New run today

5 mile if good run

Would you match the comp?

A manager walks up to you and says one of her critical resources has put in papers. And she is confident that if you match the comp of the new company, he can be persuaded to stay. What do you do?

Read about the experiences and learnings I have had at my new blog site: http://www.rajibroy.com

Rajib

Shift Happens

Shift Happens

This is a great video showing how technology is making us grow exponentially. It also reflects on how inadequate our education systems are in preparing our kids for the fast changing world.

See it in my new blog site :  http://www.rajibroy.com

Rajib

Taking software downmarket

Taking software downmarket

It is not as easy as you think. And technology is not even the problem. So, what are the real difficulties. Can it be made to work?

Read it in my new website: http://www.rajibroy.com

Thanks,

Rajib

Courage in Leadership

Courage in Leadership

What are the traits of leaders who show courage in the face of time time? Here are some observations of a few such leaders I have seen.

To read more, go to my new website: www.rajibroy.com

Rajib

Exit Interviews

Exit Interviews. Is there a better way?

How much sense does it make to interview a person about organizational inputs after the person has decided to leave the company?

Read about it tin my new website www.rajibroy.com

Rajib

80-20 Rule. Intriguing Thoughts.

80-20 Rule. Really?

I am not going to bore you by explaining what the 80-20 rule is. Rather I was going to point out some intriguing implications of it which makes it somewhat difficult to believe.

Read the blog in my new website www.rajibroy.com

Rajib

Reference Calls

Reference Calls - what is the value for this?

Read the blog in my new website www.rajibroy.com

Rajib

Partnership Myths - Part 2

6. Partners usually embark on a simplistic Go To Market: This is probably what I am most passionate about. Great business plans are almost never worth anything once the partnership has been announced. The go-to-markets vary from the banal “I will take you to my account and vice versa” to more lofty “we will integrate our products/services”. Simple integration usually does not lead to too many gains. Part of that comes from the fact that now you have two companies fighting for the same (or nearly the same) budget that the customer has. And inherently, each will try to maximize their share.

7. Making a partnership work takes a lot of hard work: If anything, this is the single most reason why partnerships do not pan out. It is not easy to keep so many divisions of two different companies in constant touch points and ensure are working [part of their time] on common goals. It takes a lot of commitment and trust from each partner. Setting up a Partners division usually does not do anything other than the fact that you at least have somebody who will try to follow up on action items and try to keep the “relationships” live. However, this organization usually has absolutely no authority to get anything executed thru the line managers. Successful partnerships have commitments right from the top who is willing to demonstrate it too.

8. Success from partnership requires patience: This goes with the previous point. My experience has been that C-level executives expect results – in terms of sales dollars – too quickly from partnerships. It takes a few years to get a coherent story to the market that customers find appealing. And this assumes all the backend from sales commission to product integration has been worked out. However, usually, executives start questioning or second guessing within 6 months of announcing a partnership.

9. Successful partnerships take very deep skins in the game: The only kind of “deep skin in the game” I know of is hard money. There are two cases where I have seen partnerships have the rare success. The first is where a company not only announces a partnership but at least one of them takes a stake in the other (sometimes both take stake in each other). This is commitment at the highest level. There is a tangible way of benefiting from each other’s success. In case of vertical partnerships (e.g. one is a software company and the other is a services company), it gives the much sought after “exclusivity”. The second model – which I have seen lesser number of successful cases – is when the sales organization is commissioned on selling the partner’s offerings. The reason it is less successful is pretty obvious – at the end of the day, a company will pay more to a sales person for bringing green dollars to the company.

10. Two and Two has to add to Five: Finally, a partnership, from a customer’s point of view is something interesting (and the whole partnership will eventually come unstuck if customers do not buy) if the sum of the two is truly more than the parts individually. Other than the marketing slides, the customer needs to be convinced that this truly solves their business problems more and at an advantageous rate. Most importantly, the two teams together can do a better job than if the customer has to buy them separately and put them together.

I do want to point out that there are partnerships in software world that have succeeded. I consider the Big-5 partnership with SAP as a big success. From what I saw, I think Accenture with Retek was a good success too. I am told IBM and Dassault had a very successful partnership too. But they are few and far between. If you or your company are thinking of getting into a partnership that is to bring in any meaningful money, think about it carefully and convince yourself that you are willing to put in the money and the effort. For the fun truly starts after the initial euphoria of PRs and handshakes are over…

Partnership Myths - Part 1

PARTNERSHIPS – A lot of talk, lot less of results

Most of my commentary here is based on my experience in the software sector. It perhaps can be extended to other sub-sectors in the IT world but probably not any further. However, in the software sector, I have seen the patterns repeat often enough to convince myself these are not accidents.

If you have ever led a software company or even worked in one, you definitely are aware of your Partner/Alliance organization. I have not come across too many companies where this department has been a very effective department. When I was a senior manager, most of the time, these were huge drains of time in attending meetings, making presentations and all that – and very rarely a lot of bottomline revenue to show for it.

