The corporate lingo

I live in a apartment complex, where most of them are working in the IT industry. We have formed a committee to take care of various aspects like resident grievances,moderating accounts, maintaining equipments, planning budgets and organizing events etc. We also appointed a operations manager to execute these activities in a planned manner. The committee has various positions (President, Vice-president, Secretary etc..) which in most of the cases held by folks who are in entry/middle level management positions in IT industry. These folks use ‘corporate lingo’ in every other opportunity they get. Recently I came across couple of interesting scenes.

Scene 1: Operations manager’s resignation

Last Sunday Mr.President of the association called for an ‘urgent’ meeting to announce the resignation of the operations manager. Here is what he has to say:

“This is to inform you that our operations manager X has resigned from his current position. He got such a lucrative offer that its impossible for us to match it. Looking from his career prospective it is a good decision and he will grow well in his career by taking this decision. I have accepted his resignation and asked Jayakumar (me), Gupta and Krisha to work on the transition. The last working day of X will be July 5th 2008. Let us wish him all the best!”

I was stunned to hear such speech and thought “Am I sitting in company meeting or apartment
association meeting?”. I know X (operation manager) personally and he is a 55 year old ex-central government employee. He opted voluntary retirement, took up the current operations job just to keep him occupied and make some decent money. What career aspirations or growth he can have at this age? Who can offer a high-growth career for him for looking after mundane things?

Scene 2: Discussions regarding rain water harvesting

Couple of months back we had another meeting to discuss the possibility of installing rain water harvesting system in the complex. During the same time we were purchasing water from tankers as our borewell levels has gone down significantly. Here is what Mr. Vice president has to say:

“How much we will be spending for installing the system? By installing this how many meters the ground water will come up? How much amount we can save by stopping external tankers? Can you provide me the overall Return-On-Investment (ROI)?”

This was a bumper to me! It was exactly sounding the way my project manager asks questions to engineers by keeping the commonsense in a corner. Doesn’t he know that rain water harvesting is a community initiative? Even if he don’t know can’t he ask for more details? Why should he ask typical “manager” questions and quickly jump into ROI?

According to me 95% of things in life and work is all about applying commonsense. One need to understand ‘what-to-apply-where’ and ‘one-size-doesn’t fit-eveyone’.As I mentioned above Mr.President and Mr.Vice presidents are a mid level manager IT managers primarily doing people management. They got used to asking same set of questions in their workplace, which got
carried away to apartment association meetings as well. If at all they would have applied basic commonsense,those questions would not have come. As time progressed, the ‘corporate lingo’ got into their blood.

Will they ever learn the importance of commonsense?

IT.India part – II: Workplace diversity

Before reading this post, please check out this link for my opinions about diversity.

Here is the latest buzzword among Indian MNCs — ‘Workplace diversity’.

The amount of non-sense going behind this topic is pretty interesting. It also shows how, we Indians bow our heads and accept things without asking any questions. Whatever told by the parent organization in US/UK is taken as a ‘mantra’ and we end up implementing it without knowing head or tail of it. Especially the senior management of India based MNCs has no clue of the rationale behind many of such initiatives. The latest ‘workplace diversity’ campaign is a classic example.

According to ‘Wikipedia’ the diversity in workplace or business is defined as:

The “business case for diversity”, theorizes that in a global marketplace, a company that employs a diverse workforce (both men and women, people of many generations, people from ethnically and racially diverse backgrounds etc.) is better able to understand the demographics of the marketplace it serves and is thus better equipped to thrive in that marketplace than a company that has a more limited range of employee demographics. An additional corollary suggests that a company that supports the diversity of its workforce can also improve employee satisfaction and retention.

What does that mean? It’s very straight and simple. When hiring new employees organizations need to make sure that they hire people from diversified background. This really helps in business as different set of people bring strengths in different areas. For example: the diversified mutual funds have proven track record of giving consistent, better returns for a long period of time. This is mainly because it has stocks from various industries in various proportions. When one sector is not doing well another will balance it, which eventually keeps the ROI intact for the investors.

In western countries, organizations promote diversity by — hiring more women candidates (gender diversity), physically disabled, African Americans, Asian Americans etc to have the proper balance in the workplace. Even in those developed countries (like US) they are very particular and make sure all sectors are represented properly. In the past, initiatives like ‘Affirmative action’ ( were taken to promote the workplace diversity at corporate level.

As we all know, US/UK based companies have started their offshore centers in countries like India to take the demographic advantage. Now these western organizations want to promote initiatives like ‘workplace diversity’ India. What is the result? The ‘workplace diversity’ is narrowly interpreted as ‘gender diversity’ and companies are hiring women candidates with special recruitment drives. Here is the pattern of advertisements I get to see in job portals and local news papers.

