Shubha Patvardhan, Professor of management at the UD’s Alfred Lerner College of Business and Economics, and J Ramachandran from the Indian Institute of Management Bangalore in their award-winning paper ‘Shaping the Future: Strategy Making as Artificial Evolution’ put forward a unique idea that to successfully shape their futures, companies need to adopt a specific approach. Though this paper, Patvardhan and Ramchandran map the evolutionary process of India’s largest retailer for handloom and handcrafted products Fabindia Overseas (Fabindia) — which they term as “artificial evolution”.
The paper has been awarded the Best Paper by the Academy of Management’s Managerial and Organizational Cognition Division. It was also one of five finalists for the Academy of Management’s William H Newman Award for Best Paper Based on a dissertation and was one of 25 division finalists for the Carolyn Dexter Best International Paper Award from the Academy of Management. The team used multiple on-site visits, observation and job shadows and conducted more than 155 interviews for their research.
Modifying its business strategies
Since 1960, Fabindia has produced ready-to-wear apparel, household furnishings and more. The company traditionally manufactured Indian handloom fabric — with its manual, small-batch process, inconsistent production and non-standardisation. However, in 1950s, demand for the company’s handloom fabrics was overshadowed by a growing demand for cheaper and easy-to-maintain synthetic fiber fabrics. To bring Indian handloom products back into the mainstream, the company modified some of its business strategies.
From 1960 through the early 1990s, the company focused on creating a market for Indian handlooms products internationally. It re-fashioned its handloom products by applying contemporary sensibility to traditional handloom techniques. The firm also adopted an export model by creating products for international markets and partnering with overseas buyers. The firm also established a network of its international retailers.
From the early 1990s to 2010, Fabindia explored the possibility of creating an Indian handloom retail brand by transforming its retail landscape and reimagining its supply chain. The brand would have over 200 stores across the country and overseas. From 2005-2013, Fabindia focused on creating community-owned companies that would unite individual craftsmen into an organised collective. It bought the shares of the collective from the craftspeople and resumed its business model from the second case.
Directing evolution through imagination
Across the three cases, the research team noted a pattern in the decisions made by the firm’s senior managers that gradually shaped the evolutionary direction of the industry. The team realised that these managers used their imagination to direct the evolution of the industry. Instead of discovering and predicting the natural trajectory of their industry, they focused on imagining an alternate trajectory for the industry.
Another key finding was how managers translated this imagination into reality through a dynamic and complex process. They internally prioritised initiatives that represented their desired future environment. Though this led to resistance from buyers and skepticism from suppliers and employees, they were awarded as these initiatives were accepted by the market.
Another way firms can push their work environment in ideal directions is by actively embracing imagination and luck. Such strategies will help firms to not only register greater profits and a sustained advantage, but also help them to play an important role in solving seemingly intractable problems of society.