MNCs Hiring Abroad

Wall Street Journal recently reported about American MNCs sifting their hiring momentum to outside of the United States. This is not outsourcing, in the strict sense of the term, but kind of a mix between that and catering to local market needs. I am not aware what kind of reaction the report generated in the States, especially as President Obama continues to play to the domestic galleries with his recent rant about healthcare tourism. Irrespective of public reaction, this trend in MNCs is here to stay. Broadly, there are three reasons why MNCs go outside of their headquarters to hire talent and setup centers (apologies for the poor quality of the graphic. Pls click on the picture for a high resolution version. Opens in the same tab in the browser)

MNCs traditionally chased the top. Lever Brothers came to India not to exploit the talent and not to arbitrage costs – it found the Indian markets attractive for its produce. The state of technology did not allow them to come down the pyramid (they did however extract their top talent and put them for overseas assignments. Something that MNCs today call flow-and-grow). The game has changed significantly since. The MNCs that are here to stay have invested across the span of the pyramid. That investment gives them greater flexibility of running businesses and benefitting from economies of scale

Laws of Motion version 2.0

Joel Spolsky had once written about two groups tasked with making clay pots. Group A was asked to make the pots as perfect as possible while Group B was asked to make as many as they could. Over time it was observed that pots coming out from Group B were much better than what Group A was shipping. The point here is this – shipping often and shipping early leads to learning that can go to improve subsequent shipments.

Writing – or any work in the knowledge age for that matter – has its laws of motion. An idea or work will remain in its state of inertia until you break that state with something. Anything. It is like the first pot that came out from Group B – possible imperfect and maybe not even looking like a pot. But once that inertia is broken, the second law takes over. Your work continues in the state of motion, picking acceleration from the effort you keep providing to it. The third law is not so far behind. Visible feedback from your work is instantly available in today’s age and time. Your action provides the feedback. But here is where things break away from the Newtonian laws. Your feedback is neither equal nor opposite and it does not necessarily have to work on the same object. The magnitude of the feedback grows exponentially as it makes your work progressively better and the halo effect spreads to other adjacent (and perhaps even non-related) projects (If asked, the successful Group B would most likely paint their pots much better than Group A).

Effort is vastly underestimated as perfection is rated much more than it ever should be.

PS: I was postponing the idea of writing a business plan, looking to find the best structure, data points, graphics and so on. Actually, I was getting blocked by the idea of picking up the keyboard and banging on it. So I decided to pick up a book I was reading and just started typing out the contents of a chapter. Maybe this is how athletes get into the zone, but soon I realized I was thinking better and was all ready to start on writing my own stuff. Quantity wins – quality follows.

 PPS (humorous aside): You haven’t heard of the Mahesh-Majumdar laws, have you?

Picture courtesy:

So long, Flip, and thanks for all the videos

Single use products are always living a dangerous life. They are precariously placed at the bottom of the food chain risking being devoured by stronger participants in the ecosystem that can do more – and better – than that one thing that single use products do. Actually, it is the more that counts first and the better always follows – we will keep this hypothesis for a later post 

Cisco, the owners of Flip cameras had bought the asset paying $590 million in 2009. Yesterday, they shut down the product. The act has attracted emotions ranging from sadness of parting (Kara Swisher of All Things D did a Zuckerberg interview with it once) to sagaciousness of inevitability (Felix Salmon said it wasn’t Cisco that killed Flip. It was Apple). The death of Flip brings to the forefront the narrow focus versus cast-the-net-wider approach of managing products.

The narrow approach is great so long as it fulfills a well defined market/human need in the most optimal manner (take products like bicycles, television sets etc.). Adjacencies – what strategists define as the immediate user-need neighborhood to existing propositions – are few in these cases (yes, one could attach a motor to the bicycle but that serves a totally different need where the physical exercise is taken out). Flip had not only multiple adjacencies but strong players in those adjacencies. And to Flip’s discredit, they did not do much to either explore those adjacencies or build strong ecosystems in the portable-movie-making device business. Anyone that could slap HD recording, AV signal out to a mobile-phone like device could eat Flip’s lunch. And they did (Felix is correct – i-phone killed Flip much before Cisco did).

