And Vijay Says…

IBM is a good case study for balancing out everyone singing the “transformation is cool” tune . Transformation is utterly painful – almost directly proportional to the size of the company .

So IBM announced its Q1 results and no surprises there – HW business is not in good health , and software and services are not exactly stellar either .
But that is the top line story . Bottom line – or specifically EPS, is a different story . EPS continues to grow as IBM promised in its plan .

Several people commented today that The best days of IBM are behind them . I actually think the opposite is true . I think IBM will come back with a roar in couple of years .

Why do I think so ? For two reasons primarily

1. Look at their investments in last couple of years while their top line was shrinking . They formed the Watson group – and put their best leaders in charge of growing it . They bought Softlayer and are moving full speed to make it the base of their cloud strategy up and down the stack . They partnered well with growing technologies ( capitalized on Hana momentum from SAP on the hardware side – and yes they sold it off to Lenovo , supported MongoDB API in DB2, etc) . They haven’t let the slow down on top line from affecting their investments – that is how IBM works . They bet on the long term and don’t panic (at least in public). On top of that they continue to invest heavily in their research capabilities . iBM spends more money on research than many hot shot companies make in revenue .

2. They have a very deep leadership bench – and has the brand and money to attract more leaders if needed . This is by far the most important reason for me to believe IBM will come back with a roar . There aren’t a lot of leaders of the caliber of Ginni Rommety , Steve Mills etc. The people working for them are equally talented and it goes a few layers deep . And if that is not enough – they have plenty of cash and brand value to attract away most top leaders from other companies .

So what is it that IBM doesn’t have ?
They don’t have time on their side !

Investors are not always a patient bunch . On the bright side , people buy IBM for guaranteed dividends and long term appreciation . Come what may – I am sure IBM has enough capability to squeeze costs to make earnings promises be made good . But if the investment community doesn’t show patience – they might have to cut deeper than necessary to deliver and that helps no one .

As much as I care for IBM – I feel terrible every time they let go of people, since I have a lot of friends who work there . And in every round, some of them get affected . That makes it difficult for me to justify what looks like a good decision on economic front . That does not do IBM any long term good – a business is only as good as the people who work there, and not just the leaders . But that is the price to pay when IBM does not have time on its side .

For the sake of all my friends who still work there , and for my own sake as an ex-IBMer who cares for the company – I hope that IBM can buy some time to make its come back and not cut much more deep into its payroll to deliver on its commitments to the street .

This is the greatest mistake that happens when we try building teams . We start out with the intention of hiring an “A team” – and pretty soon it magically transforms into a hunt for “A players” . It took me a long while to realize it’s not the same – and often hiring all A players into one team hardly makes any sense .

There are only two ways of building an A team that I know of .
1. If you have money and luck on your side – hire all A players you can to fill each role in the team.
2. OR, hire a few A players with strong leadership skills and fill the rest with B and if needed some C players . Then make it the Responsibility of A players to bring along the B and C players

Option 1 is a no brainer . A players love working with other A players – but there are only so many of that caliber. And you probably can’t hire them all.

Individuals can win a few matches with their sheer talent . But to win consistently and become championship material – it takes a team . Not just any team – but an A team .

My favorite example is the Indian cricket team that won the 1983 World Cup . There were two top talent players – Sunil Gavaskar and Kapil Dev. Rest were average or slightly above average players if you look at their life time stats . Yet – Kapil led that team to win the World Cup , defeating the best West Indies team ever in the finals . That is the nature of A teams .

The Australian side of Steve Waugh in 90s was probably close an A team built with all A players . And they kept winning for a very long time , except when that crop of players retired – the team could not make another A team of A players . Now they are taking an approach which is closer to building an A team with couple of A players and the rest with B players .

I have had the fortune of working in A teams where every one was a star player , and also in A teams where only some players could be described as stars . But in both cases – output was stellar . And my current thinking is that the viable model is to discourage people from trying to build an A team of solely A players .

However, an A team with A, B and C players needs some ducks to line up in a row before their execution ability gets into stellar territory. Here are my top 6 thoughts .

1. An A team needs strong leadership – ideally an A player who can take responsibility of bringing along and improving the non-A players to play at major league. It’s the acid test of motivational ability of a leader.

2. Hire one or more A players to keep the leader honest throughout the time the team works together . Most often, of the leader alone is an A player – their ideas will go unchallenged . That can only hurt in the long term . You always need people in the team who can challenge the leader when needed

3. Never allow the B and C players to recruit . If you do – then the chance of them hiring an A player is close to zero. The biggest long term risk is the standard of incoming players decreasing over time and the team moving from stellar to mediocre status.

