Strategy: It’s the Big Bets that Matter

Creating a well-thought-out strategy for your business requires accepting that you can’t control everything.

May 16, 2023

Do you have a strategy? Or do you just have a plan? Understanding the difference and how to define and execute on both is essential to transforming your business. Abhishek Rungta, founder and CEO of INT, realized he had been running his business without a strategy for far too long. Hear his journey and gain strategic insights from Jesper Sørensen, senior associate dean at Stanford Graduate School of Business, on why strategy is all about managing uncertainty.

Abhishek Rungta started his IT business in 1997 while he was still in college. But 10 years in, he faced a familiar predicament for founders. “We didn’t have any focus. Anyone who sent us an email was a customer,” he recalls. He admits that most of his business decisions lacked real strategy and were instead led “by gut feeling, not by real research or discussion within the organization.” By 2008, he was losing customers and employees because there was nothing that truly differentiated his company from the competition.

To grow his business he needed to be more than a low-cost provider — he needed a strategy to truly differentiate his business. “The way I look at it now is, what can I do which my competition will find extremely difficult to replicate?” Rungta explains.

According to Professor Sørensen, most organizations associate strategy with planning and tend to focus more on logistics (the planning) than on the logic of the underlying theory or strategy. “Strategy is mostly about the things that you can’t control. So it’s about what customers are going to want. What are your competitors going to do? Those are all things that you don’t have any control over, so strategy is about managing all this uncertainty,” he says.

Sorensen explains that strategy is fundamentally about making an argument and then coming up with assumptions that support it. And you need to include assumptions about how uncertainty is going to resolve itself so you can accomplish your goals.

While it certainly didn’t happen overnight, Rungta eventually constructed a more complete strategic argument based on clear assumptions, namely the fact that clients valued speed over price and that regulated industries were ripe for targeting. And then he let those assumptions drive action.

Sorensen reminds entrepreneurs that there’s no real way to future-proof your strategy. “I don’t think there’s any kind of pill you can take that will guarantee your success against all the changes that might happen in the future,” he says. “But what you can do is you can say, okay, when a change comes in, I can then think about, well, does this impact the logic of my strategy or not?”

Listen to Rungta’s strategic pivot and leadership journey for what he calls his “25-year-old startup.” And get advice from Professor Sorensen on how to construct your own strategy and examine the assumptions that matter most.

Grit & Growth is a podcast produced by Stanford Seed, an institute at Stanford Graduate School of Business which partners with entrepreneurs in emerging markets to build thriving enterprises that transform lives.

Hear these entrepreneurs’ stories of trial and triumph, and gain insights and guidance from Stanford University faculty and global business experts on how to transform today’s challenges into tomorrow’s opportunities.

Full Transcript

Jesper Sørensen: I think most people in most organizations associate strategy with planning, and those two words are then married to each other in a lot of people’s minds, right? In other words, we have to do strategic planning.

Darius Teter: Do you have a strategy? Or do you just have a plan? Do you even know the difference?

Jesper Sørensen: Planning is important, obviously, you need to do planning. But I don’t think we should confuse planning with strategy.

Darius Teter: Welcome to season three of Grit & Growth from Stanford Seed, the podcast where Africa and South Asia’s intrepid entrepreneurs share their trials and triumphs with insights from Stanford faculty and global experts on how to tackle challenges and grow your business. If you’re investing in a company, you may not want to hear that the founder is a gambler. You’d probably be even more worried if you found out that they were making big bets, ones that risk the future of the company. But when it comes to strategy, that might be the most responsible thing to do. In fact, the bets you make on strategy can be transformative to your products, your clients, even your culture. And that’s exactly what happened with our guest today. What does strategy mean to you, the term?

Abhishek Rungta: It meant a plan to me 10 years back. Today it means making choices. I’m Abhishek Rungta, founder and CEO of Indus Net Technologies.

Darius Teter: Now rebranded as INT, right?

Abhishek Rungta: That’s right, yeah. I started this business in 1997 when I was in college. I call Indus Net a 25-year-old startup.

Darius Teter: Paint the picture for me — what did INT look like 10 years ago?

Abhishek Rungta: So 10 years back, INT was a company who was everything for everyone. So for us, what mattered was, anyone who wants to come and give us a business to develop a mobile app or to develop a web application, and we would gladly go ahead and do it for them.

Darius Teter: And where were most of your customers?