Having said that, there are a handful of small companies I am told have made this succeed and I had the pleasure of setting of one very successful partnership myself (but that’s all ;-) )

Here are my Top 10 observations (in 2 parts):

1. Most partnerships are between “unequals” : The basic reason why software/service companies partner is to get access to each other’s customers or technology. Usually, the higher priority need is access to market. Therefore, the smaller partner is more interested in getting the partnership going. The bigger guy has little interest unless access to this technology opens up a large market for them. (which is rarely the case). When the bigger partner is a service company, they have even lesser interest to tie themselves to only one technology vendor. It is in their revenue interest to partner with any number of technology competitors – hoping they can win in either situation. More often than not, the smaller company keeps trying hard and eventually loses interest (not totally though – they need the big partner’s logo on their website J )

2. All partnerships start with a “feel good” factor: Regardless of past experience, all new partnerships start with a lot of expectations and self-deluding visions of conquering the world. For the larger company, the deal maker senses that a great line item has been added to the portfolio for the sales people to sell to everybody. The smaller company, of course is highly elated that finally the doors to the entire world has been opened up with them. While a few do work out that way (in a very restrictive model though), after a few of those “Steering Committee” meetings, reality starts setting in reasonably quickly.

3. In a large number of cases, partnerships start because of a personal relationship at a high level: Big or small, most of the partnerships are put together because somebody high up knew somebody high up in the other company. In general, business runs that way – through networking and personal relationships. In cases of partnerships, this is even more important since the trust and faith factor is taken care of from the word get go. In my experience, some of the more successful relationships have that one common thread. There is a deep personal relationship between the two persons who put it together in the first place.

4. There are enough second guessers on any partnerships: The above point has some unintended consequences. Since two partners often are brought together because of some existing relationships at high level and some truism behind Murphy’s law about “there are as many deeply rooted beliefs as there are possibilities”, there are always other people with different opinions on the partner. Unfortunately, partnerships take a unified line of execution across multiple divisions of a company – marketing has to support with marketing materials, sales has to support by educating sales/presales and pushing the partner, development has to work on integration etc. Unless this is driven right from the top, usually there is enough passive opposition that these get slowed down. Usually a few quick wins at account level helps speed things up

5. Most partnerships are opportunistic: At the end of the day, everybody wants a free ride. An ideal scenario for the companies is “I do not have to spend too much time on you but your sales will bring me to a lot of accounts”. And if that is not happening in the next 2-3 quarters, we need to think about it. I once worked for a reasonably large size company which was known to be a very opportunistic partner. This used to be held against the company. Contrary to what most people think, I do not see why this is a great problem. My view is business is business. Companies partner for a good reason – not because they feel good about each other. As long as there is no unethical or illegal behavior, I personally do not see any problem with partnerships bring put together driven by market opportunism

(to be continued)

The "Internal Customer"

I am sure you have encountered the concept of the "internal customer" in your organizations (especially if you are in delivery organizations). This happens when one group or team in an organization believes that they essentially serve to another group/team internally which in its turn, exist to serve to another team and so on till the last team actually serves up the real customer.

This happens when Development thinks Product Management is their customer or when Product Management thinks Sales is the customer and so on. A few weeks back I overheard a variation of the same concept in a meeting "we will completely outsource this to you - let's agree on the budget and SLAs".

The theory is if each team performs to its best level in delivering to the next team and the chain continues in that fashion, the real customer will get the best performance.

In reality, this is a very simplistic view at best and delinquency to the real customer at worst. The fallacy of the thought process are many. To name a couple,

• This gives rise to "buffer bloat". Each team, in its desire to meet the agreed upon SLAs and metrics, will build in its own "safety" buffer. (also known as sandbagging). By the time these buffers are compounded across the chain, it can be scary.
• This also loses the straight line of sight to success. Which means you will find situations where the customer and organizations closer to the customer are not meeting success critieria but other organizations (usually further away from the customer) meeting their numbers and declaring success.

The best culture to grow is recognition that there is only one customer. And that is the person who pays up the money.

Nobody else is the customer. Everbody else is part of a team that delivers to that one customer. To compare with a football (soccer) team, no one player passes the ball to the player ahead of team and declare his/her job is done. Everybody has a position to play - even when they do not have the ball. But they have only one common goal to meet - no interim internal goals.

To mix the metaphor a little, to compare with the American football team, everybody plays on the same game plan. No doubt there is going to be one quarterback (I like to think of that as the sales organization). But there are running backs, tight ends, punters, wide receivers each playing their own position in tandem with each other to meet exactly one goal. But nobody in the team is trying to "satisfy" some other player in the team. Nobody is measured on any other term than the one score that everybody else is measured on.

In summary, dissuade people from thinking they serve some internal teams.

Establish a clear line of sight for each team to the one real customer - one goal.

Align metrics such that no one of the teams can be successful if they whole chain is not successful.

Would like to hear about your experiences...

Thoughts?

Rajib

Not all functions are equally difficult

It has been almost a year and half since I jotted down my learnings. Clearly, my learnings have not stopped. What had stopped was my discipline of putting it to pen and paper after reflecting on them. I also realized that in the meanwhile, Google had changed some of the setups of Blogger – due to which I was not getting notifications for any of the comments. I cleared and published all of them today.

In the last 15 years, I was fortunate enough to have run all the 4 critical functions of a software company – Global Engineering (R&D), Global Consulting (Professional Services), Global Marketing and Global Sales. As you can imagine, there are lots of learnings that I had to go thru. I am sure some of you have gone thru this too. It would be great to hear from you about what you have learnt. I also want to point out that I did not have the pleasure (yet) of running any of the other organizations like HR, Finance, Legal etc. (I sure hope to run HR someday)

Some of my observations:

1. Everybody thinks they have the short end of the stick: R&D always felt that sales sold without understanding what is there in the product and what is not. And now they have to slog it out to meet completely unfair deadlines. In fact R&D’s opinion about sales personnel has not been too different in any of the software organizations that I have seen (worked or was on the board or just had good visibility into).

Consulting, on their part, always thought that they were stuck between the fire and the frying pan. Sales set them up with all sorts of expectations and R&D takes their own sweet time to deliver anything – needless to say it is going to be buggy. And now they have to face the music in front of their customers.

