War & Peace

“The Purpose of all Wars is peace” is a hoarding sponsored by the Indian Army that I came across this morning and it set me writing this edition of the blog. I began wondering even as I read it, whether it was true? I have my doubts because of the causes one identifies with the purpose. First and foremost is the question on whose perspective it is and how inclusive is the maturity in understanding the diversity of thought. Do I need to go further than this? It took Alexander and Ashoka to shed a lot of blood to realize that the peace they sought lies in conquering the self. Hitler and George Bush II have subsequently discovered no better.

One of the frailties of being human is perhaps the inability to identify the causal self; always seeking the problems in others and externalizing rather than journeying inward and seeking within. From an individual, this subsequently explodes in its manifestation in families, societies, organizations and nations. Despite humans being endowed with preceptory senses, we refuse to exercise our options that are available to us to live intelligently and perpetrate peace and growth.

On this planet, we are on that fork in the road where we need to make some clear choices that will impact us and our future generations, NOW.

Innovation, Transformation and Growth have to become key factors in the way we think and act and we need to increase the number of people to the right than to the left. Despite us human beings, this planet has witnessed amazing transformations and therefore there is still hope. At all levels, this time around, patch work and thrift in thought will not do. This is a time for large heartedness and if it warrant, even stopping to take a deep breath and re-wiring oneself for the future. Visible Leadership is clearly a prime priority to rekindle the spirit of excellence that has somehow faded in recent times that can lower the noise of those sceptics that keep harping on the need for reality.

At a recent business lunch, my business partner from the US mentioned that Obama was not good for the economy. However, he opined that the Republicans were not organized enough to deny him a second term. On quizzing him further, he reeled statistics about how the common business people were affected by the policies or the lack of it, by the Obama administration. And finally, he concluded that Obama picked people in his team who were academicians and probably lacked commercial flair. Though I did not mention it at the table, it made me wince at the perspective.

All of us who are out there trying to create leadership teams know how difficult it is to get the people you want at the time, rate and place that you want. Could it be that Obama has found it difficult to find people with integrity to work in his team and avoided people with commercial flair, precisely for that reason? I have a vague feeling that he is the last person to lose sleep if he did not make it to a second term. Yet, his leadership bears the promise of that inward introspection and the need to search and find lasting answers even at the cost of short term unpopularity. Is there a way that this message could be carefully orchestrated and communicated to the masses?

2012 promises to be much more than just another year. This planet will significantly enter into a new phase of growth and diversity powered by Knowledge and Experience. Each one of us has an opportunity to participate and make a contribution. We have enjoyed enough entitlements and it is now time to give back. I wish and pray for each one of you to resolve taking that journey inward. You might be surprised on the potential you discover along the way.

PS: The Indian government finally woke up and announced an Innovation Fund to create an enterprise that will impact the poor in the country positively. This is four years after China announced a fund (100 times larger) and has implemented hundreds of successful programs under that agenda. However, I am a firm believer that it is never too late and no fund is small. Hope flows eternally for a start somewhere. Congratulations on that!

No Integrity in Public Polity

This morning our man who does our laundry informed that the neighbourhood vendor who sells fresh coconut water had committed suicide. The reason being mounting debts which he was unable to repay. Just around the time I received this news, I saw the Prime Minister’s statement in Cannes that (http://www.ndtv.com/article/business/food-inflation-may-be-result-of-growing-prosperity-pm-manmohan-singh-147118?pfrom=home-lateststories) that “food inflation may be the result of growing prosperity” and the opposition leader making a statement that “corruption was the cause of rising food inflation”. Both these gentlemen in question are in the prime (as in ripe) age of their life. Both seem to have lost the ability to reason and relate to reality around them.

Whose prosperity is the Prime Minister talking about or corruption of which kind is the opposition leader referring to? The only class in independent India who are prosperous are the corrupt; the politicians and monopolistic businessmen. Neither cares about the rotting food going waste every day in government godowns and depots, in vegetable mandis and poor traders and farmers and daily wage laborers struggling to eke out a few rupees to make a living. They have no voice and are yet to be counted other than in a census; for they neither contribute nor are the beneficiary of the GDP growth rate which is pitched at &+%. Unlike the USA, where the ordinary folk are counted first and there is integrity in their reporting of the GDP growing at 4%. Because, the lowest of the low strata of their society is struggling while there is no perceptible change in the lifestyle of their prosperous consumers.

The level of sensitivity displayed by these two public personalities and the legions of their followers betrays the integrity they mask; the former is an economist from London School of Economics and has served positions in the highest level of civil services in India before becoming the finance minister and subsequently the Prime Minister of the country.  The latter is a politician who has been on the cover of national politics for over 5 decades  and part of a government as a home minister and an aspirant to the Prime Minister’s position. If this country has chosen to be guided by such gentlemen who boast of eminent titles but mediocrity in thought, is there hope for a bright future with such people at the helm of policy and polity making?

