NASSCOM EMERGEOUT 2009 in Chennai

I was a panel member  in the Reinventing Organizations:  Lessons from the dotcom burst session at NASSCOM EMERGEOUT 2009 in Chennai. Here is a summary of my ideas on the lessons learnt during the session

1.  When slowdown or recession happens, different markets for products and services are impacted differently. When the recession is over and there is overall growth in the economy, how each market is impacted can be broadly classified in to 3 categories

– Markets
Disappear / Vanish : A product or service is no longer needed and so demand for the same becomes non-existent. In this case, it is important for a company to recognize and invest resources on new markets /opportunities

– Markets are depressed, but stabilize
and stay depressed : Demands become less i.e. overall market size shrinks. But the market stabilizes at the lower levels. There is scope for consolidation in this case where the market leader walks away with the large chunk of the market. It is important to align investment, plans and expectations with the changed market scenario

– Market grows during and / or after the recession & slowdown : It is important that the vendor invests on quality, brand building and reach to become the market leader to exploit the opportunity So, there is no one rule for all. Each one must analyze where they are and prepare a plan that best suits them

2. Packed lunch or preached advice never last long. So, it is important that each one learns to listen, question, analyze and make their own judgment on which way the market is heading, what is their vision of the future state, how they perceive the company’s role in such future state and plan accordingly

3. Intense engagement is key to survive and win : It is important to listen to customer(s) and learn the market trend. Increase the resources / time spent with customers and spend more time understanding the customer need. Also, switch from sales based planning to demand based planning. In manufacturing and supply chain, it is proven now that companies that implemented demand planning dealt with much lower inventory related issues due to slow down. So, it is important that management measures  the increase / decrease in leads, opportunities and deal pipeline to assess the market trend for the products and services. It is critical that people in sales and marketing talk the truth and gives a true
picture on these so that management has great visibility on the demand and can do good demand planning. The
management must also have an open mind to assess the opportunities and challenges in the market rather than be in a state of denial or hope against hope. Here it is important not to have a cast-in-stone plan but be very agile and flexible in reacting to changing market conditions

4.
If you must do a layoff, please call a layoff a layoff. We see most of the major IT companies in India going extraordinary lengths to prove that they did not do a layoff and they just fired the poor performers. We must learn from the US companies on how to handle layoffs. It is important that we understand the psychology of the person being laid
off and not make it harder for them to deal with the situation. When a layoff happens, especially in a small company, everyone including the management, other coworkers who keep their jobs and the laid off staff goes through lots of trauma and hardship. So, it is important to show sensitivity to the emotions and make sure the layoff is done in a very
transparent and professional manner. It is also important that everyone looks at a layoff either as a condition forced by the market or by the incorrect planning of the management. In simple terms, management must be transparent in terms of sharing the challenges faced, the plans and make sure the entire company faces them as one team

5.
Finally, have reasonable expectation and set reasonable expectation with everyone involved with your business from investors to employees, from partners to customers. Setting expectations that you cannot meet, you cannot meet in a profitable manner or those you cannot meet consistently in a sustained manner are the reasons for many of the problems we face

I am sure most of us know these.  I just want to reiterate these simple, what I consider 101 rules of engagement

– Kumar Vembu