Managing in difficult times

The author is COO and president (US operations), MindTree Consulting
Peter Drucker is the most-read author on modern management theory. Drucker, an ageing California-based immigrant, is regarded as a philosopher with depth, simplicity and an uncanny ability to anticipate future. Peter Senge, a professor at MIT, is acclaimed as a thinker with high impact. His seminal work, The Fifth Discipline, brought into focus the importance of systems theory to modern-day managers. I remain in awe of both men as much as I am surprised how few Indians are aware of both the Peters.Some time back, I came across a video conversation between Peter Drucker and Peter Senge. The two Peters talked about managing in difficult times. In this instalment of Arbor Mentis, I am going to talk about four important lines of thought that touched me. Drucker, who talked in most part, highlighted the concepts of planned abandonment, need to focus on opportunities, preserving values and learning from non-profit organisations. The concept of planned abandonment deals with 'letting go'. It is a difficult thing for many designers and architects of products, services, or even business models. According to him, you have to move on when things look 80% complete. Similarly, you need to destroy your own creation when everything is looking just perfect. Creative people and technologists become so attached to their creation that it becomes their life. In time, it becomes a deadly embrace. The next concept is about focussing on the opportunity, not on the problem. An example Drucker gives is how a mediocre orchestra like the Chicago Philharmonic became world class in the hands of a new conductor. Drucker went to check the man out. When asked how he managed to uplift the standard, he said that the gap between the excellent people in any organisation, and those who are average is always constant. So the trick is to raise the level of the top performers, and, automatically, the overall performance level moves up. Peter Senge gives his own example of how every teacher has a problem student who is disinterested in the class. The teacher often makes it his or her personal challenge to reform this one student. Inordinate amount of finite energy is focussed on the problem student at the cost of the more attentive ones. The trick is to recognise where the natural flow of energy is, and go with it.Next, Drucker talks about values. But first we must understand that most of the time, we are really dealing with the challenges of growth. However, growth of any kind is inherently destructive. It happens because of the tension between centripetal forces of continuity and centrifugal forces of change. The secret, according to Drucker, is in emulating nature. Nature found out early on that the way to create vast amounts of change is to find out a core of constant values, and keep spinning around it. For example, nature created animals on the principle of polar symmetry. Physically, we are all symmetric at the poles. Once nature found out about the power of polar symmetry, it kept that as a constant value and created a two-legged animal, a four-legged animal and even a centipede around it. The number of times a heart beats in a human being and a salamander is constant. Keeping that value as constant, nature has been able to create endless variations of life forms around it. In an organisation's context, the polar symmetry or the heartbeat is the value system. Once we get that right, it is possible to grow without getting destroyed. Finally, Drucker talks about learning from non-profit organisations. It is about volunteerism. The industrial and post-industrial workplaces use a number of monetary instruments to motivate employees. Stock options and bonuses work only in good times; they backfire in bad. The key is to learn from voluntary organisations, where people give their best even without any of these. Drucker is convinced that 'for profit' organisations have more to learn from 'not for profit' organisations than the other way round.