My mind wanders back to the coconut water vendor and the options he had in life as an Indian citizen. He could have cheated his way through, or subjected his customers to dangerous adulteration to earn more profits from the Rs. 10 he charges for a coconut! And then he would be labelled corrupt while the guy who funded the political rally of the opposition leader and the one who wrote the speech of the Prime Minister would be rewarded with a contract and a higher position in government; whoever wins the election and comes to power. Such odds of Winning and Losing in a democratic country, where every adult has the right to exercise his franchise and select the people and trust them to create governance that spells growth!

Chicken or the Egg? What comes First?

Recently I was making a pitch for growth at an Information Technology Solutions company and I was just through my first segment drawing the inference of the External Environment with reference to the trends in macro economic  conditions, Technology, Competitive and Innovative trends when I was interrupted and challenged by this very senior officer in the corporation who had also been a successful local entrepreneur. He said “if we examine business history, those who adopted LPG Mantra (Liquidity, Profitability, Growth) and in that order, succeeded. So Liquidity comes first and growth comes last. Why are you talking about growth first”?

I tried to explain and my arguments are as follows:

• First of all, it is not about an order. All the three are mutual causing phenomena. It is possible / true that some established large corporations may as a matter of prudence choose to give precedence for one over the other at various lifecycles of one’s business as a short term fix. However, it cannot be employed for long term advantage.
• Fundamentally, growth includes Profitability and Liquidity whereas the converse cannot be true. Every business comes to a position of liquidity only after experiencing growth.

The officer got more aggressive now and quoted Michael Dell. Now, I have a great respect for Michael Dell and the way he has shaped the success of the Dell Corporation business. I had not read (and I still haven’t as I write this piece) and so had to pause in my defence. All I could muster was, I don’t know what would have been the context for Michael Dell to make such a statement and therefore I will have to research the same as well as read the book. This subject also kept me thinking and I tried to draw several inferences from general life as well.

For example, do we ever think what is more important from a nature’s perspective – Ice, Vapor / Clouds or Rain? Is it worth debating about the solid, vapor and / or liquid state of the same substance? Isn’t this debate about what comes first with respect to Growth, Profitability and / or Liquidity akin to a similar argument? Further, is liquidity confused with stagnant pools of dirty water or is it the flowing river that creates fertility for fresh growth of crops and life over a larger territory? Is business removed from life that we cannot be inspired to learn from nature and incorporate the basic principles of physics to the structure and systems of business?

I did some research on Michael Dell and though I am yet to read this purported book in which he has made this statement, the link I have hear seems to suggest the opposite (http://www.performance-measurement.net/news-detail.asp?nID=12) . Far from suggesting that Dell focused on Liquidity in place of growth, the article clearly shows methods that balanced the three to produce more robust growth. In this very interesting interview titled “Executing On Innovation” (http://youtu.be/bQpNhZ1SndQ ) Vijay Govindarajan, Earl C. Daum  Professor  of International Business Tuck School of Business Dartmouth, makes an amazing revelation; Studying the recession patterns of over the last 200 years, his research has revealed that every period of recession is followed by a twice or thrice the period of greater expansion in every society.

We are living in an increasingly democratic world in the throes of an Information Revolution that is guided by Experiencing Knowledge. When leaders tend to take a unidimensional mutually exclusive stance on subject such as growth, they are letting themselves and their corporations down of exploring great opportunities and pursuing them concurrently; not just because it a fancy new way of doing things. Rather, the external engineering of technology and systems today facilitates us to engage in this multitasking and therefore the luxury of mutual inclusivity; mutating the cycles of Mind 2 Market (M2M) and Time 2 Market (T2M).

The world is coming through the grips of a global recession and is in desperate need for new business models that will mutually address growth and productivity; Invention, Innovation and Improvisation concurrently. Understanding their distinct differences and providing the impetus for their enterprises and the managers who work there, the empowerment to collaboratively participate in their ecosystem facilitating growth not only for themselves but for the entire value chain.

I would love to hear your perspectives in shaping this debate further.

