Riding The Tiger

Congratulations to Mahindra Satyam for being able to wade through the mess and get the numbers for 2009 and 2010 released.  This is a great step forward for a wounded company that has worked hard to rebuild itself.  We feature many of the leadership practices implemented to get Satyam through the turbulent times in Riding the Tiger: Leading Through Learning in Turbulent Times.

See Economic Times New video:
http://economictimes.indiatimes.com/videoshow/6652902.cms

We are happy for their ability to pull through, and especially believe the way the people reacted, responded and courageously led through those darkest of times was inspriring.  However, we are concerned about the message delisting from the NYSE sends to investors and customers in the US in particular because such a large amount of their revenue comes from there.  What is Mahindra Satyam’s plan for the U.S. investors who are now let in limbo?

Read more at:

Wall Street Journal – FY 10 Satyam Not out of the Woods Yet
http://online.wsj.com/article/BT-CO-20100929-710574.html

Economic Times –Mahindra Satyam Should be Higher in next 12-18 months
http://economictimes.indiatimes.com/markets/stocks/views/recommendations/Mahindra-Satyam-should-be-higher-in-12-18-months-Satish-Betadpur-Independent-International-Investment-Research-PLC/articleshow/6651290.cms

India’s fraud-hit Satyam posts loss but is on the mend
http://www.physorg.com/news204955945.html

Business Week — Fraud-Hit Satyam Narrows Loss After Mahindra Purchase 
http://www.businessweek.com/news/2010-09-29/fraud-hit-satyam-narrows-loss-after-mahindra-purchase.html

Economic Times — Mahindra Satyam Board approves delisting from NYSE
http://economictimes.indiatimes.com/infotech/software/Mahindra-Satyam-board-approves-delisting-from-NYSE/articleshow/6653226.cms

I received your book on Friday and have read it twice!  I will be reading it many times more, it’s like a new bible of usefulness in the work that I do.

As to page six, paragraph two “Somehow, something good must come from this catastrophe.” – Something phenomenally important and inspiring has indeed come from an event that I almost wish to have been part of.  Many congratulations to you both, I know too many people who very quickly wish to distance themselves from disaster, however, you have courageously ensured that all the good lessons and experiences are captured here for all time and in a most constructive and humanistic fashion. Genius!

I could almost write a whole book of praise after two reads!

I do hope that the “leaders” of the financial crises buy your book and learn from it.  Some day, when I put together my own book of life experiences in helping people to deliver sustainable change, I’d be grateful for your counsel. Many things in your book clearly articulated thing that I already knew but did not consider so deeply until now.

My very best wishes and look forward to reading of your next adventures.

Regards

Diane McWade
CEO
Evolution Network Limited
http://www.linkedin.com/profile?viewProfile=&key=7256585&trk=tab_pro

In January 2009, founder and chairman of India’s Satyam Computer Services—the “largest publically traded company you’ve never heard of”—Ramalinga Raju confesses to massive accounting fraud and resigns. In a five-page letter to the board, he described the problem saying, “It was like riding a tiger, not knowing how to get off without being eaten.” In an instant, he left behind him, chaos, distrust, and plummeting moral among his more than 53,000 employees. But Riding the Tiger is not about how the Enron-like tragedy occurred, but how a leading through learning strategy calmed the chaos and helped the company recover and rebuild.

Authors and former Satyam employees Pricilla Nelson (Global Director of People Leadership) and Ed Cohen (Chief Learning Officer) share the take-away lessons learned on the road to recovery and renewal. Step one was what they eventually called the “Lights On” strategy. That is “deciding exactly what must be done to keep the business moving and doing only that which is critical to help the organization stabilize.” They describe 6-steps—beginning with hold everything and build an adaptable stop-stop-continue plan—based on the two pillars of learning and communication.

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There we were, close to 50 of us huddled in a small conference room, watching the television, shocked beyond belief. The screen displayed a photo of Raju on the right and a graph depicting the falling stock price on the left. The value of our stock had plummeted in less than 5 seconds, drained like an hourglass. I immediately grabbed my phone and called Ed. He did not answer. It rang and rang. I tried the home phone, and no one answered there either. I continued to call every few minutes.

The reporter on TV began reading a letter from Raju: “It is with deep regret, and tremendous burden that I am carrying on my conscience, that I would like to bring the following facts to your notice.” We watched in disbelief as the news emerged. The letter indicated that for the most recent quarter ending September 2008, Satyam’s bank balances had been overstated by close to $81 million and more than $265 million in liabilities were not accounted for. 