Abhishek Rungta: Oh, they were all over the world. So we were having customers in North America, the entire Europe, Australia, Southeast Asia, even India. We didn’t have any focus, so for us, anyone who can send an email was a customer.

Darius Teter: Did you have a formal strategy? If I asked you, Abhishek, show me your strategy, did you have something written down?

Abhishek Rungta: No. So it was like every now and then, let’s say every quarter, I would scribble down something on a piece of paper, just try to see where I am and what I want to do next. Most of the time it was not well thought out, and to be honest, most of the time it was retrofit. So I would do something, if it works, then I would actually start thinking: What worked here? Or why did I choose this? So a lot of these decisions were by gut feeling, not by real research or discussion within the organization or even within my own mind, to be honest.

Darius Teter: It may seem surprising that INT could run for years without a formal strategy. But Abhishek isn’t alone. Plenty of founders don’t have a defined strategy, or they think they do, but what they have isn’t really a strategy at all. So we brought in someone who can set the record straight.

Jesper Sørensen: Hi, my name is Jesper Sørensen. I’m a professor at the Graduate School of Business at Stanford University.

Darius Teter: And what do you teach at Stanford?

Jesper Sørensen: Here at Stanford, I teach courses and strategy.

Darius Teter: Jesper is also co-author of the excellent book, Making Great Strategy, and the faculty director of the Stanford Seed Program. There’s really no one I’d rather talk to on this subject. So my first question to you is: What is a strategy, and what isn’t?

Jesper Sørensen: So that’s a great question. I mean, strategy is one of these terms that is widely abused and used to refer to any number of things. And so when I think about what a strategy is, I think it’s the logic of success for the organization. How are we going to get the resources that we need in order to accomplish what it is we want to accomplish? What we’re trying to articulate in the book is a view of strategy, that a strategy is an argument. We call it a strategy argument, and that when you do strategy, what you’re doing is you’re constructing this theory about how causes lead to consequences.

Darius Teter: What’s important here is the logic, not the logistics. Jesper says too many companies skip straight to details without doing the hard work of imagining how your company succeeds in an uncertain future.

Jesper Sørensen: I think most people in most organizations associate strategy with planning, and those two words are then married to each other in a lot of people’s minds. In other words, we have to do strategic planning. Planning is important, obviously, you need to do planning. But I don’t think we should confuse planning with strategy. And Roger Martin, who’s a writer, has talked about this as well. We like to focus on planning in organizations because planning is all about the things that we can control. But what Martin says, which I think is exactly right, is that strategy is really mostly about the things that you can’t control. So it’s about: What are customers going to want? What are your competitors going to do? What is the regulator going to do? What are your suppliers going to do? Those are all things that you don’t have any control over per se. You can influence them, you can shape them, but it’s not like you can sit and you can command them to do things the way you can in an organization usually. So strategy is about managing all this uncertainty.

Darius Teter: Planning feels so much safer than strategy, which is why many leaders fill their time with operations and micromanaging.

Abhishek Rungta: I was a problem solver and I like to get deep into problems and find innovative solutions and give it to my team. So I used to absolutely love doing that, and that is what I used to do day in and day out. So I would get into meetings, back to back, the entire day, and listen to problems, check out data, and give feedback and give inputs. In fact, so much of that that I didn’t have time to even check if people have worked on those inputs or not.

Darius Teter: I totally know that feeling, right? I sometimes go there myself and you go into the meeting, here’s my brilliant thought, let’s move on this — onward, next meeting. It’s a good feeling, it’s easy, quick satisfaction. But to grow your business, you need a strategy. Abhishek found this out the hard way. What were the problems that you saw with your business and what sort of triggered the idea that maybe you need to rethink your business model?

Abhishek Rungta: So first thing is that between 2008 and 2012, I had lots of companies which came out of Indus Net. So it was very easy for someone to just move out of the company, take some clients and employees along with them and start a new company, and we would kind of keep suffering the blow one after another.

Darius Teter: You were not spinning these off? These were literally people walking away from you and taking some of your customers with them?

Abhishek Rungta: Yes, absolutely. Not only customers, but also some of the key employees. As I said, the immediate tendency of anyone at that point of time would be to blame the other person. They would say, how ungrateful! And I did the same, so I was no different. But over a period of time I realized that it is not about someone just being ungrateful, it is about the company does not have a concrete strategy.

