Digital Age - Nitin Seth

The project presented us an opportunity to create a new product that cut across three different divisions and technology stacks of the bank. This was a technology integration challenge, but even more so a challenge of coordination across different divisions. I think the most important action we took was to structure this new e-broking business as a separate organization to ensure it was not caught in the legacy organizational issues. I find it remarkable that more than twenty years later, when I look at large enterprises setting up new digital businesses, the key issues are still organizational – should a new capability be established as a new organization or part of the existing organization?

We wound up ActiveKarma after two years, but my first foray into entrepreneurship taught me many invaluable lessons – such as the importance of anchoring the business in a solid customer proposition, going slow to go far, managing cash flows, and so on. I was reflecting on how this ‘dotcom bubble’ that many of us lived through has been such an important milestone in the evolution of the digital age we see today and still holds many important lessons for enterprises and entrepreneurs. It showed the disruptive growth opportunity of Internet-based businesses; it also showed how dangerous it can be when business models and enterprise valuations are not anchored in cash flows but on speculation. The ‘dotcom bubble’ burst in a couple of years and it took Nasdaq fifteen years to regain its dotcom peak.

There is so much to talk about the McKC story and the learnings from it that it would merit a separate book. But at this stage, the main learning I want to highlight is the amazing potential of the global delivery model. McKC was created to drive cost efficiencies and increase productivity. However, when we added high-quality talent to the mix and gave them an entrepreneurial culture to flourish in, the impact was explosive. We brought talent at McKC with significantly higher capabilities than what we traditionally had in the research function at McKinsey. It took some time for this talent to build domain understanding and grown in maturity, but when that happened it changed the scope of McKC dramatically. It evolved into an innovation centre and allowed McKinsey to experiment with and build new capabilities, which it could not have otherwise. This ability to increase innovation capacity leveraging the global delivery model is a great opportunity for enterprises in the digital age.