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Updates - 30 April 2006
The world's most modern management - in India I have seen the future of management, and it is Indian. Vineet Nayar, president of India's 30,000-employee HCL Technologies, is creating an IT outsourcing firm where, he says, employees come first and customers second. "Everybody was aghast the first time I said that," admits Nayar. Here are some things I can say about him with confidence: He is good at motivating employees, very committed to building a great team, but a little shaky on getting things done on time. These are not my observations. They are what his employees told him in an extraordinary process of upward evaluation he implemented last year at HCL. Every employee rates their boss, their boss' boss, and any three other company managers they choose, on 18 questions using a 1-5 scale. Such 360-degree evaluations are not uncommon, but at HCL all results are posted online for every employee to see. That's un-heard-of! And that's not all. Every HCL employee can at any time create an electronic "ticket" to flag anything they think requires action in the company. Explains Nayar, "It can be 'I have a problem with my bonus,' or 'My seat is not working,' or 'My boss sucks.'" The ticket is routed to a manager for resolution. Amazingly, such tickets can only be "closed" by the employees themselves. And Nayar is vigilant that managers not intimidate employees about creating or closing tickets. Managers are evaluated partly based on how many tickets their departments are creating - the more the better. Nonetheless, I'm sure it continues to be recommended not to be the employee who regularly posts a "my boss sucks" ticket. There is a method to what some might consider madness. The winners in IT, Nayar believes, will be those that deliver the best results to customers. Employees who are secure and happy can better focus on customer success, he thinks. So he aims to build an organization full of highly-skilled employees dedicated to creating customer value. He wants to make HCL, which employs 20 percent of its workforce overseas, the place people most want to work. Nayar is also looking to solve a problem that looms large for Indian IT companies these days: Attrition. The best employees are increasingly the hardest to retain. Nayar wants anyone who leaves for a job elsewhere to end up frustrated. Early signs suggest his bold strategy is working. Nayar has only been president for a year, a tumultuous one in which most of these innovations have been implemented. But in that time the attrition rate has dropped in half, he says; the stock more than doubled - HCL Technologies' market cap is $4.2 billion. Revenues last year grew 34 percent to $764 million. In January HCL won one of the biggest Indian outsourcing contracts ever, a three-year deal, reportedly worth $300 million, with European electronics retailer DSG. HCL's innovations are not only managerial. The company aims to become a strategic partner with customers by also working with them on business process management and by managing infrastructure remotely, a business it pioneered in India, says Nayar. It has succeeded with AMD, a marquee customer for which it does all those things. Another key customer is Cisco, a 10-year customer with whom HCL is now embracing another form of innovation - shared risk. Since February, HCL has been completely responsible for engineering one Cisco product. It gets paid based on how well the product sells. In engineering all this innovation, Nayar's humility appears to be a potent managerial asset. Last week he wrote a letter to the company's employees marking the anniversary of his taking the job (He worked his way up over 21 years.). "Please excuse me if I stepped on any toes or hurt any feelings in trying to hurry the transformation agenda," he wrote. "I am here as long as I have your support and confidence." Don't you wish more managers had the strength to speak like that?
Putt-Putt Tractors, Revved-Up Goals India's Anand Mahindra isn't thinking small about the global vehicle market. When young Anand Mahindra--now managing director of $3.27 billion (market cap) Mahindra & Mahindra, the flagship of his family's business group in Mumbai--returned from the U.S., armed with an M.B.A. from Harvard, it wasn't to an India of entrepreneurial license. He recalls enduring death threats over a strike as general manager of a group company in late 1984. Mahindra, 50, has come a long way since. At his current post he's transformed a stodgy, conservative outfit making tractors and off-road vehicles into a multinational corporation with a presence on several continents. For now it would seem that M&M is firing on all the right cylinders. A robust tractor market in India, a burgeoning passenger-car market in Asia and an ongoing boom in auto-component exports are all expected to further boost its revenues, which grew by $400 million to $1.5 billion in fiscal 2005. Moreover, as highway construction gains speed in India--the so-called Golden Quadrilateral project is linking major urban centers with 3,700 miles of multilane thoroughfares--M&M hopes to put more wheels on those roads. He sexed up M&M's lineup by rolling out a new sport utility vehicle, the Scorpio. The SUV contributed nearly a fifth of the company's unit volume in fiscal 2005 and may reach 22% this year, even with higher fuel prices. The Scorpio--Mahindra's pet project--was developed from scratch for just $120 million, maybe a fifth of what it would take in Detroit. Yet it's still the single largest product investment the company has made. The making of Scorpio is now a case study at the Harvard Business School. Mahindra roped in suppliers to do the designing and the testing. For instance, the Scorpio got its gas engine from Renault, its claddings from Michigan-based Visteon Corp. and its front axle from Dana Corp. of Ohio. It also signifies M&M's global quest. Scorpio has been launched in parts of Europe and the Middle East, and is trying to create a splash in South Africa. Productivity has been increasing steadily since the strike of 1991. In 1994 the company found that while it used to take 1,230 workers to manufacture 70 engines a day, this had improved to the point where 760 workers produced 125 engines a day. In fact, it's the tractors--30% of M&M's sales--that are also the primary international wedge. The company has been the market leader in the sector in India for over two decades. Mahindra, whose company is less than a tenth the size (in revenues) of world leader Deere & Co. of Illinois, audaciously wants to be number one in the world--in unit terms--by 2010. M&M's internal research suggests this will mean almost doubling this year's expected output of 85,000 tractors. The company also seeks to double the export share of tractors, now 10%. Though still small in international terms, M&M can take heart that it is the largest tractormaker in one of the world's largest tractor markets. Nearly 250,000 were sold last year in India, with its many independent farmers, according to the Tractor Manufacturers' Association, an Indian trade group. That's more than in the U.S. India's tractors have much lower horsepower than those in the U.S. or Western Europe, because farms are smaller. Also, lower horsepower costs less. The U.S. is a key market for M&M exports. It has 270 dealerships in the U.S. and two assembly plants in Texas and Georgia. M&M sells its less-than-70hp tractors for about $10,000 to hobby farmers. Mahindra USA recorded $128 million in revenues last year. And earlier this year it took over the largest auto-forging company in the U.K. Now M&M is eyeing China, as well. Last year it took an 80% stake in Jiangling Tractor. In addition to selling in the Chinese market, M&M wants to use the country as a base to export tractors to the U.S. It has also started buying components from China. What a difference 20 years makes.
