"Looking Beyond the Veil" by Mr.Subroto Bagchi

Looking Beyond the Veil!

Interview with Mr. Subroto Bagchi, COO, MindTree Consulting

The bigger issue is that the national mindset must change towards manual work. The gap between an MBA and a carpenter or a driver is absurd.

India's record GDP growth has come to the limelight across the globe, with 8% growth and record stock market levels. In your opinion, has the average standard of living actually improved in India as much as these parameters have?
- In some ways, it has. In many ways in has not. The state of rural health and primary education has not kept pace with the so-called GDP growth and urban development. Remember that the GDP growth comes off a low base, considering that we are a
nation of a billion people. Our infrastructure is way behind what it should be and it can be. Our women continue to languish. Beyond the veil of GDP, we have a lot more real developmental issues to deal with.

Is there some truth in the statement that we are creating too much of a hype about the IT / ITES boom in India and neglecting some of the other sectors like manufacturing and agriculture?
- We must recognize sectors like agriculture and manufacturing. These have significant potential.We must also encourage other services sectors that have huge potential, like travel and health services. We must also give the folks working in the infrastructure sector their true dues. But the bigger issue is that the national mindset must change towards manual work. The gap between an MBA and a carpenter or a driver is absurd. Only in our country, we have such a wide gap. We do not realize how exploitative is the
middle-class mindset that thinks only of rewarding itself. The living standards of the nation cannot improve unless the auto-rickshaw driver and the farm hand and the construction worker are substantially better paid. Only in India, such people can not afford a personal toilet at home. In Singapore, US, Germany, France and Tokyo - they
can. To me, that is the test.

Your famous speech, 'Go kiss the world', has been a source of great inspiration to a lot of us. The simplicity and the background are quite dumbfounding. Given the poverty levels and the below par standard of living in rural areas, how do you think IT be leveraged upon to improve this situation, or is it a tall order?
- IT is a tool. It cannot by itself, change character. Character flows from within. The below-par standard of living in the rural or for that matter, urban areas, is a function of vision and determined action over a sustained period of time. In addition, one generation will have to say, "we will give, we will not take". Come whatever may. It will change
everything. Without character, IT will merely put lipstick on a pig.


MindTree's vision statement talks about contributing a significant portion of the company's PAT to support enhancement of primary education. When MindTree goes public, how do you plan to convince your investors in contributing a significant portion of the PAT to the society?
- I am sure the Vision itself will not be controversial.What constitutes "significant" will have to be socialized with investors from time to time.

Increasing stress at work and working at different time zones has led to a youth
population that is more stressed and under higher risks of diseases today. Work-life balance is becoming a serious concern. MindTree being known so much for its HR best practices, what measures does the company take to help the employees manage such a demanding nature of work?
- We address the issue in many ways. We think that the work place can be high on challenge but not on stress. When the quality of work is good, there is recognition for work done, the climate is nonpolitical and there is continuous communication,
people are not stressed. Then of course, you have the usual thing that everyone provides - a gym, flexible work times, cafeteria, a nice workplace, yoga, fun at work and all that stuff. These by themselves, do not de-stress. Nothing stresses people more than, lack of
conviction in what they are doing. The incidence of stress in IT is also overrated. A
traffic cop inhales carbon monoxide 12 hours a day.A surgeon stands on his feet for 4-5 hours every day without taking eyes off a 6" by 6" opening under a flood light, a train driver routinely spends sleepless nights. These people have a lot more stress than
someone being bussed up and down, sitting in an airconditioned office, dealing with mostly noncontroversial things, being well paid and having multiple job options. Go and go talk to a young bureaucrat in a government office you will know what stress is.

