Riding The Tiger

Organizations are made up of both conscious and accidental cultures and turbulent times truly magnify both.  The conscious culture comes from what’s written and documented.  Its accidental culture comes about from those accepting and performing around unwritten or unspoken behaviors and norms passed from one employee to the next, and even one generation to the next.  Most likely an employee “knows” that it is part of the culture, yet it has never been documented. Accidental cultures can create both positive and negative outcomes.  Here are examples of how the accidental culture emerges:  At one business, a team has an impromptu happy hour every Friday where they celebrate all their accomplishments, welcome new members and say goodbye to those leaving. 
 
Another business tolerates leaders and managers that chastise employees in front of others.  Yes, we’ve all seen this at some point in our careers and maybe you are currently experiencing this kind of culture in your organization.  Obviously you would not see anything written that encourages this behavior which is why this is a good example of how accidental culture emerges.  And in fact over time, it may become so acceptable that it is actually not considered a violation of core values when it happens.
 
Sometimes process leads to accidental culture.  Many organizations require their people to complete times sheets (beyond the hourly workers).  This is quite common in service organizations where time is billed to the customers.  Logging hours spent on each project is a mandatory part of the job and yet while necessary, it can accidentally create a “watch the clock” type of culture.
 
As stated earlier, a conscious culture evolves from written and spoken goals, values and behaviors, and practices that are taught, measured and reinforced in the organization.  There are distinct benefits to a conscious culture:
 
·       Leaders more rapidly assimilating to the culture
·       Employees more quickly understanding the range of acceptable behaviors
·       Recruitment is easier
·       It is easier to identify and take action when there is a lack of fit.
·       There is a likelihood of successful integration in the case of a merger or acquisition
·       Systemic change is easier because there is no battle between the conscious and accidental cultures

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

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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The canvas we were painting was a collaborative effort, a true partnership. We were partners in developing world-class leaders. Our inter- and intra-team diversity made us stronger with team members from Nigeria, Germany, Greece, Columbia, Sweden, the United States, and of course India. We had measured significant business impact and won numerous international recognitions.

We created best practices and next practices that were being proliferated to diverse industries all over the world, and were the masterminds of a new model to build global leaders faster. We were the first organization outside of the United States to receive top honors in ASTD’s BEST Award; and we had journal articles, numerous interviews, and keynote presentations and requests to add to our beautiful canvas of success.

Then, without warning our canvas was taken from us. We watched as our Taj Mahal of learning began to crumble. On January 7, 2009, Ramalinga Raju, the founder and chairman of Satyam Computer Services, told his board of directors that he had inflated the amount of cash on the balance sheet by nearly $1 billion, incurred a liability of $253 million on funds arranged by him personally, and overstated Satyam’s September 2008 quarterly revenues by 76 percent and profits by 97 percent. There we were, close to 50 of us huddled in this small conference room, watching the television, shocked beyond belief…

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