And Vijay Says…

All over the world, there is anger and frustration about how China handled the pandemic . I fully share that view – we could have all handled this disaster much better if the Chinese government did a more responsible job. And I doubt any of us believe the stats coming out of China – and we live with it only because there is no other source of good information to rely on. There are more conspiracy theories floating around now than I can keep up with – which is perhaps normal for these times.

A lot of American politicians have already been calling for a hard break with China because of what they did with the Corona pandemic. That was my first instinct too – but as I thought through this more, I doubt this is a pragmatic solution anymore. As always, these are just my personal views.

Calling Corona Virus as China Virus is just dangerous

It is perfectly normal for nationalist feelings to surge when we feel attacked . It is also a great point that plenty of viruses were named in the past after country of origin ( including some like Spanish Flu where there are stories that it was an unfair tag ) . So when we cloak our hatred for Chinese government with an academic argument to hide our bias – we tend to forget how it affects Asian people everywhere.

I was born and raised in India. I have lived roughly half my life outside India now. No one should find it hard to guess my ethnicity if they see or hear me. And yet – when 9/11 happened, a lot of people mistakenly thought I was Arab. It is not an exaggeration to say I was afraid for my life at that time. Absurd as it might sound to people who know the difference – that is how this works. Ignorant people who also feel under attack – they react in absolutely nasty ways that you may not realize. So please resist the temptation to tag China – your words and tweets can unintentionally hurt innocent people !

Capital and Talent problems

America and other countries consciously let China become a single point of failure in their global supply chains – be it clothing, semiconductors, auto, pharma , medical equipment or any number of things we all need every day. The capital required to rebuild all of that in every country is huge. And even if governments agree to find the money to do it – in most cases, the skills are just not there in quantity and quality to make it happen in reasonable time. And it will take time and resources away from many other priorities.

Even if we just think about the world of medicine – equipment and drugs – we should be scared at how much we depend on China for our population to stay alive. Now that they have flattened the curve, and their factories are buzzing again – they have an upper hand already while rest of the world is still figuring out its response. I don’t know how much of a sustained advantage that will be – but its worth keeping it in perspective. For now, they are helping US and others ( and with it comes some complaints on poor quality)  – though perhaps not just out of just humanitarian reasons.

Realistically – even if just the rich countries like USA start bringing all this in-house we are going to have to wait decades to get it done. And given we tend to value our economy over and above other interests – the cold calculations will probably stop most private sector companies to do a total shift back to homeland.  Best case I see is that we will shift some significant manufacturing capacity to Vietnam, India etc in near term.

That is all good and much needed – but China probably will remain a single point of failure for a lot longer even in a well planned transition.

How about Tariffs as a way to keep China in line ?

US has played this hand with China already and we found that all that happens is that it is not the exporter that gets stuck with the bill, and its the importer – and that is passed on to the end customer. On top of that – we also had to take some tariffs off already because of our dependence on China to get through this pandemic.

If we look at this from a Chinese exporter’s point of view – they may also come to the conclusion that they should perhaps reduce US as a big market, and start building markets elsewhere. USA is big strong economy and can still hold some punitive power with China. But that is not the case for the smaller economies – their constraints will make them do things which US will be able to avoid.

Net-net – Tariff is not much of a magic wand to wield !

Corona might not be the last pandemic – it may just be a beginning

I don’t wish it in the least – but that is the pragmatic assumption for now. I have no doubts that we will learn a lot from handling COVID19 and hence will have a better playbook for the next time. But what is the role of China in that future playbook ?

Since the whole mess started in China – and since China has allegedly controlled it significantly now – it is quite possible that they may be the first to come out with a treatment plan and vaccine too. Don’t we want them to share it ? Not just now for the current crisis – but going forward as well.

I am not an expert on pandemics – but I do remember reading frequently about US and China co-operating in tackling past pandemics from George Bush’s term in office all the way to Obama’s time ( joint effort to help Africa). I would think that model is what works for the world – as in for common folk like you and me. Virus is not nationalist in its kinetics, and there is no good reason in my mind why the solution to prevent its spread should be nationalist.

