Crashing out of Goldilocks zone

I wrote this article for WARC’s ‘Future of Strategy report – 2020′.


Survival is a delicate affair of balance and luck. Consider a monarch butterfly for instance. The place where they breed should have temperatures between 86°f to 95°f. Too high, eggs go dry. Too low, the monarch can’t fly. The climate change, loss of milkweed (their food & shelter), loss of overwintering habitat, are among other variables pushing the monarchs out of existence.

We might not be as beautiful and blameless as the monarchs. But we are just as much under threat. Digital disruptions, Covid-19, lack of organising culture among industry workers, lack of vision among leaders…we are crashing out of the goldilocks zone hard.

As advertising agencies refuse to evolve quickly enough, strategy departments (cost centre with an increasingly uncertain payoff) will be the among the first sacrificial lambs at the altar of P&L statements sinking towards red. Covid-19 is merely accelerating this trend.

Here’s my thesis on the industry’s growing fragility.

1. Advertising is no longer as important for brand growth as it was in 20th century.

In 20th century, a memorable jingle ‘scaled’ quickly in the collective consciousness translating to years of brand success. 
But in 21st century, commercials simply can’t make that kind of imprint on the collective consciousness.

What scales instead?
Supply chains with tech-based innovations;
Predicting consumers’ needs and desires with big data analytics;
Targeted nudges to consumer desire with cookies & notifications;
Product personalisation with material innovation, delivery experience or social engagement;

Memes that resonate with the zeitgeist…. The list is endless.

Digital technologies have given brand owners so many new tools to creatively find new ways to grow brands. Digital transformation is simply more deserving of the ‘growth’ budget. Consequently, advertising budgets are under pressure. Consequently, advertising agency business models are under pressure.

What can help?

As dimensions of brand growth grow, so must strategist’s capabilities even if agency’s offerings don’t. Strategist must develop appreciation of the broader context and not be focused merely on communications strategy. This can help build agency’s capability, but also strategist’s prospects beyond agency roles.

2. Agency leadership so far, have shown a deep incapability to respond to this shift.

  • The advertising industry’s choices to grow are clear –
    • Improve its capabilities in view of the changing world and offer new services or
    • Increase the premium of its offerings to earn more from the shrinking set of clients for whom advertising remains critical or
    • Leverage digital tech to scale – serve more brands with fewer people

Even after loud ‘Relaunchings’ and ‘transformations’, most agencies still are fundamentally unchanged.
The business model is still unchanged. (I don’t know of a single major agency that has substantially invested in either its capabilities, its delivery or its systems. Most changes are cosmetic.)
There are no path-breaking offerings/ new products being created by agencies. Mass media communications remains the major source of revenue for most agencies.

There is no serious attempt at improving capabilities of their people. (The deluge of webinars doesn’t count. What is needed is a culture of positive feedback and experimentation.)     

As agency margins come under pressure, agency leadership look to prune the costs rather than spending capital on building capabilities. This lack of vision is detrimental to strategy department’s relevance.

Ideally, strategists should play a major role in helping agencies navigate the transformation agenda.
This hasn’t happened so far to the best of my knowledge.People leading the transformation agendas in top agencies are usually business folks who are invested in the status-quo.

What can help?

Strategists should actively participate in the agenda of agency transformation. Strategists must appreciate reality of agency business and be capable of leading organisational improvements.

3. The role of communications in brand building is increasingly relevant in shorter time frame of here and now and not long-term brand legacies.  

Many brands these days don’t find the need for long term campaigns or big TVCs, altogether. Since their product/ service is evolving daily, they are more aligned to keep their communications just as alive with daily/ weekly refreshes. They are often more attuned to the changing market dynamics and want to respond at the speed of thought.

The new client expectation is for agency leadership and strategy team to be just as immersed in the brand world as they are. They want agencies to proactively respond to emerging trends, events, sentiment etc.

But often agencies expect the linear flow of directive – client brief -> creative brief -> idea. Repeat.

Agency leadership needs to step in here to set right expectations and enable a working environment where client-talent collaboration is fruitful and not marred by mismatched expectations. It’s not a difficult problem to solve. We just need a will to adapt and partner in new ways, work in new ways.

What can help?

Strategists need to be more vocal in re-engineering the work-flows and creative processes. Strategists need to lead the effort in guiding clients and agency leadership in collaborating more fruitfully in the new fluid brand world.

