18Nov2016

Competing in a Cashless Economy

I believe you are doing fine and have been able to tide over the demonetisation of 500 and 1,000 Rupees notes.

The various pro and contra social media posts as well as news on the recent demonetisation of INR 500 and INR 1,000 currency notes got me inspired to share my thoughts on competing in a cashless economy.

I was very fortunate in having lived both the planned demonetisation in Germany when Deutsche Mark got replaced by Euro and the unplanned adhoc demonetisations in Brazil when Cruzado Novo got replaced by Cruzeiro, Cruzeiro by Cruzeiro Real and finally a virtual currency UFV: Unidade Fiscal do Valor for transitioning to Real, the current Brazilian currency. The drive for these were obviously very different. However, in both the cases there were queues in Banks, ATMs, Post Offices,.. as we are experiencing now.

The segment of the population involved in kick backs and black money unfortunately always had a way out in hoarding either in foreign undisclosed secret accounts, gold/platinum, immovable assets or in foreign stable currencies. Therefore, I for one believe that the demonetisation, an approach addressing the minority share of the black money, per se is surely not a robust strategy to wipe out black money, but may restrict black money channels from the increased threat of demonetisation. However, I see that the demonetisation and the thereof perceived threat is an excellent driver for creating a cashless economy, so critical for the GST roll out on the 1st April 2017. I can parallel this to the days in Brazil when almost every 3Y a new currency was being introduced. It was quite common there to buy provisions, vegetables, even newspaper either with a cheque or with a debit/credit card. Of course, doing so one could benefit from the daily inflation (March 1990 the inflation was a whopping 82,4%; the year 1990 2,477%) at least.

Well, what could change in a cashless economy? Firstly, OFFERING ILLEGALLY FAVOURABLE BUYING OPTIONS, a major factor for competing in an economy driven by unaccounted cash will either vanish or become insignificant. This then will create a comparable playing field, making VALUE INNOVATION, OPERATIONAL EXCELLENCE and AGILITY the main competing factors.

  1. Couldn’t this be the reason why most of the top brands and products have originated from the developed world?

  2. Can you imagine BMW, Mercedes, Apple, Samsung, Microsoft, Coke-Cola, Sony, etc. becoming globally recognised top brands if they could compete firstly in their economies by offering illegally favourable buying options?

  3. Could the demonetisation and the planned GST roll-out be the biggest opportunity for working on value innovation, operational excellence and agility?


I am sure each one of you will have unique answers to these questions. I am sure you must now be wondering that many such cleaning up initiatives from the Government are indeed excellent as a foundation stone for a great future. You may want to think of how to significantly improve your competing ability!

Inspiring and empowering the people of an organisation to get better engaged and to just start doing their knowing is in my opinion the most robust strategy to become more competitive. I came to this conclusion based on my international experience and therefore, developed the mass deliverable doHow™ methodology to bridge the knowing and the doing gap for creating world class companies and exceptional leaders.

I think the time has come to start doing the knowing.

Happy reading!