When it comes to saving lives – China and US and everyone else should let science lead, and politics follow ! The other way around is stupid.

We need a better balance of Nationalism and Global Co-operation 

Pendulum always swings to extremes. Now it is swinging to an extreme on nationalism. But its side effects are yet to be seen.

In India – there are states closing their boundaries physically to stop people from neighboring states to enter in times of pandemic. It is not clear how the supply chains of food and health care will get affected when states do it. Will it next happen within districts within a state ? Taken to an extreme – nationalism can be quite destructive !

US may not be much different either . What happens if richer states can offer more money and take medical pros and medicines from poorer states ? I hope we won’t see it play out that way – but when we feel under attack, its normal to close in. Toilet paper hoarding is roughly the same thing at a micro level – people with money to hoard will keep doing it and people with less money will disproportionately suffer.

Although off topic here – climate change is one of those things we can look at as an example. There is no effective solution to climate change if China does not play nice. And China has limited incentive to play nice if it gets isolated globally !

Parting thoughts

It is not a comfortable position for any of us ( Certainly not for me) to think China apparently continues to hold an unfair advantage despite their mistakes. We largely brought this on ourselves with our significant focus on the economy and lesser focus on healthcare, infra, education etc. It is not as if we did not have some huge advantages – we enjoyed a prolonged bull market as a result of sending more work to China. I hope and pray we learn from this history and have a more balanced and holistic view going forward.

I have been staying at home for the past week or so since I returned from India . All my global team is working from home too and we are all getting used to the idea of 100% work from home as the new normal . Earlier today, I heard from my mom about the 21 day shut down in India to combat the pandemic . And my cousin in Britain is dealing with their shut down . It’s all a bit overwhelming to say the least .

It has also made me think hard on what’s next for us . As always – these are strictly my personal thoughts and opinions .

Grief offers a fresh perspective

I recently lost my dad . He was in critical care for nearly two weeks before he passed away and I saw a different part of life that I hadn’t experienced before .

The first is that money cannot always buy good outcomes in health . Just to see patients on ventilators was a shock and it still gives me nightmares . No amount of money and top notch care could save my dad . Helplessness need to be felt first hand to realize how bad it can be.

The second is that lack of money almost always leads to bad health outcomes . Every day at the hospital I saw families struggle to pay bills . I helped a few folks where I could – paying a little money , buying coffees and lunches and paying for cab rides etc . And the reactions ranged from gratitude to indifference to rejection . I didn’t take any offense , nor did I feel any happiness – it’s a strange sense of camaraderie that prevails amongst families of patients admitted in a hospital , especially in critical care . Words can’t describe it . Every day – often multiple times – I saw families dealing with death of their loved ones .

In some strange way – I feel blessed about the timing of dad passing away . At least I was able to go to INDIA as soon as he was admitted to the hospital and stay with him throughout and then stay with my mom a little bit to get her settled down a bit before coming back to US . If it had happened today – I am not sure I could have lived with myself . And yet – that is exactly what must be happening all around the world with folks with elderly and/or high health risk parents .

Hunger trumps health and social responsibility

The shut down in India seems like a much needed step to contain the pandemic – and kudos to the leaders who decided and acted quickly . But how practical is such a shut down ? I was born and raised there and I just spent some time there till last week . Significant part of the population earns their wages daily and without that they can’t afford their food . When the country is shut down – how will they eat ? I hope the government – and the society at large – steps up big time to help the most vulnerable citizens and do it quickly . Even for middle class people who can afford to stock up – I don’t know anyone in India with large enough fridges and freezers to stock up for several weeks at a time . And coupled with the population density in cities like Mumbai – I am seriously questioning how this shut down will sustain three weeks – or god forbid, longer .

It’s no different in US and UK . Not everyone can afford to stock up . And even if people and government can figure out food and shelter – mental health could be another large scale challenge . It will be almost like most of humanity being put in an open jail .