4.  Covid’s impact

Covid has accelerated the shift of advertising dollars towards digital media. This has meant agencies have lost majority of revenues very suddenly. Agencies that had not worked on their transformation so far, are bleeding now. It’s time for tough choices in such agencies. 

What can help?

Covid has precipitated economic hardships. Many of us will lose our jobs in this crisis. The industry bodies must take steps in safeguarding livelihoods, augmenting capabilities and creating opportunities to collaborate.


WFH hasn’t affected the effectiveness or efficiency of work. However, WFH has radically alienated people from each other’s journeys. Some teams are exploiting the full potential of productivity tools while some aren’t. Webinars have helped some gain perspective while many have gotten tired with their frequency. Some of us will accelerate in their skill improvement while some will languish. The lack of visibility over each other’s work/ conversations will only increase the disparity.

What can help?

Leadership needs to be more active in communicating with its team members during this time of crisis-lived-from-home. Efficiency and effectiveness are not everything. Community is being ruptured and we are not doing enough to heal it.

Five principles to rescue humanity from the Post-Covid spiral

The crisis is bringing out the worst in us: Curtailment of labour laws, labour being on the line of fire in every decision we take, corruption in n-95 masks, complete lack of foresight and compassion in decision making, rampant profiteering by brands… greed is so normalised now that business and political leaders don’t even have the slightest discomfort in throwing its weakest under the bus, if it means saving their top-lines from eroding a bit.

The realist in me says that we are fucked, we are heading towards dark ages – walls will close, inequality will rise, climate will create new refugees and in a decade we will have mass civil unrests across the world.

I don’t want that to happen. So I want to think of how we can rescue ourselves from this situation? I see this event has as an opportunity to do revolutionary pivots.

Here’s a few principles that i think would serve us well…

  1. Systemising Wealth Transfers
    The situation can get dire. we need to urgently institute wealth transfers. from cities to hinterlands, from top 0.1% to bottom 70%, from money market to actual economy.
    The elite has rigged the economy, the laws, the legislative in its favour. As long as that remains, we are doomed. Violent revolutions are quite likely. Alternatively the p2p economies which exclude the existing system players is also a revolutionary possibility. Both seem far-fetched. Consider the fact that a recent document by IRS officers CONSIDERING increasing wealth tax, just considering, were laid-off. That’s the power of elites.
    Well, we are doomed as long as elites continue to influence our systems.
    We must innovate to incentivise wealth transfer. Either through taxes, moral campaigns, decoupling from global economy etc.,
  2. New view of growth: Increasing Productivity, decreasing consumption
    Growth can come from productivity and consumption. it’s easier to stimulate consumption among the elite, harder to educate, train, build infrastructure for increasing productivity. India will continue to suffer unless we pivot to productivity gains to grow.
  3. New Eco-conscious Economies
    We are heading headlong into a future ravaged with climate change related uncertainties. India will be uninhabitable in another 50 years. We have to build economic exchanges, market places that helps us survive. Economy needn’t be always extractive.
  4. Breaks on globalisation
    Globalisation will slow down and even reverse. Global mechanisms of co-operation are breaking. Money flows but people can’t. Much discontent.
    New post-covid themes – self-sufficiency, no more bottomless cheap capital (a la amazon), decentralisation.
  5. Platform as commons
    Here I have written about this in more details.
    we need to build platforms that belong to people, that empower their exchanges, that are not driven with only profit motive.

Covid-19 is here to stay.

Imagining a Post-Covid World

As Covid-19 mutates, so must our lives.

The virus might be microscopic, but its impacts come in various shapes at various scales. It affects how we feel, how we work, how the global leaders form new alliances and even how the earth heaves a sigh of relief (or not).

So here’s looking at the world at the post-corona world through seven levels of consciousness.

1. Individual

a. The isolated soul

The economic currents take us away from our hometowns and the coronavirus has shut doors on the possibility of going back anytime soon.
Quarantined, worried and unsure – we are profoundly lonely as existential questions dance on our conscience without pause.
Distractions are our only succour.

b. Trust

In a hypermediated world, opinions after opinions lash at our consciousness like waves at a rocky beach – incessant and slowly eroding our sense of solidity.
Hydrochloroquine, 9 min 9 tamashas… power that be wants us sedated with confusion and meaningless gestures.
Who do we trust? What do we do?

c. Freedom

Every cough a threat, every touch an attack. Scared, worried our eyes have grown suspicious. Even after lockdown, how freely will you move?

