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Having
grown tremendously over the past decade, Indian IT companies need
to pause to realign their management practices to get in line a
steady growth trajectory. The ‘best practices’ of boom time may
not hold good now, writes MOHAN BABU
After
a decade of hyper-growth, the Indian IT industry is finally showing
signs of slowing and its honeymoon with the media and public is
drawing to an end. A sign of this is the spate of recent articles
in the Indian press taking an unenthusiastic stance on the prowess
of tech companies that continue to wow us. Among the more analytical
and insightful articles was a recent piece in a leading Indian financial
daily called Deep inside Infosys. In the article, the authors focused
on the changes in Indian IT’s poster child, but the write-up
could well have been about Wipro, TCS or Satyam. The article ends
by challenging Nandan Nilekani, CEO of Infosys to transform the
company from “Good to Great”, which incidentally was the
title of a business bestseller published a couple of years ago—Good
to Great: Why Some Companies Make the Leap . . . and Others Don’t
by Jim Collins.
The
author of the book, Jim Collins, in a recent interview in Fast Company
magazine says, “I want you to realise that nearly all operating
prescriptions for creating large-scale corporate changes are nothing
but myths.” Debunking a few common corporate myths, the author
goes on to add:
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The Myth of the Change Programme: This approach comes with the
launch event, the tag line, and the cascading activities.
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The Myth of the Burning Platform: This one says that change starts
only when there’s a crisis that persuades “unmotivated”
employees to accept the need for change.
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The Myth of Stock Options: Stock options, high salaries, and bonuses
are incentives that grease the wheels of change.
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The Myth of Fear-Driven Change: The fear of being left behind,
the fear of watching others win, the fear of presiding over monumental
failure—all are drivers of change, we’re told.
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The Myth of Acquisitions: You can buy your way to growth, so it
figures that you can buy your way to greatness.
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The Myth of Technology-Driven Change: The breakthrough that you’re
looking for can be achieved by using technology to leapfrog the
competition.
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The Myth of Revolution: Big change has to be wrenching, extreme,
painful—one big, discontinuous, shattering break.
The
points raised above could very well pertain to the Indian IT industry,
which is definitely poised for transformation and change. For instance,
even during the days of IT boom, Infosys was not known to be a big
paymaster but its overall package was more than compensated for
when one added the magnifying prowess of its stock options. In a
page lifted from the “myth of stock options,” the managements
of software companies across the globe are coming to grips with
options that are
seriously
underwater. Perhaps the first large company to really do something
about this is Microsoft, which recently announced plans to give
employees stocks directly instead of awarding options. This is perhaps
a forerunner to the reality which is setting in among business leaders
in the high-tech industry.
Underwater
options are just one of the myriad aspects driving change at large
Indian tech-companies. Having grown tremendously over the past decade,
they need to pause to realign their management practices to get
in line a steady growth trajectory. “Best practices” that
worked during the boom time, may not really hold good as the companies
come closer to the billion dollar mark (TCS claims to already be
there and Infosys is aiming to touch that figure this fiscal year).
To manage a billion dollar company with global footprint will require
managers and executives to be comfortable in bidding for twenty,
fifty or hundred million dollar deals. For instance, behind every
five or ten billion dollar outsourcing deal that IBM, Accenture
or EDS regularly announces, there is a tremendous amount of groundwork,
behind-the-scenes drama and activity that is hardly ever mentioned
in news clippings or press releases. Many of the players at the
bidding process in these giant companies are of Indian background,
and are exactly the kind of executives the Indian IT companies need
to attract, which in itself would require a global management mindset.
For executives and marketing professionals, working on large multi-million
dollar deals is as gratifying as the huge commissions they rake-in
after successful inking of the deals.
The
question is—are the Indian companies there yet? Maybe. However,
as the Yanks would say “Show me the money.” Indeed time
for us to move from being merely Good, to becoming Great!
Mohan
Babu is a US based software consultant trying to find the ‘sweet
spot’ where IT meets business. E-mail: mohan@garamchai.com
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