It’s a tight rope walk – but the North Star is clear

Governments all over the world have an unenviable job at hand – balancing between loss of life here and now and the long term negative effects on the economy . A binary view is clearly a terrible choice and I hope no government takes a benevolent equivalent of the “final solution” as their strategy . If we need a binary choice – I fully believe the only right answer is to save lives .

We need a fine grained approach

But that’s what made me start thinking about whether there are targeted approaches possible . A lot of analysis of the pandemic is based on age as the primary risk dimension . I am starting to think that age is too coarse grained for a targeted approach . We now have data about people who lost lives all around the world – and at least those who died in hospitals should have more than age as available data . Can we further narrow down by specific things like gender, blood pressure, COPD, A1C etc ? The better we narrow down – the more our ability to isolate fewer people and have a more realistic estimate of what’s the net impact .

Social distancing, washing hands etc are excellent steps and I am glad that most people are doing the right thing finally . But just like age being a coarse grained dimension – isn’t geography a coarse grained dimension too now ? I am not a pandemic expert and will gladly stand corrected if someone can show me the fallacy in my thinking . Can we zone into high, medium and low risk amongst geographies too ? Manhattan, NY is high risk and lockdown seems to be the right solution and everyone should stay home . But should Chandler, AZ be treated the same , or can some low risk segments of people go to work there ?

Test, test , test

Lack of testing – quantity especially but also quality – is a HUGE problem throughout US and INDIA and probably other countries too except maybe China and Korea . I am still livid that when I returned from India last Monday, there was not even a temperature test for passengers in TRV, DOH, DFW or PHX . Till it’s reasonably fixed I guess segmenting people is not a realistic safe strategy to pursue . Segmenting is a two phased problem – especially for assigning risk to a geographic segment. You need to know when to put people into a segment , but also a set of specific conditions that will get them out of that segment . Otherwise the purpose is kind of defeated .

We need to think holistically

It’s great to see the ventilator shortage situation being addressed with urgency . Better late than never . This is the time for us to be on our innovative best . I also hope that whatever else needs to go with ventilators – all the other ICU apparatus needed (as well as meds for people who cannot be intubated ) are being addressed in parallel . Two weeks of watching people in critical care on a full time basis and talking to doctors three times every day has now given me more information than I ever needed on this topic – and to put it mildly I think we are vastly under estimating the holistic nature of the problem .

We need a better strategy for effectively using medical professionals

Talking about doctors – it is great that retired medical pros are being requested to come back to work all over the place . I also read that many of the older folks who came back to work died in Italy . Doctors and nurses are probably the hardest part of this fight back equation and we need to think about a long term plan to use them . Maybe one way is to tier their use – let the retired folks at higher health risk take over telemedicine channels , and form a reserve capacity when front line active personnel eventually need to take breaks . Perhaps medical students and nurses can take over some of the upfront triages (perhaps some tech can help ? ) . And active duty pros can just focus on high risk patients needing immediate attention .

Fatigue is a real big issue for these amazing frontline healthcare workers . My heart breaks when I see the pictures everyday of thoroughly exhausted people who are going above and beyond . Given all of any country is not suffering at the same levels – can we send more help to the hot spots to take care of the issues there and contain it ? I don’t know if there are legal issues with licensing etc – but hopefully those are all addressable by governors and other government bodies quickly . We have to tackle this issue without letting geographic boundaries being a problem . Sharing pharma research globally , sharing data on patients , increasing production of test kits and medical equipment all need extreme co-operation. Nationalism needs to take a back seat .

We won’t fix the economy with just more money

When governments talk about the economy – we need to interpret it in two ways . What are they doing for companies (not just big ones – but the small ones too) and what are they doing for people .

Like everyone else, I find no joy in watching my 401(k) lose a good chunk of its value these last few weeks . I even joked on twitter that now it should be called 101(k) . I am blessed to be employed and with the flexibility to work from home and not having to worry about putting food on the table for my family . I also know that even paid sick leave which people like me take for granted is not common for a lot of people . It is also high time we divorced health insurance from employment in this country . If there is a positive side to this terrible crisis – it might be that now is a great time for our elected reps to do the right thing for the citizens for once .

