Sunday, December 27, 2009
Monday, December 14, 2009
With the whole world against...
What do you do when your colleagues range against you? That too because you want to play straight? My friend Ch Hanmantha Rao provided an answer through this personal account. Prof Rao retired as Dy Director from Central Institute of Road Transport, Pune. He completed his Engineering on the support of a Government merit scholarship and joined the AP State Road Transport Corpn as an officer trainee. He worked in various positions within the corporation for over 15 years. He then joined the CIRT and worked there for over two decades. This incident happened in his first years in the Corporation. I give it in his own words.
"I had joined the Corporation, as I thought it my duty to serve the State Government, which had provided me with the scholarship, but for which I would not have completed my BE. I was posted to a Depot, which was headed by a senior Manager, who was seasoned and wise as well. He was my first mentor so to speak. I used to go to him for every issue which troubled me. I was young and impatient and could not stand the lazy, the shirkers and the shrewd ones. After a few months, I noticed that barring a handful, most of the officers there were interested in their petty ends and had no concern for the Corporation. They used to tell me not to work so hard. I mentioned this to the Depot Manager. He merely asked me, 'what do you want to do?' I said, 'of course, I want to do a good job.' 'Then go ahead, ' he said.
A few more months passed. My colleagues now started making fun of me for my sincerity. They said, 'Hanmantha, fine, you want to work hard. But who has stopped you from having fun?' What they meant was that I should accept invitations from vendors for parties. In one of my conversations, I mentioned this to the Depot Manager. Again he said,'do what you think is best for you.' I was not satisfied with this answer. I wanted to hear a categorical answer from my mentor, denouncing such hobnobbing with the vendors.
Things reached a point of intolerability one day. I was seething with anger when I stormed into my Depot Manager's cabin. He asked me to calm down. I told him,"Sir, these people have crossed all limits today. They said one has to take advantage of the Corporation, just as one goes to a prostitute to enjoy her. Sir, they went to the extent of calling the Corporation a prostitute. I cannot tolerate this. You must take action against them."
The old man asked me, 'What did you tell them?' 'I was so angry that I left them there and came here direct to tell you.' He said,'You should have told them that yes, it is a prostitute.' I was aghast. I felt for a moment, even the old man could be a part of the racket. He paused and thumping his chest strongly cried out,' Yes, for the world she may be a prostitute, but for me she is my MOTHER!' It was a moment of epiphany for me. I realised what strength of conviction was and how I had to face the world on that strength alone."
I have narrated this to many audiences and every time I am overcome with emotion at the end. I have derived tremendous strength from that unknown Depot Manager of APSRTC.
"I had joined the Corporation, as I thought it my duty to serve the State Government, which had provided me with the scholarship, but for which I would not have completed my BE. I was posted to a Depot, which was headed by a senior Manager, who was seasoned and wise as well. He was my first mentor so to speak. I used to go to him for every issue which troubled me. I was young and impatient and could not stand the lazy, the shirkers and the shrewd ones. After a few months, I noticed that barring a handful, most of the officers there were interested in their petty ends and had no concern for the Corporation. They used to tell me not to work so hard. I mentioned this to the Depot Manager. He merely asked me, 'what do you want to do?' I said, 'of course, I want to do a good job.' 'Then go ahead, ' he said.
A few more months passed. My colleagues now started making fun of me for my sincerity. They said, 'Hanmantha, fine, you want to work hard. But who has stopped you from having fun?' What they meant was that I should accept invitations from vendors for parties. In one of my conversations, I mentioned this to the Depot Manager. Again he said,'do what you think is best for you.' I was not satisfied with this answer. I wanted to hear a categorical answer from my mentor, denouncing such hobnobbing with the vendors.
Things reached a point of intolerability one day. I was seething with anger when I stormed into my Depot Manager's cabin. He asked me to calm down. I told him,"Sir, these people have crossed all limits today. They said one has to take advantage of the Corporation, just as one goes to a prostitute to enjoy her. Sir, they went to the extent of calling the Corporation a prostitute. I cannot tolerate this. You must take action against them."
The old man asked me, 'What did you tell them?' 'I was so angry that I left them there and came here direct to tell you.' He said,'You should have told them that yes, it is a prostitute.' I was aghast. I felt for a moment, even the old man could be a part of the racket. He paused and thumping his chest strongly cried out,' Yes, for the world she may be a prostitute, but for me she is my MOTHER!' It was a moment of epiphany for me. I realised what strength of conviction was and how I had to face the world on that strength alone."
I have narrated this to many audiences and every time I am overcome with emotion at the end. I have derived tremendous strength from that unknown Depot Manager of APSRTC.
Wednesday, October 28, 2009
Satyam - 2
The word is substantiveness. That's the difference between a trader who deals in any goods that are in demand and a manufacturer who invests in the product and the market. A trader can also garner substantiveness by investing in a class of goods and in a locality. That's how the retail chains have built their brand identities. In IT industry, if you are doing software development projects, how do you create substantiveness? There is the personal level at which the leader needs to hold substantiveness and also the organizational level.