How will we measure freedom in 2021?
With number of trackers on our phone tracing Covid’s spread?

d. Individualism

We have been living so far as if we can live disconnected invulnerably. ‘I rise alone. I chart my own path.’
But we die together. we suffer together.

It might be a ‘me-versus-the-world’ world.
But for us to survive it must become ‘we-are-in-this-together’ world.

e. Power

Covid-19 has stripped us of our hubris. We are now suspicious of our own breathing and touching. We are truly helpless. Our enemy is invisible, all around us. And for a while, we will have no weapon against it.

f. Death

Fear of death is a kinetic force; it moves us to do things in our lives. It forces us to live more consciously.
Better eating, exercising, reading up, talking to people for longer, entertaining philosophical curiosities, getting religious… Fear of death is a fountain of activity.

g. Amusement

Well, not all of us are brave enough to acknowledge death. We must remain in denial. We must remain entertained and amused. God forbid that the internet stops working now. We would have riots the next day.

2. Social Life


Intimacy is beautiful with the right partner. It’s a private hell, otherwise. Under lockdown, people are discovering this, often for the first time. Record number of Chinese couples filed for divorces in Wuhan after lockdown was lifted. What will happen to your relationship by May 3rd?

Social dinners

To meet someone in the capitalist world is to spend money collectively on an evening/ afternoon meal. Under lockdown, we are now instead playing games together, complaining about the bad connection of video calls together…
To be social need not be about spending money.

Family life

A family may stay apart in today’s world, but it worries together. We police each other, we exchange news and laugh uncomfortably away the political differences.

3. Community

Public spaces

In the last century, the socialists imagined great things from public spaces – fertile spaces for ideas to emerge, art to get created, political discourses to be enjoyed, anthems to togetherness be sung…
Public spaces died first with malls. Covid was the latest nail in the coffin. The public imagination for possibilities with public spaces has taken a tragic turn.


Crises are opportunities to disrupt. Revolutionaries can tip over the critical mass. Or capitalist can profiteer and strengthen hold over the resources.
Privacy, masks, foodgrains, brandband access – everything is an opportunity with someone losing, someone winning.

Health-centred orientation

Microfinance empowered women and rebuilt community relationships around finance. Maybe time has come now for health centred co-operatives, shared insurances, indigenous knowledge systems meeting modern medicine?

4. Culture

Us vs Them

Covid will strengthen the xenophobia, make us sceptical of each other. We are hurtling towards the dark ages where we seek people to pin blame on rather than seeking co-operation. We will come-around. Fingers crossed.

Caste & Religion

The whatsapp university graduates are busy turning social distancing into a communal/ casteist conspiracy. Social untouchability might become untouchability. How do we ensure that caste system doesn’t gain currency?
Religious powers are bound to gain power everywhere.

Small town vs Cities

The epidemic has made evident the absolute lack of safety net for the migrant labourers in city. Demonetisation, CAA riots and now Covid induced hunger. Third strike and out? Would migrants demand more now? Shouldn’t they?

Time for taking economy to small towns instead of getting people from small towns to economic centres.

5. Economy

Capitalism & Human capabilities

With imagination and agency, human enterprise can shapeshift to adapt and counter the threat of any crisis. If every swiss person is ALSO trained in operating arms, and many last-generation villagers could ALSO sow paddy, why can’t most earthlings be trained in multiple capabilities? Imagine a person being able to serve first-aid AND code. Another can bear arms AND do financial analysis.
Capitalism wants specialism – one cog doing one act repeatedly in service of efficiency and cost reduction.
For humanity to thrive that model must change. The cog needs to be empowered to react, empowered with more capabilities than one.

Digital v/s physical

The ones with wi-fi access and jobs that can be done online are the new haves. The have-nots are the ones who must interact and produce something in the physical world.
Until the next vulnerability to digital world is discovered. Diversify our existence between digital and physical?

6. Politics

Governments versus subjects

Will this be another excuse to consolidate power and disenfranchise people in one way or another?
Covid-19 might pave the way for Authoritarianism rule in Southeast Asia.

Global versus Local

A globalised world is a world that globalises risks too.
Many countries will wake up to this insight and start ‘diversifying risk’.
Local capabilities and resources are not replaceable, cannot be made redundant. We will witness a hard swing to localism.