Darius Teter: Abhishek needed a strategy, but as a small business, he faced some common challenges.

Jesper Sørensen: Most small and medium-sized businesses are in head-to-head competition.

Darius Teter: By the way, one conversation with Jesper is never enough. So we called him up on the phone a few days after this interview.

Jesper Sørensen: So when you’re a small or medium-sized company, you have this problem oftentimes that you have very powerful suppliers and you have very powerful buyers, one or the other, or both in the worst case scenario. And there’s usually not anything that you can do about it, because those problems are usually about the supplier or the buyer being really big and you’re really small and they have lots of alternatives to you and you don’t have any alternatives to them. Oftentimes what they can do something about is competition and they have lots of rivalry and they have got to figure out: How do I win against competition?

Darius Teter: This really describes INT’s situation.

Abhishek Rungta: Competition is a very big reality in the industry because it’s not a blue ocean business, it’s a red ocean business. There are hundreds of IT companies, if not thousands, who are in the fight to get a business.

Jesper Sørensen: And there’s basically two different ways in which you can do that. You can do that by saying, okay, look, the customer’s going to look at those chips on the shelf and they’re not really going to care which one they choose because it’s all the same to them, but the way I’m going to win is that I’m going to have a lower cost to producing and delivering those chips to the store than my rival is, and that’s what we would call a low-cost strategy. So the customer benefit is the same, they’re indifferent between the different products, but I incur a lower cost and so therefore I have a higher potential margin.

Darius Teter: If Abhishek even had a strategy 10 years ago, this was it.

Abhishek Rungta: Back then INT was a low-cost provider. So our mode was: Can you offer at the lowest possible price?

Darius Teter: But low-cost strategies have their downsides.

Abhishek Rungta: We realized that we were serving the companies for whom it does not matter what size and what capability does the other company has. For them, the only thing that matters was: Can the other company offer them a cheap service?

Darius Teter: So you didn’t have product differentiation.

Abhishek Rungta: Yeah.

Darius Teter: You’re trying to be the lowest-cost provider, and turns out that anybody can be a low-cost provider.

Abhishek Rungta: Yes.

Darius Teter: So your own staff saw opportunities: Well, if Abhishek can do this with INT, I can do this with my own company because it’s not that hard and the customer doesn’t actually care who’s doing this in the back end as long as they’re delivering a working product at a low price.

Abhishek Rungta: I am offering the same thing that a 20-people company can offer, though we were already 300 people in the company, and this means that the client has no reason to pay our overheads and to work with us in that scenario.

Darius Teter: And I think the other thing I would say there is, your own team members probably didn’t see a really big future in that business.

Abhishek Rungta: Of course, so we were always considered a training ground for everybody. Though I don’t mind people thinking of Indus Net as a great learning organization, but definitely it was not supposed to be considered as a training ground for the future career growth. So the whole point here was that I started looking inward: What am I doing wrong? And I figured out that I’m working without a major differentiator. I’m working without a very, very defined culture in the company.

Darius Teter: Strategy affects everybody in your organization. If your people don’t see a compelling vision, why would they stay? And if your product isn’t differentiated, anybody can replicate it. And you might find, as Abhishek did, that you’re training people for the street.

Jesper Sørensen: The other strategy that you can pursue is what we call a perceived quality strategy. And so that means that when they look at all those chips on the shelf, their eyes are drawn to yours, and they’re like, “Ooh, that’s the chip that I want because I think it tastes better than all the other chips.”

Darius Teter: And I think there’s a key word there. It’s the perception — not your perception, but your customer’s perception.

Jesper Sørensen: Exactly. So you might think that your chips are much better than your rivals’, and you might even be right, they might taste better to you, but your customer has to think that they taste better.

Darius Teter: INT was struggling with a low-cost approach. Abhishek realized to attain his ambitions, they needed to change. So you have this epiphany, you look inward, you realize that something has to change. What’s next in your strategy journey?

Abhishek Rungta: Yes. So for us, it was a challenge that we wanted to move up the value chain. By that time, I understood that of course, we are at the bottom of the value chain in a way. We wanted to move up. So I started thinking that instead of serving the smaller businesses who really don’t care much about the size of business on the other side of the table, should we go and look at the larger businesses? So we started looking at: How can we go out and sell to larger businesses? So while doing that, I tried in the U.S. first, we got some clients, but we were getting the not-so-critical portions of their business. And that is another thing that we realized — that us working on things that do not matter to the business as much as we want is a big problem.

