Mis Management

It was a surprise for me early in the morning recently when I took up my copy of the Economic Times to read and see that on the first page the magazine had an article on the sad demise of management talent and sensibility at an up and coming and a bright star Indian IT services company.

I was surprised as the ET – venerable paper as it is – does not easily take a stance as to call out someone or a company and a star of the media and up and coming and all that out for being worse off than we thought they were. I wouldn’t say that I have a very good idea of the company being thus identified or know people there or are aware of what they do and how they do it. Little that I do know and what I read from the front page article on the ET – it seemed like they fairly well yes had lost the plot. Born in the early 1970’s as I am  – I remain still rather partial to the feel of print – actual physical news magazines and newspaper and occasionally maybe once a year – even do take a printout or two. Reading the newspaper I realized that I should quickly have an electronic copy since they may pull the article from the web site soon and downloaded the soft copy of the e paper.

The article on the company was interesting and it seemed even if you don’t know them all that well that they were kind of doomed to fail on the bets that they were taking. The one that sticks out the most was their plan to develop a cell phone on Android! I can actually visualize this in my head – the main people thee CEO and CFO had probably in one of their foreign trips and goaded most certainly by their children had gotten themselves the latest iPhones. That blew their minds and they saw this huge opportunity – maybe initially for Apps or something but then some smart aleck most certainly said – why not go the whole hog and make a whole new phone. These are what I call the emperors’ new clothes moments – the group think and communal blindness situation – no one in the board or that management meeting would be able to see why this could not work.  The reference here is to the fairy tale about the emperor that had gotten new clothes stitched that were not actually there and he was naked – but no one in his entourage or among his people could see that. No one at this company could contemplate when they planned to get into the cell phone business that hey we are up against the best and the biggest – people like Samsung, Nokia, LG, Apple, Motorola besides ODMs like HTC, Acer and the rest – what are the chances we will succeed. I mean this specific space – making another cell phone (handset) is something on which a lot of research has definitely been done – dominated as it is by the big daddies of the tech industry – some names that I have already taken. I will however also mention that in that same time two hitherto unknown companies who had been distributors of Nokia managed to make, brand and sell their own cell phones giving stiff competition to both the Finnish and the Koreans. It is not so much about the phone or what you bet the farm on – it is about the orchestration, the execution and the delivery. You mess that up and you mess a lot of the big things up!

Mis management at companies and their grandiose plans that are never well thought out and doomed to fail from conception isn’t new. They have been happening since people have gotten into managing and there is nothing surprising about that either. Management is about people done by people and people have several issues and thought processes that are exposed to their inherent psychoses and personal frailties’. More often than not these cast a long shadow on decision-making processes and they way team members are selected and managers tend to fill themselves and their rank with coteries and yes Sayers. It is like they are primed for failure. In my career as a corporate slave and managers I have had exposure to several companies and managers who had no clue. Sometimes it is chilling to think of how some people wield unbelievable power by their circumstances when they ought not to be allowed to do so! One of the worst examples of this in my life ever as hen I took up this role heading sales and marketing at a start up telematics company. They made a neat little product that would use GPS and the GPRS radio system on the GSM to track the movement of the vehicle in which it was installed over a map in real time. A pretty simple business model it seemed to me and something that we ought to be able to find customers for and partners to take to market with I felt. This was especially so as products like LoJack were already pretty useful in the US and were something that had shown a credible business model. The company also had a sizeable OEM business outfitting high-end yachts with these tracking systems. I was sure we had a great thing going. For the terrestrial business however the plan was to sell to domestic (Indian) users like the road traffic companies who ran busses and we had won a deal in such a company in a tender situation where we had managed to win the deal as we had quoted the lowest – which at that time was free and we would also pay the company some money. If it does not immediately make sense – there is hardly anything wrong with that – there is no reason or rhyme behind it and there never was. The plan was we would have access to the busses that we had set these GPS tracking equipment up with and the bus company would give us advertising rights on these busses. We would recover the money spent and also some extra with ad revenues.

So the company had outsourced the selling of ad spaces in busses to this third party agency – which at that moment had not been the best in selling such ad positions in busses. The whole project was failing miserably all around us as t he number of busses that had to be covered or connected to these devices – each of which at its cheapest was a shade above a thousand rupees. We had a situation where we were bleeding money on installing the devices free of cost and not really recovering anything on the advertisement revenue model due to poor execution there. It seemed counter intuitive – we were a company that started out making devices that helped you track your vehicles and boats in real time over the air. We were not in the advertising business and there was no surprise that we were making such a hash of what had seemed at that time on paper at least a very brilliant one! We were rushing towards bankruptcy at a rate unbeknownst to the best but our management had been rather successful in getting venture capital and private equity investment of the risky type from people that they had been petitioning for a while. The CEO and who had hired me was a septuagenarian IIT graduate who had in the past been senior management of not CEO or COO at two large American multinational hard disk and disk drive makers in the 1980’s and early 1990’s. The problem was that he was this bad decision a day kind of a manager and had occasional brilliances like giving away our bus tracking data through the GPS devices that we had in place to other companies who built services like bus tracking for bus passengers on web and SMS etc. free. The other guys built these services and made money and we made nothing. To be honest I thought my CEO’s decision making was trouble and initially thought it might be an offshoot of some strong medication that he may have been under. A little basic research on the internet showed me no that he was in fact a chronic case and in the early 1990s and as COO of his then company had made a huge investment in a massive plant to make 5.5” floppy drives in Thailand. The Thai economy had chosen just that year to tank due to political instability and well 5.5” floppy drives were overshadowed for that small while entirely by 3.5” floppy drives. So let us say that was the worst of the bad bets that you could possibly taken in that line of work. That company went into bankruptcy and liquidation pretty fast and the then COO and my current boss had at that time made what can be termed a pretty neat killing during the winding down. This was information available from the SEC website and the EDGAR online services free of cost and was there for any one that wanted to see. At least some of the PE and VC companies that had till that time invested some $15 million in that 10 year startup should have?! I didn’t stay with them for too long unable to see for myself a valid and meaningful role and leant a few months after that I had left that it had been sold to a large MNC in the telematics space for the off shore development centre that the company provided with its bench of trained engineers and process for what seemed a paltry $2.5 million. The old CEO made a neat packet and on hindsight what then seemed to be mis management seems now to my cynical self like an astute plan to run the company into the ground and sell for cheap!

How are companies then ever be able to grow unhindered if they have not been from birth or later growth endowed with the best and most idealist managers that have naught more than the organizations growth and dominance in mind? It never happened even though this is the one that companies need to wrap their arms around. Large companies like Microsoft long since known as the hot bed of politics and the setting of a many a corporate coup inside the organization’s hallowed halls manage to exist and thrive due to the one time singular brilliance perhaps of their founders that have helped them develop artificial monopolies that help them carry on and turn a neat profit far into the next generations. But it is not a smooth flow and even there new incumbents have overturned what existed and there is a dearth and death of innovation from such organizations. In many places and industries perhaps in this world you could get away without being perhaps the greatest innovator – not so however in the spaces that Microsoft operates in.

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About Soumya
A technology enthusiast, forever enamored by all that it hath wrought and of course here is an attempt at making sense of it all and perhaps simplifying it!

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