Monday, January 12, 2009

Management Style of Satyam

I've been reading up on the debacle facing Satyam, one of the trailblazers that essentially started the outsourcing industry in India. B. Ramalinga Raju, one of the co-founders, took a big risk to get John Deere, a large American farming and construction equipment manufacturing company, on board as his first customer. Since then the company has not grown at the same pace as other outsourcing firms, like TATA, Infosys and Wipro. This has a lot to do with the fact of Mr. Raju's management style, a style that I have witnessed numerous times since arriving in India.

In an earlier post, I discussed the amount of deference and kowtowing that is expected from their employees' behavior toward them. I also discussed the bevy of oily yes-men who typically surround these executives. The executives make decisions regarding substantial change in their organizations only when forced to do so. Mr. Raju's behavior seems to have been making a typical short term decision (very common here) and wanted the board to make two acquisitions in two construction companies, both run by his sons and in which he and the co-founder also owned a considerable stake. This is by far, not the most egregious error made by a CEO, but it displays the lack of ethics typically found at the upper level of management.

One of the bosses I've had here had no issues with using copyrighted content from competitor web sites to build his own. He had no issues with going out stealing the entire UI and design of their sites, either. It was more critical to him to get sites launched without understanding the consequences of those actions in regards to organic search engine optimization, something that was quite critical in that particular industry.

Another boss refused to make any upgrades to a site left so far behind in style that it looked like the personal web page of someone working for the PTA built in 1995, with hokey backgrounds, popup advertising, blinking graphics - you name it. It took 6 months to get rid of the popup ads, and changes to the interface have just recently launched (over a year).

These firms have very clear hierarchies, and one must work with each level to move on to the nest level to get things done, if you want the job specified correctly. The way it works is that as a VP, Group Leader or middle manager, you need to talk to one of the owners to approve a new project. And most people don't do their homework. Sometimes a boss hears a buzzword from someone and says we need to do "blank" right now. The boss has no idea what it exactly is or how it may impact on all goals that each department is working toward. Many times it is doomed to fail.

One thing I don't see done here is empowering Marketing to take their rightful place in the hierarchy and enable them to continually evaluate the marketplace and develop strategies and tactics to maintain and increase market share and maximize profit potential. Marketing needs to establish a need and a concept for fulfilling that need in the marketplace in order to drive sales. Marketing needs to do research on that need to assess the universe of solutions currently available. Marketing must answer a very important statement: "To really succeed, you have to do things your competition won't do, can't do or hasn't even thought of." Only then can you start the new project specifications.

Marketing is all about differentiation. It's about branding, reputation, and quality, too. Brainstorm a series of ideas to address the statement above. Ideas can and should come from anyone in the company, from the lowliest office boy to the owners of the company. This can't happen here. Once you have those ideas, meet with the other people involved who work in other parts of the business. Talk to the designers. Talk to the programmers. Show them current competition, show them your ideas, and get feedback. Then and only then, the product specifications should be developed.

These specs should take about a week to write, especially if you have met with all the stakeholders previously. Then develop the timeline for production and QA. Have the stakeholders agree to the timeline. While the project is in development, each group can work pretty much in tandem. Designers develop designs based on the UI from the product spec. Programmers develop the backend code that snaps into the back of the graphics. Copywriters develop content. Marketing plans out the launch. Most web-based technologies like widgets, social proofing, etc. should only take a few weeks to produce an alpha version which all stakeholders review. Quality issues should be addressed, while marketing distributes beta invitations. When the product is ready for beta, let everyone know about it by any means possible. In the internet world, that means publishing every week until full launch. And full launch could be months, even years (how long did friendster stay in beta?).

Upcoming trends are microblogging, customization, and localization. Our attention spans have been decreasing year after year. Software development, which is the backbone of the Internet, has to be done with an eye toward what the user thinks they need and what they want. It shouldn't be a buzzword an owner hears at a conference, and projects shouldn't be implemented by programmers without feedback from marketing at the very beginning of the project. I've seen resource-heavy projects spend six months sitting around, never completed, while short term, highly viral projects languish. I have watched projects completed and launched, independent of Marketing, that were just awful because no one asked Marketing if the visitors need it or even want it, nor did they interact to develop a simple and professionally designed interface. DBL (Dead before launch) situations occur all over the place.

Satyam suffered from the control freak style of management, short term vision, and a serious lack of ethics. When you are considering joining a company here in India, ask about the company structure. As about Product or Project Specifications. If they don't have them, don't even consider working there. If they do, ask how much time it takes to get a project from spec to launch; ask for an example. Ask them how many times does a typical product spec change before launching. As about team sizes and turnover rates. This can provide you with valuable insight into the company and its management style and help you make a wiser move up your career path.


  1. Jeanne... do you see any change happening to the management mindscape in the post-Satyam, post-Wipro World Bank ban scenario in Indian companies... given the top-heavy management styles?

  2. Good question. What mystifies me is that some of the top executives in India have been educated, trained and have experience working in MNCs and outside this country and know how other companies work. It's possible that it's simply easier and more comfortable for them to resume the management style of their fathers.

    I will write a more detailed post to address your question in more detail. Thanks for the good question. I hear there are red flags going up at Wipro - they may be next...