The art and science of managing Indian culture...

Thomas Friedman let us all know that Chindia would own the next century back in 2004 (see 'The World is Flat'). It seems that every large company is outsourcing to India or China at some point in their value chain. 

But have you ever tried to manage a group of employees in India?  I've been talking to people about this over the past month, and the reviews aren't positive. A friend in Boston mentioned to me recently that his company shut down their office in Chennai and gave up on the notion of outsourcing directly. Instead, like most ISVs, they're going to use a large provider (Wipro) - despite the cost per resource being nearly 100% higher.  Why?  In his words: "Managing Indians is impossible. Only Indians can manage Indians."

Over the past week, I've checked in with several business managers - all of whom I know to be actively involved in managing Indian staff.  All of them admit to having been occasionally baffled by the culture. 

So, consider this an open call to all readers of this blog (especially those in India):  what advice do you have for North American business managers about how to best manage Indians, and navigate Indian culture?

To start you off, how about commenting on this rant: it is an an excerpt from an email I received last week:

"If you are in a management or leadership role, you already understand that gossip is and always will be part of corporate life.  Indian workers, however, take the gossip vine to an entirely new level.  The word ‘confidentiality’ doesn’t exist in Indian culture. People will discuss their salaries openly (usually for bragging purposes), invent stories about their colleagues (did you know Amar and Shilpa are fooling around in the back of the call center?), and claim first hand knowledge of upper management’s top secret intentions.  What’s worse:  No rumor is too stupid to become reality in the minds of your staff.   This is the single biggest difference I’ve found between the gossip vine in Western culture and the gossip vine in Indian culture. A rumor started in India, no matter how silly, will be taken seriously."


True? False? Opinions please.

Einstein had it easy: on Leadership, Complacency, and finding Peace in news of Layoffs

“When I read that Einstein failed to figure out a Unified Theory of Everything and died thinking that the universe was ultimately incomprehensible, I realized I could scratch that problem off my own list.”

Thus spoke Robert Fulghum, describing the peace and oneness that comes with finally admitting how little each of us actually knows….about anything.

I recently found  a similar kind of peace… in a piece of rather morbid news.  About Layoffs. (Upcoming layoffs, to be precise).

And no, I’m not joking.  I am privy to confidential information about a group of people that are about to suffer through a devastating experience (job loss), and it actually set my mind somewhat at ease.

(Before you judge me, please finish reading).

A friend recently joined the senior ranks of a billion dollar business unit of a multi-billion dollar technology company which shall remain nameless. 

A few months prior, the company had  hired a new CEO, who like most new CEOs brought a coterie of loyal executives with him to help get the job done.  My friend was one of those lieutentants, and as such was privy to a piece of secret information:  the new CEO was planning ‘regime change’.  Iraq style.  In other words, dozens of middle managers were to be asked to leave the company.  Staff who had been with the company for years - many of whom had played key roles in the company’s initial success – were about to receive cute little pink slips of the kind that were routine at General Motors.

Why, you ask?

Simple: after spending several months MBWA (managing by wandering around), the new CEO felt that too many of the middle managers and ground-level employees were complacent.

Low sense of urgency.  

High sense of entitlement.   

 Unwilling to change. 

The usual. What leader hasn’t had to deal with problems like these at some point?

But here’s the part that blew me away.  My friend’s new company - the same one planning to layoff employees who have become complacent and resistant to change - is routinely ranked by Fortune Magazine among the top 20 places to work - on planet Earth. The company pays higher salaries than almost every competitor (only Google and Microsoft are known to be comparable), with generous year end bonuses of up to 45% for every employee.  The list of benefits and perks includes:

Medical (unlimited)

Dental (unlimited)

Free onsite daycare

Laundry services

Matching 401K contributions

Free lunch (5 days a week)

Matching charitable donations

Ultra-cheap onsite massage therapy

Game rooms galore with billiards, X-Boxes, PlayStation 3’s, ping pong tables, and air hockey. Even speed-chess  zones.

The list goes on. And on. And on.  Trust me, after listening to my friend rhyme off his new company’s list of ‘retention initiatives’, I considered filling out an application form.   Though the chances of getting hired were slim to none.  This company, like Harvard, Stanford, MIT, Google, McKinsey, Goldman Sachs, Microsoft, and Facebook, is after the best of the best – admitting fewer than 5% of the thousands of applicants waiting at the door.   The managers of Studio 54 would be proud.

And therein lies the irony that brought me  – for a moment at least – a sense of peace.

None of the employees at this unnamed company are fools. Ask any of them whether their company is as  great a place to work as Fortune Magazine reports, and they will nod enthusiastically.  They routinely turn down recruiter calls, insisting they have no interest in working anywhere else.  And yet…complacent they are.

And so it turns out that a company that goes to great lengths to recruit and retain the best people, pay them the highest salaries, shower them with perks and benefits that 90% of global workers can only dream of….is still struggling with a fundamental leadership problem: motivation.  Questions like: How do we get our people to realize that what they did in the past won’t work in the future?  How do we persuade them to look in the mirror (not out in the window) when things aren’t going right?  How do we get the team to embrace change as a matter of routine?

“When I read that Einstein failed to figure out a Unified Theory of Everything and died thinking that the universe was ultimately incomprehensible, I realized I could scratch that problem off my own list.” 

Yep, me and Robert Fulghum both.  Somehow, I doubt I’m going to be the one to figure out a Unified Theory of Human Motivation.  There is a measure of peace in that thought.  After all, with Albert Einstein dead and gone, there’d be no one around to celebrate my genius with!   Well, maybe Seth McFarlane.

Big company or small business. Silicon valley hip or east coast conservative.  Old economy manufacturer or cutting edge high tech. No company is immune.  People are people, and as such, only human.  As my friend summed up, ‘you can get complacent anywhere.”   