India
Hopes to Attract Media Jobs For virtually everyone in TV except the celebrity news anchor, it will be a sobering thought. According to two of the most ambitious companies in India, nearly half the media industry should logically be relocated to India. Genpact, the largest provider of offshore outsourcing services in India that is 33%-owned by General Electric Co., has allied with New Delhi Television, a leading broadcaster, in a 50-50 venture that breaks fresh ground for the industry. Their new venture, which will initially target costly technical, editing and production functions in the audio-visual segment of the industry, is the latest sign of the growing threat to media jobs in the U.S. and Europe from low-cost offshore locations. The companies will initially market their services to studios and TV networks looking to lower the cost of digitizing libraries of old programs — creating graphics and subtitles, editing raw footage, tagging material and archiving programs. Prannoy Roy, NDTV's chairman, said “70% of the global media and entertainment industry, valued at $1.3 billion in 2005, could be digitized. Of that, 70% could be outsourced, potentially to India. There are 50 years of analog tapes lying in vaults one mile long and they all have to be put onto disk, logged and meta-tagged. It's a massive one-off task that in many ways is like the Y2K debugging exercise of the late 1990s." The relocation of high-value media jobs to India has begun to take off in other segments of the industry. Reuters moved 200 jobs to a facility in Bangalore that was inaugurated in October 2004. Hollywood's animated film industry also has shifted significant business to India. "Shrek 2," "Spider-Man 2" and "The Chronicles of Narnia: The Lion, the Witch and the Wardrobe" benefited from India-based animators and visual effects specialists.
In India, "om" is where the laugh is In the grainy half-light just after 6 a.m., a few dozen men and women gather in a small park in Bangalore, greeting one another beneath a canopy of flowering trees. Ranging in age from 40 to 80, they clap, form a circle--and unleash a gale of uproarious laughter. "Ho ho. Ha ha ha. Ho ho," they guffaw, sides heaving and heads thrown back to the sky. A passing jogger doesn't give them a second glance, and why should he? They're the regulars from the Mini Forest Laughter Club, commencing their daily ritual of smiles, giggles, chortles and belly laughs that--in combination with stretching and breathing exercises--make up the quintessentially Indian discipline of "laughter yoga." Named for the park where it meets 365 days a year, even during the drenching summer monsoon season, the Mini Forest Laughter Club is made up of middle-class retirees, homemakers and businessmen, among others. It is one of scores of such clubs in this high-tech city. Invented by a Bombay physician, Madan Kataria, in 1996, laughter yoga is predicated on the idea that "laughter for no reason" can promote spiritual well-being and health benefits, such as lowered blood pressure. The concept has given rise to laughter clubs in India and a number of other countries, including the United States, and inspired a 1999 documentary by celebrated Indian filmmaker Mira Nair. "Really, they are crazy. They are addicted so much, they don't like to miss even a single day." M.R. Basavaraju, a retired state bank officer whose business card identifies him as a yoga therapist and "laughtologist", who founded the Mini Forest club, said of his fellow laughter enthusiasts. The morning session unfolds according to well-established ritual. After the introductory bout of "executive laughter," the group warms up with more traditional yogic routines. They rub their abdomens in a circular motion while repeating "Om," the sacred Hindu mantra, then extend their tongues and pant like dogs. The laughing commences in earnest with a minute or two of "stretch laughter," which consists of laughing while miming the shooting of a bow and arrow toward the sky, followed by a cleansing burst of "blaster laughter." "Breathe in--blast with the laughter!" commands Basavaraju, prompting an explosion of loud guffaws. During the 45-minute session, the group partakes of "ice cream laughter" (a low chuckle that is savored slowly), "coffee laughter" (performed while pretending to pour coffee) and "mobile laughter" (initiated by shouting "Hello! Hello!" into an imaginary mobile phone). The hilarity is infectious, especially when the members parody a mirthful lion--opening their mouths wide and wiggling their tongues--in the exercise known as "lion laughter." Some laughter exercises are more subtle. "Meditative smile, please," orders Madhav Pai, 64, a retiree. Interspersed with the laughter are various stretches as well as facial exercises to strengthen the eye muscles and tongue. As the session winds down, it acquires more of a spiritual dimension. After directing the members to hold the left hand up and the right hand down, Basavaraju tells them to "feel yourself like an antenna," with "cosmic energy" entering the body through the left hand and "negative energy" leaving through the right. "Shanti, shanti," he says, repeating the Hindi word for peace. "Observe the inner silence you have created." The meeting ends with "appreciation laughter"--members laugh while flashing each other the OK sign--and "garland laughter," in which they garland one another with imaginary flowers. |
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