“Diversity initiative for women candidates at company XXX”

And one of the HR guys makes a generic statement like:

Hiring more women into the organization has brought in stability and
maturity within the organization. We find that women are also better at
multi-tasking and move more easily from one project to another.
I can agree on the advantages that gender diversity brings in; I am not agreeing the narrow interpretation these companies are doing a about diversity. When it comes to India, it is the country with diversity at its best. People are different in terms of food, culture, customs, caste, religions, regions etc and no-body need to do any diversity hiring in India as a special drive. When a team has ten people, they are naturally diversified given India’s nature. Given this Indian context I am not able to understand how hiring more women candidates will bring in strength to any organization? This might have worked well in the western world, but requires some amount of retrospection or customization when it comes to India.

The local management and HR folks in India need to evaluate such initiatives before implementing. This also shows how much un-aware the local folks are when anything new is asked to be driven. I have one simple word to tell them: ‘Grow-up!’

IT.India Part I : Offshore R & D

For the past month or so the Indian rupee is getting stronger against the American dollar, which has come down to 39 INR compared to 45 INR. This is already bleeding Indian services companies and their Q3 numbers speaks for that. When the rupee was getting weaker these service companies used to make 4-5% of their margins just by keeping their money in dollars and converting them back during the results announcement. Nowadays Indian service companies are mulling multiple options to resolve this problem — six day working week, reduced hike for employees, productivity improvement, moving to lower cost geographies (like China and eastern europe) etc. With STPI tax sops are getting withdrawn by 2009, Indian IT companies are having challenging times ahead.

Let me take the example of product R & D happening in Indian companies as an example. Of course value creation can be done at multiple levels apart from R & D as well. Majority of MNCs which are having their engineering centers in India are working in the ‘Offshore R & D’ or ‘Engineering services’ model. In this model, the offshore team owns majority piece of the SW that goes as a part of the product and take the complete ‘delivery ownership’ from India. This is slightly better than the ‘pure-vanilla-service’ model which Indian service companies (like Infosys, Wipro etc..) are offering majorly.

To understand this slightly better, let me take ‘Core vs Context’ framework introduced by Geoffrey Moore’s latest book ‘Dealing with darwin’. Let us understand the four quadrants with
some new definitions:

Core: Processes that enable and amplify your chosen vector of competitive differentiation
Context: All other processes

This Core and context can be again classified on ‘Mission critical’ and ‘Non-Mission-Critical’ which leads us with four quadrants. See the picture below to get a better idea:

Indian service companies, which are offering ‘pure-vanilla-service’ come under the bottom right side of this model, which is popularly known as ‘outsourcing’. There is very little value addition can happen here as it falls under ‘non-core’ activity.

The offshore R & D organizations are operating under the top-right quadrant. This means the activity is ‘mission-critical-but-non-core’ portion. For example: if a company is working on a enterprise router, the offshore R & D team can work on adding new features, maintaining the existing code and do some level of program management. From the business point of view this is critical, because the product is generating revenue for the company at present. In a way this quadrant is higher in the product value chain, but still it is not coming under the ‘core’ portion of the company’s strategy. Because the work the offshore entity doing is not providing any ‘competitive differentiation’ to the parent company. On the other hand, the parent companies will place all the resources into developing core portion of the product.

Sitting in places like India, contributing into the ‘core’ portion is extremely difficult. Following are the major challenges Indian companies are facing now:

  • The offshore team is totally un-aware of the customer needs. They are far away from the customers and most of the technology products won’t get deployed in countries like India. I won’t see this changing in the near future because these ’emerging markets’ need to mature a lot before they start adapting any new technologies. Except for the areas mobility I don’t see any technology has taken off in countries like India.
  • The local job market is over-heated where retaining talent has become uphill task. Engineers jump jobs every 1-2 years and its very hard to build the product building expertise with this mindset. I have personally seen engineers dedicating 30 years in a same product and understanding ‘nuts-and-bolts’ it. Its very very hard to such stuff here.
  • The offshore leadership team is primarily grown in the engineering domain and lack business acumen. For example a second level manager don’t have much idea about the big picture of the overall product. They only possess expertise in areas like: resource management, delivery management and to certain extent program management.

Now, how does the future looks from here on?

At one end its hard to imagine any US/UK based company to offshore the ‘core’ work because it doesn’t make business sense.On the other end the offshore entity can’t do much because they don’t know the customer. In a way the ‘offshoring’ is stuck in top right portion (quadrant-III) of the Geoffrey Moore model. In my perspective, it will continue to stay there for a long period
of time until the local market gains significance. The local market growth will mainly depend on multiple factors like: Good governance, robust infrastructure, litracy and technology awareness. I would say the ‘india-offshore-story’ has just begun and it is foolish to start celebrations at this point in time. These companies have got to cover much more distance before they really achieve ‘value creation’.