Financial Daily from THE HINDU group of publications
Monday, Nov 29, 2004
Columns - Racy Cases
Who should be paid more, rep or techie?
A. V. Vedpuriswar
Chatshow trusted Socrates. At the classroom he never lectured. He only asked questions and gave his views only when he found that the solution was beyond the students. He believed that most of the time, the students had the answers even if they were new to the subject. Make them "learn to learn" was his philosophy. On November 11, even Chatshow was unprepared for the bizarre developments that would take place in the class.
Chatshow: Hi folks. Do you think that this subject has any use for you?
Class: Of course Sir (in chorus). We live in a knowledge society. Knowledge is power.
Chatshow: If knowledge is power, what should it lead to?
Class: Better career prospects. And more money.
Chatshow: Can I say that people with knowledge will make more money than those without knowledge?
The class agreed. But Bhoka (he was so good that this was the only way that the class could get even with him) would have none of it. "Sir, two guys may be equally knowledgeable. But one may earn more than the other. I feel some forms of knowledge are more valuable. And the person with that "more valuable" knowledge gets paid more." Chatshow was impressed. None could disagree with Bhoka's logic. For Chatshow, it presented another opportunity to experiment.
Chatshow: Can you give an example of a knowledge intensive industry?
Class: Computer software.
Chatshow: Well what are its defining characteristics?
Class: It is export oriented. It is profitable. And it employs knowledge professionals.
Chatshow: Who are the most important people in a top software company like TCS?
The class debated at length on whether it was the marketing team or the techies who were more crucial. With some prompting from Chatshow, the class quickly agreed that an overwhelming majority of the workforce in these companies were techies. These were the young programmers who worked long hours on computers to write thousands of lines of code. True they were expendable. Meaning if one techie left, another could join in. True being entry-level staff they were paid less compared to the project managers. But their sheer numbers and their technical knowledge made them the key contributors to the organisation.
Indeed, senior managers in these companies spent considerable time wondering how to attract, retain and motivate these young upstarts. A top CEO had once famously remarked: "Every evening our assets (the techies) walk out of the door. We wait anxiously hoping they return the next morning."
Chatshow: Tell me another industry which is similar to the software industry in terms of its defining features.
Class: Pharmaceutical industry. Pharma companies sell their products globally. They operate in a knowledge intensive industry. And by and large they are profitable.
Chatshow: Who are the real drivers in the pharma industry?
Class: The R&D staff.
Class: R&D is necessary to develop new drugs. Without a steady stream of new drugs, no pharma company can retain its competitive edge.
Chatshow: What kind of R&D do Indian pharma companies do?
The class slipped into silence. Then one student, who was interested in the industry said, "In India, we have process patents, not product patents. Companies examine blockbuster drugs produced by global players such as Merck and Pfizer and remake them with a slightly different composition and using a slightly different process. This is called reverse engineering. Like remix, in the music industry! Chatshow was impressed.
Chatshow: Ranbaxy is strong in antibiotics. What would happen if it introduced in India a new antibiotic based on a blockbuster drug that Eli Lilly launched in the US?
Class: CIPLA or Dr. Reddy's will follow suit quickly.
Chatshow: So what is the real challenge for India's pharma companies if they make look-alike drugs?
Class: Marketing. The company should be able to convince the doctors that its product is better.
Chatshow: So who drives the show in the pharma industry?
Class: The medical representatives, sir. They meet the doctors. The quality of their efforts drives sales.
Chatshow: Let us get back to what we discussed in the beginning of the class. People should be paid according to the knowledge they possess. Who possesses superior knowledge, the techies or the medical representatives?
Class: The techies.
Chatshow remarked in his usual confident, flamboyant style: "So now you know why the techies are paid much more than the reps even though both play a significant role in their companies." He thought he had made a flashy point. As the class nodded their heads in unison, Bhoka got into the act. "Medical reps have specialised knowledge. I feel that managing relationships with doctors is more difficult than writing a computer program. You need to read the doctors' mind. You need to deal with them with caution since technically the doctor is the boss".
He drove the nail saying, "It is wrong to view medical reps as people roaming around from place to place with their bags." Chatshow asked Bhoka to explain. Bhoka continued: "If a techie gets stuck while writing a program he can consult a colleague. But the medical rep has to think on his feet. In a few seconds, he has to gauge the mood of the busy doctor and make his pitch suitably. Therefore he is taking real-time decisions.
The techie may be brainy, but he is doing work where the steps are clearly defined. He also gets time to correct things when they go wrong. Effectively, he takes off line decisions. And most importantly his knowledge is not easily transferable."
Chatshow wasn't willing to give up. But surely the techie has better education, right?, he remarked.
Bhoka continued "Sorry Sir. Today engineering colleges have mushroomed all over the country. Anyone can get a seat. A medical rep who has done an MSc. from a good college is better qualified than an engineer from one of those private colleges. In fact, it is easier to get into the engineering college than into Loyola or Madras Christian!"
By now the class was beginning to see Bhoka's logic. So did it mean that medical reps deserved to be paid more than the techies? And if they are paid handsomely will some of the brightest guys take it up as a career?
Chatshow asked the class to reflect on the issue. As he left the class he knew full well that he had been stumped. Bravo Bhoka.
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