Darius Teter: Because it means that there won’t be a sticky client.

Abhishek Rungta: Absolutely, because this means that for them, this is just maybe a small experiment or they may not continue with this over a period of time.

Darius Teter: So you do all this work to find these American companies, they give you some tiny slice of their business, they’re not making a big bet on you, which means they can drop you tomorrow.

Abhishek Rungta: That’s right.

Darius Teter: So your customer acquisition cost is going high, but your repeatable sales and your predictable sales still aren’t there.

Abhishek Rungta: That’s right.

Darius Teter: INT still wasn’t getting anywhere even as they reached larger customers overseas. And that’s because their strategies didn’t account for how those customers would behave. They didn’t account for lower cost entrance into their market or how larger clients would view their partnership. Those things weren’t up to Abhishek, but they still radically affected his business. So how do you strategize around those things that are beyond your control?

Jesper Sørensen: That’s why you have to think about strategy really as about an argument, because an argument is all about making assumptions, right? Assumptions about how the uncertainty is going to resolve itself so that you’re going to be able to accomplish your goals. So once you have clarity about, okay, I’m going to assume that these are the things that are going to happen if I do the following things, then you say, “Okay, now I need to plan consistent with that set of assumptions.” So I said, “Okay, if I build a really big manufacturing facility and invest in that kind of scale, I think that the following good things will happen to my cost structure, to my market share, to all these other kinds of things.” Great, now you have to plan to make that happen.

Darius Teter: Is there anything a leader can do to make their strategy more future-proof today?

Jesper Sørensen: The concept “future-proof” is funny because the challenge, of course, is you don’t know what you don’t know, and you don’t know what the future is going to hold. So I think the way you make a strategy more future-proof in that sense is to be as clear as possible with yourself about what assumptions you are making and be vigilant about changes in the truth of those assumptions. And second, to be aware of the fact that you’re probably making a set of implicit assumptions that you’re not aware of and pay attention to be able to discover what those are.

Darius Teter: Assumptions are key to strategy. They’re essentially bets, educated guesses about what the future holds, and you’re already making them. You just might not know it. I think one of the pieces of that that really came out to me is by forcing people to give a logical and coherent argument for why they believe this course of action will lead to that outcome, is it makes implicit unstated assumptions explicit. And then you can have a debate about whether the logic holds, whether the assumptions themselves are actually strong or weak or biased. The actual quote in your book is, “Implicit assumptions are most dangerous for strategic decisions where the implicit premise will often be non-obvious but controversial.”

Jesper Sørensen: The reason we emphasize trying to be very clear with yourself about what you’re assuming is that you want to know what bets you’re making.

Darius Teter: And the greater the bet, the greater the potential reward. One of the things I really found fascinating in the book is that a forward-looking strategy that only has safe assumptions is not actually going to get you anywhere. You have to be willing to take some bets. And I found that really interesting, that if your strategy is predicated on safe and comfortable assumptions, it’s probably not going to be a very earth-shattering strategy. It’s going to be an incremental strategy. After several false starts, Abhishek constructed a more complete strategic argument, one based on clear assumptions. Can you describe for me what are the big bets you’re making in Indus Net? What has to be true for your strategy to succeed?

Abhishek Rungta: Well, a few things that are the foundation of our strategy is, number one, clients want things to be delivered faster, not cheaper.

Darius Teter: Sorry, say more about that. So they’re more interested in getting stuff fast rather than cheap. So that was your big “aha’ moment. What did that mean on your side in terms of investment in the company in skills, technology?

Abhishek Rungta: Yeah, so we started building what we call code accelerators. Now, just to decipher it for you, these are sets of codes that we keep ready. This means they are our building blocks, lots of things which are already built in, and then we can keep putting it together like Lego blocks to build any software. This enables us to reduce our time to develop and cost to develop by almost 35 to 40 percent. So this helped us in moving faster.

Darius Teter: Notice here how the assumption drives the action. The bet that Abhishek made — that his target customers would value speed over price — came first. The code accelerators were a means of achieving that strategy.

Abhishek Rungta: The second thesis that we have is that regulated businesses will continue to invest in their applications, and they have to continue to invest in the maintenance of those applications because they are regulated, and they have to spend and continue to spend on not only new applications and new changes, but also the older applications and older systems, because as regulation changes, they have to adapt to the regulation. So you see, all three industries we chose are highly regulated industries: insurance, banking, and pharmaceutical businesses or life sciences.