Given the massive recruitment in IT/ITES sector and the corresponding rising costs, do you think IT players could promote quality education in smaller towns which would help the non-metro population as well as act as a sustainable source of human talent at an affordable cost?
- The current compensation in IT sector does not show a gap between metro and non-metro locations.Irrespective of the cost issues, IT and ITES companies are going to tier-II cities. Towns are a little further away and pose other infrastructure challenges. We have just decided to go to Bhubaneswar as our third location. It is a city of 1.5 million people. We
will involve ourselves with local educational institutes.

The recent KPMG report on "India Fraud Survey 2006" has brought forth the increasing occurrence of frauds and its many forms within the ITES and the financial services world. Given the high visibility of the Indian IT/ITES sector,
how do you think companies can overcome this threat? Is this because of a fundamental flaw in our educational system?
- It is because of a fundamental flaw in the national character. IT companies cannot be islands of good behavior. We are a nation in denial on this issue.



The development activity in any country is fueled by the amount of entrepreneurship observed in the country. We are already seeing the benefits of entrepreneurship, especially in the IT Industry. Do you think the governmental policies are conducive to nurture entrepreneurship in India? What kind of changes would you suggest in improving this state?
- We must celebrate small entrepreneurs a lot more.Though people say that entrepreneurs are born and not taught, we must introduce entrepreneurship as a subject of study. We must make infrastructure a fundamental right of citizenship and remove corruption for one generation of Indians. If these are done, we will cease to over focus on so-called
"policies".

We see a lot of buzz around Corporate Social Responsibility (CSR). Do you think companies really are bothered about CSR or are there a lot of them who consider this as a way of capturing goodwill in the eyes of the shareholders?
- Many companies are genuinely concerned about CSR and do it as an integral part of who they are. But I believe that CSR begins with paying one's taxes right. As long we all pay our taxes right, whether or not we are doing CSR can wait as a subject of conversation.

We have read that MindTree minds rebuilt a school in a village called somennahalli. There are so many issues from Bangalore infrastructural
development to rural education and healthcare. What role do you think, the corporate world should play in order to forging an effective private-public partnership in social development?
-Companies must focus on running a profitable, competitive business and pay their taxes right. They must have high standards of governance. Public- Private partnership begins there. Then comes the issue of other forms of participation. There is greater need of citizenry getting involved in the "I pay taxes right - I vote - I get involved" cycle than just
companies sponsoring roads and parks.

– As told to Vikram Ananthakrishnan and
Umesh Mariappan, PGPM Class of 2006
(via e-mail)

"The Mind of Strategist" by Dr.Suj Krishnaswamy

The Mind of a Strategist

Dr. Suj Krishnaswamy, Principal, Strategic Insights Inc., Chicago, IL.

The next big thing in the management world is the co-creation of value, meaning: the creation of value in collaboration with the customer. It is an all-encompassing term.

India is fast losing its competitive advantage as a low cost producer of goods and services. What are the key issues India Inc. needs to address to make a successful transition to high value services?
- Transitioning to high value services is going to require not only creating the brand promise in that market space but also delivering on that promise. Delivering on that promise will in turn require cultivating the value-oriented mindset at all levels within Indian companies. So helping initiate, navigate and sustain this kind of a systemic mindset change will be extremely important for the leadership teams in these organizations. Organizations can start with reassessing their strategies in their enterprise level accounts, or key accounts. As Phil Kotler and Neil Rackham, my mentors and co-authors, point out, the mindset of a high value services provider =has to be very different from that of a transactional services provider. High value service providers are expected to co-create value for the client’s enterprise at all levels. This therefore implies that all levels of contact with the client’s organization are designed and coordinated to move towards the overarching strategy. It also implies it is no longer sufficient to be involved only at the level of multiple renewable short-term
projects.

What do you think are the learnings for the West from the outsourcing led growth of Indian economy?
- First, India has set a great example in showing what commitment to great education and family values can do for a nation. Second, the phenomenal growth of the Indian economy from outsourcing has helped the West truly understand the implications of a “flat world” (to borrow Tom Friedman’s term).