For sales, it was they never got a good healthy qualified lead list and in any case, they never figured out what they heck R&D really does for a living. Sure enough the competitors seem to be developing much better products than us.

Marketing groups were a little more interesting. Most of the complaints I heard revolved around budgets than anything else.

2. I do believe some things are more difficult than others: I am sure you realize that nobody has a cake walk – everybody has a tough job to do given that the market dynamics and customer expectations keep getting tougher and tougher. But allow me not to shy away from speaking my mind – based purely on my experience.

Of all the jobs, I think the sales person has the toughest one. There are two metrics I use to judge the toughness of a job – how measurable is the success of a job and how much can a person control the variables to make the job a success. I absolutely am convinced that sales has the tightest measure – pure dollar numbers – it is totally in black and white. Sure R&D has to deliver to deadlines, Consulting has to deliver to customer sat, marketing has to deliver to pipeline, branding etc but if you think a little more carefully – and I mean this without any disrespect to any profession – it is possible to cut some corners to meet a deadline, it is possible to smooth out some satisfaction issues with personal relationships, it is difficult to nail down exact pipeline quality / branding ROI etc. Not to say there are not established measure for this – but nothing compares to the exactness of the green dollars either being there or not.

As a double bind, sales has the least control over the variables. A salesperson has to do with parameters which are mostly external - prospect's budget, prospect's political alignment, prospect's timeline, sense of urgency etc. etc. The best sales person of course tries to influence these but, at the end of the day, these are external variables. Marketing has a similar issue too (see below).

3. Marketing is something else: Of all the jobs, marketing is the most amorphous. It is very difficult to nail down a straight line of sight from what you do in marketing today and what you actually get. The lead time of doing something in marketing (by the way – this is not true in the consumer side of the world – I am talking about enterprise software only) – be it branding, be it a new message, be it a new segmentation strategy – and actually getting the results from such is so high (typically a year and a half) that most people (notably CEOs) lose patience on it. This makes the marketing job somewhat easy (difficult to pin down what is wrong with one is doing) as well as difficult (you always have to fight your point without results).

BTW, somebody once threw me this data that an average CMO lasts for a year and a half. I am not sure how true it is – but if it is, I completely understand why.

In short, my respect for sales people is the highest. So much so, that I always return all telemarketing calls and email marketing (not the spams :-)). I tell them that there is no chance of doing business. Having been on the other side, I understand the value of being at least told a polite “No”.

Would love to hear from you…

Rajib

Why is people management so difficult?

If you have been a manager of managers, undoubtedly one of the things that would have frustrated you is how so many of your managers who had an otherwise perfect record were woefully lacking in people management. The pattern has repeated like clockwork in my life.

This has prevented numerous ambitious managers from moving forward in their careers and often has frustrated them immensely. (Don’t count on the latter though. Most managers far overestimate their organizational and people skills). I am not talking about managers who “are liked by people”. While this can be a charismatic leader, often people “liking” has little to do with a manager’s effectiveness with their organization.

I am talking of a manager’s ability to get the most out of individuals and the organization in a way that is profitable for both the company and the individual. I am talking about a manager’s ability to keep the organization continuously hungry to scale greater heights. I am talking about a manager’s ability to deliver 5X results compared with similar sized teams. (In the IT industry as well as many others, this is absolutely achievable)

There are various books written on how to become a great people manager and such other topics. Given the number of books written on this subject, I suspect this is not a commonly agreed upon topic!! I shall try not to add to that literature base.

However, what I am going to narrate to you is what I believe is the fundamental reason why so many bright managers who manage just about every aspect of their business very well, find it difficult to get the people management aspect straightened out.

What makes people management so different from other streams of management?

At the core of the difference is standardization versus differentiation.

Pick up your MBA courses or the millions of books written on management – be it production management, development management, sales management whatever. The focus is always to derive higher gains by running it as a well-defined process. The general theme is very simple – look at the processes, standardize the processes, set in the measures and then drive higher goals through those measures and exception management whenever there are variations to those standardized processes.

That is how Ford drove how to manufacture cars. That is how companies like Siebel and salesforce.com have made money – by helping to standardize the sales process. That is how developers have increased product quality – standardized development process.

You don’t make one car fundamentally different from the next on the assembly line. You try not to make every sales deal a Picasso (unique creation). You follow the same steps to write the next line of code as you did for the previous one.

However, this management upbringing falls completely flat while dealing with people. Each person truly is very different from the other. They need and demand very different kind of treatment. They respond to different kind of stimuli. Given two machines, you will roughly follow the same steps to get 30% more productivity. Try that on two employees sitting next to each other and you will quickly realize the futility.

The art of differentiating makes or breaks a good people manager. The method of “standardize-measure-manage” will not work here. Good people management takes far more time. The best people managers try to find the right buttons for different employees and figure out how to challenge each one of them while keeping them focused on the corporate goals.

Any “broad brushing” of people issues usually has a very limited effect. I am sure you are aware of what kind of exciting responses you get from your employees when you talk of HR Policies. I suspect it is this “one-size-will-fit-all” approach that they roll their eyes for. As individuals, they demand individual attention and micro-plans/policies. (I am not saying all of them are justified).

Next time, you are facing a personnel issue or are drafting something of that nature, take a step back and give this a thought.

Rajib Roy

Perpetual Optimism is a Force Multiplier

In my experience, organizations have a tendency to dwell on the negatives. How many coffee bar discussions have you run into or have been part of - where the basic theme was “why we are not doing things right” or “why this manager / executive is totally screwed up”? Surely many more than the ones which talk about the company wins or what the organizations are doing right.