Darius Teter: So they become stickier customers because the regulatory risk and potential costs to find a new provider to drop Indus Net and find somebody else, it’s higher for them as well.

Abhishek Rungta: Absolutely. And instead of just height, it’s more risky. I think they’re all risk-averse businesses. They don’t want to risk moving to just another provider or just bring someone else to manage the system that has been built ground up by some other company.

Darius Teter: This approach doesn’t just affect your products, it can help define your organizational structure.

Abhishek Rungta: And we have also designed our organization in a way which is verticalized. This means a complete vertical organization just focuses on insurance. Another vertical focuses on banking, and the third vertical focuses on life sciences. That is how we have also designed the org.

Darius Teter: Sometimes strategy requires that you close certain doors so you can focus on your big bets with less distraction. So prior to this strategic focus in these verticals and your restructuring, you were taking whatever business showed up. So when you made this shift, you had to make some choices, you had to give up a bunch of business, right?

Abhishek Rungta: Oh yeah, many. Obviously, our prices went up, so some businesses themselves dropped out who were very price-conscious.

Darius Teter: Abhishek’s strategic assumptions have led to investments in areas he never anticipated.

Abhishek Rungta: So the last but not the least is that the world will keep changing very, very fast. And if we have to stay afloat, we have to stay at the cutting edge of the business. And for that, even if we are an IT service company, we need to have a very strong R&D center, which we never had before. So we created an R&D center inside the company, which basically continues to churn out innovation on cutting-edge technology, which is not yet adopted by companies. So this also gives companies a comfort that Indus Net would always be at the cutting edge. They can bring the most important and most useful innovations on the table and that will help us.

Darius Teter: So Abhishek, these are really dramatic changes you’re describing. I mean, you’re going from low-cost service provider taking whatever business you can find, whatever comes across the transom, to someone who’s investing in your own technology stack and your own IP, your building blocks, your accelerator process, and now your R&D center. I mean that is a real maturity of the company. I like how you describe it as a 25-year startup because I see it’s a complete — really a different company from even 10 years ago. But what happens if your assumptions are wrong? Does the business just collapse? Well, hopefully not, because you shouldn’t be surprised. You’re keeping an eye on your assumptions and constantly testing if they’re true.

Abhishek Rungta: I call it changing plane engines at 30,000 feet, and that is what I have been doing. So it has been a very interesting adventure, and I think most of the learning in the initial days of thinking and making this change was by reflecting and by going through the different experiences and putting one thing together — Is that where am I wrong? Where am I wrong? What could I have done better and what can I do better now?

Jesper Sørensen: The most important assumptions to test first: think about it in two dimensions. Any given assumption, you can assess along two dimensions. So one dimension is: How uncertain are you about it? There are certain assumptions that I’m going to make as I go about my daily life that I don’t really worry about. I don’t worry about whether the sun is going to rise tomorrow. And so I kind of build my strategy around that assumption. So that’s the uncertainty dimension, right? On the other hand, I don’t know, for example, on the uncertainty dimension, what’s the demand for electric vehicles going to look like in 2035? I have a lot more uncertainty around that.

Darius Teter: The second dimension: How consequential is this assumption to your success?

Jesper Sørensen: So you could say, well, maybe I should just — all the assumptions that I should focus on are the ones that I’m really uncertain about. But some of the assumptions don’t matter so much. In any given argument, there are typically, kind of, some nodes in the argument, so some kind of node in a network kind of sense, where if that assumption fails, everything else falls apart. It’s consequential in the language of our book because it’s really important to the logic of the strategy and it’s highly uncertain. And the combination of those two things means that that’s the thing you’ve really got to pay attention to.

Darius Teter: Abhishek uses a similar formula to examine his assumptions.

Abhishek Rungta: So, for example, we know what are the outcomes which we are very confident about because they’re just extrapolations of what we have started doing and which have started giving results. And there are certain experiments which we have to experiment for, which we cannot extrapolate because they are zero or one.

Darius Teter: Give me an example?

Abhishek Rungta: We want to sell to small banks in the United States of America and Canada, and we have not done that till now, and we have to get in that market. So this is a zero or one. I’m not saying we will be zero, but this one may take a longer time than expected. So what I have done is that I have divided the responsibility at the mental level. I am more involved in zero to one, which are the high risk areas where you need to actually figure out multiple ways and then choose one way to get to that one. And anything which is one to 10 or one to 100, I have given the full decision making to my team. They are taking all the decisions and they are deciding how to move forward.