Why do you think Marketing and Sales teams work in “silos”?
- The “silos” are more prevalent in traditional companies and reflect the historical relationship, when sales started running the show and marketing was a sub-function. As
companies grow and evolve they realize that aggressive growth cannot happen unless marketing and sales are in sync. In fact they realize the phenomenal reduction in sales cycle times and sales costs as sales and marketing are integrated. As you know, this is the focus of my research with Phil Kotler and Neil Rackham and is the topic of our Harvard Business Review paper, in case you want more details. We are now extending this work to India in collaboration with Dr. Bala.

What are your suggestions to integrate Sales and Marketing strategies and how does Strategic Insights, Inc. work with companies to achieve this?
- The first thing we look at is the organization’s growth agenda. Where does it want to go and what does it need to get there? This is ascertained through sessions with the CEO and his or her team. This process involves answering three broad sets of questions:
What value does the organization choose toprovide that gives it competitive advantage
overall and in its various lines of business?What does it need to do to create that value?
How can it communicate that valueconsistently in the marketplace?Strategic Insights uses the Kotler andRackham framework to help companies integrate sales and marketing strategies to successfully choose, create and communicate the right value in the market.

What suggestions would you give to a consultant who is creating a marketing strategy for a firm?
- A major suggestion would be to look at how marketing and sales are structured. Then
look at the overall growth agenda of the company and work backwards and ask: What needs to happen, and how can marketing and sales be integrated to achieve the needed growth?

How has marketing research evolved over the years and how are companies leveraging it as a strategic weapon to fend off competition?
- Definitely there have been significant advances in terms of the sophistication of the techniques being developed. We cannot just be generating data charts without extracting implications. And that’s where market research and market strategy truly interface. As Phil Kotler says, there are three steps: “What So?” is the description of the current state that market research initially answers; we then consider the implications of all we’ve learned and answer the question “So What?” and then finally we should get to the prescriptive question “What Next?” On the question of how companies use research data to fend off competition, one company might take the numbers, analyze the implications and use them productively to tackle the next wave of competition, while another might just say, “Hmm, interesting learning,” and continue to operate as they always have. The way you fend off competition is by acting on research and using it as a sensing and tracking mechanism. If you look at it as a fad or the flavor of the month you are not going to able to use it as a strategic weapon. Research is an ongoing component that grounds successful organizational strategy.

Last 50 years have seen buzz words like total quality, competitive advantage, reengineering, core competencies etc. What do you think is going to be the “next big thing” in management?
- It is already here in the management world.It is co-creation of value, meaning: the creation of value in collaboration with the customer. It is an all-encompassing term. It addresses the key question: “How are we going to involve all stakeholders like client organizations as well as our eco-system to co-create value?”

On the flip side, how do you think such fads have actually affected companies?
- Fads will always be there. The problem is when companies adopt a “flavor of the month” growth strategy. This is different from truly understanding how the marketplace is evolving and making the necessary adaptation. If leaders in organizations do not have an idea or roadmap as to where the company is headed, there will be dissonance in the organization. There will be a tendency to adopt one strategy and put processes in place and then before that strategy begins to pay off hop onto another strategy, eventually leading to unsatisfactory results overall.

What are your 3 key take-aways from interacting with great minds like Philip Kotler and Neil Rackam?
1. To be open and committed to lifelong learning. Phil and Neil never say they are the gurus or let others perceive that they have all the answers.
2. To be discerning about ideas. This is about being open to ideas from all spheres but very discerning about what is accepted.
3. Having an eclectic perspective: Being open to sharing knowledge and working w i t h p e o p l e f r o m d i fferent backgrounds, cultures, industries and spheres of life. Phil Kotler has written books on marketing and positioning in almost every major field from
performing arts to marketing of countries. Neil Rackham was raised in Asia, did his higher studies in the UK and has conducted most of his breakthrough sales turnaround work in the US and around the world.

