When my niece was graduating from REC (NIT) Surathkal I urged her to join Wipro or Infosys. Explaining that it was a great place to learn in your formative years Vs joining a MNC. Her response was that MRC (Mass Recruitment Companies) are the last option in campus and only those who do not get any jobs land up in these companies.
Things have changed a lot for these companies. I recollect in the 1985 – 95 era Wipro & Infosys used to attract the brightest talent from India’s best institutions. Students preferred these companies to leading Banks, FMCG and at times even Global Consulting brands. Having worked in one of these companies for nearly 14 years I have fond memories of their golden years.
As I drove past Salt Lake at Cal last week and saw a dull, faded, torn signboard of the bright & radiant Rainbow Flower I was reminded of a quote that Scott McNealy made of DIGITAL (DEC) in the height of the dot com boom. We were lucky to have Scott in our induction program at Santa Clara and Scott is the epitome of a sharp, intelligent, aggressive CEO – on being questioned about the future of DEC he said ” DEC was a great company but its now gaining momentum and losing altitude” . I just hope this is not true of Bangalore’s leading companies.
There are many thousands who owe their first salary, first car, first trip abroad, first house, kids US citizenship, and many more fond memories to Wipro & Infosys. A whole generation has benefited. But sadly the sense of loyalty and passion that was exhibited by employees a few decades back is grossly missing. When you visit any online TOI / ET article about these companies almost all the comments are negative and downright nasty – and I ask myself what went wrong ? How could the Bangalore Tiger & modern Indias global picture boy take such a beating and plunge from its global high’s?
Yes the market has slowed and there is global recession, but these are companies that are still growing 15% + YoY and delivering margins in excessive of 20% – both of which when compared to the manufacturing industry or global IT consulting companies are still very very creditable. They employ over 150,000 people each and are juggernauts who even in recession hire in excess of 10,000 employees every year. So what is the possible reason for this negativity both internally & externally ? Is the 20 year wave getting over or is there more to it ? I spoke to many old friends in both companies , some who had just left and a few interesting observations emerged. These companies still have amazing leaders and people like TK Kurien are razor sharp, hard working , analytical wizards who are doing all that they can to turnaround, but I hope that some of these constructive suggestions help them in accelerating.
1. Where do you want to go, what do you want to be ?
20 years back this question had a clear answer, Vision was to be a leading player , get to 1B then 5B and be a global player to be reckoned with. The thrust was on Quality & Value for Money – Six Sigma , SEI CMM all of this made the mantra work. The dream was realized. What next ? Most people don’t see the dream for the next 5 – 10 years. Is it just chugging along with Growth , is there a radical change , how do we move from one plateau to the next high ? This question needs to be answered – not as poster across the company but a clear direction on where you want to be and what you want to be in the future. One needs to look beyond the quarter results, the 1% dip in EBIDTA, and the fear of losing the 2nd or 3rd position.
2. Applying Thought & Powered by Intellect – is it a ground reality ?
Thanks to amazing visionaries Narayan Murthy & Azim Premji the companies did practise what they preached for many many years. Applying Thought & Powered by Intelllect on the foundation of Integrity & Values was deep rooted. Every employee inculcated it & personified it. At a young age responsibilities were demanding and the sense of ownership was high. People worked 6 days, long hours and were thrilled and excited. Managers were fair, worthy were rewarded and competition amongst peers was healthy, attrition was rare.
Somewhere down the line the whole equation broke down – as quality of hires started going down , future managers were weaker, not all decisions were fair , growth slowed down – while expectations continued to rise , 15% + annual hikes and a promotion every 2 years was demanded. The fear of attrition resulting in many unworthy employees getting pampered and the work culture changed from brilliant hard working to arrogant mediocrity.
Add to this press reports on misuse of B1 Visas & financial irregularities have all cast a shadow on the impregnable fortress of integrity & principles which was the hallmark of these companies.
3. Managing scale – too fast growth a dangerous thing.
When you have 10,000 employees and a 30 % bench its manageable, but when you have 150,000 employees and a 30% bench you are paying salaries to 45,000 people for doing nothing. Thats killing. Thats exactly what is happening to these companies. The scale and size they have reached is unprecedented in India. Only the Indian Railways or SAIL probably have the experience of managing so many employees. Systems have struggled to scale, the personal touch is missing and the juggernaut is indeed huffing & puffing and like my niece pointed out – a MRC that no smart kid wants to join. Whats the solution ? Maybe its time to create smaller companies of 25 – 30 K employees each and allow them the roadmap of growing to 50K employees in the next 3 – 4 years. Restrict the size of each business with a CEO to a max of 50K and create scalable units.
4. Grooming managers with values
This is tough if you have high attrition. But what stops these companies from starting their own colleges in their own campus. Focused on CS & EC – a 4 year program that is geared to get them productive on day 1 , no finishing school training needed. Inculcate not just competency & skills but also embed values. If you do it right people will stick to you for long stints with no bond. I am happy to see that at least Wipro has started a University and I hope that in the near future they embark on a venture to backward integrate and start a graduate school for engineers.
5.The role of Finance Managers
In both companies the role of Finance Managers has far exceeded their scope. The whole purpose of functioning appears to be to squeeze that extra % of profit by cost cutting or innovative accounting. This is hurting and the core business team seems to be quietly resentful but helpless. Partly this is linked to the obsession with the Stock Market & the quarterly results – that obsession needs to wane down.
When Hema Ravichander the successful HR head of Infosys moved on and was replaced by the finance director it started to spell the beginning of the end of good robust people practices. A decline that accelerated over the years.
6. Are you a true blue Global MNC ?
Or just another Indian company with offices abroad. The desire to hire & integrate people of other nationalities has been attempted again & again but not worked. At a top level the core team of 20 people who on an average have spent 20+ years each in both these companies do not allow outsiders to integrate. Of the total 150K employees how many are Non Indian , if 90% of work comes from outside Indias shores should there not be at least 30% employees who are Non Indians ?
Are you an equal opportunity employer? Or do you have different travel limits, hotel limits, food limits for different levels of employees.
Many Sr Executives from Wipro & Infosys have left and joined Indian IT Companies or Startups – will say a company like Accenture look at hiring the top talent from these companies at C level jobs ? I doubt – or at least there is no history of the same.
Its time these companies stepped back and took a real hard look on the way forward. For the sake of Bangalore , for the sake of India lets hope they Gain Momentum & Gain Altitude. Here is wishing them all the best in the years to come as they traverse this challenging journey.