Employees First, Customer Second – A Review

This edition of my blog is dedicated to reviewing the book “Employees First, Customer Second (EFCS)” authored by Vineet Nayar, Vice Chairman & CEO of HCL Technologies. I recommend it as a must read for every Indian to understand the ethos of Transformation /  Change. The most striking revelation from the book is the criticality of a narrative to the succeed in any Transformation / Change initiative. Mr. Nayar comes across refreshingly as a modern day CEO, sensitive to the changing dynamics of global commerce and the need for businesses globally to be adaptive and agile. His integrity (Personal, Professional and Emotional) and emphasis on action shines through; from the first to the last page and is a striking contrast to the mediocre landscape of the Indian Leadership scene. His aspirational analogy on an organization or enterprise resembling a starfish where every unit assumes a life of its own is a very mature depiction of the future of enterprises to succeed in a global commerce. His creative interpretation of the Amsterdam Window for his business should influence leadership in other businesses to become more convincing than concealing in their branding strategies at their respective enterprise.

The future of business / organizational model?

As a proponent of  continuous innovation and transformation in organizations, I have a few questions that seem to conflict in my mind with the narrative of EFCS.

1. Despite the fact that Mr.  Nayar maintains the tone of mutual inclusivity throughout the book, the very title of Employees First and Customer Second seems to negate that. The reason I bring this up is to reflect on the real world where co-creation is more a reality than a management theory. Isn’t this creating walls /  boundaries when processes, roles and outcomes must collapse to create a more universal value zone? Should not the customer universe or ecosystem be inclusive of Employees, Customers, Shareholders, Stakeholders, Business Partners, Vendors and / or Society? So  the question is not about Why Employee First but rather Why not the entire ecosystem first? In other words, why isn’t an employee a customer as well?
2. Following from the above, is the question on the perception of value. In a truly process oriented enterprise, the measurement should be continuous with respect to process outcomes and measures with respect to Quality, Cost, Delivery, Service and Flexibility should be mandatory. Though Mr. Nayar mentions the implementation of the Balanced Score Card, there is hardly any mention of the Innovation Index; where HCLT would  have created Mind to Market and Time to Market outcomes for their customers. Wouldn’t that be worth celebrating in a work such as this? An ideal Performance Measurement would aggregate and disaggregated elegantly between Enterprise, Process, Teams and Roles that participate; thus leading to an accurate measurement of an Individual’s contribution for a given context of Transformation.
3. There is evidence of the growing realization that businesses such as HCLT are not about delivering software or services but rather enabling innovation and business strategy of customers through technology. However, this realization does not come across in terms of action where technology is bridged between HCL Technologies and its Customer Universe to participate in the continuous evolution of strategy and transformation. The mention that there is one part of the HCLT enterprise that is focused on cloud computing for example makes it even more confounding, raising a red herring. HCL has in this quarter announced 20 transformational deals. How can a deal be transformational, when it does not impact and / or transform the core process of the customer organization? The question is more about HCLites beign Connected and Capable of delivering Strategic Innovation, Transformation and consequently growth.
4. There is a clear mention that nothing is ever perfect. Yet, there is a lot of energy spent on wondering about the longevity of EFCS. As a leader, isn’t the spirit of transformation that Mr. Vineet Nayar sows enough for the future generations to benefit from? Why the bemoaning on what would happen to EFCS after his time? Perhaps it will take a better and bigger shape for a different context of the environment that the HCLT business finds in. The real question is therefore, is there a doubt that the right seed has been sowed and nutured for future generations of the customer universe of HCLT to reap the benefits?
5. Finally, in an enterprise such as HCLT, the majority of the workforce is at the bottom of the pyramid. Is there a measurement to link the Human Capital Index of the enterprise to the growth of the individual; directly relating it to the contribution to the growth of the enterprise and the customer universe? The only way to find this out would be if the enterprise has a continuous Intellectual Capital Management Process (that establishes the threshold of capability required) integrating  with the Human Capital Management to build Value Capital and Managing it continuously. I am not sure there are references to any such processes being in place during this course of transformation led by EFCS at HCLT.

I recognize that transformation is a continuous process. However, speed is also its currency. It is possible that I have failed to interpret many of the meanings that could lead to answers to the above in the book. Despite these questions, I found it useful for me and a learning exercise while reading it. The lucid style and condor of expression help in empathizing with Mr. Nayar. As I said in my opening paragraph, he is definitely a cut above the rest as far as leadership goes in the IT Software and Services business.

The Anatomy of a Social Enterprise

This edition of my blog is inspired by Mark Benioff, Salesforce CEO who talks on Growth, Strategy, Social Media (http://youtu.be/xqlKed-V_L8 ).  Three key points made in this interview with Bloomberg TV have resonated with me in the context of the topic he was addressing and are paraphrased by  me here:

1. Enterprises are not outside the context of the society that we live in which is witnessing this massive revolution with respect to connecting socially and collaborating on creating a way of life we all commonly aspire. So he wonders in the  corporate context “which CEO is likely to be the next Mubarak?”
2. Technology has been traditionally used poorly by enterprises and it is time to use them wisely as resources get even more scarce than ever before. If this isn’t the time for enterprises to be “Socially Mobile on the Cloud”, what else is relevant?
3. In the context of Salesforce.Com having a great financial year in the midst of industry ruins, he says business was always about focusing on customers and keeping the vigil on the topline for him; rather than worry on manipulating the look and feel of numbers for the investor community.