The number of women at the helm of companies is very low. Great Lakes through the SWIM (Successful Women in Management) initiative look to empower women in business. What are your suggestions to make this a success?
- I have to congratulate Great Lakes on launching this initiative. Hats off to Dr Bala for kicking this off! You have a great team and I am delighted to be a part of it. Along with opportunities being available, it is also important to help women overcome hurdles that hold them back from pursuing challenging senior leadership positions. Hence, one of the key areas for SWIM initiatives to focus on would be helping professional women tear
down the barriers that prevent them from realizing their potential-these barriers could
be work related, family related or psychological.

Dr. Suj Krishnaswamy is a principal at Strategic Insights Inc, a global business strategy and management consulting firm (www.stinsights.com), headquartered in Chicago. She is currently working on a major project with Prof. Philip Kotler and Prof. Neil Rackham on sales marketing integration and its implications for growth. She can be reached at sujk@stinsights.com.
– As told to B Vasanth Sandilya and Ramesh Chandramouli ,
PGPM Class of 2006

Note from Dr. Abid Hussain

I am delighted to write this note for ‘Gravity’- the Great Lakes Magazine.I have always believed that a change in the style of governance and mindset of the people of India is essential to improve the quality of education and research systems with a view to making the nation
competitive in the international arena. Padmasri Dr. Bala Balachandran has aimed to do just that as the Honorary Dean of Great Lakes Institute of Management.

With globalization taking centre-stage and India becoming a vital part of the global village there is a growing need for business ready managers. The one-year program at Great Lakes with a focus on customer centricity has come a long way in bridging this gap. The stress on imbibing leadership and entrepreneurial skills in students is worth noting.

More and more multinational business houses have set up their bases in India while Indian companies have made inroads into the developed countries through acquisitions. The future belongs to those with wealth of knowledge as the world is getting interconnected at a fast pace.
Knowledge management, research & development and quality human resources will prove to separate the great companies from the average ones. Great Lakes Institute of Management, with research tie-ups with Yale University, has impressively equipped students with the right mix of knowledge, skill and attitude. It has all the ingredients to make it one of the best business schools in the country.

Dr. Abid Hussain
Former Indian Ambassador to the United States of America
Business Advisory Council, Great Lakes Institute of Management

Many a Slip Between the Cup and the Lip

Prof Aswath Damodaran is the Professor of Finance at the Stern School of Business, New York University.
Prof Damodaran is recognized worldwide as the leading mind and expert in the area of Valuation. His website has enabled many students and corporates to learn the concept concisely.
The audience was spell bound and engaged on the intricacies of valuation. Prof Damodaran shared with us his three fundamental rules of valuation a) Remember when you are bidding against someone and when u are not; b) Words like synergy, growth potential have no value & c) Without Cash flows, no valuation is possible. He advised us not to follow the herd mentality like the way of the lemmings and to stop and think and re-look the fundamentals and value drivers. According to him, valuation gives us a life vest i.e. it justifies perceptions.
He demystified the myth that valuation is a search for true value by stating that valuation was biased and it was only a question of how much and in which direction. He also stated that the bias and the magnitude to valuation are directly proportional to the amount paid to the person doing the valuation. Another secret he shared with the students when doing a valuation was not to come back with a nice round figure but to always end the final figure in decimals as it has the potential to create an amazing illusion.

He also lamented the sad state today of price being paid arrived at first and then a valuation done to justify the same. He stressed the importance of liquidity and control by using the example of Mittal Steel's bid on Arcelor. The real value of control is because L.N. Mittal feels he can run Arcelor better than the current top management. He also stated that hostile acquisitions are no longer done on financial terms but to quench one's emotions. He also cited the case of Time Warner's acquisition of AOL as among the worst in the history of M&A in corporate America.

