Monday, November 14, 2011

Of Horses, Cats and...Tiger !!

I recently did a 3 part interview with Phil Fersht from Horses for Sources. Came out quite and react!

A big cat for a big job: meet Tiger (Part I)

One company has done more than most (some argue any) to change the very face of Business Process Outsourcing over the last few years.

Its origins can be found in a world-class finance and accounting captive that commercialized its operations with an army of enthusiastic process geeks, schooled in the arts of LEAN and Six Sigma… and at competitive prices. “Isn’t that the GE company” asked one CFO of me, when I ran him through a potential list of F&A BPO providers candidates, “Get them in, I want to hear what they have to say”.

Indeed, the rise to prominence of Genpact has been nothing short of remarkable, as the firm has reemerged in 2011 hungrier and more acquisitive than ever. Having survived a tough recession for the BPO industry, successfully fending off larger competitors baying for its blood, Genpact has recently taken a new direction: appointing NV “Tiger” Tyagarajan to take the helm from the irrepressible Pramod Bhasin, who preached process so poetically with us last year.

Anyone close to the business has always talked about the “Pramod-Tiger” double-act for several years, with Tiger initially being the US face of the firm, and Pramod coordinating activities from India. More recently, Tiger returned to his native India, not only to reconnect with his first love, cricket, but also to take on the role of COO and ready himself to succeed Pramod, who had inexhaustibly led this firm, since its 1997 inception, to surpass $1 billion in revenue.
Tiger is now settling back into New York – a short train ride from his son’s university in Georgetown, Washington D.C., where he is now in the process of adding his personal leadership style to the Genpact machine. So the $2 billion questions today are: what will Tiger do differently? How will Genpact fare with its leadership team Stateside? How will Genpact continue to evolve its business to move beyond its mainstay finance and accounting service line?

Well, you needn’t wait any longer, as Tiger recently spent some time bringing us up to speed:

Phil Fersht (HfS Research): Good morning Tiger. Before we delve into the current business issues, let’s talk a little bit about your earlier career and about you as an individual.
NV “Tiger” Tyagarajan (Genpact):
I did my undergrad in mechanical engineering at the Indian Institute of Technology in Bombay. And while I loved the problem-solving, logic-driven approach that engineering teaches you – and I use that in many situations today – I realized I didn’t want to spend my time with machines. I want to spend my time with people.
So I did my masters at the Indian Institute of Management in India, and specialized in marketing and finance. And I loved those two years. I thought I had found my sweet spot, being able to use logic and numbers and finance while at the same time, driving change through groups of people to get to a decision or a certain point.
My first job was selling, believe it or not, cosmetics for the Indian subsidiary of U.S.-based Chesebrough-Ponds. By my seventh year with the company – which by then had been acquired by Unilever – I had sales management responsibility for the country’s largest region, which accounted for 40 percent of the company’s sales.
That was great management training, and gave me the chance to learn the ropes in managing sales teams, and in understanding consumer and business behavior. But I was getting a little tired of a single product market environment, so I decided to switch to financial services and joined Citibank’s then new retail mortgage lending business. I held six different jobs in three years at Citi. And without going into all the ugly details, I was quickly termed the “cleanup guy”, the person designated to clean up a problem, and one of the ways I did that was by attracting and building up a team of A players. But my fundamental view was that if you really want to succeed, you’ve got to surround yourself with the A players, and I’ve carried that view forward in my career.
By that time, 1994, GE Capital announced it was going to set up a financial services company in India. I read Jack Welch’s two books and fell in love with GE. I knew it was a place where I could spend my entire career, going from credit cards to aircraft engines to healthcare to NBC, without ever leaving the company. I could also at some point in time actually see myself leveraging my engineering background and feeling good about it. So I joined GE Capital – and was probably the third or fourth employee in India – as risk head of its consumer lending business.
I moved to the U.S. in 2002 as the Global Head of Operations and Six Sigma for GE’s commercial lending businesses. Then I joined Gecis, which is now Genpact, and here I am.