Social Enterprise is definitely enabled by technology. However, for it to be a reality, it needs to transcend / transition from a mindset of Broadcasting to Interacting and Collaborating. As the illustration demonstrates, this technology is relevant and impactful when extending enterprise applications across a Customer Universe (Employees, Customers, Vendors, Shareholders, Stakeholders, Business Partners and / or Society). A few illustrative examples in different industry segments to create New Products, Processes, Services and / Or Platform that orchestrate Growth and Profitability in such a social enterprise would be:

• A software services firm that builds an innovation process that connects its entire customers universe; where ideas and concepts that emerge from the experience of this universe creates new Products, Processes, Services and / or Platforms.
• A Consumer Products Goods (CPG) company that associates its Research and Development closely with the Consumer Experience to extend the ‘Moment of Truth” beyond the Retail Cash Register to the entire Life Cycle of a Product intersecting with that of the Customer Life Cycle.
• A government forming powerful alliances to engage citizens and becoming involved in their lives from “cradle to grave” across generations; thereby lending credence to governance, safety and security.
• A network of global educational institutions becoming a partner in progress and growth of an individual and society from the three dimensions of Personal, Professional and Emotional.
• A Financial Institution becoming an advisor and guide for wealth management depending upon the segment of society; involved in both the Insurance and Risk Assurance of an individual or a family /organization.

This may also be the time when enterprises reinvent and renew themselves across the five layers of the enterprise architecture to be winning in this new world order.

• Strategy: Looking at the business model that addresses the Socially Mobile Cloud from a Customer Focus Perspective.
• Process: Business Enterprise that is Service Oriented where Products are just not vended but serviced across the customer life cycle and experiences captured for innovation.
• People:  Capabilities to transform for the above continuously and concurrent to business contributing innovatively to both; Mind 2 Market (M2M) and Time 2 Market (T2M) connecting the aspirations and expectations of individuals and enterprise.
• Technology & Applications: Device, Channel and Medium independent Content delivered at the rate of use uniformly inclusive of Data, Graphics, Audio and Video for real-time computing.
• Infrastructure: Data (Unstructured) to render Empirical & Analytical as well as Intelligence serving cognitive and Business requirements, Security connectivity, Real Time Networking, Seamless Communications within a global framework of Physical and Virtual Real  Estate.

Every industry segment across the globe has reached its nadir. We have the fundamental definitions of economics and commerce being redefined. The business opportunities, spending power and markets are in developing nations. Business Enterprises have to make a cultural transformation in involving and innovating in these societies and this requires a new focus and renewed vigor. The pursuit of propelling growth must be looked at from a fresh perspective that involves understanding, assimilating and being part of new cultures and contexts.

To summarize and once again paraphrasing Benioff, it is not just a digital but a social divide that needs to be bridged to become successfully contributing value in this new world order.

The end does not justify the means

Most if not all of us, want a corruption free society. One where we can take the daily encounters of our life to be smooth, hassle free and represented by an equal opportunity for everyone. The movement led by Anna Hazare has the right intentions but not the right means. Anna’s call for civil disobedience is unwise at this juncture, when the global economy is delicate and the lifeline of many are critically poised. Gandhiji’s call for civil obedience was meant to cripple the British economy, as a means and tactic to oust a foreign power. Why do we have to do this to our own economy? Thousands of young people are contributing to the already poor productivity and the increasing inflation that the country is facing, as a consequence of the agitation and Jail Bharo call.

Inflation is caused by poor productivity and not government policy. One needs legislation not to arrest inflation but to fight the malaise of poor productivity.

It is quite naïve to believe that introduction of Lokpal legislation will eradicate corruption in the country. Corruption has various forms at different levels of the society. At the lowest level, corruption happens because of poor remuneration, poor skills and capabilities and bad service. At the middle level, it happens because of expediency. At the highest level of the society, it happens in the process of aggrandizing greed and power. At any of these levels, legislation cannot prevent the ingenuity of the human mind to work around. It must and should be supported by processes and systems that are aimed at prevention more than cure. No legislation has ever succeeded that has been built on the premise of punishment; rather it is only possible to bring about change though a process of reform. Corruption is a call of conscience of an individual more than anything else; which in turn is a response to the external stimuli.