4. Don’t drink the “culture fit” koolaid in big gulps . It is important that people get along – but end of the day, fun needs to be balanced with output. And output needs specific skills and experience . This is a grey area at best – and a true test of a good leader is the ability to find the right compromise.

5. Stretch, but don’t break . A players typically can stretch a lot in the assignments they take on. Don’t let that make you try to stretch the B and C players too in similar fashion . Everyone has a breaking point – and the sooner the leader and team realizes everyone’s breaking point , the better the chance of great execution. In most cases , B and C players and can stretch the same as A players over time – as long as it is done in small increments .

6. Rotate players when they are successful . Let new players come in with new ideas . Let your A players go to other teams and expand their horizons . Share the wealth of talent – that is how it multiplies and scales .

It is parliament election season in India now . The country is so vast and infrastructure hasn’t caught up yet – so elections have to be held over several weeks in a phased manner . Whichever way I look at it – a coalition government is bound to rule India for the next term . And that usually is only slightly better than no government . And a country so diverse as India – with 1000s of languages and tens of states and countless religious beliefs – good solid governance is a must have to ensure continuous progress. It’s not a trivial challenge – to say the least .

There are three strong political groupings – one led by Congress , one by BJP and a third by the new AAP .

Congress led United democratic front – which in reality is neither united nor democratic – ruled for the last two terms . They barely got to govern with their structural issues . Regional parties held the government to random throughout the term. And given Manmohan Singh was just a figure head – whom the party could not find a safe seat to get elected, and hence had to get him in through the back door via Rajyasabha – his ministers seem to have had no intentions to take his lead . One of the greatest presidents we had – Dr Kalam – wasn’t even given a second term . And now they are projecting Rahul Gandhi as the PM candidate . If Congress can’t find a leader outside the Gandhi family in all these years , how exactly are they going to watch out for the common man ?

It’s not as if Gandhi family is the only one looking for politics as a family business venture . Veteran leaders like Chidambaram , Jaswant Singh and many others found no moral issues in asking for seats for their kin . The country has a billion plus people – why does this keep happening across all political parties ?

There is BJP – and they have some very strong leaders . The big issue with them is that despite almost a guaranteed secular rule if they come to power – like their last term – they find it necessary to stir up a Religious agenda to get votes . That regressive nature is not fit for a secular republic that the constitution envisions . India needs economic development – which happens with unity of purpose, not with communal tensions . BJP tends to keep church and state separate when they govern – but not when they are running for offices. It’s pretty sad that this is the best way for them to come to power .

And finally there is the AAP . I was elated and disillusioned back to back with AAP . Corruption is a very serious issue in India and Arvind Kejriwal took a great step in rooting that issue . Unfortunately – they lack political maturity and ended up as a one trick pony . Running away from office in 49 days meant that they couldn’t take the heat of actual execution . Talk is cheap – and now they have to deal with the stigma of being a party that ran away . Real life governance is not binary – you cannot govern with the attitude that you will do only one thing . Fighting corruption is fantastic – but the state needed more and AAP didn’t stay to deliver . However , I am positive that in 5 to 10 years , AAP will be a very viable party to form a good government . And in the process, they will force other parties to reform and get closer to their citizens

In my mind – the reason for this mess is mostly a lack of education. We always get leaders that we deserve . The politicians who are after our votes would rather have a large uneducated and poor vote bank – which can be swayed by simple and mostly false promises . If I can’t find three square meals a day – I will vote for the guy who offers me free or subsidized food . If I am an oppressed factory worker who has no skills to find another job – the communist ideology might be too attractive for me to see other options . If I can’t read – I probably won’t realize that Rahul Gandhi is not the great grandson of Mahatma Gandhi . If I didn’t have access to a variety of TV channels and newspapers – I might not realize that not all Muslims are terrorists and that many Muslims have served India at highest offices . If I don’t go to school – I might never hear about gender equality .

And for that – education is key. Education improves life across multiple dimensions – and gives us options . And it teaches us how to evaluate options . It allows us to have different beliefs but unites us as a country . It makes us Indians first and followers of a religion second . Education is what India needs – in abundance . It takes a lot of political maturity for a political party to push education at grassroots level across the country – as opposed to pontificating in an election manifesto.
The onus is on those of us who had the good fortune to get education to help our fellow citizens who were less fortunate . Part of that responsibility is in choosing wisely the people we want to represent us in government . Let’s choose wisely every step of the way for this election and every single one coming after it .