People - the lifeblood of an organization

From my seventh article in the Start-up Logic entrepreneurship series in the Hindu BusinessLine

In every entrepreneur’s life, there comes a moment when a bulb goes off, “Darn! We are a real business.” You’d think that having embarked with much thought (or for some of us with little thought) on the path of entrepreneurship, learning that you are a real business wouldn’t surprise you. Of course, such a realisation usually occurs when the problems of running a real business put in an appearance.

When you first start your business, it all seems more fun than work — figuring out what you want, whom you are going to make the journey with, whom your customers are and what they want and if you have raised capital, what prospective investors want. Notice, but for the first day, you haven’t had time to think about yourself.

However, soon each new day seems to bring up a number of issues, ranging from life-threatening cash-flow problems to stumbling product development, stuttering sales and marketing and the inability to hire good people fast enough. We will look at each of these issues, and how best to address them over the next few weeks.

Let’s begin with the good news – you are not the first entrepreneur to go through this. The bad news is that this knowledge does not make it any easier to get through this period. As with adolescence that every one of us has had to go through, companies too go through an equivalent phase. Only this seems to appear a lot sooner for entrepreneurial firms and, at times, more than once; as with any hormone-laden teenager this will be a time of monumental emotional ups and downs for your company and you.

The one thing that can help you navigate your way through these emotional rapids is having great people on board with you. I spoke of business being all about people earlier and this is truest in such times of corporate hormonal sloshing. Hiring, retaining and motivating great people is far easier said than done and fixing hiring mistakes always takes far longer than we’d like. The truth is companies that learn how to do this well are the ones that grow and prosper in the end.

Read the rest of the article here.

Communication and culture in organizations

A few months ago, I wrote about the need for communicating early and often and a recent article by Toni Bowers, Senior Editor, TechRepublic titled "Say what you mean, mean what you say" highlighted the sore need for clarity in these communications, even if done early and often! The readers' comments to that post, due to their specific nature were extremely illustrative, reinforcing the core message of how critical clear communications are, particularly when it comes to individuals and dishing them unpleasant news.

Less than ten days ago two of my long-time colleagues, sat me down and after some initial politeness ("you have issues rather than you have a problem") they got down to their core message "We don't believe you handle unpleasant stuff well, what do you think?" Talk about a topic for reflection! The reflection has made me particularly receptive to Toni's post and the discussion thread thereof.

Toni's core message is -

• Be direct and specific when giving feedback, particularly relating to problems
• Don't be heartless but use simple statements that preclude misinterpretation

Key points the commentators added include

• Communicate expectations up front (my early and often mantra) to avoid misunderstandings
• Don't tell the team they have a problem, when you want to communicate to a particular person - do it one-on-one
  
• Be open and interested to find out reasons for why you are where you are (ask and listen, not just talk)

As with all good advice, once stated it seems simple and self-evident. The fact that more of us don't practice it consistently only points to the need for periodic reminders. Which brings me to the whole running water and rock metaphors of many Zen koans. The Buddha said (with regard to cultivating virtues) diligent practice will work like a "... small stream being able to pierce rock if it continually flows." Alas this is true not just for virtues but for bad habits like poor or no communication, a constant stream of which can wear down the enthusiasm of even the most motivated team member.

Even one dinosaur brain manager or toxic teammate when not dealt with direct and clear communication can start a tear in the fabric of your organization's culture. Subsequent failures of communications, however small, only grow this tear till soon all we'll have left will be shreds! So whether rock or fabric, our organizational culture needs continual renewal through simple, clear and sustained communication - to grow and prosper!

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.

Hiring for Skills, Talent AND Values? One Story

In a recent Forbes article, Nathan Bennett and Stephen A. Miles state,

Repeatedly we hear from executives that the talent pool is not nearly as
challenging to navigate as is what we have come to call the "values pool." We
suggest that, [...], the real shortage facing companies in the future will be less
about finding individuals with the knowledge, skills and abilities to do the job
than about finding individuals whose personal value system provides a fit with
the company's values and mission.

Anyone who has run or worked in a startup knows how true this is. In our own startup Impulsesoft, at the very beginning (circa 1999) there was no such separation of values and talent. When you are less than eight people, everybody better be able to pull their own weight - but then again the reason you do a startup (at least the reason we did) is to work with people who share your values and vision. It's when you try to begin hiring beyond the first few - the core team, the importance of values becomes real apparent. We went through four distinct phases in our startup -

[i] can we get anyone else to even join us?
we got started without a lot of forethought or planning. We even got our first customer signed up, before we bought our first computer. Now there was the minor matter of actually doing the work. It dawned on us then that with no money, no office and no clear grand strategy could we even get anyone else to join us. We talked a good story I can tell you that - but when our first prospective employee's dad showed up to check us out, we knew we had a challenge on our hands. However values were paramount at this phase, as we felt we had the talent to get the job, any job, done!

[ii] lets focus on bringing only these three/four folks on board
Once we had our share of new college grads (NCGs) come by, wisdom bloomed. We were not going to be able to do it all - hustle customers, write proposals and actually write code - let alone direct the still not-steady-on-their-feet NCGs. By now we'd been talking to ex-colleagues who shared our values and skillwise walked-on-water; they saw that we were not yet dead and realized there might be something here after all. Suddenly we had a core team, that was incredibly talented and well aligned.

[iii] how fast can we hire hands & bodies and bring 'em on board?
Suddenly we were a real business, with customers signed up for products we hadn't built yet, and paying customers expecting us to support them with prototypes we had shipped as product. The software managers wanted more coders - the hardware folks more designers and everyone wanted more testers - we just went crazy trying to find the "talent pool" - if you could walk, string a set of C code together and didn't drool excessively, we hired you! Even the talent bar probably got shaky in this phase.

[iv] what the hell where we thinking in phase [iii]
When products still didn't work as advertised and customers were no happier, having paid up even more money and our own managers ready to kill some of their staff, we began wondering what the hell had we been thinking? The questions now were how do we let go of these folks and get folks with the right values and attitude even if we have to teach 'em the right skills? The lesson we learnt was that though we had hired talented folks, they had come up real short in both attitude and vision alignment. Our hiring process about which we had become quite proud (It's hard to get hired at Impulsesoft, we'd say) had become too much talent focused and too little value focused in phase [iii]; the fact that I am writing this today means we learned from this and while it hurt us, it didn't kill us. But then again that's the sort of lesson that stays with you. Bennett and Miles are right - only the future is here NOW!