You have the Fortune 500/1000 companies that are being targeted by all IT majors. You have all got PCMM level 5 certifications. You have the organization structures almost dictated by the clients. So there is hardly anything to distinguish, except the speed with which you move into the markets, rates you quote and the kind of practice (experience) that you build up. The quality-reliability-delivery standards built up by each IT major in India came out of their peculiar organizational capabilities. This capability is the result of the value each major attached to people, processes, systems and results.
Satyam stood out from the others in the emphasis it placed on people and results, while projecting its commitment to processes and systems. This is the peculiar mindset of the construction industry in India, which is yet to start on the professional path. Raju transferred this mindset from his construction industry background. The results were electrifying. His chosen business leaders enjoyed tremendous freedom and moved quickly to take advantage. Business grew, numbers flew and the Board kept the markets happy. Only when the Maytas deal happened, the shareholders rose in protest. When the things came out in the open, the professors beat a hasty retreat.
The question then is: can the stakeholders escape their share of moral responsibility in the Satyam case?
You have the Fortune 500/1000 companies that are being targeted by all IT majors. You have all got PCMM level 5 certifications. You have the organization structures almost dictated by the clients. So there is hardly anything to distinguish, except the speed with which you move into the markets, rates you quote and the kind of practice (experience) that you build up. The quality-reliability-delivery standards built up by each IT major in India came out of their peculiar organizational capabilities. This capability is the result of the value each major attached to people, processes, systems and results.
Satyam stood out from the others in the emphasis it placed on people and results, while projecting its commitment to processes and systems. This is the peculiar mindset of the construction industry in India, which is yet to start on the professional path. Raju transferred this mindset from his construction industry background. The results were electrifying. His chosen business leaders enjoyed tremendous freedom and moved quickly to take advantage. Business grew, numbers flew and the Board kept the markets happy. Only when the Maytas deal happened, the shareholders rose in protest. When the things came out in the open, the professors beat a hasty retreat.
The question then is: can the stakeholders escape their share of moral responsibility in the Satyam case?
Thursday, October 22, 2009
The Twisted Tale of Satyam
I have been trying to unravel The Satyam tale in my mind at the level of the protagonist's dilemma. There are of course many angles to the sordid drama: corporate governance, ethics, siphoning of funds and so on. I have been interested in figuring out the existential dilemmas faced by Ramalinga Raju. For this purpose, I found it useful to compare him with three others, viz, Ratan Tata, Narayan Murthy and Azim Premji.
Ratan Tata and Premji have been scions of business families and the name Tata enjoys unparalleled prestige in India. Obviously both are secure in their own ways, but not a little on account of the shareholding the former commands without owning and the latter owns and commands. I have seen men in high positions become insecure both materially and psychologically. Material insecurities can be provided for and insured against. One way to deal with psychological insecurity is to create a circle around oneself consisting of trusted, reliable and respectable supporters. It's important that these people are supporters.
Neither Tata nor Premji seem to have gathered such supporters around them. Instead they chose professionals for their competence and commitment. In case of Narayan Murthy, he had the co-founders - all professionals - with him and from the beginning he was the first among the equals. This had a lasting impact on the evolution and growth of Infosys. Consensus building, value sharing and transparency were thus written into the genes of the organization. Infosys truly inaugurated the era of the New Age Ethical Business in India.
Contrast the three with Raju, the only MBA in the leaders of IT majors in India. (Premji left the programme half-way for personal reasons) He started with construction business and without heritage or business pedigree, went on to create Satyam riding the wave of IT emergence in India. In spite of the growth, Raju was never certain of his place among the majors. He tried to mirror Satyam on GE by adopting their practices and mantras. What did Satyam represent that was different, valuable and loveable? It was entrepreneurial, fine. But the term 'entrepreneurial' has many unsavoury connotations as well. What else? Raju felt empty inside. He refused to accept that success had happened to him and he had little to claim for it. You know it, but you refuse to accept it. You are in denial.
So he surrounded himself with "success" - awards for corporate governance, awards for corporate social responsibility and whatever else. He surrounded himself with "supporters" - note that many of the independent board members were Telugu speaking persons. In the end, he tried to surround himself with real estate. He tried to create a make-believe world around him and spun the fiction of numbers to keep that world intact.
But the hard world dashed against the make-believe world and it came crashing down. The success of Satyam owes itself to the entrepreneurship of Raju, the hard work of Satyamites and a favourable market environment. The twist in the tale came from Raju's refusal to accept that his role was limited and not larger-than-life.
Ratan Tata and Premji have been scions of business families and the name Tata enjoys unparalleled prestige in India. Obviously both are secure in their own ways, but not a little on account of the shareholding the former commands without owning and the latter owns and commands. I have seen men in high positions become insecure both materially and psychologically. Material insecurities can be provided for and insured against. One way to deal with psychological insecurity is to create a circle around oneself consisting of trusted, reliable and respectable supporters. It's important that these people are supporters.