If Anna Hazare and his team have a political agenda to settle scores with the government they are welcome to do so at their personal expense and time. They do not have a right to subvert and mislead the country. It would have been much wiser for Anna to fight for the education and emancipation of the villagers whom he is familiar with; for them to get a better remuneration for the efforts they put  in their respective areas of work. Or for Ms. Kiran Bedi to publish a system that rewards and celebrates a better law enforcement force. Or Prashant Bhushan to develop a system that prevents arduous legal processes and enables justice to be delivered swiftly for every Indian. This would prevent corruption. Not a piece of legislation.

As Narayanmurthy has eloquontly articulated in his “Walk the Talk” interview with Shekar Gupta, let the government and Anna’s team bring together a 9 or 11 member committee that will create a framework consisting of legislation, process and systems that integrates a program for an active and effective way of bringing probity in every walk of life, across our society. The problem is more startling at the bottom-most part of the society and that is where the effort to strengthen the fabric of our society should begin.

We cannot be carried away by our notions of idealistic self-righteousness. We now live in a global society where our actions are watched and impact us for the perceptions they create. This world is  not an ideal place. Even in the United States where there is a great adherence to law at the level of common people in society, a Dominique Strauss-Kahn walks away scott free after “probably” committing a sexual offence because of corruption.

Rather than deliver a solution, let us not create a more debilitating problem for ourselves. Let us act responsibly and responsively. The path to hell is  paved with good intentions!

Vande Mataram – The Indian National Transformation

On the eve of the 65^th Indian Independence day Celebrations, I am wondering whether we as a nation know exactly what we want and aspire for. Rajdeep Sardesai, the editor of CNN IBN has written a editorial where he urges to look for the positives rather than the negatives of the nation ( http://t.co/5gA8Ruu ). Anna Hazare has threatened to once again embark on a “fast unto death” to implement a version of the Lok Pal bill bill which he and his followers believe is in the best interests of the nation. The government is paralyzed by scams and opposition parties’ inability to engage in dialog without dysfunctional behavior in parliament and elsewhere. The common man who is earning some or any money is soon losing his identity in the consumerism blitz and the one who doesn’t earn continues to die of poverty and hunger. The scientific community is yet to define its place in a global knowledge society and the economic machinery still does not favor or promote entrepreneurship. The media vacillates between self righteous indignation to outrageous sensationalism while our sporting and cultural fabric plunges to new lows after glimpses of promise every now and then.

The above is not a diatribe against the nation that includes me but a commentary on a meaningless, meandering national fervor without a sense of purpose and achievement. This is when someone calls for  a positive uplift to the mood and perspective of the nation, one tends to retreat into greater cynicism. Be that as it may, there is a solution. One at a time, as a nation, for each one of us, as individuals, citizens, professionals and whatever else we would like to label ourselves as; here is an opportunity to once again dig deep into our consciousness and collectively raise the bar of our thinking and actions. Ask ourselves the question from the context of Mahatma Gandhi, what he wanted of an Independent India? We have the opportunity to weave the fabric of this nation, just as he did on his charka, individually one yard at a time.

I ask Anna Hazare not from the arrogance of a “Know ALL” but a humble student who wants to “Learn” what is his vision for a corruption free India. It is still not clear to me.

• Does he want to create a legislation that will send politicians and other people in public life to jail for having enacted the corrupt deed or does he want a public polity that is free of corruption in its very process itself?
• Are we as a nation only going to be regulated by laws and legislation or is there hope that we can evolve to being better human beings and do the right thing every time we are presented with a choice?
• Do we want to trace the process from budget to expenditure?
• Do we want to understand the process of planning, execution and outcomes for welfare and growth of our society?
• Do we want evidence of how our learning and growth as a nation is contributing to its global standing?
• Do we want talent in this country to contribute in every sphere with a sense of belonging to the nation?
• Do we want legal compliance and statutory obligations from every citizen and entity being carried out without the need to extort and police?
• Do we want to track how every day every citizen is witnessing an “Improved Quality of Living”?

Would it be better to ask this UPA or any other government to implement processes and display information in real time  as a Balance Score Card where the every citizen will know how his tax rupee is spent? Can we create Processes and Systems that respond to providing us real time information on a seamless interface between Citizen and Government as partners in progress? After all, it is the citizens who elect their representatives to the government? Can we stop focusing on antiquated ways of governing ourselves with policies and regulations that are accessible and interpreted by a few to the larger disadvantage of a common mass? Can we mandate our government to create the necessary governance in the context of processes that treat citizens as customers for their outcomes?

In a world where information is traded freely, we still have people creating blocks. Such blocks cannot be removed by legislations and laws. This is what the history of the past century teaches us. When laws and legislations are created, there are ingenious brains who come up with ways and means of circumventing them. I am not suggesting that we should not have laws and legislations. Those must be for the exceptions. As a society, we must be ruled by a sense of belonging. How many of us steal from our own house? Or vandalize it? Or rape the people we love and care for? The point is, laws and legislation is for deviant behavior. So what aids the one who is not deviant?