Darius Teter: I love that. I love the way you described that, because one of the other things I think about with strategy is that a good strategy has to make some bets about a future, which is not really knowable. If a strategy is just “let’s do more of this and more of that,” I mean, you might succeed, but it’s not a strategy that’s going to fundamentally change your organization and lead to 100 x of anything, right? It’s just an incremental plan. So I love the idea you’ve put across here, which is that there are some big bets you’re making that are unknowable and those are the ones you worry about. And then there’s this sort of incremental growth of businesses that you’re confident in, and those are the ones where the main risk is execution. Abhishek had examined his assumptions, he’d made informed and intentional bets. He finally had a strategy, but he also had a problem. His company wasn’t built to implement this strategy. To achieve success, Abhishek had to change how things were done, and that started with him. If you’re going to have a strategy that makes a few big bets, you’re risking the business, you can’t do that alone. How did you get there?

Abhishek Rungta: I had a great team, actually — a great team of people who can operate well, who can execute well. But the challenge was that I was the only one who was taking all the decisions, and that was creating a lot of bottlenecks. And not only bottlenecks, but it also tires you out a lot and you don’t get much time to think through, or not about just today, but also about tomorrow. And it took serious time, myself because it means that I’m changing my leadership style from being a problem solver, from being a micromanager to someone who is basically communicating the vision and let the team run the show. And for that, of course, you need very different kinds of people whom I have never recruited in the past.

Darius Teter: Your mindset was: I want to find great operators who can execute what I tell them to execute on, they’re going to do a great job, they’re going to be reliable. I don’t want to oversimplify it, but they’re kind of like worker bees, right? You give them a task, off they go, they do it, they’re reliable. You needed somebody who was actually going to challenge you or contribute to the strategic vision.

Abhishek Rungta: You are right, but we were more looking at people who have been there, done that, and over time I realized that people who have been there, done that may have a lot of experience. And at times the big challenge with such people is that they generally go back into their experience and they try to find a solution for everything from that experience. And in the way the world is changing today, that experience can be a big liability, because they may bring an outdated solution to a new problem. So we then started looking at people who have lots of different kinds of experience and who can actually think for themselves using first principle thinking.

So we started looking out, and we started interviewing, and that is where my big realization came that since I have not hired such people and have not interviewed such people at that scale in the past, this was itself a huge learning curve for me, because the kind of attributes I was looking for were not necessarily suitable for such people to come and make an impact in the company. So we went through a process in which we all kept observing all the people that are already inside the company to see how different people react and how different people behave. And from there, we identify two leaders from within the company who can be molded to become the senior management people whom we felt that they can take their decisions on themself and they will not necessarily fall back on me all the time. So the first thing that we did was to promote these two people in senior management.

Darius Teter: It’s so interesting because it really is the fundamental nature of a human capital strategy: Does the team you have today, are they the right people to take the company where you want it to go? And you realize that actually they weren’t, although some of them might be there within your company, but they’d never been given the opportunity to actually express their other skills. You never asked them, you never gave them an opportunity to actually be a leader. And on the other hand, the company that’s moving in a fast-changing environment, you need people who aren’t anchored to the past. It’s really a human capital strategy.

Abhishek Rungta: Organization change cannot happen without people change, and people change cannot happen without a leader change. So I think that first, I had to change myself to a level where I said, “Okay, should I drive the business by activity or should I drive by culture?” And that is where I choose culture, because culture is what will give us a long-term competitive advantage because it’ll continue to keep changing the tasks that we want to do and people will themselves discover. So for example, the whole building block concept that I’m talking about, the accelerator we are talking about, this idea hasn’t come from me. I was not even involved in it. One of the two people which we promoted internally, he came up with that idea that I want to create this framework because without creating this framework, I cannot break the silos in the company. So all these ideas are coming from the same leaders that we have promoted and we have put on the pedestal, and I think they’re living up to that.

Darius Teter: Strategy is not executed in a vacuum. For a meaningful pivot, you’ll probably need to reevaluate your talent pool, your organizational design, even your culture, because what got you here isn’t necessarily what will get you there. The changes at INT go beyond surface level strategy, and as a result, they’re separating from the pack.

