Three lessons a consulting secondment taught Chandar Lal

Elixirr Manager Chandar Lal spent the last year with Sequoia Capital, a US venture capital firm based in California. Speaking on his return, he explained the three key lessons he learned from his time in Silicon Valley.

Elixirr is a boutique strategy and innovation consultancy based in London. Chandar Lal joined the firm in 2017, being promoted to Manager the following year. Since his arrival, he has led projects with executives of the world’s 2,000 top public businesses across Europe and Africa, in retail banking, corporate banking, and wealth management.

The latest of these engagements saw Lal take up a secondment with Sequoia Capital in Silicon Valley. Sequoia Capital is a venture capital firm in California and mainly focuses on the technology industry. While September saw his time as an “adopted Californian” come to an end, bringing with it a return to the drizzling cold of UK’s capital city, Lal is excited to put what he learned into practice on home turf.

Penning an article on the last year for Elixirr’s website, Lal said, “I’ve been fortunate enough to receive a world-class education in the business of emerging technology. I’ve immersed myself into an unparalleled ecosystem of entrepreneurs, investors, and corporate leaders. I’ve seen first-hand how large enterprises can get innovation right – and how they can get it wrong. And now, from that vantage point, I’m excited to build the best consulting firm in the world.”

Corporate tourism

According to Lal, his time in the US taught him three key lessons. Firstly, he came to understand the importance of targeted partnerships for growth – something which Elixirr has made central to its business model in recent years. This has seen the firm sign deals with Kaizen to produce an innovative transaction reporting platform for financial services firms, and Thomas Cook Money, among others.

In the case of Lal’s time with Sequoia Capital, he said that the rising number of firms similarly looking to risk and reward sharing partnerships is leading to a heightened amount of “corporate tourism.” This means that more and more corporate CEOs and boards are spending time in Silicon Valley, in search of left-field answers to their biggest strategic challenges. According to Lal, this is broadly a good thing, as executives can avoid being disrupted by partnering openly with the entrepreneurs that would otherwise eat into their market share, driving immense mutual commercial opportunity in the process.

“However,” Lal cautioned, “open innovation can be too open-ended. It only works if you arrive with a precise strategic goal, rather than the all-too-frequent mission statement of “wanting to see what’s out there”. Every time our team brokered a game-changing partnership, it started with a clear heuristic for all parties: “what’s the biggest market / product / customer segment / pain point that I can’t win on my own?” If the answers align, pursue the idea hard.”

Network effects

“Silicon Valley is often perceived as a Schelling point for dynamic, energetic, optimistic people,” Lal said of the second lesson he learned. “Whether you’re in SoMa or Sunnyvale, there’s a clear network effect at play. Talent leverages talent, and the value of the ecosystem increases exponentially relative to its size. Young companies come to speak a common language which helps them grow – there’s a consensual focus on pace, experimentation, short feedback cycles, and failure as a source of learning.”

Lal has spent some time considering how a corporate executive can replicate this, as it is impossible to change a firm-wide mentality overnight. The Elixirr professional asserted that while it is difficult to do so quickly, it is not impossible, with success resting on the ability to build a function that has absolute freedom to experiment on major strategic problems.

He added that the function must also be situated in proximity to the C-suite and Corp Dev, so that it can drive top-line impact, and be staffed by the most visionary talent in the business. The function needs to be enabled to instill its ways of working into the wider business over time, through a subtle introduction of new incentives, structures, and controls. According to Lal, Elixirr has itself helped a number of recent clients do exactly that.

Meaningful disruption

The final lesson Lal learned from his secondment is that all categories of GDP are open to meaningful disruption. The global IPO scene enjoyed a relatively strong year in 2018, raising around $223 billion in around 1,200 deals. This was up slightly on 2017 and well above the most recent dip in 2016, at which point $145 billion was raised. According to Lal, on the back of this, it’s likely that 2019 will be a record-breaking year for tech IPO exit value. While linked to macroeconomic conditions, this is also an indicator of the pace at which a vast spectrum of emerging technologies are maturing.

This means there are a number of sectors ripe for disruption. With many major tech trends reaching maturity, including AI/ML, AR/VR, and autonomous transportation, he suggested the world is also seeing “new products emerge at a fast pace in verticals as diverse as finance, biotech, retail, and media.” At the same time, there is continued growth and consolidation in apparently more mature tech revolutions, such as mobile and cloud.

Lal concluded, “The cumulative effect of these factors is a major creation of new market value, and a substantial reallocation of existing market cap. Suffice to say, I could not have picked a more interesting time to spend a year in Silicon Valley. In summary, it’s been a phenomenal year: inspiring and challenging at the same time. I’m grateful for the privilege of working with an extraordinary community of people at both Sequoia and Elixirr.”