Business, Culture and Entrepreneurship

Saturday, March 15, 2008

Retention, culture and building products in non-urban India...

Sranamamitra talks about Sathyam's GramIT rural BPO project in a recent Forbes article and adds in her blog,

I would love to see more projects like this come about, get funded, and scaled in the commercial domain in India. I see rural / small town BPO as a very interesting opportunity for the next phase of India’s evolution as the world’s back-office
While undoubtedly true, her assertion does a mild disservice to a slew of entrepreneurs, who have already begun doing this, not just in BPO/KPOs but for tech software as well. Mainstream business media in India is still caught up with how many bodies a company has ("TCS plans Pune campus, to hire 10000") or how many million dollars they are going to invest ("Nokia Siemens to invest $100 m in India!") So the Sathyam story while definitely worth telling (and yes big firms can have bigger impact), it's the little guys who are leading the way. Entrepreneurial firms in India have been innovating in their business models, organizational development and culture, over the last decade by going to Tier 2 and smaller towns. Two such efforts that I have had first hand experience and knowledge of include an engineering development center in Vellore and Integra, a provider of pre-publishing services in Pondicherry.

Before I talk of these folks' experience, (better yet invite them to talk about it, to take a leaf out of Sramana's blog :-)) it is worth addressing one other question. A commentator on the original post asked,
Maybe you can comment on why Indians in 3rd or 4th tier cities would work for $1200 when they could move to a Tier 2 city and make many times that.
People in India, actually work in smaller towns (many times at or near their hometown) for the same reasons, that people want to work in South Portland Maine, or Kalispell, Montana - that they are not the Bay Area or Boston, where though the salaries are higher so are the house prices and commute times. And of course folks who work in small towns usually have (extended) families near. [Outdoor sports, unfortunately in most Indian small towns are yet to bloom unlike their counterparts in Montana and Maine :-(]

In both these companies the founders and operational managers discovered what Hal Rosenbluth (in his book "Customers come second") found when they set up their first backoffice in Linton, North Dakota. In his words - "a pattern of quality work, with no absenteeism and no turnover. [...] morale was high and that office was the epitome of teamwork." Granted Bangalore firms such as Zoho and earlier our own firm Impulsesoft have successfully built teams, sustained teamwork and retained folks through downturns and pay freezes/cuts, but the pressures of the big city exist as in the Bay Area. And in many ways everyone else has settled for 14-15% employee churn as normal.

It is possible to get away from this is what the folks operating outside Tier 1 and even Tier 2 cities have discovered - a motivated, eager to learn and committed, albeit at times inexperienced, workforce. One of the managers in Vellore stated it as, "People still have old fashioned views of work and contribution. Any engineer who moves to Bangalore whether he gains experience or not, gets an entitlement attitude within the year."

SNS Datascribe is another firm that I have come across recently, operating successfully for several years from the outskirts of Coimbatore. Anu and Sriram at Integra have grown from strength to strength operating out of Pondicherry. I will try to bring their voices to this discussion directly.

1 comment:

  1. Mark wrote


    I had an early experience with this when I joined the editorial staff of Byte Magazine in its heyday in early 1981. Byte was located in a small town (pop. 5000) in rural southern New Hampshire, about 75 miles northwest of Boston. A spinoff of an even earlier journal of the then budding microcomputer industry, Byte was comprised of mostly local people who had never worked in the publishing industry before. I was probably the first staff member with real publishing experience, having transferred there from another part of McGraw-Hill in New York City, which had recently purchased the magazine. The differences between Byte and my New York office couldn't have been greater, both on a publishing experience level and cultural one, too.

    For example, in New York, firing someone was a relatively straightforward process with few, if any, ramifications if handled properly. But in New Hampshire, it was much harder to fire someone you see on the streets of the
    small town every day, whose sister works in another department of the same company and whose father owns the local diner where you have breakfast each morning. And when a manager took his new female employee out for lunch, the manager's wife got a warning phone call from a neighbor who saw her husband dining with "an unknown blond woman." And when a young man on your staff got killed in an automobile accident, I was left to deal with his grieving parents who come by to pick up his personal office items.

    Small town life is often glorified, but it's really a set of trade offs. Anonymity versus lack of privacy. Casual connections versus true friendships. Danger from street crime versus danger from freezing to death if your car breaks down. Endless choices versus every shop owner knowing your name.

    Small towns are not for everyone. And not all small towns are the same. In the case of Byte, the town was actually quite cosmopolitan due to it also being home to one of the country's better known artist retreats and having established a rather sizable creative community. The town was much more than just a bunch of pig farmers and trench diggers.

    Small towns have great potential for building a business, but the culture of the town has to fit well with the culture of the company, and vice versa. And the town must offer a welcomed change if you want to be able to be able to attract employees from outside the local community.

    - Mark