I would like to believe that the spirit of Independence is a free will that exercises its obligations with diligence and authority with restraint. I yearn for a respectful living that contributes to the growth of the self and the society in equal measure. I am sure each one of you does the same too.

Outcomes Versus Results

Outcomes is the “Means to the end” which is results. So why do enterprises focus on the latter and ignore the former? The fly on the wall would say “everyone likes to take the path of least resistance”. Is it so and if it is, does it stick in the long run? If this nitpicking is confusing you, let me illustrate some examples here.

A personal level illustration could be one where ‘outcome is happiness and result is getting rich’. It is extremely important to be happy in life to enjoy the wealth one creates but the contrarian is not true. True happiness does not spring from money alone. At an enterprise level, outcome is the joy of generating intellectual capital and results is the cumulative success in harnessing that intellectual capital to Revenue. Where Intellectual Capital may be defined as the “Threshold of Capability” of an Enterprise while Financial Results that combines Revenue and Profitability.

In their zest to create globally viable companies, Indian software vendors have exploited the individual skills of engineering education, english speaking, globally mobile, aspirations to build a better lifestyle for the family and ingenuity to adapt among the global workforce qualities to great advantage. But now that balance has been achieved with a critical mass at both, individual and enterprise ends. Now what is there to exploit? Under ideal conditions, the outcomes of all these years of exploitation must result in areas that can be harnessed for further growth. But alas, that is not the case. Here is a litmus test; how many Indian companies can register a 15% new revenue Q on Q in the next 4 quarters in any geographical market? If the challenge were to be more specific, then I would name the US and European markets specifically.

In these market conditions with labor arbitrage being a sensitive issue, the only way to earn new revenue would be to find new markets, products, processes and services. In the software parlance, this would mean deploying  business components that can be plugged and played to the customer’s existing business to grow them worldwide; outside their current scope of markets, products, processes and services. Are those capabilities available with the Indian software companies? How else can new revenue be generated, either by the customer or by the vendor if they have to deploy fresh resources to create this enabler for business that will facilitate growth?

These are going to be difficult times for Customers too in the US, Europe or UK markets. New emerging consumer markets demand their products, processes and services delivered innovatively and competitively. These customers need to embrace global cultures, much different to the military and monopolistic attitudes of the past histories will teach them and focus on a string of sustained outcomes to find their place under the rising sun of global commerce. This is the reality of a new world with new channels, medium and devices to reach consumers, share information transparently across the Value Chain and balance global as well as local markets with equal panache from the epicenter of the customer universe one creates for the enterprise. Global boundaries can be erased by processes to seamlessly create the synergies of the global and the local. Partnership and Co-Creation far from being a slogan can truly become the catalysts for the organization of tomorrow; which is now and the immediate quarter. Not some distant future.

At the cost of sounding repetitive, let me re-assert – the true meaning of global commerce is that, the age old headquarters and regional branches has no significance in the organizational design anymore. Organizations have a need to be headquartered in the epicenter of their customer universe. This is the new paradigm that needs to be addressed by businesses all over the world, irrespective of the vertical industry sector they belong to.

Part II – Transformation of the IT Services

Illustration 1: The Maturity Vs Value Curve

This edition is the second part in the series on Transformation of IT Services Companies and their relevance to customers globally. In the previous edition, we skimmed the surface on the Maturity versus Value curve without really going deep into the characteristics of TransValuation (The Transfer of a higher degree of Value to Customer as a consequence of creating a higher threshold of capability at the Vendor’s end). In doing so, we can eliminate the subjectivity of the debate and look at the transformation objectively; thereby providing the opportunity for those who choose to renew the model as needed.

The following table provides an overview of the Strategic Framework of the transitions that IT Services Companies and their Vendors would have experience as they moved from 1.0 to 3.0 Versions of their business.

Illustration 2: The Maturity Index Unravelled

It is not difficult to notice from the above table that the IT Services businesses as they matured from Version 1 to Version 3 would have ideally emerged more and more stronger at their core. What this means in the real world is:

• In the earlier versions, their sales people powered the business from the periphery and moved work inwards for execution. In the current Version 3.0 a complete flip would occur where the business will need to be driven from the core to the periphery for sales to occur.
• The earlier relationship matrix from a one to one would have progressed to one to many. However, Version 3.0, the mandate would be for many to many.
• Measures of Delivery would move away from transactional delivery Process (Quality, Cost, Delivery, Service and Flexibility) to Value Chain Business Processes in the form of  Mind & Time to Market (Innovation Index).
• From Customers choosing Vendors, the model would be flipped to IT Services companies partnering with those that create Annuity Relationships and mutually guarantee growth and progress.
• Intellectual Property (IP) and definitely not size and scale will be a criteria in an open world where the former is unique and the latter a commodity.