Phil: Tiger, we all know what an amazing job Pramod did to get Genpact to where it is today. Can we expect anything radically different under your leadership?
With the dynamics and pace of change in our industry, all providers have to be nimble and able to change rapidly, and Genpact did that under Pramod. There will continue to be dramatic changes, but that’s par for the course for us.
A few specific changes I am focused on are:
- Significantly growing our investments in domain-led sales and account management folks who have the knowledge and expertise to bring a high degree of sector-specific thought leadership into conversations with clients in vertical industries including banking, capital markets, CPG, pharma, retail, manufacturing, insurance and healthcare
- Shifting the center of gravity of the company’s leadership so that 50 percent are located on the ground in client markets. This of course includes my running Genpact from NY

I think the next 10 years will be about the science of processes and the insights gleaned from data analytics. So we’ll build on our unique, 10+ years of deep analytical capabilities across a broad range of industries to help our clients make increasingly smarter decisions

Phil: And is your leadership style very different, or very similar, to Pramod’s?
As we both grew up in GE, there are aspects of our leadership styles that are very similar…bias for speed and action, the passion we openly wear on our sleeves, a deep disdain for bureaucracy, etc. But there are also differences in our styles. I get my energy, ideas and passion from conversations with clients, people in the industry, my team and our broad employee base, so I spend a lot of my time on the road in the markets with them. That is core to my style, probably because of all the time I spent in sales – 22 years! I also believe that this is the best way to drive innovation. And with my years spent as a risk leader, I’m a huge believer in the 80-20 rule…in this case, pick a few things you say “yes” to, and say “no” to a whole lot of things, and then drive the “yeses” hard, and with consistency and investments.

Click here to read the full three part interview trilogy, where we talk more about Tiger’s plans for Genpact and his vision for the future of technology and BPO…

Tuesday, May 3, 2011

Not just nurturing...rooting for gender diversity!!

A couple of weeks back a young and upcoming leader at the mid management level in my organization did something that most people would probably hesitate doing – she wrote to the CEO, myself and a group of senior leaders in the company about a personal experience very close to her heart.

Her note referred to International Women’s Day and started off talking about all the media hype around the event, which tends to focus on the position of women today, workplace issues etc. …. with an underlying tone of the need for being treated equal. Probably like most of the others marked on the mail, I assumed this was either a congratulatory note to to applaud our gender diversity efforts or she was suggesting new ways to beef it up further.

But the note wasn’t about that. It was about sharing a very personal experience she had going back eight years and what it meant for her!! She referred to the time she was called for an interview with Genpact and how she was convinced she'd be rejected at the first level – why? Because of her 8 month baby bump! To her amazement her experience was very different… and I quote: “To my surprise, my impending motherhood did not deter the hiring team from taking me on… they were focused on the capability that I would bring to the organization! I have come to realize that in our organization, opportunities are assigned always based on capability." She then went on to describe how our flexible culture and meritocracy driven environment has played a significant role in her staying on with the company and how many people probably take this culture for granted.

Her note, while flattering to the culture we have fostered and built, also made a very important point – the fact that many women assume that pregnancy and motherhood comes in the way of building a career -- ironic since she was actually starting the journey of a long fruitful career during her pregnancy.

The question in my mind has always been how do you create and sustain an environment where you can tap the best talent available, drive a strong performance culture, allow people to dream and attain their full potential over time and yet be able to allow them to go through life’s many milestones. We're obviously doing something that's working that must be replicated sustained and encouraged everywhere in the world.

All of us in our leadership roles in organizations strive for business performance that’s admired by our stakeholders, customers, investors, employees etc. We drive hard to find a motivated workforce... but in the end it’s the fact that we can actually create an environment that makes one write what she wrote, allow her to fulfill her ambition while going through other pulls and pressures of what makes everything else pale into insignificance in comparison. WWish we could all create more environments across the world like this!!!

Thursday, April 21, 2011

Cloud as a neutralizer of scale benefits!!

The notion that the cloud is taking over the world has got to be tempered. I was recently at a conference where most of the CXOs admitted that they don’t know how it will impact them. They’re not thinking about 5 years later - they’re thinking now.

Most people who understand the cloud and have done stuff in it are very clear that when it comes to IT infrastructure and software as a service, it’s quite obvious how the cloud can benefit. However, it’s when it comes to everything else including data, services, processing etc on the cloud, the majority view is that it won’t happen in a hurry across the board.

Standardization is a big question – how are we going to get on the cloud standardization across companies when many are not standard even within!! The best that could possibly happen is a private customized cloud. I am referring to large global corporations.

However, when it comes to mid-sized companies, or start ups the argument changes. It’s likely that the cloud will allow these mid sized enterprises to “leapfrog “ , get ahead of the larger ones as they have fewer constraints and legacy. Emerging market companies can now be structured very differently and designed better for their business from day one as compared to a more evolved large global corporation. They can be set up to leverage the cloud and standards from day one …. And that could mean a huge competitive advantage!!

Industry after industry will see the rise of brand new companies who have a killer product or service and because they will structure themselves differently from the beginning, they will have a massive edge over the others in terms of go-to-market speed and flexibility as well as in terms of a cost structure that would rival if not be better than a large corporation with huge scale.

