genuinely believe in what the company does and that I can really add value. I am always happy to help talented people with my ideas, skills or network. A great idea is unlikely to succeed without great management teams, and resonating with these people is a key consideration for investing time.
I’m also attracted to disruptive technologies that could have a big impact on the business world. Some of the companies that I am a board member of include Pronto, a partner orchestration and automation platform; SmartBeings, an AI based smart speaker focused on enterprises; and Crosby, a blockchain-based asset tracking technology which is unique and differentiated.
What is your advice to CEOs and how do you adapt to changes in today’s world?
- Get comfortable making frequent or sudden pivots. Never get into a comfort zone or be complacent, even when you are ahead of your competition.
- Find builders and give them responsibility, authority and accountability.
- Develop foresight and skillsets to navigate business complexity and strategic ambiguities.
- Move away from intuition to data-driven decision making wherever possible.
- Build ecosystems and develop skills to monetise them. There is no need to own the value chain, but you should learn to have a specific and influential role in it.
- Continuing with traditional approaches will not change much.
- Invest in continuous and fast-paced learning.
- When it comes to the organisation, be agile and respond quickly.
What is your advice to the Management Consulting community on how they should adapt to the changing landscape?
- Understand the changing business landscape and identify your niche, skills required and ways to play.
- Look at ways to adapt your skill set and see how you can create value as the next big thing surfaces.
- It is about constant learning, reinvention and reorientation of your skills.
- Bring data, facts and insights into everything that you do and put yourself out there.
- Your network is a vehicle to engage, learn and amplify your personal brand – reach out to people and create avenues to exchange value.
- Client relationships are for life. Stay engaged and avoid tendencies to move on after your successful project.
- Adapt your thinking from pure enterprise or client to the ecosystem itself – you will discover more ways to add value for your clients.