How could this be true? Just last week, there had been an article in the newspaper indicating that Satyam had an excess of $1.6 billion in cash. The reporter continued: “The gap in the balance sheet has arisen purely on account of inflated profits over a period of the last several years. What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years.” We later found out that this deception had been going on since 2001 and that it added up to more than $2.5 billion. Everything we had created at Satyam—our Taj Mahal of learning (see appendix A)—was starting to crack and crumble. 

“Every attempt made to eliminate the gap failed,” Raju’s letter continued. “As the promoters held a small percentage of equity, the concern was that poor performance would result in takeover, thereby exposing the gap. It was like riding a tiger, not knowing how to get off without being eaten.”  

What had we missed? The unthinkable was playing out before our eyes. Could this all be true? I had actually been worried about Raju for months. His recent lack of communication was a red flag. I had spent years as a psychotherapist and worried that the economic fallout now reaching India was taking its toll. I’d even tried to speak with him, and he had quickly changed the subject and darted off to another meeting. Ed also sent a note to Raju that people were starting to worry and needed some form of communication from him. He finally sent out a brief note saying that it was concerning for us all to watch the economy affect us, yet we were prepared and had enough to “weather it.” He asked for everyone’s support, and we had all willingly given it. Now his letter ended: “Under the circumstances, I am tendering my resignation as the chairman of Satyam and shall continue in this position only till such time as the current board is expanded.” We were numb. None of us believed that Raju could have such a dark side. We all worried that without him—our founder, our leader, the man who defined Satyam—the company would not survive. 

“Rarely does a book come along that is as useful as Riding the Tiger. Ed and Priscilla have turned their turbulent experiences into a realistic howto guide for the rest of us. They show how to move from crisis to credibility of leadership; from pain to passion for the brand; and from scandal to renewed success. Using their practical experiences as a basis, they share action item lists, introduce a new vocabulary, suggest questions to ask, and present a plan to move boldly forward from chaos to confidence. This is not a book to be read, but one to put into action, especially when you are riding your own tiger.”

Elaine Biech Author of The Business of Consulting and Thriving Through Change

The huge scale and impact of Satyam’s downfall were clear in the headline of The Economist’s cover story: “India’s Enron,” and Business- Week featured a photo of Raju on the cover with the headline “From Icon to I Con.” Even in the maelstrom of this scandal, however, for the vast majority of Satyam’s dedicated leaders, daily life at the firm still came first— customer retention, revenue, collections, delivery of projects, and tending to wounded employees. Yet Satyam’s leaders, and in fact most leaders in India, had never encountered anything like this. Employee morale had plummeted to an instant all-time low, no one knew whom to trust, and feelings of betrayal had left a sour aftertaste.

But this book does not tell the story of Satyam’s downfall. It tells about what happened after Raju’s confession and how a “leading through learning” strategy was implemented to stabilize the company and help it recover and rebuild. Moreover, though the story of the crisis endured by Satyam’s leaders and employees in Hyderabad is engrossing, the leadership lessons from their experiences are just as applicable to a nonprofit advocacy organization in Baltimore, an agricultural products firm in Omaha, a sporting goods retailer in Beijing, an investment bank in Sydney, or a hightechnology firm in San Jose. These lessons, in short, are universal; whenever people in an organization are facing turbulence—whether caused by external recession, internal malfeasance, or anything else—the organization’s leaders and all employees’ efforts to continue essential initiatives play a key role in resolving issues and putting the organization back on an even keel. Thus, when a crisis hits and the going gets beyond tough, when it gets nearly impossible, this crisis itself—in accord with the Chinese proverb— is paradoxically both a grave danger and a great opportunity to set the organization on a path toward renewal.

“To be faced with a crisis the magnitude of what Satyam dealt with and then one year later to be reborn and vibrant in a new avatar speaks volumes about the value of a strong leadership culture. This resilience is the result of years of painstakingly implemented leadership development strategies, which were spearheaded by teams led by Ed Cohen and in which Priscilla Nelson was also a highly influential senior leader. As a beneficiary of the leadership techniques covered in this book, I believe they are a must for all who aspire to succeed in today’s world.”