As I think back on this, there are three things I believe I have learnt…

1. Negative news travels much faster than positive news: Have you seen how sales “loss” stories are known by more people faster than the “win” stories? How some negative press about your company is on more desktops of your employees than positive press? You would think there is almost a salacious side to all of us that focuses on the “gossipy” side of events for this to happen. Organizations behave as if negative news is more “urgent” than positive news.

2. “My self-worth is tied to how I can prove others are screwed up”: I believe when people – in a work as well as a social environment – engage in pointing out how and why things are screwed up, there is an inherent human psychology working that is trying to portray that “I know better”. I also believe that there is a side of us that is convinced that others will think that we “know more” if we can show the imperfections than if we talk about the perfections.

3. Positive people have a remarkable effect: Although rare, I have indeed come across people who can always see the brighter side of things. Who can focus on the things that are going right. And I am not talking about “spin” marketing. Though such leaders are few and far between, people tend to agree that such people are “better” leaders than your run of the mill ones.

This is probably a great pointer to many of us who aspire to become great leaders some day and leave a mark in this world. I loved it the way Colin Powell put it – “Perpetual optimism is a force multiplier”. My personal experience has been that it takes time to get organizations to share your level of optimism. But you can do that by being sincere, acknowledging that there is work to be done but repeatedly focusing on the wins. Once you do that, organizations grow a natural tendency to follow you as a leader.

In a previous environment that I worked, where we were clearly losing path as a company, it was remarkable to note how the “optimistic” leadership statements, while bought by rank and file initially, was quickly seen to be spin and insincere since that is exactly what they were. Ever since, I am convinced, that as a leader, you first establish your sincerity – then focus on the positives. That is an amazing combination that can energize organizations. The “can do” attitude is very infectious. Once the leader exudes it, the whole organization exudes it.

I would like to end by quoting from Colin Powell again which best articulates my theory on this topic…

The ripple effect of a leader's enthusiasm and optimism is awesome. So is the impact of cynicism and pessimism. Leaders who whine and blame engender those same behaviors among their colleagues. I am not talking about stoically accepting organizational stupidity and performance incompetence with a "what, me worry?" smile. I am talking about a gung-ho attitude that says "we can change things here, we can achieve awesome goals, we can be the best." Spare me the grim litany of the "realist," give me the unrealistic aspirations of the optimist any day.


Please let me know if you have any thoughts on this. Or what your experience has been.

Rajib

What CIOs are looking for

If you have been selling enterprise software in the last five years, you have undoubtedly gone thru the following scenario multiple times. You did everything that you know you should do – you have put in a perfect value proposition, your software scored most points in a bake off with other competitors – you even got a off the record assurance from the business users that yours is the software they will recommend. And yet you lose the deal – sometimes to the ERP vendor and increasingly to a decision to make a home grown solution.

Whatever happened? After interacting with scores of CIOs in some of the largest companies in the world, this is what I have distilled in my mind…

The shift of power to the CIO

Ever since the internet bubble burst, as organizations have realized that they went overboard in buying packaged applications (most of which could not be implemented due to want of implementation funds and time), there is a subtle shift in power that has happened in this buying process. And that is the emergence of the CIO as the more powerful decision maker. It used to be the business side of the house. But that underwent a change.

Don’t be fooled into thinking that business value of a solution lost its utility. It absolutely remains a driver. Contrary to popular belief, CIOs are totally aligned with the business folks in extracting business value from their investments. However, a second driver has emerged as a decisive factor in many of these decisions – and that is the Total Cost of Ownership (TCO).

TCO includes not just the license cost of buying the application but also the cost of implementing it, integrating it, writing code to extract data and massage them and then more importantly, maintaining all this over the years.

And here is where the whole charm of best-of-breed application vendors starts falling down. While a lot of software has been written in the last 15 years solving some business problem very elegantly, very little has been done, in what I have seen, to solve the CIO’s problem. A typical supply chain product implementation across the industry as an example usually had the following breakup – for every $ that you spend on license software, you will spend anywhere from 30 to 50 cents on hardware and other middleware, anywhere between $4 to $10 on professional services (to configure, implement, integrate etc), and another 1 $ over the next 5 year or so for annual maintenance.

Add to that the cost of upgrading the software (application vendors will invariably ask you to upgrade once every 3-4 years and these are not simple technical upgrades of putting the CD in and pressing some buttons here and there) and the cost of the internal people or external contractors who are involved in the long term maintenance of the implementation code written. Now you get an idea what makes the CIO cringe even though you are asking for just a $ of product to be bought.

This is where broad providers like ERP vendors win. They may not have the best and most elegant solution – but their “good enough” solutions are very attractive since that avoids a lot of the integration and data manipulating costs (the story at least from the ERP vendors is that the new modules work perfectly on top of the old data models). Maintenance is far less of a cost and there is one less vendor/provider to deal with for the CIO. If you read a previous blog I had written about mergers, you will realize that it is the same driver – focus on total cost of ownership – that made the winning mergers rewrite the acquired software all over again with their existing architectures and data models.

The re-emergence of home-grown software

The swing towards the home-grown software is occurring ever since three things have come together. First, as I explained, the cost of making a best of breed solution sit on a pre-existing IT environment is high. But the fun starts after you have decided to spend that money. No pre-packaged software ever solves all the business needs and requirements that you have. (That is the nature of the business – it is not necessarily the fault of the application vendor). However, for you to get those features built in, you are asked to stand in a queue of other customers and follow the product release deadlines that the vendor has.