Similarly when we talk about helping companies stay alive – we need to make sure it comes with guard rails on exec comp , stock buy backs etc . Hopefully we remember the lessons from 2008 meltdown and bailouts . Companies also need to be held to a higher standard when it comes to taking care of their employees .

Perhaps it’s time to fundamentally redesign and recalibrate the world’s capital markets

Capital markets have been wild, to say the least . At near zero interest rates, market strangely still craves even lower interest rates . Companies that have extremely healthy balance sheets and free cash flow and rock solid business models get punished irrationally in public markets without any specific fundamental reason to attribute, and so on .

I think it’s a good time now for the important people in the global financial markets to come together and rebaseline how companies are valued all over again . If that needs the markets to stay closed for a bit or for circuit breakers to be RE-calibrated or whatever, then so be it . Capital markets are divorced from the reality on Main Street now . The dog and it’s tail have reversed who wags who – and it needs to be fixed . Let’s try to fix that imbalance as well while we are at it rather than resort singularly to throwing more money into a system that no longer seems to be capable of reflecting reality.

This is perhaps the longest blog post I have ever written . A lot of thoughts are swirling around my mind – but it’s probably best that I leave those for a future post . Stay safe everyone !

It’s been a difficult few weeks for me personally . First I lost Hobo . Then I had to rush to India since my father fell critically ill and passed away . It was not clear if or when I could return to US given the Corona virus situation – and after being away for three weeks , I got home yesterday . It took me about 30 hours door to door and most of that time I was thinking about how the world around me is evolving at a break neck speed .

Obviously I have no crystal ball to gaze into the future and I have done no scientific studies on this topic either . And as always – these are purely my personal opinions and not that of my employer .

I have been thinking about whether this pandemic is a one time thing or whether this is a pattern we should expect in future . A quick poll on Twitter was the closest to a checking around I could do from TRIVANDRUM .

This is what the handful of people who responded thought . It aligns with my own thinking – we should consider the possibility that this could be a trend and evolve our personal and professional lives to deal with it .

So with that background – let me share what I think we should plan to deal with in the world of IT services . Some or all of it may apply to other industries too

1. Obviously , we will learn to work better from remote locations

I have worked from home and client locations nearly all my adult life . I offered some quick tips last week when I saw posts on social media by people who seemed to be struggling with the transition . I absolutely think any temporary loss of productivity can be mitigated with better connectivity , processes, education and tooling . I say this significant conviction because I didn’t see any serious loss of productivity when a big part of my own team and I went remote as part of invoking our business continuity plans .

2. Travel and co-location become less important

It might take a few years to be fully embraced – but the difficult times we go through now will provide enough proof points that we can function effectively and efficiently without all being in one location . Consultants flying every week to a client location (or commuting for hours every day) is a habit we have carried over from a different era (when there was no internet and remote communication was ineffective and costly) and we can finally stop doing it as a primary mode of delivery . Face time will always be important – but it will probably come at a premium in future .

The money saved from all these can either go to bottom line or even better, spent on more value generating projects . We will all be doing a greater service to the only planet we can call our own !

3. Less divorces , and more happy families

It’s a touchy topic and taboo generally to talk about – but I am going to say it anyway . I personally know several people who ended up in divorces because of the nature of our work . I think this will change for the better if the low value travel in our line of work is minimized or eliminated .

I also know several friends – and many of them women – who had to make a hard choice to not raise a family because of the constraints of work ( mostly related to travel ) . I hope they have more choices in this matter going forward.

There is a part of me that does worry that families will need some adjustment when we all work from home . But hopefully this can be worked out with relative ease if we approach it consciously . I have some thoughts – which I plan to pen eventually .

4. Different measurements

The general measurement paradigm for staff consultants is utilization and for executives it’s sales . If and when work becomes more remote – I think we will have to switch to a different set of measures than billable utilization . This is perhaps the hardest change this industry will face and we better prepare for it now .