This is a fundamental and foundational shift in the way the business is organized and delivered. There is a huge requirement of the Change Management process; Education, Ownership and Commitment from the Customer as well as the IT Services companies’ side. Has this happened is the trillion dollar question? There appears hardly any evidence on either side of the fence, anywhere in the world.

• There is evidence in the form of IBM’s Smarter Planet Campaign being Visible and having allocations of teams, budget and resources. But there is hardly any evidence at the execution end or an impact on Customers.
• The emphasis in sales has hardly shifted from announcing dollar based contracts to IP based Valuation.
• The majority of the Indian enterprises are busy catching up with last quarter shortfalls as opposed to dedicated product development. Lean and Agile are still discussed either as a concept or at a software implementation level (read as in Scrum, etc) as opposed to a business implementation level.
• Most or all of the companies at a very foundational level have to figure out how the customer will see their BPO, IT Services and Infrastructure offerings from a common framework perspective rather than being confounded with making multi vendor / party decisions. Cosmetic interface level changes will not cut ice.
• The integration and cross-pollination between acquisitions and organic organization has not seen tangible benefits for the IT Service providers or their customers as it is hardly anything to write home about (geography, cultures, functional mindsets and turf wars still at large) another than a concocted sales approach.

The American, UK and the European economy is still on the verge of doubt and despair. The businesses in these developed nations where the incumbent Customers reside for the IT Services companies require growth on a global basis to survive and sustain their business for the future. At the same time, new emerging markets such as China, India, Sub-Saharan Africa and Asia Pacific (to a lesser extent) require Innovation to take global center stage. The opportunity is clearly going unattended when the pace and demand of Change / Transformation is met with advertising campaigns and constipated response with respect to the new mental and business model.

Indian IT Services Business – Can they Transform?

We are possibly in the fourth decade since the business of IT Services began flourishing. Today we hear companies such as Infosys talking about an Enterprise 3.0 that sets out to meet the aspirations of its customer universe. The rhetoric is pretty much similar whether you consider an IBM and Accenture at the head of the food chain or an industry interloper such as Cognizant Technologies and HCL Technologies or even established leaders such as TCS and Wipro Technologies. This edition of my blog is to elucidate what those aspirations really mean for the customers and how they are being fulfilled by the software services companies. The founding premise for a higher and different aspiration than what we have seen in the last 3 decades is:

1. Businesses have matured and realized IT & IT enabled services to be more centric and innovation enabling their enterprise; collaborating and transparently sharing information across the ‘Customer Universe’ has become a cornerstone for sustained success.
2. The globality of businesses and the advancement of technology especially the Internet, compels enterprise adaptation to the rapid changes in the external environment with agility and minimal downtime or dysfunction. Services Oriented Architecture (SOA), Cloud and Business On Demand are no longer concepts but practical illustrations of plugging and playing globally.
3. Software and Technology are embracing Open Systems and Sources more willingly and capabilities are no more properietary and monopolistic. And hence the requirement to work with a more responsive workforce that is resilient and adaptive at every level, participating rather than being instruction driven.

Illustration 1

As is evident from the above illustration 1, the Value sought by customers has moved from Labor and Cost arbitrage through operational excellence delivering competitive advantage to Innovation and Industry Transformation Partnerships. From a Vendor to a Collaborator to a Partner, customers worldwide have a need to shift attitudes and work practices to derive value out of expenditures incurred for developing, supporting and sustaining IT and its related services. In other words, the businesses no longer are thinking about spending on IT; rather about spending the money wisely that derives not just support but ignites and drives the business engine.

Similarly, the demand for renewed business models on the part of IT Services companies has necessitated them to seek a structural shift from poople being resources and  commodities to the current scenario where Human Capital Management is strategic to business innovation and transformation. In the earlier version of the business models, both the customer and the vendor saw little else than billing for people’s time who carried out agreed instructions diligently. The expectation today is progressively moving towards people demanding and using the resources and infrastructure that will enable their learning and build on the collective intellectual capital to deliver  Intellectual Property (IP). This is expected to result in the walls of inter-enterprise collapsing to create a global enterprise that thinks globally and delivers glocally. From the head of hub and spoke systems rearing during the operational excellence era, the thought has advanced itself to more open trust and capability based relationships that connects partners with core competence to deliver value along the chain to Customers and Consumers.