The second myth that he demystified was that a good valuation provides a precise estimate of value but in reality, there are no precise valuations. He also stated that the payoff to valuation is greatest when valuation is least precise. The third myth he demystified was the notion that the more quantitative the model, the better the valuation. The fascination for a quantitative model by most investment banks has led them to create complex models but has later resulted in what he calls 'input fatigue'. He provided examples of how simpler valuation models do much better than complex ones. He used the three methods of a) Discounted cash flow model b) Relative valuation c) Contingent claim valuation to value two Indian companies Wipro and Tata Chemicals, to highlight its practical use.

Note from Jamshyd Godrej

We are at a key juncture in the evolution of India, where history is being written everyday, not only in the corporate boardrooms but also in a social, political and cultural sense. Having set the ball rolling, the onus is now to ensure that the momentum gathered thus far is sustained over large periods of time. This rests on the shoulders of Young India. While there is an unprecedented demand for talented managers to fuel the growth of the Indian economy, management institutes like the Great Lakes Institute of Management aim at bridging this gap. The “Global Mindset, Indian Roots” approach that Great Lakes imbibes in its students is worth emulating. The need of the hour is managers who think globally. India has already been put on the world map but the presence needs to keep growing stronger. Great Lakes was born as a result of Dr. Bala’s vision to create knowledge and disseminate it in a most effective and beneficial manner. The innovative one year model at a modest price along with faculty from the best institutions across the globe, will make Great Lakes one among the finest in management education. The school also has a strong industry interface leading to research and consulting.

While I was at the convocation of the pioneer batch at Great Lakes last year, I had the pleasure of interacting with the students. It was a memorable experience and very encouraging to see a group of students who were clearly ready to move into the corporate world and take the challenges head on.
I am pleased to be associated with this college. My best wishes to Dr. Bala and I am certain that in the years to come, the students of Great Lakes will be a driving force for not only the corporate India but also, India as a whole.

Mr. Jamshyd Godrej
Chairman, Godrej & Boyce , India
Business Advisory Council, Great Lakes Institute of Management

Uncle Bala's Perspective

Welcome to Great Lakes Institute of Management that is Powered by Knowledge and Steered by Ethical Values with a 'Global Mindset and Indian Roots'. It is with extreme delight that I introduce the second issue of Gravity, the Great Lakes magazine. The theme for this issue is India Balanced Scorecard, a Reality Check.

How do customers see us?
At Great Lakes, excellent start to the placement season, 80 offers trickling in the first two days of placement cycle itself, has set the pace for another eventful year; the admissions for next batch are in full swing.

On a wider perspective, India continues on a dream run of 7-8% growth. It has never been a one dimensional nation and continues to challenge its interpreters. State heads from developed nations are making rounds unaffected by Third World myopia.

But not without an effort, India has been a frontrunner in forging relations. Even in the tentative moments of freedom, when secularism and socialism defined the nationalist ideal, leaders like Nehru had the prescience to foresee the possibilities of liberalization in the post-Stalin Soviet Union and who with Tito and Nasser was one of the chief architects of the nonaligned movement. Russian alliance got a further boost with Mr. Gorbachev transforming the former Soviet Union to the current group of Russian nations. Global relations seem to have come full circle and India's intent in the past one decade seem to have borne fruits with President Bush approving the nuclear deal, helping meet one of the key infrastructure challenges of an energy starved nation. The successful transformation of the US-INDIA relationship will have a decisive and positive influence on the future International System, such that India will benefit by leaps and bounds.

If India is to become the THIRD largest Economic Power, it is not going to be attained either by Politicians or by the Government and Bureaucracy but by Business Entrepreneurs and Leaders of tomorrow who are groomed by Great Lakes and other schools of higher quality and values.

What must we excel at?
Increased acceptance globally also entails responsibility. Indian businesses are now leading the transnational mergers and acquisitions BUT still managers with global perspective are a scarcity. It's definitely by design that at Great lakes a global perspective and constant innovation surge in curriculum is sustained through multifaceted initiatives.