While vendors are absolutely eager to help you and see how to expedite things, there is no guarantee that your feature will be put in. The vendor is in the business of making standard products and will always prioritize “commonly asked for” features higher than the rest. (Don’t forget the sales and competitive pressures R&D organizations go thru also – their internal sales/executives saying “have to have this feature else we will lose the deal”!!). From the CIO’s point of view, he can’t care less about all the plethora of features that he never uses. He just wants his stuff – his way and that’s all he is asking for.

Second, as the budget of the CIO kept getting squeezed over the last five years, the ratio of money spent on “new projects” has been going down. A CIO divides his/her budget roughly into two parts – the ongoing maintenance of existing systems and then “new” projects. Pre-2000, the new projects could command as high as 25 to 30% of the total budget. Over time, that has been squeezed down to sometimes as low as single digit of percentage. Think of ongoing maintenance cost as almost fixed cost. And as budgets got squeezed beyond those levels, the CIOs started adopting the India model whole scale since that brought down their maintenance side of the budget by about 30% on an average.

However, the business demands did not sit tight just because budgets were being cut down. If anything the landscape became even more competitive and customers were less tolerant of service levels being missed. In this world, the CIOs started looking into the possibility of harvesting their existing investments. Technologies like web services have made it much easier to leave the existing code as is and put wrappers around and use these existing functionalities in workflows that you can build outside these code bases. These are usually called composite apps. The theory is - as I said above – you put in wrappers over your legacy code to expose the functionality as web services. And you can write composite apps that use these web services and any new ones that you write to solve a business problem. You leverage the existing data models as well as functionality.

Finally, the emergence of quality labor at a fraction of a price from the India vendors has made it much easier for the CIOs to attempt to build these solutions themselves. And some of the CIOs have gone to the extent of opening up their operations in India themselves (almost without exception, given the market of India, these companies have some sales presence and a legal vehicle already existing in India). Opening up your operations gets you further cost advantage (almost 1:4) but on the other hand you take on some of the management problems on yourself.

In any case, hope this helps you understand what goes thru a CIO’s mind. Hope this will help you in steering your company strategy on how to build solutions. In the least, you will know how to give a good sense of where your products are on the TCO front to the CIO.

Rajib

What makes people go thru walls?

Have you ever wondered why certain companies have extremely loyal band of employees and some do not? I am not talking of people who continue to work in an environment due to sheer inertia and the inherent human inclination to avoid a change. I am talking about those set of people who work with maniacal ferocity towards a vision often against large or at least better place competitors. What makes them drink the “Kool Aid”? What gets them the mantra?

What is that the leaders of these companies do? Without exception, these employees consider their leaders to be charismatic. What is charisma? And how does one achieve it? Is it purely a personality thing?

Sometime back, I was doing some research on what makes organizations last very long. Most companies die out before reaching double digits of age. I think it is worthwhile to study the parallels in how these employees behave with some very long standing organizations. The three longest standing organizations that I can think of are (i) the army (ii) the church and (ii) universities. Their longevity has run from 200 to 2000 years. Only half a dozen of corporate organizations can come close to even 200 years of age.

I will take a parallel from the army to explain the loyalty of employees. Why would any logical-minded soldier rush up a hill under heavy machine fire with incredible personal peril? Similarly, why would anybody not revoke their religious beliefs even under the severest torture? Why do employees work for a small company where the odds are against its survival?

There are three conditions that need to come together for the above to happen.

(*) A soldier needs to have tremendous belief in the commander that he is asking them to charge the right hill.

(*) A soldier needs to believe that, with enough sacrifice, the hill can be conquered.

(*) A soldier needs to believe that they have the “moral” right to win the hill.

Thus in companies where you see the maniacally loyal employees working towards a “great cause” invariably have the following things...

(*) The leader has painted a great vision – a vision that surpasses Wall Street expectation of mere fiscal pressures – a vision that shows why the world will be a far better place to live in – a world you would like to leave for your children if you achieve your vision. The leader exudes confidence in explaining to the employees why that is the “right” hill to charge up.

(*) The leader has impressed upon the employees that the only difference between the winner and the losers is execution. It is hard work. It is a success that is built upon a lot of sacrifice from the employees and their families. The leader acknowledges the sacrifice and thanks them for that. But also maintains that there is no short cut to success. Is quick to articulate why he believes he has the best “soldiers” too. What makes his employees different from other employees?

(*) The leader impresses upon his employees why it is their moral right to win the war. How they have the best vision. How the world is served best with their view of world order. How they focus on the right things which supersede small elements of focus like quarterly profits which is the sole focus of the competitors. How the competitors are busy make money for themselves while they want to make money for their customers.

That is the essence of what I have concluded…

Please let me know if you have any thoughts on this. Or what your experience has been.

Lessons from mergers and acquisitions

During my last stint of 10 years in an enterprise application company, I was fortunate enough to see many mergers and acquisitions as we grew (over a dozen). The acquisitions ranged from very small companies in far flung places like Scandinavia to the largest software acquisition (of that time).

The lessons that I learnt are the following:

Things always look great from outside. Almost always things were much more hairy than was visible before the acquisition. Be aware that somebody who is willing to be sold out would for very obvious reasons put their best foot forward. There are more stories than you would care to hear in my previous company where we had everybody involved in the acquisition swearing by the greatness of the company to be acquired and without exception, each one of them turned out to be disasters. That does not mean the executives and team members were not intelligent (although I will admit they were more impressionable than other others – I think that happens in young software companies especially if they do not have a healthy ratio of seasoned executives brought in from outside). What it says is that take all your time to do the due diligence. Assume that 50% of your conclusions are wrong. Then seek data to disprove that hypothesis.