Venkatesh Roddam
Director, VenSat Tech India
Former CEO at Satyam BPO

As a business leader and learning professional, my eye is always geared toward exploring insights into learning cultures and models. During my visit to India in 2008, I was the keynote speaker for the Indian Society for Training & Development’s annual conference, which was hosted by Satyam. I was immediately struck by the power of Satyam’s image and infrastructure. The support provided for the conference in the sparkling, high-technology facility in Hyderabad was impressive. Even more affecting was the learning culture that had been created by Ed Cohen and Priscilla Nelson. A few days later, I facilitated an offsite seminar for Satyam professionals on how they could use a “whole brain” approach in designing their teaching and learning. I had the unique opportunity to discover Satyam via this vibrant, growing team of professionals, who demonstrated such passion and dedication to their mission that, at first, I was a bit suspicious. As my time with them unfolded, however, I felt the power of an organizational culture that was designed on the basis of learning and growth—in contrast to so many, who treat learning as a separate function or an add-on. The leadership approach that Ed and Priscilla delineated at this seminar has as one of its core principles the recognition that a learning organization is engendered from within each employee and the infrastructure that is made available to them.

“I read it. I lived it, and I recommend it. Ed and Priscilla have carefully and eloquently captured the essence of the betrayal of a Leader (Ramalinga Raju) to those who not only respected him personally but admired his professional leadership vision.

This book highlights for the reader those attributes and characteristics of “true” leaders – who benefitted from Raju’s vision of “everyone is a leader” and the Satyam School of Leadership’s meteoric rise in recognition (Ed Cohen’s drive) that transcended the misplaced trust and actually provided the corner stone of a firms unparalleled successful survival. ” Hetzel Folden, CSC

published May, 2010 in Leadership Excellence Magazine 

WHEN YOU ENCOUNTER STRONG Turbulence,you should revisit your core values and then adjust, communicate, and reinforce them. For most leaders, today’s turbulence stems from the global recession; but others may be dealing with rapid growth, mergers and acquisitions, reorganization, internal corruption, or other changes.

We invite you to review your core values and decide what to keep, what to change, and what to add, ensuring that each value is clearly articulated and the boundaries of behavior are well defined. We’ve identified core values that are vital for all leaders: 

1. Conviction: Conveys sincerity and confidence in beliefs and decisions; willing to make and stand by decisions.
2. Diversity: Values different perspectives; builds multifaceted, diverse teams; seeks to understand what drives and motivates individuals.
3. Entrepreneurship: Recognizes opportunities and organizes resources to maximize them.
4. Excellence: Strives for excellence, not perfection; recognizes that excellence may vary from country to country, depending on the local context.
5. Fairness: Makes decisions that are fair, consistent, and equitable.
6. Humility: Acts in the knowledge that you are no better or more important than others.
7. Integrity: Demonstrates honesty and makes ethical decisions.
8. Passion: Leads by example; shows high energy and enthusiasm.
9. Perseverance: Shows resolve in moving along the path, with a strong will and the drive to accomplish.
10. A positive attitude: Maintains a positive attitude; represents decisions and policies in a positive manner.

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When Ramailnga Raju confessed to cooking the books sending Satyam into a downward spiral many people thought the company would cease to exist.  The passion of the leaders who applied the leading through learning strategy sustained the organization until April 2009, when Tech Mahindra checked in. Since acquiring Mahindra Satyam, much has happened to put the company back on the path to success.  We are thrilled to see the organization rebounding under the leadership of Mahindra and Mahindra.  Keep up with what’s happening at: http://www.youtube.com/buzzatmahindrasatyam

Throughout an organization’s life, additional norms, behaviors, and practices creep in. This reality is even more pronounced during turbulent times. Positive behaviors may include greater pride, fierce loyalty to the organization, a stronger work ethic, broader collaboration, and boosted collegiality. Negative behaviors may include fear, distrust, and anger that results in hoarding of information and unhealthy internal competition. Together, both positive and negative behaviors change the organizational culture.

Charles Hill and Gareth Jones (2001, 396) define organizational culture as the “beliefs and ideas about what kinds of goals members of an organization should pursue and ideas about the appropriate kinds or standards of behavior organizational members should use to achieve these goals. From organizational values develop organizational norms, guidelines, or expectations that prescribe appropriate kinds of behavior by employees in particular situations and control the behavior of organizational members towards one another.” Unfortunately, countless leaders do not recognize the influence that organizational culture has on the past, present, and future accomplishments of their enterprise. Even more important is their lack of understanding about how they influence the culture.

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