Thursday, January 30, 2014

Managerial challenges in 2014 for mid-size software companies (in India).

Most of the mid-size software off shoring companies in India have been growing their business for past 8 years. They have substantially grown during this time and have globally expanded their services to many more countries.

I have noticed that there are many reasons for their success. To name some; most of these companies are run by their business owner or partners who are technically qualified. Their focus has always been more on USA and Canada from the beginning due to major cost difference in skilled labor cost. B2B business (projects) from USA, Canada and Europe was initially easy for them to grab. Demanding customers were comparatively less since low cost application development in India was just fine for them to manage their profitably of their businesses. Global image of India as an excellent outsourcing destination with highly skilled engineers was being established; thanks to companies like TCS, Wipro, Infosys, I-gate etc.

In nutshell, I would call it an “organic growth phase” which helped getting macro level success for many mid-size companies in the business of providing offshore services. Also there are many similarities observed in these companies.

While going little deep into my analysis, some visible flows have come up on the surface. During organic growth phase, customer satisfaction was on back seat and focus was always on high-volume execution, delivery and financial results. Management structures in most of the companies were orthodox (Old factory model of management) based on command and control and execution of task in fastest possible time was the main focus. Managers were controlling teams in “task master” manner. Most of these companies still use the same command and control systems and they  use “more pay for more task completion” as motivating tool along with the threat of job loss. 

When employees feel that speed, delivery and results are the only things that matter to their management, they start drifting away from "ownership" of their projects. Start becoming reluctant to risk taking and do not come out with new ideas, concerns, or even doubts since they feel unsafe to say what they have in their minds.

Even with all these flows, the overall success ratio was high between 2000 and 2012, why because demand for low cost services was much higher than the offshore service providers and there were enough knowledge workers available at low cost in India which enabled consistent development and delivery of services.

Like it happens with every new business, organic growth cycle has already started moving toward its end. It is also cropping up some new challenges for mid-size companies in current times.

Beginning 2013, it has been observed that B2B project inquiries from USA have substantially reduced (one of the reason could be president Obama’s restrictions on outsourcing). Clients have become much more demanding compared to previous years. More than project "execution & on time delivery", perceived value of "business benefit" is largely increased among service buyers.

Above changes in buyers behavior are increasing and also impacting both "customer experience" and "user experience". 

Unfortunately management strategies have still not changed in most of the mid-size companies and artifacts of it has resulted in unfortunate legacy systems which still exist in many companies. 

Many companies still consider monitoring employee output through their daily time sheet. Unfortunately long prevailing management structure of command & control system has blinded these companies to initiate the most important shift in their structure.

Organic growth phase in business also has a life cycle and signs of it are felt by almost everyone. It is time for the business owners to wake up and initiate the required changes in their management structure. A new structure which can inspire & enable employees to solve unanticipated technical or commercial issues. Identify, explore and introduce some different approach to execution and increase their customer life cycle. 

Allow identified performers to experiment new ideas leading towards better customer experience. Respect them by promoting to higher position. Senior managers are required to strike the right tone of transparency, knowledge sharing, direct support and humor to encourage their teams.  

Encourage employees in every possible manner and allow them to “Think-Learn-Move and Win”. It will be introduction of “execution-as-learning” in its true sense. Think about it.

Bhartesh Sagar
January 30, 2014

Wednesday, January 29, 2014

Time to change old version of talent strategy

Traditional methods of performance review and performance appraisal seems to have lost its effectiveness in terms of motivating the employees.
It actually creates more of negative effects especially when the employee is required to do the same kind of job and similar assignments again and again without any changes.

Management consultant Aubrey Daniels opinion is that performance appraisals can be ineffectual and even counterproductive. The reviews are "painful and don't work" and, furthermore, they "produce an extremely low percentage of top performers." And yet 99 percent of companies still do that.

It is quite natural that people lose job satisfaction if they are required to do the same job again and again. Periodical changes in their assignment or may be some different business vertical, some new technology or geography will work fine since they will bring new challenges. In most cases, you will find that employee will put in his/her best efforts into such assignments. 

When they achieve positive results, it creates double amount of job satisfaction since they not only overcome the challenges but in a process they have learnt something new. How to create such vertically distributed opportunities will fully depend on the business owner and key stake holders’ attitude towards growth.
Sometimes changes are introduced in such a manner that the performing employee does not see any “rewarding values” in it. Abrupt changes in structure would be severely detrimental to the performing employees, legacy and overall company culture.