Be clear about what you are acquiring for. Are you focused on acquiring the customers? Make sure that you do not lose the key people who have the customer relationships (which often is not the sales or account executive). Are you focused on increasing your footprint by acquiring IP? If so, read the next point.

You cannot integrate yourself to greatness This is perhaps the greatest learning I had. As one of my peers once summarized it best – When you buy IP, it is in the people not the software. Without exception, we followed the software route. Which means we tried to “integrate” all these products into one set of solutions? The nightmare was unbelievably costly and is what I believe eventually brought us to our knees. You are much better off taking the hit of isolating top 30% of the acquired company’s engineering group aside and tell them to rebuild the solution on your existing architecture all over again.

Don’t worry about which is the better architecture. In almost all cases, it is like debating over religion. Technology is way over-rated for most enterprise problems that customers face. You will much faster to market with a truly integrated solution with lesser overall cost (for both you and your customers) of ownership by taking the hit upfront. I admit it takes guts to do this. The whole world is expecting to show you results from the merger. But companies like Siebel, Cisco have this model outrageously successful.

I would like to reflect on the only successful merger we had. The big difference I see from the other mergers is that we had some amount of history with this company. We used to resell their product for about a year. I think that gave us a great due diligence. We understood what was working and not working in positioning this product to our customers and what the difficulties the customers were having with the product were. What we did not do is the point number 3 above and I have paid heavily for it!

Feel free to send me comments about your experience.

Learnings from offshoring development to India

During my job search, one of the questions I often got from prospective employers – especially VC firms was – can you help us reduce development costs by offshoring to India? For most of them, I advised to exercise caution. It was not the right time for all of them. Here I will write down my learning from offshoring work to India.

This is based on my personal experience of having offshored work to my India organization for the last 8 years. The peak size of my team there was around 250 in product development and 350 in services. Other than this, I had about 100 partner resources working in India too. China and Hungary were the two other offshore centers (although much smaller in size) that I had. (Rest of my team and I were based out of US).

What I am very impressed by is the quality of people in India. My experience there (as well as in China and Hungary) is that there is a huge supply of highly intelligent people. They are typically very hard working. The work culture seems to be oriented towards putting in long hours. With the proper guidance and leadership, and a little encouragement, they have moved mountains for me. All this at about one-fourth my cost basis (compared to US).

Two different types of work

Having said that, I need to add that I saw great success with one kind of work and only mixed results with another. Let me explain the two different types of software work that I have seen in all companies. First you have the project oriented development. These are typically turnkey projects. Requirements are nailed down upfront once and for all. And as changes happen to the requirements, you have a rigorous change management process to deal with extra money and time. After the development is over and the software is “live”, usually, it gets into maintenance mode with small incremental changes over time. Most importantly, such software is targeted for one customer and typically one target IT environment (operating system, database, UI technology etc.).

I have found that India is very good in this. For the last 35 or so years of offshoring experience that India has gathered has been almost entirely in these kind of turnkey projects (if you take out the body-shopping aspect of the industry). Which is why, Indian companies have been in the forefront of adopting project-oriented processes like SEI CMM models and such.

The second kind of software work is product oriented development. This is where you have a “continuously” worked-on piece of software. There is no one big completion date and then ongoing maintenance model. Typically you have many completion dates (called releases). And there is no final list of requirements. Through the life of the product as the market and customers evolve, new requirements are generated. You don’t budget the activity as a project. Instead, typically, you have a fixed capacity to deal with – and now you figure out how to prioritize your requirements to fit the next release capacity. All software product companies have this model.

I am rather unexcited by my experience with India on this front. Since this is where most of my learning was, let’s try to understand why IT companies in India don’t excel (yet) in this. Before I get into that, I must hasten to add that there were 2 companies – both very small – who absolutely stood out in their ability to understand and deliver to the product oriented development. And I had the opportunity to partner with them both. But that is 2 out of probably 100 companies that I have had the chance to interact with.

What explains the difference?

First and foremost, the nature of work is very different in the two models. In the project oriented environment – typically a lot of things are spelt out and the development engine in India is focused on “doing it”. You basically code to the customer’s stated requirements. But if you are writing a product, you have to think a lot more. Good software architects become good not by designing to a requirement but being able to think thru what else might be required in the future and therefore design today such that anticipated future requirements can be put in easily. You don’t get a chance to say – “None of my older customers had required this – now I have to totally redesign the architecture”. This means the key developers need to be much smarter and more importantly understand business domain. Most of the people I have interacted with in India – are great developers – but not what I am talking about here.

And that is not all. Remember, we talked about the target environments? When you are writing a product, you have to design it such that it can work with multiple languages (think double byting), on multiple platforms and multiple middleware choices. That requires far higher level of abstraction in your thinking and design. That is not the experience typically people have in India.

Finally, don’t forget the people angle. India (like China, Japan and other countries in Asia) has a background of hierarchical society. The social ethos of what is important and what is not important is very different from what you may be used to in the US. Typically, for any average person, being a “manager” is the immediate goal in India. After that is “how many people report to me”. Being a country with a very large population and much fewer resources, the DNA is built in the people to be very competitive and fight hard to rise up the hierarchy. Most of the software developers I have interacted in US don’t want to be managers – often have a healthy level of cynicism towards them – think Dilbert! In India therefore, it is very difficult to have people work on the same piece of code year after year. Their career motivation continuously makes them look for a “development manager” job or move to offshore services work to be a “project manager” or even better international assignments. Being a great architect is hardly ever a career goal for them – and I do not blame them for it - given what their peers, market and society values. (Just look at the compensation numbers between the top technology person and the manager in any team). On the other hand, how can you be good product developers developing great products if you don’t stick to the code for a long time and have the knowledge and history of why certain design decisions were made?

