The Hindu Business Line : A sustainable growth trajectory

It is indeed heartening to see the impressive quarter-ending results of the top five IT companies in India. I am particularly bullish about at least five more global contenders emerging before 2010. They can all qualify to trace the dotted line of trajectory in the chart in per capita profitability from about $8000, that is the industry average today, to around $30,000 in the next four years. While this may sound ridiculously naïve, we have compulsions to vacate, as the late Sumantra Ghoshal put it, operating from the zone of "satisfactory under-performance".

Leadership, as we all know, is achieved not by winning a few isolated deals by chance, but having a strategy that is better conceived than the strategy adopted by the leaders. That would automatically point to one's understanding of execution effectiveness on two vital fronts — namely the integrity of the internal delivery systems and the competitiveness demonstrated in the bidding process for international engagements.

`GAPS' IN INTERNAL DELIVERY SYSTEMS

While the business world has changed rapidly with increasing sophistication and complexity, the competencies within a majority of the organisations have merely inched ahead, often struggling to keep pace. What is the flavour of the barriers that most of us are up against?

Analysis of over 400 projects that consistently failed to meet at least one (among the seven key objectives) of the key delivery commitments led to the detection of a pattern to their failure. Some of the most recurring `show stoppers' held out some invaluable lessons for us. They were so generic and fundamental in nature that it can get quite embarrassing were it to be left to the customer to point them out as our managerial `blind spots'. Predictably, and often enough, they would have been flagged internally, only to be explained away expediently as a one-off chance occurrence, until it begins to work to our own disadvantage; either the customers demand concessions in price or lower our vendor ratings as to deny extensions to contract or award of fresh work.

By no means are the tier one players spared such agonies. Being internal and easy to address, the tier one companies may have woken up to these realities earlier in the game and exercised their resolute management will to deny these instances any room to reoccur.

LESSON LEARNT FROM INTERNATIONAL BIDS

Let us imagine ourselves participating in Corporate Olympics 2010. Winning an international outsourcing bid aimed at the design of high-end business solutions and their seamless rollout thereafter (and possible maintenance subsequently) on a global turnkey basis is like participating in an international athletic event.

Envision the event as a corporate decathlon — a course of ten events that need to be performed non-stop and to win repeatedly against a limited set of established but unpredictably accomplished contenders. The name of the game is endurance, flexibility, agility, staying power and demonstrated superiority across 10 different operating terrains.

Quite akin to the winners of a decathlon, the international bidders have not only to win every one of the individual events, but also demonstrate an overall eminence collectively across all the ten events.

What are the ten bases that have to be hit consistently?

How will the individual events be weighted for their relative importance in the overall tally?

What are the rules for qualification and elimination? (In some cases, during the pre-bid conference, the customers make them explicit enough as to share their scorecard or criteria-rating sheet to be applied to all bidders.) In most other cases, however, the criteria would be deliberately kept open so as to allow room for the bidders to get creative. Consequently the rules, if ever known, become clearer only towards the advanced stages of the award of the contract.

`BUY-SIDE' CRITERIA RATING SHEET

An analysis of the criteria for selection, both explicit and implicit, points to a cluster of ten categories. Each of these not only has the ability to pack a lot of power into the bids, but also substantiality improve the `tone of authenticity' as to qualify quickly into the consideration set. The aspects of delivery discussed at the start are subsumed into these.

These top 10 items are equally useful in qualifying the level of institutionalisation claimed by the bidders on the maturity continuum adopting a CMMi scale. They provide the vital `proof points' sought by the customers or their buying agencies for them to verify and validate for themselves during their site visits; it is these factors that, we believe, tilt the balance decisively towards awarding the contract to the preferred one.

While the exact contents of the criteria-rating sheet may need on going refinement and customisation to each customer segment and domain, the framework holds validity for comprehensiveness and distinctiveness at successive reviews of deal wins and losses.

How can we be sure of that? Here are a few signals to watch out for:

Improved win quality and `hit rates'

Detection of possible `gaps' in the proposals prior to their submission. Hence improved quality of deal value proposition

Insightful listening and participation in `pre qualification' conference calls

More objective analysis of factors contributing to the deal being won or lost, without retribution and anxiety. A notable aspect would also be the reduction in the margins by which future wins are lost or won!

The 10 factors summarised in Table 1, bear a significant impact on the four key constituencies outlined in the table.

Institutionalising BEST PRACTICES

Every progressive organisation requires a framework in which to encompass their change management strategy. They recognise that it is not change that is managed; it is a movement for change that needs to be engineered and sustained.

For achieving eminence in business a 10-piece framework has been developed. This is built on some of the best thinking across industries, tested and perfected over time. It draws upon companies that have been accredited with adoption of scientific management principles as outlined in EFQM, Deming, Malcolm Baldrige, CMMi, ISO or any of the myriad models for management.

There is an apprehension, and a very valid one, that such models do not translate into business results. It is not the models per se that are deficient, but their adoption to the needs of the business that merits attention. For, these ten elements constitute the collective power of an enterprise and align squarely to the measurable results of per capita profitability of the workforce deployed.

(The writer is Principal Consultant, Goldratt India, and offers solutions for strategic and operational excellence. Founded by Eli Goldratt, the consultancy is dedicated to a holistic approach to business management)

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