And yet…..I sense that this peace is fleeting.  Natalie Maines and the Dixie Chicks once said, “free speech isn’t free.”  They’re right. It must be fought for and defended each and every day.  And perhaps it’s the same with onsite massage therapy and big bonuses .  The same with the heart and culture of an organization.  Good things must be fought for and defended….through long hours, innovation, endless questioning, endless trying.   As  a leader, you don’t have the luxury of giving up and dying. 

Einstein had it too easy.

A contrarian perspective: US vs. Canadian Economics...

I enjoy reading this blog from time to time...it chronicles how Canadian investors somehow missed the message that assets do not appreciate forever, despite the meltdown of US real estate.

http://www.greaterfool.ca

It never ceases to amaze how many experts get it wrong...and how often.  Although, Garth Turner has been 'wrong' on timing the Canadian real estate crash for years - it still hasn't happened.

Now I'm wondering whether to pay attention at all...

Stop telling me to 'hire the best people'....

Am I the only one becoming increasingly annoyed when wildly successful investors and business people claim that their secret was to ‘hire the best people’ ?

I have heard this axiom passed on from venture capitalist to entrepreneur…from CEO to business journalist….Randall Stross, author of ‘The Microsoft Way’, suggested that the single biggest reason for Microsoft’s success was its ability to hire very smart developers and give them free reign.  I myself have passionately repeated the axiom at various lectures I’ve given over the years…..

“To build a great company, you must hire great people.”

 “The company with the best management team, wins”

 “That business failed because it always hired B players”….

Right.

Ironic, isn’t it?  Managing Director of Sterling-Hoffman, an executive-search firm who’s stated purpose is to help build companies by recruiting the very best people, suggesting that ‘great people’ are overrated?

I suppose I should clarify that I am joking.  Mostly.

I’m pretty sure that smart, hard working employees play a significant role in the success of a company. Every entrepreneur has felt the amazing relief that comes with hiring a star player; suddenly, things just start to go right in a way that they never seemed to before.  Competence is a beautiful thing.

What irritates me, however, are the false implications of the ‘Hire the best people’ mantra. 

The first false implication is that we are capable of predicting who will be an ‘A player’ from something as flawed as a standard hiring process. No matter how many interviews are conducted, no matter how many references are checked, no matter how many google-like brain teasers are applied….the likelihood of predicting the future performance of a CEO or Senior Executive….is average at best. In fact, I’m not even convinced that most hiring processes succeed in choosing the best person from the slate of finalists vying for the job.

I say this because I have seen too many smart Board Members make ‘bad’ hiring decisions.  Here is a typical story: the board of directors enthusiastically selects a CEO from a pool of three finalists (all of whom have superb pedigrees). The CEO they choose formerly led a business unit in Cisco to over $300m in revenue.  The board of directors is certain that the CEO they have chosen is easily the best, the brightest, the most qualified.  Two years later, the company has failed to make its targets…the CEO has fallen out of favor…and is terminated. The board then begins a new hiring process, attempting to find a new CEO with the skills that the last one didn’t have.  They interview three potential candidates, and this time, they get it right. They hire a CEO who is better, brighter, and more qualified than the last.  This CEO succeeds where the last one failed. The company beats revenue expectations for the next three years, and the CEO sells the company to Google for $85 million – providing the investors a 10x return on their money. 

So, in the court of corporate opinion, the first CEO was a failure.  The second CEO was a great success.

Does that mean the hiring process the second time around was dramatically better?  Did the first CEO hired by the board constitute a ‘dumb’ hiring decision?  Hardly.

Any number of reasons could explain why the second CEO was ‘more successful’.  Perhaps the market was finally ready to take off. Perhaps the competition slipped.

Which brings me to the second false implication of the ‘Always hire great people’ theory, which is that the actions of any one individual are responsible for his/her own success or failure. Plenty of smart, hard working management teams do all the right things and still fail miserably.  And I’ve met plenty of mediocre executives who are in positions of great importance inside flourishing companies or business units. It’s amazing how many empty suits  make it to the top.

‘Bad’ hiring decisions are not the same as ‘dumb’ hiring decisions.  Bad hiring decisions are only 'bad' because the person's hiring was not directly correlated with success in the company's eyes. What we often call ‘bad’ hiring decisions sometimes have nothing to do with the person that was hired.  How do we know the first CEO was at fault for the company’s failure to meet expectations? That’s like saying Barrack Obama is a ‘bad’ President because he couldn’t fix the economy in two years.   Barack Obama might be a bad President, but whatever your politics, you surely understand that failing to fix an economy as screwed up as the one he inherited is not proof of incompetence.

Startups, established businesses, or the US economy – success in any of these depends on an infinite number of variables, the interactions of which are far too complex for any CEO or management team to manage. A company can succeed in spite of bad employees and poor or unremarkable leadership. I’ve seen it happen (no, I will not name names).  And a company can fail despite having the most competent leadership team in the world.  I’ve seen that happen too.

This blog is called ‘If the Black Swan was a CEO’ in homage to Nassim Taleb’s brilliant and poetic book by the same name.  The point of Taleb’s ‘Black Swan’ theory is that human beings, collectively, are absolutely terrible at predicting the future, explaining the past, or controlling their collective destiny.

CEOs are human.  Ergo…no CEO should be entirely blamed for failure, or credited for success.

Isn’t it about time that we, collectively, stop pretending like we know what we’re doing?  Life is uncertainty, and business is a subset of life. 

The next time a bright-eyed MBA asks a successful entrepreneur for the secret to his success….I’d like to see the entrepreneur say, ‘Sometimes, shit happens.’