It’s a tough job however matured operation manager - COO will always be able to device new talent strategies that can enhance the internal capabilities without creating any ill feeling for employees. Through on-the-job training and re-skilling their performing employees for new platform and enable them to leverage on new business opportunities.

Think about it.

Bhartesh Sagar

January 29, 2014

Tuesday, January 28, 2014

Do I contribute values?

In India, traditionally almost all mid-sized companies with their employee strength between 100 to 350 are run by business owners / partners in conventional manner of command and control so they are internally more focused on cost to the company, bottom line revenue figures, productivity per resource, and processes that keeps their of command and control systems alive. They generally do not appreciate improvements in customer experience achieved through consistent efforts by an employee which sometimes d-motivate the high performers.

Fact is that result oriented employees, who have consistently proved themselves with their positive – high value contribution for years are the genuine assets for the company.

According to Jim Clifton – Chairman and CEO of Gallup Inc., “Great managers build development plans around every employee’s strengths. When employees work from strengths, nothing motivates them to achieve more — not money, not love, not vacations, not good benefits, not company volleyball games, not motivational speakers. And employees working from their strengths do win new customers.

Every qualified employee is looking at a job wherein he/she can make use of their knowledge and talents. For example; engineers gets much more job satisfaction especially when they go about fixing things by themselves, receiving customer feedback, make necessary changes and learn from it. 

Sensitive phase is when all time performer has gone down (little down) on his performance simply due to market and business volatility. 

Matured manager will have to such individuals and try channelizing their energy into right direction by enabling them with additional support, getting them the real time relevant data and allow them to experiment. They will mostly open up new windows, may be with some potential challenges but then they are the growth opportunities that can scale up the company / business. 

This can create very positive work environment in the company and resignation ratio will surely get reduced. Create some new policies for rewarding such bold, well-apprehended attempts for those who have tried to break through the conventional limitations.

  1. Enable performers with the higher opportunities and provide more resources to optimize their talents for outstanding creative solutions
  2. Remember and be patient with problem solvers since that they are the closest to the problem.

This will mostly depend on the intelligence level and maturity level of a senior manager. Command and control kind of management can have adverse effects which ultimately will result into increase in resignations.

One question that every senior manager should ask himself, “Do I contribute values to the company worth what I am being paid?”

Bhartesh Sagar
January 28, 2014

Tuesday, January 21, 2014

Success criteria for SME in India

Common life cycle phases for all businesses are known to everyone. They normally start with;

        Organic growth phase:
Quantum growth in demand for the product or services, high volume of sales out, less marketing cost, easy money and profitability.

        Beginning of consolidation phase:
High volume of business with high sales and marketing cost, Profitability is almost maintained.

        Consolidation phase:
Volume of products and services start declining, moderate profitability, volatile market conditions, very high sales and marketing cost.

    End of consolidation phase:
Very few big players (companies) and specialty product / service organizations will survive in market, profitability will shift from high volume sales out of products / services in to low volume sales out of high-end products and services and replacement market will open up. Crucial survival issues will crop up for small and medium size companies. Merger and acquisition will increase.

My observation is that in India, most of the business owners of small and medium size enterprises (SME) have their success parameters traditionally based on their own early retirement or on how much amount they will get when they sell their business. There is third factor which is “appreciated value of the business premises”. So when consolidation phase is started, they become confused about where your business is going, start becoming directionless and start feeling exhausted with the unproductive work load.
Decision to scale up or scale down their business solely depends on their own capability for embracing the risk, learning from past mistakes, energy and interest.

Bhartesh Sagar

January 21, 2013

Friday, January 17, 2014

What is ‘actual cost’ of losing employees?

Can we think about the ‘actual cost’ of losing employees?

 All most all companies across the globe are deeply concerned about their employee turnover and for some industries such as software outsourcing service providers in India; their attrition ratio is almost 25% to 30%. Question is why some employee/s that has scored high on commitment to the company is now found low on energy? Why is he/she looking at other options? What is d-motivating him/her?

Employees, involved in active client communication are always seen as brand ambassador of the company by clients. If employee satisfaction and employee engagement are not taken seriously, it can have negative impact on client.  

