Wanted: Entrepreneur-CEOs

Something

very interesting came up during a recent discussion with some industry leaders

and investment bankers. One of the finance guys had this sharp insight: The

problem with the Indian IT sector is a great shortage of professional

leadership. "There are still some CEOs who run companies for the owners,

but are never really playing anything more than a manager’s role," he

observed. "What is needed is a large number of professional boards and

leaders who are allowed to and want to behave like true entrepreneurs." In

an industry, which is looking for new means of sustaining and increasing the

pace of growth, this point is worth pondering.

The information technology industry in India is clearly at the crossroads.

Battered in the stock markets, suffering inevitable losses owing to the US

slowdown, which has sent half of Silicon Valley into panic trenches and many

Indian programmers back, Indian industry is also suffering from a crisis of

identity as the wheat begins to get separated from the chaff. And while the new

Budget has sent some adrenaline coursing through our veins, there are still some

real issues to be tackled.

Each sector has its own problems to contend with. The hardware sector has

never really recovered from the blows that weak demand and increasing opening up

of the economy inflicted on it in the nineties. With a weak economy and

virtually every business and industry segment showing weakness, nothing much can

be expected in the near future. This general malaise extends to networking,

systems integration and every other domestic offering that received a slight ray

of hope with increased government spending, but is now back in the dumps with

both industry and government turning out empty pockets.

The software challenge

The software industry still holds out great promise, even after the rapid

demise of the dot-coms, both in India and abroad. The Indian dot-com debacle has

meant that a number of entrepreneur wannabes are out of jobs and of course

masses of graphic artists, Java programmers and content specialists that moved

out of the more traditional print, publishing and advertising firms, are also

making a beeline back to their organizations.

IT services firms still hold out promise, particularly those that have not

depended too heavily on one product or service segment or geography. This is the

time when Europe is looking as attractive as the US and forays into South-East

Asia, Japan and South Africa, which were seen as incremental strategies less

than a year ago, are now assuming new importance given the US slowdown.

In the B2B e-commerce space, undifferentiated marketplaces have reached the

edge of the cliff, with their only alternatives being to jump off and shut shop

or sell out to brick and mortar incumbents who still have the ability to build

private exchanges for their value chain partners using acquired technologies.

The success stories even in India are of those who are able to provide a

comprehensive range of technologies to companies as well as industry groups.

The applications that are gaining traction in this space are private

marketplace creation to public marketplace participation, enabled search and

discovery processes for new suppliers, materials or services, forward and

reverse auctions, and of course the ability to complete transactions with the

extended enterprise. With every player, from the big ticket management

consultants to the software houses to the boutique firms like i2, Ariba and a

host of smaller players, competing for mindshare in this space, this promises to

be the major battleground in 2001.

Amidst this seething competition in a shrinking market, it is not surprising

that we are seeing "SELL" advice coming from investment banking houses

for a number of companies which have at one time been stock market darlings. And

the differentiating factor between the men and the boys, between the success

stories of the future and the meteors now nearing burnout, is the quality of

leadership they are able to bring to bear in a tough environment.

In the boom-time of the US economy, virtually every company with a software

tag attached could lay claim to stock market fancy and high valuations. The

quality of management, the depth of clients and indeed the value proposition

that was brought to the table were rarely questioned as it was in everybody’s

interest to keep the euphoria going. But now is the time, as never before that

strong leaders will have to emerge to build a new stable full of Infosys

equivalents.

The new leadership

What will constitute this leadership and what will they have to do to enable

Indian industry to keep its tryst with the $80-billion destiny? First and

foremost, industry leaders, be they owners or professional CEOs, must display

true entrepreneurial appetite and the ability to take risks, be innovative and

lead from the front. Of course, they will need the support of truly professional

boards, cognizant of the need for corporate governance and having both the

willingness and the ability to protect shareholder interests and build value.

Leaders must also focus on breaking into new markets rather than keeping the

existing fires burning. Rajendra Pawar, the doyen of the computer training

industry in India, was fond of describing leaders as "those who do the

tough job of breaking down the trees and forging new paths while the managers

clean up the ground behind them and create settlements for future

generations". This is particularly true in the current context of the

software exports industry, where new geographic conquests are called for to

sustain the momentum.

Finally, leadership is all about building teams. In the organization that I

led till a couple of weeks back, we found that it was never salary or benefits

that held people back but the power of a compelling vision, coupled with a

framework of fun and friendliness that motivated people. Given this environment,

the entire staff would contribute every bit of their intellectual and emotional

energy to the common cause. The great leader is separated from the average

manager through his energy, charisma and quite simply, the ability to inspire an

entire generation to rise above their hygiene needs of money and creature

comforts to build and achieve lofty collective goals.

The problem in India is it is not the occasional great leader that is needed

but an entire contingent of leaders to build 20 Infosys and Wipro-like

organizations, not to speak of hundreds of niche products, services and

IT-enabled services firms. Will this vast nation of over a billion people

deliver these leaders to build the IT industry in the new millennium? Only time

will tell!

Ganesh Natarajan former president of

Aptech and a founder-director of BConnectB, is deputy chairman and managing

director of Zensar Technologies.