Exploring and exploiting adjacencies should be a never ending process for a product strategist (ask your users the question – “what do you do three minutes before you start using our product and three minutes after you are done”). Adjacencies also consider ecosystems. People who used Flip were the ones that valued “immediate” over “control over filming”. What do people who prefer “immediate” generally do with their output? They mostly would want to circulate it within their networks, get it on their blogs, send to the newsroom and so on (silently add the word “immediate” before each comma in the last sentence and you get what I mean). Why was it that Flip never considered allowing these users to do that without having to transfer the media to another device first? And once wireless delivery was possible, how much time would have taken someone to realize that video calling was just a step away?

Cry not for Flip if you can. If you own a Flip (I do), keep it on your desk. Look at it each time you are thinking about product and business strategy

Big Fish. Small Fish.

Two species growing in a competitive environment usually results in the dominating specie pushing its traits down on the peripheral one. This is as true in nature as it is in mixed employment markets with labor mobility. Take the Bangalore IT/Software market for example

In this milieu, it is a no-brainer that the red bubble will dominate the blue when the two are fishing from the same end of the talent pool. This creates a conflict straight off the bat for the blue guys. Blue bubble guys want to run lean teams where the focus is on depth and not so much breadth. Their business success comes from having the best developers, best designers, best data-center optimizer, best customer service reps. The blue companies promote greater autonomy, greater flexibility and more horizontal career options. Jason Fried of 37Signals wrote a great piece in Inc on why he runs a flat company (impressed by his writing, I purchased and started reading his book “Rework”. Good work, Jason). In a strange sort of way the business success of the red bubble is quite the reverse of the blue. A services company creates fungibility in their resources so they can be deployed across projects and they want predictability over mavericks (imagine someone like Jason working for say CapGemeni). They also want to “make” their resources as senior as they can (within limits of reason, of course) because their billing to client is title driven in many cases. And it is imperative for these human resources to have people management skills – skills that do not focus on their domain as much as it does on managing people. The latter also leads the HR policies of the red bubble promote vertical career options aggressively.

This inherent business model conflict spills over to talent acquisition – and cultural fits – when these models co-exist in the same geographical area. And if that area happens to be in India, which is a rather hierarchical society, then the blue guys have the disadvantage of having to start with a poorly dealt hand. Companies in the product space in India face the challenge of employees looking at services companies and demanding an identical HR model – a square peg in a round hole essentially. Unfortunate as it is, the blue guys sometimes bring over senior management and HR specialists from these services companies, muddling even further the already muddy waters and worst, creating internal conflicts

It’s not all doom and gloom though. NASSCOM, the industry body in India, has been helping Product centric companies lately in making themselves, their differentiators and positioning more visible to the general audience. Niche consulting firms have been burning the midnight oil to ready the pitch and educate the industry in general. It may be early days to pass judgment whether things are reflecting the sought after change, but the effort surely is in place. Like all pioneers, the product centric companies that have braved the first – and inclement – winds have done exceptionally well in hanging on there – you have our respect.

PS: My colleague Mahesh Ramakrishnan, faced with this same challenge, had written this guest piece for the blog. Mahesh and I continue with our crusade.

Of Embargoes and Selective Scarcity

My first career was as a spot FX (foreign exchange) trader on a corporate treasury desk. Esoteric theories I had learnt at business schools around currency pricing very quickly went out of the window (for a strange reason, our dealing room did not have windows, but that’s not really the point). The ubiquitous volatility of the trading day however seemed to take a breather around 5:30pm India time (around when my boss would go down for a smoke) – a mere pause before the madness resumed in doubled frenzy just after 6:00pm. Precisely at 6:00pm, which was 8:30am EST, the US markets released macroeconomic/monetary data that traders instantaneously interpreted and positioned themselves to trade accordingly. I later learnt that journalists were all herded into a room ahead of the news release, given copies of the about-to-be-released data to digest but they could only wire out the information (and analysis if any) at 8:30am IST. This was the information embargo

Institutions mostly apply embargoes on news and research for different reasons. Non scoop: Ensuring one news agency cannot “scoop” the news ahead of others. This is particularly important if the news has potential to cause a major disruption of status quo. Client protection: Applied in case of research, premium client engagement conditions might dictate that the wider distribution happens after a period that allows premium clients to digest the content.