Does that mean that the cloud allows mid sized companies to compete with large corporations? Does scale become less relevant because of the cloud?

For instance, we all know emerging market companies in the wireless market that are structured differently and fast becoming global competitors in the wireless space with global standards. They often have the unique combination of the lowest prices in the entire world, at the highest profit for themselves with better service for their customers!!

Think about companies that structure themselves from day 1 to only focus on design, product and customer interface and ownership - everything else is done through an ecosystem they’ve built which allows for flexibility and speed and scale leverage from day 1 and variability from day 1 .

So to me the Cloud could mean if not demise at least reduction of scale advantage in some industries and a further boost to emerging market cos with global ambitions!!

Tuesday, April 5, 2011

Inclusive growth is not charity!

The folks up at ISB (International Business School) invited me to write for their quarterly journal, B.Smart, on incusive growth. Do have a read and let me know your views.

Economic liberalization which began in the early 1990s has accelerated India’s growth rate to an average of 7% per year since 1997, up from 3.5% in the 1970s. During this period India transformed itself from an agricultural economy to a service economy. Services now form 55% of the Indian economy. The growth and development of the Information Technology and Information Technology enabled Services have had a significant role in changing the face of the economy. The good news does not end here. The growth rate for India is expected to overtake China’s double digit growth rate in the next few years.

This news however, hides some alarming trends. Growth continues to bypass a large section of people. A large majority of Indians live in the villages and they have been excluded from India’s growth story. Rural India is facing endemic problems – land holdings are shrinking, slow growth in agricultural production and limited social and economic infrastructure. Women, Children, backward castes & classes and other minorities often are excluded from the growth story. The rise of grass root militant movements which plague nearly one-tenth of India is a direct result of this economic exclusion and the unfulfilled aspirations of the bottom billion.

The task to feed, house, clothe, educate and employ India’s growing population, which is expected to reach nearly 1.5 billion by 2030, is enormous. This includes a net increase of 270 million people which will be added to the work force. Bringing them into the economic mainstream both as producers and consumers of goods and services must be the basis of any inclusive strategy.

Today, economic power rests with a precious few. According to Credit Suisse, the top 1% of the population own 15.9% of India’s wealth, the top 5% own 38.3% and the top 10% have 52.9% of Indian’s wealth. What this really means is that 90% of Indian, the urban and rural poor has a very small stake in the pie. Growth must lead to the re-distribution of this ever growing pie to a situation where the bulk of the population is middle class and a smaller percentage of the population is either very rich or very poor.

The aspirations of the “bottom billion’ cannot be wished away. If India is unable to address these aspirations, the “demographic dividend” that the country can reap will become a demographic liability.

This mammoth task cannot be done by government alone. Industry and civil society must partner with government to drive inclusive growth. Cognizant of income disparities and growing aspirations of the people the government has been working to address these through programs like NREGA and Aadhaar. Civil society has contributed with design and governance oversight. But, in my view the greatest lever for driving inclusion is jobs.

India is expected to witness huge changes in the coming decades. If the growth trajectory continues the economy will grow from a $1 trillion dollar plus economy today to a $4+ trillion economy in 2030. According to a report by McKinsey & Company the number of urban households will grow to 91million, up from 22 million today. This trend is already visible as people in rural India have begun voting with their feet and are migrating to towns in search of economic opportunities. Shiela Dikshit, the Chief Minister of Delhi has often spoken about 3 lac people migrating from villages and small town to Delhi every year looking for economic opportunities. Similar migration is happening to other big cities. Infused with the migration mind set and work ethos these people are contributing to the local economies both through their labour and consumption.

What has been the true impact of the IT-BPO Industry?

Many have joined the IT-BPO industry. A relatively young industry, it employs more than 2 million people directly and 8 million people indirectly. According to NASSCOM the impact of this industry is manifold – its contribution to India’s GDP is 6%. This industry has created 45% of total incremental urban employment in the last decade.

The industry began in Tier 1 cities like Bangalore, Delhi and Mumbai and quickly moved to tier 2 and tier 3 cities like Hyderabad and Jaipur in its search for economies and talent. Not only has this led to the development of infrastructure in metro towns but has also driven regional development. Not long ago Hyderabad was a sleepy town in Deccan India, Gurgaon and Noida were suburbs of Delhi. New housing, shopping complexes, office buildings have come up rapidly, supported by the cheque books of companies and employees of the IT-BPO industry. Similar changes are visible in Jaipur, Bhubaneswar and Vishakhapatnam and many other cities.