What can I offshore then?

First, you should not pass up on the opportunity to leverage the great tool offshoring is. The price arbitrage and quality of people is too high not to think about it. Just make sure you are offshoring the right parts of your operations, though. While the cost difference is great, there is additional cost you take in terms of more rigidity in process of communication and handoff between teams separated by a couple of oceans, training costs, attrition (and therefore re-training) and the like. Do not focus on how many dollars you are spending in either scenario – focus on what will you get for a dollar. “n” people in a team often outperform “4n” people in another team – especially as “n” tends to be smaller. (4 represents the cost multiple).

Look at which aspects of your software development are more commoditized than others. If you are a typical enterprise software development company, start with the services side. Your usual customer implementations exhibit all the characteristics of a project based execution. Requirements are nailed down early on; you typically have a “go live” date and then move on to maintenance. There are a large part of this work (especially between post-requirements and customer site testing phase), that can easily be packaged and moved. As an example, a lot of custom development, data work, model building work, testing work can be easily done from India.

If you are a services company, obviously, this is a no-brainer. I suspect you are under enough price pressure and customer pressure that you are doing this already.

For the software development teams, I strongly advocate against doing this till you are about 15 people (development team) strong or so. After that, you start looking at those parts of the work which are easier to package, are reasonably commoditized, and can be managed even if the team members change every 2 years or so. Examples of these are bug-fixing teams, internationalization teams, quality testing teams etc. Also, if you have a long list of nice-to-have features which need smaller changes but you never get a chance to prioritize them high enough – they would be a good candidate too. It is very important to point out here that it is highly desirable to ensure that you have a source code control system and regression testing framework that can work across multiple sites – or else you are going to have a lot of fun merging work of multiple teams and then coming up with errors too late in the game.

After you have reached a size of 30 or so, you should think a little more ambitiously. If you have a portfolio of products, pick out the ones that have reached reasonable amount of maturity and most of the development are incremental development. If you have one product, identify the modules that don’t need a lot of understanding of domain or day to day handholding – e.g. framework layers. Finally, if you are thinking of doing next version (new architecture – not next release) of products, move the old product to India and do all the new product in one location (even if you bring people from outside) rather than trying to do some part of the development from offshore from the very beginning. I saw a few teams succeed with this model (right from the beginning split work between India and US) but my opinion is it has been a far more costly and slow.

In essence, the size of the team and the nature of the work will drive your decision.

Those were my learnings. Feel free to add in your comments or learnings…

Rajib

Learnings from executive job search - Recruitment practices

In my experience, there are 3 types of companies when it comes to recruiting practices.

Talent hunters: These were the most pleasant to work with but you have to have time on your side. These companies seem to be focused on getting good people in and then figure out what is the right role for you. Unless you are a person who is extremely bothered about what position/role you start with, these are the best targets for you. If your history is like me, if your company is growing, so will you. You will not be holding the same job for more than one year in such environments. My philosophy is not to be too worried about the starting role. Designation (level) may become important if the company has a philosophy of bands of compensation by level.

I came across 2 companies like that. One is a small company in the East coast. When I talked to the CEO, it was obvious he had no outstanding job requirement. But every conversation left both of us with the impression that there is a great potential for both of us. I eventually talked to almost all the leaders in the company and then the board of directors too. One of the advantages of keeping your mind open in a small company is that you are not seen as a threat by any of the existing leaders who might be worried that the new executive will replace him/her.

The second company is a large company in West coast which takes this process one step ahead. Their recruitment process is entirely designed to see if that person is a fit for the company. The secondary question is where. In my case, after 14 interviews, apparently they decided I belong to them. However, before I left them, I had also expressed my opinion that none of the groups that I talked to had a lot of interesting things for me. I was asked to come back and talk to other groups and help find out whether there are other interesting opportunities that will excite them and me. After another 12 interviews, I found something that excites me immensely and I feel I can contribute from day one.

These kinds of companies had the most innovative questions to ask too. My favorite – “So, Rajib, 25 years from now, when your daughter has a 5 year old child and he/she asks – Grandpa, tell me a story from your office – what story are you going to tell him/her”? I had to think for some time. But that night as I thought about my answer, I realized – Man, that was a great way of finding out what is relatively important to me and what is not – what kind of things leave an impression on me and what doesn’t – leading me to understand what is my internal value/belief system. Incidentally, what I remembered first was a Herculean effort put in by somebody against all odds – and my bets – and carried the day for a customer of ours. No point for guessing where that person is after he/she left our company. Yep, same company who was interviewing me!!

Job Fillers: By and large, this is the majority in the spectrum. This is your typical “need to fill a job” recruitment which is usually the result of an executive leaving or the company operations expanding. The aspect of interviewing that struck me most was the amount of stress put on experience. Lot more stress is given on matching the exact kind of application (sometimes down to the exact application), industry, type of companies etc. than an executive search should ever do, in my opinion.

