Case Analysis I: Managing Technological Innovations at Deki Electronics

Introduction

Deki is a story of strong leadership, bold pivots and leveraging the people power, all bundled into one. The organization has shown consistent growth in term of revenue, partnerships and product lines over the last three decades and has emerged as a role model for entrepreneurial leadership in the electronics component and manufacturing sector.

The Three-Decade Growth Story

One of biggest attributions to Deki’s story over the years is the organization’s ability to understand the changing market dynamics and to respond to the same with utmost agility every time over the last three decades.

The Initial years of 1980–1990 were during the License Raj where Deki secured a license and delivered value in a controlled market—an environment where the seller was the king.

With the liberalization of the markets in period between 1990 and 2000, the markets opened with limited competition. Deki leveraged that period to consolidate its position as a leading capacitor manufacturer in the country and focus its energy towards building a strong technical team. Deki was an early player in getting the ISO certification

The period of year 2000 onwards had ITA-1 implemented, import duties down to zero and components left to compete with global companies, along with dramatic changes in technologies and price pressure.

Deki was quick to read the change early on and to realize that developing in-house R&D and technical strength would be critical to their long-term survival and sustainability. They further leveraged their relationships with global partners and collaborators to bring about product innovation and technical know-how to India.

Applying Design Thinking

Deki became the preferred supplier for many customers, not just for the good quality and competitive pricing of its product but also for the way the organization understood its customer’s needs. Deki innovated in ways that were unprecedented to the manufacturing industry in the 1990s. Whether it was packaging innovation, pricing flexibility or troubleshooting for the customer, Deki established itself as a reliable supplier. Vinod Sharma (Managing Director, Deki Electronics) often encouraged his team members to visit the customers and spend time with them to understand how they interacted with the components supplied by Deki and what could be improved in the process to make the customer’s life easier. Vinod himself got involved with the customers and employees at the lowest level.

Investing in People and Culture

Creating or changing a culture is tough. More so in the manufacturing sector where the dependence on the blue-collar worker’s mindset and efficiency is the key driver of business success. Vinod invested in its team across all levels. His belief of involving the factory worker in the process of innovation was unique and paid rich dividends. Every worker was encouraged and pushed to give suggestions for process improvement. Implementing 34,000 suggestions is no mean feat. Employee attrition was controlled when workers saw their suggestions being implemented. Ownership of process compliance was given to the workers and the process of appraisal was made completely transparent. Thus, Vinod created each one of his 600 employees as innovators.

The Hard Pivot

Deki’s overdependence on one vertical business, namely, CFL, hit them like a tsunami when government schemes changed. With close to 70% of its business dependent on CFL-based lighting solutions coming to a grinding halt due to the change in the demand pattern, Vinod had some hard thinking to do.

Most organizations would find it hard to turn around from a point where the demand falls to nearly zero! A timely realization and swift strategic intervention helped in pivoting the business model of Deki. Vinod realized that overdependence on a single product line was a shortcoming in his strategy. A plan for diversification was rolled out with his top team. All industries which used sensors were explored. New product lines were also considered. Industries such as footfall counters, retail scanners and RFID-based anti-theft alarm systems were brought into the offerings by Deki in record time.

This was a tough pivot for the organization which had been comfortable in producing capacitors for many years. But the agility with which it was able to adapt to these changes makes for an impressive turnaround story.

With the lessons learnt, the management took the decisions of not having more than 40% of the business in one vertical. With the market moving from CFLs to LEDs, Deki was able to develop a new range of capacitors, moving away from the traditional DC capacitors to AC capacitors for LEDs with higher temperature tolerance. This was possible due to their in-house engineering and R&D strength. Over the years, Deki has built up a committed technology team which has the customer’s confidence. This, combined with the flexibility to provide new and modified products to the customer, helped Deki to stay afloat through this period of crisis and dilemma.

In Conclusion

Deki has shown steady financial performance over the decade and has remained profitable. Thus, it’s been able to spend on modernization, expansion and R&D, creating a positive spiral of growth led by innovation and market adaptation.

This case study is a powerful reminder to hardware entrepreneurs that to survive and grow, they need to first invest in their people, develop in-house technical skills and remain agile. Keeping a close watch on the changing market dynamics and technological upgradations is always critical. Most importantly, changes in government policies and change in demand triggered by incidents like the pandemic can disrupt a well-established business. Entrepreneurs will need to always factor in diversification in their strategy along with being ready to pivot.

The great decisive leadership by Vinod at every stage is commendable. Deki has become a flag bearer and an inspiration in the run for an Atmanirbhar Bharat for many entrepreneurs in the electronics industry. Deki has truly made entrepreneurship in manufacturing look attractive again and is now ready to take on the world to become a global brand.