Many articles, white papers, blog and suggestions are published on it from multiple perspectives. I personally feel that micro analysis of below mentioned factors can help to great extent in understanding the route cause, analyze and identify ways in which some sound strategy can be formed that can help reducing high turnover of employees.

Competence of an individual is highly influenced by a number of external factors like:

  •         Degrees of low energy
  •         Levels of ownership
  •         Levels of motivation

There are many other factors however these three factors seem to me more important and clearly indicative for the management to initiate corrections in their policies.  Periodic assessment and ongoing corrections on above factors are crucial for every company to ensure reliability of their key employees.

Employees’ behavior is required to be aligned with satisfactory customer experiences. Think about it.

Bhartesh Sagar

January 17, 2014

Monday, January 13, 2014

Do you know what it means by “Fungible”? A word given by IBM

"Fungible" is a new word introduced by IBM and they have been using it within IBM to describe workers who are “virtually vague and indistinguishable from others” in terms of the value of their contributions in the workplace. Now a days In many companies, you will find such people who are indistinguishable and always looking for someone’s hand holding for every task and decision making. Proactively they will never try finding ways to add value in exchange for their own recognition and the opportunity to grow professionally. 

They do not have their own ability to think or innovate or have vision for big picture so they simply try working with weak employees due to their inability to delegate. They are always waiting for the boss to direct him on every single matter and this is a clear sign of “Fungible” manager.

Such people will simply prefer to work with inefficient, lazy and boot-licking juniors who will never criticize them. It also creates some new issues like efficient employees are reluctant to come up with new ideas and feel that showcasing initiative will becomes a threat to them especially when there is a “power and status” kind of management ruling in the company. Just imagine how many above-average employees out there might have suffered by such incompetent “Fungible” managers?

Sometimes such clueless managers do get financial benefit simply because they have been able to impress their bosses during an interview. It could even be the deliberate attempt by business owner or key stakeholders to appoint such "Fungible" managers who cannot efficiently manage their portfolio and remain dependent on them. Their visibility is too common now a day in mid-size companies in India.

In a long run if they continue looking at them for hand holding, very soon their bosses will lose interest in such person. One of the hard realities is that if you want respect, then you don't actually work "for" a company Instead, you work "with" a company.

If management wants people to be responsible, provide power to them along with timeline for visible results. Change the power structure. Change the company culture.

Bhartesh Sagar

January 13, 2014

Thursday, January 2, 2014

How important is employee energy for the organization?

Every activity of the employee is a result of large scale and extensive nature of energy prevailing in their department. Collectively it will have ultimate impact on the overall work environment of the department and the company. 

You don't build a business - You build people and then people build the business. This is the hard reality. Efficient energy usage by employees at work place is of significant consequence to every company and this is something that should be carefully managed by the person in leadership position.

It is always from the interactions of some people, one can recognize the origins of sensible (as well as irrational) employee behavior. Without being specific to departments or on single character behavior, reality is that one cannot expect good results to be delivered when their employees do not perform their jobs with full energy and job satisfaction.

Individuals normally accumulate their own perceptions into their mind and use it for their tasks such as planning, evaluating possibilities, knowledge gained from the many direct and indirect experiences; accordingly they manage their daily functioning and decision taking.

A good leader will always focus on employee needs of the department for understanding and exploration. They need to learn and understand the way in which the specific work environment supports or hampers employee needs since this is likely to affect everything from behavioral competence to job satisfaction and the interrelationships of all employees within the department. They all are highly interrelated with each other.

Team-based problem-solving and brainstorming are some of the most effective cluster-based exploration tools that a leader can use through which they can explore and identify employee issues and their department need. Active discussion will also help and allow employees to expand their thought process - understanding.

Real issue is when a person in leading position has his own mind frame based on limited domain knowledge and experience, uses the power of position and drive employees as per his own (right or wrong) understanding assuming that this is the right way of performing the job. They never take pains to get into self experience and perform the employee task so they are never aware of the actual pain points. They mostly behave like a task master who will have absolute negative effects on moral of the employees. Chained reaction will also affect the group behavior. After that you cannot expect employees to perform their jobs with full energy.

Active participation in the process and self-experience of performing the task will prove to be meaningful action rather than acting as task master and playing around with moral of the performing people. By the time damage is done, it will be too late.

Think about it.

Bhartesh Sagar

January 2, 2014