In my philosophy, if you are looking for a lower level job, I can understand the need to seek exact matches. (Actually, even that, I am not totally comfortable with. If you are looking for a Java developer, I will absolutely look at a C++ person and judge the person’s intellect level, ability to learn and work ethics. I can teach him technology quickly). As you start going higher up, you should absolutely be looking at broader skills – not exactly what technology, industry, and application somebody has worked in. Here is a simple fact of life – if you are growing as a company, your business will change, your models will change, and your market will change. You want to get in leaders who can see such changes coming and can actually quickly learn and adapt. Don’t forget that Nokia started as a paper company (and then rubber!), Wipro started by selling soaps and Lou Gerstner knew nothing of hard drives when he came to IBM from Nabisco. Experience can give people data – but you want people who have grown judgment. And yes, it is much harder to interview for these things in one hour!

At the end of the day, the root cause of this issue is that in these companies, recruitment is not looked upon as a strategic tool. You have to keep a good pipeline of candidates. Good people are not going to fall from trees when you have a job opening. Nor will you have a good opening the day you meet a great person. If you have to fill a job in a hurry, you do what I experienced with these companies.


Unenlightened Ones: While I am quite sure these companies have a great strategy for themselves too when it comes to getting talent, they left me with the highest degree of frustration just by their lack of professionalism. Fortunately, I did not have to go thru a lot of them but each and every of the large offshore vendors from India (I went thru 4) fell in that category. I am very well connected in these companies and invariably the CEO or top guy discussions went very well. Then things fell in a hole. The pattern was eerily repeated.

First and foremost, whoever you are talking to is always looking to getting you in their group. When it was evident that there is nothing that fits, there was more effort put with more promises of glorious future of that group than to look out for the rest of the company.

Second, with the exception of one company, there were too many phone meetings that did not happen (one was set and missed 4 times!!!) or started way late. There were a lot of promises of getting back within a stipulated time – which needless to say did not happen either. In case you thought this was happening with high level candidates only, another person from my company who worked in my group (couple of levels lower) gave up after getting promises from one of these companies (where unfortunately, I had referred him to) to finish the interview process for over 4 months!

I have to add that some of the smaller offshore vendors from India came across far better in this regard. At least they were professional enough to say that there was no fit or compensation requirements cannot be met… etc.

One more unprofessional practice you may have to get used to is that many companies of the second category (Job Fillers) just simply don’t tell you after the interviews are over that your candidature just did not work out. Between 3 friends of mine and I who did the job searches in collaboration, we are still waiting to hear from about 8 companies (and we know that those posts have been already filled). About 3 months back, there was a half page article on this in Wall Street Journal. Evidently, this has become pretty common in US.

In any case, those are some of things that I saw. Once again, these are reflections of my experiences. Feel free to send me your comments/experiences.

Rajib

Learnings from executive job search - Pipeline generation

I am in the process of (hopefully) concluding a job search for myself which started in the background about 6 months back but in right earnest about a month or two back. As a background, I am a senior executive who worked for 10 years in a leading software enterprise application company - running global product engineering and professional services - about 800 people across the world. Before that I worked for 4 years in the finance industry.

Here are my learnings. These are entirely based on my experience.

Executive search firms are highly ineffective. At the end of the day, executive search firms work for the company. They are measured on whether a job was filled rather than how many resumes they were able to find jobs for. In the last 6 months, I must have contacted over a dozen executive search firms - including the top 6. None of them came thru. The one executive firm that did put me up at an account is somebody I had not contacted - they found about me from somebody else. Part of their challenge is that I do not think they share the resumes within the company. While many claim to have databases - other than one firm who I saw truly share their resumes - when I talked to as many as 6 people from the same firm - they had not a clue that all of them were talking to a person who is already in their database. My suggestion is to keep your network of the exec search firms up but do not count at all on that. Additionally, I found that the exec firms often help in coming up with the job description and they use their own way of "filtering" people - not necessary wrong or unfair - but very different from what I would do as a practitioner.

Surprisingly, small search firms come thru. I had the best experience with the small boutique companies. Usually, they cannot put you thru to more than a couple of companies but they were able to put me thru to the highest level. They also seemed more hungry for the business. Two out of the top five prospects that I liked best were brought to me by small search firms.

Websites are a good start. Sites like 6figures.com, linkedin.com are a good start. Usually you will find some job descriptions that you may like. What was effective for me was to find out about the recruiting firm or the company from these sites and then I called them up. 50% of the time I was able to reach somebody and then when I explained who I am, was put to the highest level which resulted in a phone call and often interviews.

You will be surprised who will come thru for you ... and who will not... When I spread the word around people senior to me with whom I had worked in the past that I am in the market, I was totally surprised who all came thru and who did not. A CMO of our company with whom I had very little - but not substantial interactions was very helpful - she not only got me a few good leads - she followed up on them too! On the other hand, people with whom I was pretty close - some even socially - were not effective/willing at all. Lesson is not to count on people who you think you can count on.

People who were in my division were most resourceful!! By and large, the most high quality leads that led to at least multiple rounds of talk with the company came from people who had worked in my division - in fact none of them were my direct reports except one. Three of the top 5 companies that I liked came from people who worked in my organization at some point of time. I have a habit of wishing people who have ever worked in my division on their birthdays (I put them in my diary). All three followed the same pattern - email wishing happy birthday - reply asking how are you doing - response saying great, I am in the job market - phone call/email asking would you be interested in our company - me asking what do you do? Can you put me thru to your CEO - and the rest followed very quickly!! Lesson for me - Keep up the good habit of the birthday wishes (it keeps your network renewed once every year at least).

VC network. I do not have a strong VC network but while talking to a few startups, I noticed that this network is very powerful. If VCs are impressed with you, their ability to place you in companies that they influence is very high. However, this is an observation more than an experience.

That's all for today. Next time, I will talk about some of the good and not so good practices of the recruitment process itself that I learn from...

Rajib