7. Planet

Why commute now that we know WFH works?
Why fly so often when we can do without it?
Why spend as much in shopping, entertainment when we now know that we can do without it?
Look at the blue sky outside. Look at the birds that have returned. Wouldn’t we want to retain these things in our lives? We might just end up not pushing our children in the climate change induced hellhole.

Markets & Corona virus

This post is not about brands or advertising. I had recently started investing. And the complete equity portfolio now is in deep red.

I wasn’t smart enough to exit early on. Now the question for me is – should i absorb losses and exit (fearing recession) or should i stay on with the assumption that market will recover in a year or so.

What do we know so far:

  1. World is shutting down. Today, domestic flights were grounded in India. There are curfews in all major cities.
  2. Not enough people are getting tested. nor do we have the capacity to take care of them once people get infected. so we don’t know the extent of spread in India as of now and can’t have confidence in the governance to manage the situation well. some estimates suggest that the death toll from this epidemic in India would be around 1 to 2 million. This will mean healthcare infra crashing down.
  3. We are atleast a year away from cure/ vaccine. so we are likely to remain quarantined for a long time.
  4. Food, essential shortage will create chaos. govt aren’t prepared for such curfews. chaos and fear will reign.
  5. Without cashflow, how will companies survive? unemployment will rise sharply. and during curfew how are these many unemployed people going to rage on religion and diversionary topics like that? recession looks inevitable.
  6. what could ensure normalcy in a few months? if social distancing actually works and infections are within limts. if the curve flattens out. china is opening up in three months. maybe India too can open up in three months. it will be a slow start but that’s the best case scenario.

The scenarios

  1. Best case scenario: The lock-downs are efficient. Indian heat has reduced virus’ ability to spread. But even then, the high density and low hygiene standards means that the casualties would not be like Germany, but more like Iran. A complete quarantine is a near impossibility in India. so the best case scenario will require public-private partnerships to manage to healthcare load, reduce economic uncertainty with free rations, services etc. Job losses limited to tourism, restaurants, events, aviation, travel, personal services etc. manufacturing coasts along with some months of without pay shut down and govt assistance to companies to remain afloat. services to build capabilities to WFH effectively.
    This scenario will see Indian economy to first suffer slowdown in next quarter and recovery post july perhaps. my portfolio in which case will fall further 5 – 10% (its down by 25% now) and then start recovering.
    I give this scenario a 30% possibility. its an arbitrary figure which i will tweak with new information.
    Its less likely that worse case scenario because – for it to happen, many efforts need to happen by various stakeholders in good faith. Its simply easy for the world to descend to worse case scenario.
  2. Worst Case Scenario:
    massive spread of virus -> spiraling casualties -> gloom & doom -> companies running out of cash -> govt unable to support companies or people -> rising unemployment and indebtedness -> rising NPAs -> finance sector stressed -> demand slump -> Depression -> lack of info/ panic – > chaos -> mob rule and breakdown of social life

Given the right wing forces, rise of misinformation, precariousness of finance sector and of personal finances of most Indians, and lack of info about possible infections – the worse case scenario seems more plausible.

70%. will tweak it with new information.

so overall should take at-least some of my money out of market, since markets will move downwards in most of 2020.

but to make decisions regarding individual choices, i am planning to analyse the companies along following parameters.

<when i get time> damn. WFH actually keeps me more busy. the to-do list never gets exhausted.

anyways, here’s the factors. will update about analysis when i get around to doing it. i must, soon.

Factors to consider

Nature of markets

1. Dynamic systems

Markets are a dynamic systems with many moving parts that affect each other in unimaginable ways. at an aggregate level, the complexity multiplies – it doesnt cancel out. 

so be prepared for events that have asymmetric impacts, for events that would develop quickly and cascade in directions we cant anticipate and events that surprisingly don’t affect a change or affects change slowly over long periods of time. 

how will climate change, right wing political landscape, move to e-commerce… affect each other and the market? 

2. Long term dependence
“Past continues to influence the random fluctuations of the present.” 

So what factors in our past will haunt us in the Corona-virus epoch? what choices now will influence long term prospects of companies?

3. Market turbulence tends to cluster 

Mandlebrot says that markets typically have periods of high volatility with long lulls. Right now we are in the high volatility phase. we are yet to see more turbulence. 

4. Variable speeds 

One, market movements will be ‘fast’ now.
Second, some industries will bottom out now. some others may take years yet to bottom out. Need to figure out which ones will bottom out when. 