The raw material mindset

The raw material mindset
India has the golden chance to present itself as designer of monuments, not supplier of granite
Subroto Bagchi
The author is COO and president (US operations), MindTree Consulting
It happened to me many years back on a visit to Washington, DC, home to the most-visited monument in the US, the Vietnam Veterans Memorial: "A place to remember those who served during a turbulent time in US history... a place for the nation to heal its wounds." The memorial lists 58,226 names, in the order they died or were reported missing. At the end of all those names, there is a line that says: "This granite was imported from Bangalore, India."We have been a nation that supplied to the world raw materials, rather than finished products - granites, rather than the monument's design. The world discovered us for spices in the 1st century A.D. Since then, we have been spice-sellers to the world. Meanwhile, McCormick dominates the bottled spice business, and has pride of place in supermarkets. While we export spices, who leads the food business? The best chefs keep coming from Italy.After spices, it was the turn of Indian silk. The world discovered that one in similar antiquity - with the advent of the Silk Route. For centuries we bred silkworms and spun silk, but who calls the shots on the ramp? Versace, Giorgio Armani, Chanel, Yves St Laurent. Then came software services. For decades, most Indian companies have focussed on supplying grey matter that is equivalent to quarried granite and raw silk. This behaviour is driven by a desire to live off the land, to do what has the least risk and low value-add. Not stopping there, the whole pharmaceutical industry came up on the strength of the bulk drug business. As a nation, we need to break that mould. Proponents of continuity would argue that the raw material mindset was critical to establish our presence in the world market and that now we will automatically go up the value chain. By itself, that assumption is severely flawed.Yves Doz is a world-renowned professor at INSEAD, France. He explains that by doing something well, you do not automatically graduate to the next level. He argues that there are three layers of value someone can add, and each of the three require a different mindset. The lowest layer of value-add is the technical, adaptive layer. Raw granite, frozen shrimp, cotton bales and manpower: all fall into this category. You have least risk, least value-add, and lowest margins and highest susceptibility here.Then comes the experiential layer. Here, you do not play on your ability to intermediate between the access to raw material and the end user of it. You 'step into the shoes' of the customer, and create valuable products and services. Confronted with the challenge of introducing a new car in Europe, Nissan flew in its car designers to Frankfurt. They rented different makes of cars and drove 2,500 km all over the continent to get a sense of what it takes to be a motorist in Europe. Then they went back to design a car for Europe. It is not about a car. It is about stepping into the shoes of a motorist to experientially feel the need.At the highest level is what Doz calls the existential layer. This is where Sony or Mercedes Benz, or Swatch operates. They not only know how to get into the shoes of the customer, but as Doz says, "they creep into the mind of the customer." When a teenager in the Bronx or Mumbai or Tokyo walks with a sway in his step after putting on a pair of earphones, Sony knows what is going on in his mind and works backward from there to create products and services. Each layer we talked about is separated from the other by a glass ceiling. If these layers represent the so-called value chain, the conclusion is that you do not go up the value chain. You decide where you want to be on the value chain, and perch yourself there.India is on the cusp of interesting new times. It appears that finally the butterfly will emerge from the cocoon. In that emergence, we have the golden opportunity to present ourselves as designers of monuments, not suppliers of granite. I sense that the break from the past is coming from very unusual new directions. More about that next time.