Embargo, looked differently, also allows the creator of the embargo control the subsequent distribution (news is just a special case – my intent here is to generalize). For example, Department of Labor releasing US non-farm payroll data embargo at 8:30am EST ensures that all wires – all of them – write about it precisely at that hour, creating a critical mass, rather than fragmented reporting. Same goes with film reviews coming out on a Friday morning after special screenings on Thursday nights

Technology – both software and hardware – has started with embargoes (in a different way, though). Premium agencies – like All things D, Techcrunch, Wired etc – get advanced versions of gadgets they write on.  What if commonly downloaded software had embargoes? Several people could download it and use teaser versions before all of them got authorized at a precise time. It will allow creation of a crescendo that culminates in the same news-styled time-synchronized buzz. The software creator could actually control the period and pitch of the crescendo by creative releases of used features. I wonder if this approach has ever been tested with software

On the other hand, creating a non-synchronized embargo (kind of a carefully-careless embargo design) is interesting. This is where a software releases selective features to users depending on their usage. So it will be likely that two users will see, during the embargo period, different features of the software attuned to their usage. Imagine the social media going crazy with “hey, my version of <insert software name> allows me this, how come yours cannot” and “oh, hell, why on earth can I not do what you seem to be doing with your <insert software name>”. Yes, it will be crazy, but it will be fun. And it will start a conversation going

Now, the LinkedIn Walled Garden

Professional networking site LinkedIn announced on 6th April something that Facebook had done a while back. LinkedIn was opening up its platform to developers

A platform company has the luxury of creating an illusion of openness. There is a term for it too – walled gardens. You are free to plant a tree, trim the bushes and grow some vegetables but all within the confines (or constraints) defined by the wall. The platform company, LinkedIn for example, provides the markup language that defines what you could do – maybe on your website – with their assets.  If that asset happens to be people, profile and their social behavior then the platform company is sitting on a proverbial gold mine. People – and social relationships – are ubiquitous. It is difficult to imagine a web service that does not have – or would not benefit from – some analysis of people, perhaps their members or people they refer to in stories or people that comment on their website – the list can be endless

I had written a post sometime back about how Facebook and LinkedIn seemed to be converging in terms of how people were using it. The two platforms continued to nudge – knowingly or otherwise – users in the path convergence with features like “what’s in your mind” (LinkedIn) and polls (Facebook). Indulging in some amount crystal ball gazing, the evidence of trend seems to imply that open social networking and institutional social networking will find their own spaces. In other words, time will see the emergence of specialized social networking. Think of a social network of medical professionals, researchers and investors that have interest in commodities and so on. Open social platforms have the right technology to diversify their ad-centric and premium membership (in case of LinkedIn) business to platform walled garden initiatives, but they were never designed to be specialized networking venues (This has worked, in a way, against LinkedIn earlier. While LinkedIn had “Answers” for a while, it never was able to offer what a StackOverflow could. Or for that matter Quora, which incidentally I think is a touch overrated)

Keep a keen eye on how social network platforms evolve. And watch out for firms that leverage the APIs to create innovative extensions

Picture courtesy: LinkedIn Developer website

Twenty Eight Years of Keeping the Faith

India defeated Sri Lanka in an exciting cricket match last night to win the ICC Cricket World Cup 2011 after a gap of twenty eight years. Here is a curated list of readings worth your time

Bhubon-Joyee (world-winners): (Bengali) By Sumit Ghose and Gautam Bhattacharya in Anandabazar Patrika. Bengali authors somehow still retain the Neville Cardus like touch while writing about the sport

Sydney Morning Herald: Pedestrian writing but easily the best photographs amongst all reports of the match. UPDATE: Peter Roebuck more than makes up for the earlier insipid report with this analysis

Timing the campaign to perfection: Simon Hughes in the UK Telegraph heaps praises for the Indian skipper. Also the toss controversy (this article claims the Sri Lankan skipper called “Heads” first up – and the coin landed heads – while replays are inconclusive)

The baton passes: Blogger Sidvee writes on how a team that won the cup for Sachin Tendulkar has now learned to move ahead of the little master.

KAPSLOCK: 1983 cup winning skipper Kapil Dev writes on the 2011 cup winning skipper

The Victors & The Vanquished: Vineet Khare writes for the BBC – on the joy and despair at the rival camps after the game was done

Maturity of the Indian Squad: Sharda Ugra of Cricinfo analyzes

Goodbye Gary: Indian Express (Nihal Koshie) pays a tribute to the never seen yet ever present figure in the last four years of Indian cricket

The New York Times: A Reuters editorial, buried in the bowels of the online edition