5. Emergence

What would emerge from current situations – what new organisations might emerge? new civic minded coalitions? religious extremists seeing corona as god’s will? new

what new habits and behaviors will emerge? surveillance and open access to health records? Increased hygiene routines? 

Increased legitimacy of online living – gaming, AR, e-commerce etc.

Global factors.

1. State of information.
If stock exchange is an exchange of information, we need to have confidence about how much we know. if people feel that there is lack of transparency and control, the market will remain volatile. 

Modi enjoys a messianic appeal. He can use it to reduce the volatility and showcase control and transparency of key information relevant to markets.  

Crisis is a good opportunity for the govt to embrace facts for a change.

Will it happen? i give it 50-60% probability. the event of 22nd march with claps is a test of his charisma. more mobilising will follow at war footing. some of it i hope for the good. and as the situation gets worse, hopefully govt will be forced to work in partnership with private companies and as such make relevant data public. fingers crossed.

2. War-time economy doctrine: who benefits, who suffers?

Whose infrastructure/ resources will the govt need to commandeer to say manufacture ventilators, test kits at a war footing? which hotels would the govt want to convert into makeshift hospitals? 

3. Crisis are the moments in history when great changes take place.
Will authoritarianism take hold or the ensuing tragedy of millions of deaths lead to stronger democratic institutions and a new political force? will the world take left or right?

4. Global shock
US goes into recession, Oil price shock, weakening rupee, supply and demand shocks due to disruption.

refineries, airline industries are disproportionately affected by the oil shock, demand shock.

as the world re-orients itself around corona virus – it will require new companies that can help the health workers work more efficiently, create services for the affected etc. 

A whole new economy is yet to emerge.

Company specific factors

5. Financial strength to weather the disruption for a year

the ones with ample cash war chest. the ones not depending on short term cash flow to survive. the ones with low amount/ no debt. the ones with no/ little obligation in dollars or other foreign currencies. 

6. Dependence and risk to work force’s health

well, this affects everyone. for whom does it affect less? service sector yes.? but where is the asymmetric advantage highest? mostly new-economy digital services, but which ones?

7. dependence on raw material whose supply might be affected

well everything is made in China. we might see China slowly get back to business in the coming months. but would some Indian companies take this opportunity to grow capacity and grow? Govt is pushing for electronic component manufacturing and pharma ingredient manufacturing. There are some opportunities here in the long term. 

but as the situation gets severe in India, it might actually be a very difficult scenario. local supplies, if disrupted, would be problematic for most manufacturing companies. 

we are likely going to see severe disruption to manufacturing in the coming months.

Consumer related factors

8. dependence on consumers whose demand is affected

As pandemic spreads, companies will lose employees, people might lose jobs, bread earners might die. Great gloom will spread. Consumption will go down. we are entering recession, no doubt about it.

Outdoor social economy will collapse. 

rentals collapsing in europe where airbnbs were reducing the rental supply. with corona, low tourism so property owners are moving to rentals. real estate has been fucked since a few years. this will be death knell for quite a few real estate players. but yay! i can begin to imagine owning a house one day. if i manage to keep my job/ and if not, manage to make enough money to save some. 

In the medium term though, social distancing means a full stop to consumption at restaurants, pubs etc. but the rent payments, bills won’t stop. but home deliveries are booming. maybe home deliveries will start charging premium as panic grows?

Work from home services are booming – conferencing, collaborations tools, broadband, telecom etc.  

Entertainment at home is booming – OTT, gaming etc 

People are getting bored at home – will they end up spending money on fashion online? boom or bust for myntra?

9. Balance of capital

Rich people with enough money on hand and strong enough cash flows but too worried about volatility in market, might end up spending it on luxury items? luxury cars, real estate, art, cosmetics etc. 

the vast middle class might return to FDs and public bank deposits. and away from MFs, stocks etc. so large established banks like HDFC might gain somewhat? the upper middle and middle class will save as much as they can. 

the lower class will feel the disruption the most. social distancing is already playing havoc on daily wage earners and even house helps. in rural areas the distress might get acute – constrained cash flow, fewer opportunties and gloom of corona deaths. 

They might find succour in religion (dangerous tilt to right for the nation?), alcohol, small indulgences (snacks) and cultural identity based events/ activities?

Alternatively, will the urban rich/ upper class flee to hinterlands creating new economic opportunities in the interiors?