Neither Tata nor Premji seem to have gathered such supporters around them. Instead they chose professionals for their competence and commitment. In case of Narayan Murthy, he had the co-founders - all professionals - with him and from the beginning he was the first among the equals. This had a lasting impact on the evolution and growth of Infosys. Consensus building, value sharing and transparency were thus written into the genes of the organization. Infosys truly inaugurated the era of the New Age Ethical Business in India.
Contrast the three with Raju, the only MBA in the leaders of IT majors in India. (Premji left the programme half-way for personal reasons) He started with construction business and without heritage or business pedigree, went on to create Satyam riding the wave of IT emergence in India. In spite of the growth, Raju was never certain of his place among the majors. He tried to mirror Satyam on GE by adopting their practices and mantras. What did Satyam represent that was different, valuable and loveable? It was entrepreneurial, fine. But the term 'entrepreneurial' has many unsavoury connotations as well. What else? Raju felt empty inside. He refused to accept that success had happened to him and he had little to claim for it. You know it, but you refuse to accept it. You are in denial.
So he surrounded himself with "success" - awards for corporate governance, awards for corporate social responsibility and whatever else. He surrounded himself with "supporters" - note that many of the independent board members were Telugu speaking persons. In the end, he tried to surround himself with real estate. He tried to create a make-believe world around him and spun the fiction of numbers to keep that world intact.
But the hard world dashed against the make-believe world and it came crashing down. The success of Satyam owes itself to the entrepreneurship of Raju, the hard work of Satyamites and a favourable market environment. The twist in the tale came from Raju's refusal to accept that his role was limited and not larger-than-life.
Tuesday, September 29, 2009
Welcome to Wipro
Welcome to this blog on Business Ethics. We discussed the WIPRO case today in the context of whether business philosophy can work in India.
By business philosophy we mean very fundamental meanings attached to the activity of business, the ends and the means used to achieve the ends. For some business is a family tradition to be continued. For the modern entrepreneur it is an achievement to be based on one's technical expertise. It could also be seen as amassing of wealth. For Azim Premji, it is no doubt the continuation of a family tradition of delivering value to the customers in a clean manner. But continuation has meant adding innovation, doing something new that again adds value to the customer.
The nature of the IT (software) development business with overseas clients demands utmost trust and confidentiality. Because you are dealing with the client's business processes. That in turn places a responsibility on the top management to ensure that standards of integrity are maintained down to the juniormost member of the team. You need a code of conduct to be manualised so that every member of the team understands where s/he stands. But that's not enough. You need to build this element of integrity into the selection process, appraisal process and development process. One also knows that there would be cases of doubt and ambiguity. So Wipro has set up the SOS line, on which younger members can seek wiser counsel of more experienced managers on ethical dilemmas.
And in spite of all this, there would be the odd case of unethical conduct, which needs to be dealt with in a fair and ethical manner. "Where there is body, there is disease." A healthy body regains normalcy much faster and with least intervention. In the same way, an ethical organization deals with cases of unethical conduct in a manner that preserves the faith of both the insider and the outsider in the company's commitment to ethics. Wipro has demonstrated such a commitment and that is why it has grown to be an IT major.
A constant refrain of ethics runs the risk of sounding and becoming self-righteous to the point that other points of view have no chance of being heard. This is a constant danger in organizations that place heavy emphasis on ethics. The right and the wrong become rigid and iron rules and no longer remain discussable. Once people realize that dialogue is not a possibility they start packing their bags.
By business philosophy we mean very fundamental meanings attached to the activity of business, the ends and the means used to achieve the ends. For some business is a family tradition to be continued. For the modern entrepreneur it is an achievement to be based on one's technical expertise. It could also be seen as amassing of wealth. For Azim Premji, it is no doubt the continuation of a family tradition of delivering value to the customers in a clean manner. But continuation has meant adding innovation, doing something new that again adds value to the customer.
The nature of the IT (software) development business with overseas clients demands utmost trust and confidentiality. Because you are dealing with the client's business processes. That in turn places a responsibility on the top management to ensure that standards of integrity are maintained down to the juniormost member of the team. You need a code of conduct to be manualised so that every member of the team understands where s/he stands. But that's not enough. You need to build this element of integrity into the selection process, appraisal process and development process. One also knows that there would be cases of doubt and ambiguity. So Wipro has set up the SOS line, on which younger members can seek wiser counsel of more experienced managers on ethical dilemmas.
And in spite of all this, there would be the odd case of unethical conduct, which needs to be dealt with in a fair and ethical manner. "Where there is body, there is disease." A healthy body regains normalcy much faster and with least intervention. In the same way, an ethical organization deals with cases of unethical conduct in a manner that preserves the faith of both the insider and the outsider in the company's commitment to ethics. Wipro has demonstrated such a commitment and that is why it has grown to be an IT major.
A constant refrain of ethics runs the risk of sounding and becoming self-righteous to the point that other points of view have no chance of being heard. This is a constant danger in organizations that place heavy emphasis on ethics. The right and the wrong become rigid and iron rules and no longer remain discussable. Once people realize that dialogue is not a possibility they start packing their bags.
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