Abhishek Rungta: So the way I look at it is neither the cost strategy nor the sales strategy. The way I look at it is that: What can I do which my competition will find it extremely difficult to replicate And when I look at that, I find three major elements, which I find that my competition will find extremely difficult to replicate. One is speed, as a company where we have delegated decision making to the last man in the organization and where we can move fast. And as an organization, as I said, we have divided the verticals in smaller chunks. This means every division can make their own decisions. So the organization looks big, but each division is small and agile, so they can move very fast.

The second thing is that the larger organizations cannot deliver a high level of flexibility in their modes of engagement. The flexibility is the second thing, so we call ourselves fast, flexible. And the last one is future focused. So for example, when we talk about blockchain, many large organizations want to do it, but they’re not proposing or they’re not taking the risk of bringing blockchain capabilities to the clients right now. But we have said, “Okay, this is the risk we are ready to take. We will take the most cutting-edge technology and we will start consulting and do proof of concepts with the client and where it is applicable and it works, we will continue to scale it with our clients.”

Darius Teter: What I find so fascinating about your answer is, I thought you were going to say that it’s your technology stack, and your accelerator program, and your building your Lego blocks of code. But actually what you said was, it’s your organization and culture that’s your key differentiator. Because it’s fine to have all those things, but if your product teams don’t have delegated authority to go out and make decisions to innovate, if they don’t know how to talk to a client and give them an answer on their own without checking back with Abhishek every time, then you’re not going to actually fulfill that key differentiator. So it’s actually more about the culture in the organization. I mean, the technology’s important, obviously, you have brilliant young software engineers, but what I heard was actually your organizational design and your culture are absolutely key to your product differentiation.

All along we’ve been talking about, let’s focus on these verticals, let’s build this technology, let’s have R&D, but underneath all of this is, let’s operate as a different type of organization, and that’s how we win. A meaningful strategy places bets on things you can’t control, your clients, your competition, your future. These things aren’t knowable, and it may seem safer to avoid making such bets, but you can have a point of view built on coherent, explicit assumptions and you know which ones have to be true to succeed and you know how to test them.

Jesper Sørensen: I don’t think there’s any kind of pill you can take that will guarantee your success against all the changes that might happen in the future, but what you can do is you can say, okay, when a change comes in, I can then think about, well, does this impact the logic of my strategy or not? And I think that’s actually the other aspect of future-proof that we maybe underestimate, which is I think a lot of companies spend too much time reacting to things that they don’t need to react to, because they hear all the hype about oh, crypto, or oh, something else, and then it turns out six months later nobody’s talking about it anymore because they moved on to the next thing and you just redirected your whole company to do this, right?

Darius Teter: It will take risks to grow your business, but you’ve already bet on yourself once because it’s a risk to even start a business, and you can do it again. In a world where many companies don’t actually understand strategy, it can be a huge differentiator. A well-considered strategy can and should shape elements of your business, including your human capital, your organizational structure, and your culture. Those bets pay off. Just ask Abhishek.

Abhishek Rungta: We have set the ground for massive growth, and if I also see the growth in the accounts that we got in the last few years, they have actually grown a lot. We have just been held back there just because of the churn that we have been managing, because we were also letting go a lot of smaller businesses. But I think now that churn is over, the upside should be much bigger. So we should at least grow at 30, 35 percent per annum, minimum.

Darius Teter: The more you describe it, the more impressed I am with what a big pivot this is. Because you’re talking about new products, new customer segments, and new markets geographically. You’re betting the farm on these three big changes.

Abhishek Rungta: Yeah, that’s why I said we are changing the engines at 30,000 feet, and hopefully we are changing it without losing altitude.

Darius Teter: I want to thank Abhishek Rungta and Jesper Sørensen. As I said before, you can’t just have one conversation with Jesper, so you’ll be hearing more from him later this season. This has been Grit & Growth from the Stanford Graduate School of Business. I’m your host, Darius Teter. If you liked this episode, follow us and leave a review on your favorite podcast app. Erika Amoako-Agyei and VeAnne Virgin researched and developed content for this episode. Kendra Gladych is our production coordinator and our executive producer is Tiffany Steeves, with writing and production from Andrew Ganem and sound design and mixing by Alex Bennett at Lower Street Media. Thanks for joining us. We’ll be back soon with another episode.

For media inquiries, visit the Newsroom.

Explore More