Illustration 2

Illustration 3A

Illustration 3B

As depicted in the Illustration 2, People have once again rightfully come to occupy a centric position in enterprises’ Purpose, Products / Processes and Profits. As is fashionable these days, irrespective of the organizations they work for, people can interact socially in real time and share responsibilities against well structured framework of governance. The key therefore is the Culture of engagement and the Content to Connect. The following illustrations 3A and 3B clearly establish that connection.

Oh well, so far this has been a lot of theory. But really looking at the practical side, the obvious leads to questions like:

• Does Infosys have the above infrastructure to drive Cognitive Intelligence deliver Customer Experience?
• What has the Armada of Business Units at TCS announce nearly an year ago have to show for its conquests?
• How is the People First policy of a HCL Tech manifest in Intellectual Property Creation and Profitability through participation in the Customer’s Purpose?
• How will the council of leaders corroborate the individual aspirations of their Customers to collective business performance for the shareholders of Wirpo?
• How has the business value created by Cognizant’s collaboration with its customers manifested in terms of Returns On Assets Deployed (R.O.A.D.) on its balance sheet vis-à-vis reduction in Cost of Goods Sold (COGS)?

The above are just example  questions that are bound to emerge from the declarations leaders have made from these Public Companies in the public domain. I have had the benefit of speaking to some of the senior members of the leadership in most of the above mentioned companies and they have not given me any signs of encouragement about their currency in thought leadership and preparedness to deliver to the expectations, leave alone aspirations. The conversations still range around headcount and outsourcing deals and margins based on a cost plus model. The dialog in a room with a pipeline of customers that gives the radar a strong sense of accounts being managed for annuity is still missing; where annuity is not to be confused with annually contracted business. Annuity is about the growth of business year on year, that is based on the New – Products, Processes, Services and / or Platform.

Perhaps the intent is there but it has not translated into action. Which brings us to some practical realities relating to leadership. C K Prahlad and M S Krishnan in their book “the new age of innovation” center their work around the concept of N = 1, R = G  would govern the future of innovation and competitiveness. Where N = 1 stands for a “Unique Customer Experience every single time of Customer Interaction” that uses Resources (R) = Globally (G) to build and sustain such customer uniqueness in business operations. One of the leading examples in the book is that of ICICI whose then CEO and current Chairman is K V Kamath, who is also incidentally the current chairman of Infosys. I bring this into account here because ICICI’s core capability in the book is listed as the following responsible for breakthrough customer experience:

• Business Process flexibility to reflect evolving business models
• Synchronization of strategy, business processes and ICT architecture
• Senior Management leadership in shaping social infrastructure and culture

I am not sure what evidence was used by Prahlad and Krishnan to draw the above conclusion.  I as a customer of ICICI would certainly like to disagree and the above is far from the truth. This is based on interactions at several levels with bank personnel as well as a professional as well as frequent interactions as a customer using both technology and personal interaction at a branch level. On the other hand, another BFSI player ING Group (especially in the US) continues to surprise customers with its New Products, Processes, Services and therefore innovation. The question really is whether the PR at ICICI dominate the agenda for building the business of tomorrow at Infosys by the same leader?

TCS under F C Kohli never thought about the results. It was always the process and the expected outcomes of the process for its customer. Kohli’s legacy is building a great chain of potential leaders and people aiming for excellence.A proof of that is the three month training that he inculcated as part of inducting anyone into the TCS organization. Potential is the word I use because that is the best some one else can do for you with respect to leadership. To cross that chasm into realization and performance one has to step up. In contrast, Narayan Murthy, Nandan Nilekani and their friends together put passion and pride behind Infosys.  They have been much less successful in building that pipeline of leadership which shows up in the rift of the  founders led by Mohandas Pai on something as elementary in the founder’s language on succession into key positions of leadership. This is also because they struggled from the challenge of one threshold of capability into the next, more intuitively than based on any management science. Today they seem to have a slew of management gurus on their side but that does not get reflected in the processes the organization has to bare or the people who run the wheels everyday. Ditto for Shiv Nadar and HCL, though one must admit that Vineet Nayyar’s campaign on Employees First, Customer Second resonates to create a people centric enterprise.

All this raises the fundamental question of People alignment and Talent Management right at the heart of the business, where people have worked with each other for a considerable period of time despite being fortunate at being at the right place at the right time and taking advantage of a wave of positive business opportunity in IT and IT Services. What chance do the new leaders have to establish a new way in a much larger organization of thousands of people?

I believe that this will be a period of churn where the Customer Universe including Clients, Employees, Shareholders, Stakeholders, Business Partners, Vendors and Society will throw up questions.  Rather than taking positions behind the smoke screen of PR, these organizations and their leadership must be brave and bold in drafting leadership and people who will serve the dynamically changing aspirations with dignity. After all, these are public limited companies where the investors expect them create wealth from their investment, not just make the people within the organization wealthy.