I also think the way to measure sales will also change. Revenue in the accounting sense of the word may not be enough when cash becomes even more important for businesses . Not sure if DSO is the right measure – but some cash related metric might need to be incorporated into sales metrics . Also important will be customer retention , Client satisfaction etc . It’s not that these things are not important today – just saying that we may change what’s peripheral now to a more primary component of comp models .

5. More pressure on the bottom of the pyramid – for both providers and clients

Back in the day, young consultants got into long term projects at low billing rates and learned the trade in an apprenticeship model . That’s already hard in today’s world with project sizes and time lines shrinking . Now when remote work becomes mainstream – it will be much harder to bring inexperienced new hires to the level of skills that is needed for actual projects .

This also will need some serious rethinking by the service providers along with their clients .

6. Project delivery has to evolve

Every aspect of the delivery life cycle will need to evolve and probably evolve faster than we are used to . For example – a lot of shops have already stopped splitting a work product between onsite and offshore teams . Instead they give fill autonomy to remote teams so that they are self contained . That helps minimize people needing to wake up early and sleep late everyday . That’s the kind of culture that needs to become mainstream in IT services.

I am used to globally distributed agile – but honestly it took some time getting used to it . It’s a significant change management issue for most companies – service providers and clients alike . And it might need a new kind of leader to make it happen and stick with it .

6. Automation will increase manifold

One of the biggest take always will be that people are the biggest risk to an Enterpise when the risk is biological in nature like a pandemic . So perhaps even for some wrong reasons – I expect the focus on automation to increase manifold just to decrease the dependence on humans .

But in the same breath – I have to say that what I see around me now is that automation has not replaced human decision making yet . In fact a lot of human effort and thinking is going on at the moment to mitigate the unique risks that are coming to light .

So I guess the best way to think about this is that we need highly differentiated skills to be employable in the future world of services . Again – I have way too many thoughts on this topic that I will post in another blog .

7. Security is probably the new black

Security was always important no doubt – but as we get even more distributed in terms of delivering work, I think it will become a more central issue in IT than it already is . For a long time – all consultants who were good at analytics have had a bit of an edge in the field . I think that will continue of course – but now security (specific to your domain) might be that extra skill set that will help you stand out .

8. Massive consolidation will happen

Some amount of consolidation has been happening already and I think it will pick up significant speed . The mid tier companies probably won’t have a viable way to continue and will have to merge or get acquired to stand a chance to survive in the evolving market .

Unfortunately I also think a bunch of those mid tier companies won’t make it and will just disappear . Given the gloomy nature of the topic and because I have dear friends who work there – I will resist naming any names .

Even the ones who will stay around – I don’t think they will have big pools of full time employees anymore in the middle to long term . I fully expect vast majority of these firms to depend on gig workers to get things done for their clients . And commodity skills will probably become a mainstream online platform business where clients and providers can both buy .

9. Systems integration business will grow

I know it’s a hot button topic for several people I know and respect , who believe cloud will kill SI business . That’s not how I see it . I do think SaaS and other cloud models will continue to grow . And as it grows , integration and analytics challenges will grow as well . Consequently I think the SI market will continue to be a good employer for a long time to come . The kind of work will shift over time – but the effort to integrate will continue to grow for a long time .

I am not sure yet on whether in-sourcing of IT will get affected or not in future . I will be keenly observing and if I see any visible common trends , I will share in a future blog .

10. Redundant collaboration tooling

As we increase our dependence on webex , zoom , teams etc – those services going down will have significant issues for our businesses . I am sure those companies will become very good at providing highly resilient services – but I can’t imagine any company risking their business with just one tool anymore . Maybe they will when SLA from these providers are that good – and I am keen to see how this evolves .

I am very interested in your views on this topic . Please leave your comments and I look forward to learning from you .

Post Script : here is a little video Dennis Howlett did with me on March 23, 2020 on this topic

https://youtu.be/yz30WT04nWc