One such initiative; Dr. Deepak Chopra's lecture at Great Lakes delved into hitherto unchartered territory on the Indian management scene. In addition Dr. Chopra and I have designed a new management development course titled 'Soul Leadership' on the lines of a similar course conducted at the Kellogg. Essentially, efforts should be made to contain the social costs related to stupendous growth witnessed in India. Young managers achieve levels of prosperity in a couple of years what took their parents couple of decades, So they look for larger meaning of life and courses like these will help round out business ready managers for longer hauls.

Thus Democracy, Development and Decency can concurrently co-exist with confidence and compassion in India and grow.

Can we continue to improve and create value?
Reducing cost is vital, but creating value is critical. A key roadblock to any nation's growth and its unfolding prosperity is the paucity of high grade management talent. Of course, for a country which saw its first university, Nalanda, much earlier than the 5th century A.D, with scholars including ones from China, Japan, Korea and which was frequented by Lord Buddha preaching Dharma, such foresight is expected. Indian Institutes of Management (IIMs) were setup some 50 years ago. Over the years, many other business schools have come up with an amazing array of 6000 business schools now dotting the Indian landscape, but Rule of 3 may prevail here as well with a few quality Business Schools with World Class Excellence fully differentiated.
So, India's long term model for growth is sustainable but will depend on the availability of resources and suitably trained managers to transform them into output. With Business Programs like Great Lakes, emphasizing a Business Model of "Business Readiness" with “Money Value of Time” and "World Class Quality at an Affordable Cost as a Value proposition”, and “Ethically sound Execution of strategy with a clear Radar Screen that depicts the
Value Migration”, achieving exponential growth in a sustainable way becomes feasible.

How do we look to shareholders?
I have always said that at Great Lakes, students are the primary share-holders. The amazing pace of placements for second batch validated the effort of entire student placement committee, the results of an effort spanning one full year. I am confident that this year we'll comfortably surpass the first batch average salary/CTC of 6.5 lakhs to over 7.5 lakhs.

In his lecture at Great Lakes on valuation, Prof. Aswath Damodran talked about the slip
between cup and the lip when valuations become too complex and contrived. 1992 July, was watershed for Indian equity market, with the successful Demise of "Controller of Capital Goods", the valuation process evolved beyond the bureaucratic wrangling. Aswath Damodaran and other players of the capital Market endorsed and determined the
valuation for modern Indian corporations, We are now in sync and in step with the world Capital Market and Booming.

How do we innovate and learn?
While best job offers came from Indian IT industry, microcosm of global Indian businesses and an exemplar for an industry defying the typical inside out MNC growth, the real challenge now is to offset the continuous wage inflation with increased innovation.

So, when students get a chance to meet another key shareholder in Great Lakes; Mr. Ratan Tata, Chairman Great Lakes Business Advisory Council, later in April, one question on their minds will be how are organizations pushing innovation, encouraging voice of internal customer. Something similar to ideation day a month, mentioned by
Mr. Pashupathy, Director International Programs Google, during his lecture at Great Lakes. Let us also understand why, family empires like Tata & Sons seek and recognize more value adding professionals outside of the Family to ensure the Stakeholder Values. To me such town-hall meetings with global corporate legends, of which we had no dearth at Great Lakes, in addition to world renowned faculty, help invigorate the much needed entrepreneurial talent.

Future

My message to my beloved Great Lakers, the third batch, on Apr'15, the day they get their wings will be: Daring ideas are like chessmen moved forward; they may be beaten but they may start a winning Game. It is the Finish Line that Counts. The World is out there for you to conquer and succeed.
Excellence Inspires and is Infectious. Excel in Everything with Energy, Enthusiasm and
Excellence. Go get them, TIGERS, and the "World Is Not Flat", So Climb to the Peak. Yes, You Learn to Earn, But you Earn not to Live but to Give. Give your heart, soul and mind to your company, colleagues and the country.

Jai Hind, Jai Great Lakes; God Bless You.