The investment by the IT-BPOs investment in local economies is two fold.
1. At the time of setting up of offices, this generates employment and business for infrastructure build out that takes place.
2. Thousands of employees, who live, work and spend their salaries in the local economy.

This industry has also led to increased financial independence for millions of people. Nearly 70% of the employees are below the age of 35 and a large part of income is spent on discretionary items. According to NASSCOM, the downstream impact of employee spend in FY ‘09 wasRs. 76,000/= crores. Nearly Rs. 7,400 cr in the hospitality and restaurant industry and Rs 6,000/=
crores in the telecom industry.

Driven by meritocracy and quality, this class of knowledge workers is raising the bar for the quality of goods and services they consume – in telecom, healthcare, entertainment, hospitality. Value added services in telecom, new restaurants and entertainment targeted at this segment are just some examples. People are changing the way they live and behave and are demanding quality products and services, this raises the bar for goods and service. This is always good for the economy.

Who does this Industry Employ?

There is a mistaken notion that the IT-BPO industry employs sons and daughters from the educated elite. This could not be further from the truth. NASSCOM data suggests that nearly 2/3rds are from tier 2 and tier 3 towns, 70 percent are less than 30 years old and 1/3rd are women; all indicators of inclusive growth. To deliver world class products and services, the industry spends large sums of money on training; in FY09 companies spent Rs 6,450 crores. Money spent on domain training, leadership and soft skills to create talent. As these employees grow in their careers the skill will be transferred to other companies and industries. So, this industry is creating a vibrant middle class.

How is this industry changing the face of education?

Driven by the demand for jobs in IT-BPO industry, education in India has gone through enormous changes. Several new colleges and universities have been set up to cater to the demand for a skilled work force. Educational institutions have been forced to revitalize curricula, improve infrastructure, introduce new courses and make graduates employable. Industry inputs at the time of curricula re-design, exposing students to business through internships and inviting industry leaders to college seminars are some of the steps taken by colleges and universities to become more relevant. Competition for students and placement of students has forced colleges to improve methodology and constantly work to raise the bar.

What skills is this industry creating?

Another misconception in the public mind is that the BPO industry is only “call centre”. The reality is very different. The call center business is about a third of all the work done by BPOs in India. Back office work in banking, insurance, supply chain, analytics forms the larger part of the business process management businesses. Over the years organizations have gained expertise and this has led to a creation of subject matter experts in various domains. Learning employees take with them to other organizations and industries. For example, BPOs have been applying IFRS norms for their customers for a few years now. Next year when Indian companies will have to conform to these norms, where will the experts come from? From the BPO industry and it does not stop here……

Former employees have fostered job creation as many of them have gone on to set up new businesses within the industry and outside the industry. Vendors servicing the industry have also been forced to raise the bar. For example, caterers are expected to deliver nutritious and hygienically prepared food in large scale and transporters have to be on time and standards of security which rival global standards.

Wanting to give back to communities has been the corner stone of corporate social responsibility programs in most organizations. More that 60% of IT-BPO companies employ people with disabilities. They encourage their employees to contribute to local communities through education, environment and health awareness programs. At Genpact, we encourage our employees to volunteer time in communities they live and work in.

IT-BPO organizations have played a key role in the set up and delivery of government services around the world bringing world class technology and process excellence to the table. The Indian government has already begun to leverage this expertise – the Passport Sewa Service, On-Line Income & Sales Tax Returns are but two examples. Tech savvy state governments like Karnataka, Andhra Pradesh, Maharashtra and Haryana too have set up portals to improve citizen services at the local level.

Financial inclusion must be a part of inclusive growth. Today, millions of Indians do not have access to government services or to the banking system as they are unable to establish their identity or credentials. The formal banking system is closed to them. The Aadhar card can go a long way to help. The project is huge in scope and scale and the government has leveraged industry expertise to set up and execute of this project.

Using traditional brick and mortar models which have long cycle times and require large investments will not deliver government services to the underserved. Releasing capacity through re-engineering processes and innovations like mobile banking, e-health and e-education are some possible solutions. Genpact has been working with government hospitals in India to release doctor and nursing capacity through improved processes. Hospitals have already begun diagnosing and suggesting treatment from data transferred on mobile phones and the internet. Other companies are innovating to create cost effective education, health and banking modules on the internet and telephone.

Inclusive growth is not charity. For industry to grow it needs markets, talent, changed government policy and huge improvements in infrastructure. Inclusive growth is the only way to get sustained growth!