Day trading on the job front

The lure of lucrative jobs at a very young age today is akin to the attitude of day traders during the Internet boom
CONVERSATION in an elevator: two engineers in their mid-20s exchanging notes. "How much did you ask?" "Eighty-five," comes the reply. The job interview has obviously taken place on company time. So what? The two engineers are oblivious to the fact that the elevator is a public place and that they are not alone. The casual, almost cynical, transaction reminds me of day traders during the Internet boom.Day trading, for the uninitiated, is buying and selling stocks in order to make a gain, in one day. It requires the intuition and the risk-taking abilities of a gambler. It is not about tomorrow, it is not about anything you would remotely call long term. The Internet arrived. And day trading shifted from the floor of the stock exchange to the virtual world. Many sensible professionals learnt about ways to make money without leaving the suburbs - all you needed was a PC and a modem. People quit their jobs and got on to day trading. Then the world stopped. Billions of dollars of losses later, the day-trading folk - flower children of the late 1990s - are still picking up the pieces.It is ironic, however, that the lesson is lost on many other people. The workplace is not a gambling den. To some, the most critical issue is to know who is getting how much money and where. There is no view of tomorrow and what the real wager in the game is. The initial years of a career are akin to the years spent in internship by a young surgeon. Inherent talent or skill does not matter. Real learning comes by watching senior doctors at work, learning to pick up signals while doing the rounds holding on to someone's coat-tails, and sharpening one's knowledge, skill and attitude. More importantly, these are the years when one learns to learn.But where is the time to learn to learn? I meet 20-something people who are convinced that they are ready to become the chief of finance or marketing or human resource of their organisations. They cannot wait and must get there before a 'batchmate' does. Telling them to ease up is like preaching celibacy to a teenager.Recently, I met one such give-me-the-chief's-job-or-I-will-go-elsewhere youngster. He just could not wait. I have a very simple thing to say to his kind. Think of nature. By the time you enter your teens, you have the ability to procreate. But society has realised that the ability to procreate and to parent are two different things. That is why even though at 12 you are physically ready to be a dad, you wait till you are 30. To the youngster I met, only functional knowledge mattered. That is like the ability to procreate, not the ability to take up parenting.On another occasion I was speaking to a competent professional who had just changed jobs to join MindTree. I asked him what his motivation was in stepping out of his earlier organisation. "Peer pressure," he replied. The last time I had known people talking about peer pressure was in the context of smoking or drinking. Here was an otherwise sensible, full-grown human being, educated in the best of institutions with a good job on hand. Yet, he walked out because all his friends who had joined the organisation with him were gone.One makes a job change for substantive reasons - each job change can be a snake-and-ladder game. It is not just about the job title and salary you get. In the early years, it is critical who you work with, how much headroom there is to learn and contribute, how competent the environment is to provide tough feedback, so that you are ready for larger challenges.Another group of young engineers I met at an industry event asked me if it is true that staying in one place for long makes you lose your worth. The answer lies in observing the track record of people who have made an impact during their lifetime. Seldom will you see that they have been mindless job-hoppers. They certainly haven't made job changes of the day trading or the peer-pressure kind. People at the top are invariably the ones who have made two, at best, three changes in their entire career.

Human Spirit Knows no bound S.Bagchi

LATHA was born to a truck-driver in a slum in Bangalore. She was born with a form of cerebral palsy that took away her ability to stand on two legs. Life delivered her as a cripple. In the eyes of society, she was doubly burdensome - girl children are considered burdens anyway, but she was also handicapped.Her parents gave her away to a missionary. Latha was raised at a convent away from her family. The missionaries realised the nature of her handicap and enrolled her at the school of the Spastic Society of Karnataka. We discovered her there when we were launching MindTree Consulting in 1999. We were looking for a visual identity for the organisation and decided to try working with children who had cerebral palsy.In a unique experiment, a week-long exercise was conducted with 10 children. They were briefed about the company's mission, vision, values and DNA. Our DNA was settled as Imagination, Action and Joy. She was one of the 10 children who were asked to render the concept of Imagination, Action and Joy into MindTree's visual identity. Latha, who was in the class-10 level of non-formal education at the school, did not make it with her design, but she won our hearts with her enthusiastic smile. We asked her to come and intern with us. We wanted to see if someone like her could run the front office of a consulting organisation. And over the last five years, she has grown up to fully take charge of our front office.When Latha joined us, she had just come from the doubly protected environment of the convent and the school. Though she was studying for her class-10 level non-formal exam, she talked like a small child and had a poor attention span. But we refused to sympathise. We believed that she had to learn her work, and if she challenged herself, she could scale. She did.As soon as she started with a stipend of Rs 5,000 a month, her long-lost family rediscovered her. She wasn't a handicapped person anymore. Her economic viability made her very wanted. They persuaded her to leave the convent, and come to live with them. They even tried marrying her off. And Latha was clearly not in a position to take her own decisions. We were also in a quandary: do we intervene or do we not? Were these her personal issues even though their outcome could hurt a shared goal of proving that a person like Latha could become part of the so-called mainstream? Were we selfish about nurturing that goal? These were not easy issues. Latha and the organisation worked their way through these challenges. Eventually, she emerged a winner.Today, Latha has a respectable place in society. She earns well and is even on MindTree's stock option plan. She comes to work as regularly as the sunrise. She knows her work and does it very professionally. Not stopping at that, she has trained two students from her school - both are earning members of society today. One of them is Lavesh who was a complete introvert. Many people with cerebral palsy are like that. Being part of a social system that focuses on the disability of an individual ahead of anything else, they tend to withdraw. It is both a defence mechanism and an inevitable trap.Months after coming into contact with people at MindTree, Lavesh has largely forgotten his past. He is not what his appearance or manner of speech is, he is what he knows and what he does. One day, when Lavesh was managing the front office, a visitor came looking for Abraham Moses, our administration manager. Moses was caught up with other work and, quite unlike his normal self, came to meet the visitor late. Lavesh chastised Moses and told him that while keeping a visitor waiting might be OK for Moses, it wasn't OK for him. Moses gracefully apologised, and was let off.One Latha has shown the way to one Lavesh, and to 1,300 other MindTree minds. Like Lavesh and Latha, we all have some disability or the other - some are pronounced, some are not. Latha has taught us that we are not our disability. We are our dream.

Making Sense of Difficult times

The day the world changed forever
Sept 8,2001: MindTree Consulting presented business plan to Board forecasting 100% growth YOY
Sept 11, 2001: WTC is hit by terrorists
Events next 48 hours:
Locate 2 employees
Call all hands meeting
Decision to contribute 1 days wage to an identified disaster victim


Next Steps
Company takes 10% salary cut – Directors take 10% cut on 1999 base
Decision taken to renegotiate every contract
Leadership huddles on bottom 5%
Indian managers decide not to let go, take additional cut
In US 5 non-performing high cost resources let go
Business unusual – plan is no longer valid. Focus on cost and hold on to revenue
Top Management starts over activating the communication engine
Middle Management fades
Continuous exposure to difficult news
Information dissemination replaces dialogue
Facts versus hope – what do people need?
The fallibility of Institutions & Leadership
The Government fails to protect – WTC to Anthrax
The economy crawls
There are lay-offs and closures – Scient, Viant, Cambridge Technology Partners…….
The Stock Market caves in – people lose nest egg. Heroes turn out to be involved in insider trading
Stock options look wimpy
The Priest becomes a pedophile
Big business becomes big hoax – Accenture, Enron, Qwest….
Leaders like Jack Welch – between company paid toilet paper to septuagenarian flings
What we learnt…..


Tough decisions, however appropriate, leave residual toxicity
People develop the survivor syndrome – information discounting becomes a form of survival
"Sense Making" emerges as a key leadership priority
Residual Toxicity
Many management decisions are like antibiotics. More quick acting they are, more is the residual toxicity
Every decision must be weighed for downstream implications and detoxification must accompany the decision
Decisional rules must be explained before publishing decisions
Recipient of radio activity must be clothed against radiation. A manager asked to take a tough call, must be told to temper toughness and not to conclude, it is the way to go
Leaders must look for toxicity residues. Silence and compliance do not mean absence of toxicity
Certain traces will only heal with time. Some problems can not be solved, they can only be survived
The Survivor Syndrome
Most people are Path dependent – when paths blur, there is emotional insecurity
When people see the fallibility of institutions and leaders, they can conclude that no one really can help
When I need help, only a stronger and more capable being can help me. When everyone looks vulnerable, I am really all by myself
When people around us lose, there is an invisible mourning within us
People mentally shrink and start discounting the environment as a form of defense
We run the danger of emerging as less than human beings when all becomes well

Sense Making

In externally and internally difficult times, "sense making" becomes a major leadership priority
Sense making is about system thinking. It is the ability to rise above a causal interpretation of events – you relate to larger body of knowledge and look at continuities
It involves wisdom, detachment and dialogue – it is about understanding emotional issues and not just rational linkages
Leaders must help others to do their own sense making
Apparent and the obvious cease to be appropriate
Leaders must suspend instant gratification and not try to influence every outcome

Values, humility & high availability

Values are the polar symmetry of an organization. Value centric organizations will be able to better navigate difficult times
Leaders must have humility and the sense of continuity of a farmer to be able to cross the chasm
Leaders must be available and engaged – Mayor Guiliani was available and engaged
We must know that only if we sweat in peace, we do not bleed in war