This writeup is not an analysis but an attempt to demonstrate the reason through a short story.. All names are fictitious and no such company exits to best of my knowledge.
In May 2009, after a stint as Director of a multinational company, Andrew Tan decides to move on to join an Indian software giant, Stylus Consultancy. His vast experience of 20 years has given him the chance to be appointed as Head of Asia Pacific region. He was happy to get a one year grace period to prove his mettle and improve the declining market share of Stylus in Asia Pacific. His immediate goal was to amalgamate himself to the working culture of the company and build a rapport with the management of Stylus.
His appointment was not liked by Rajan who is the present deputy head and is being with the company for last 22 years, having experience working on various positions and markets. Being so long in the organization he is acquainted with the organization philosophy and is also close to the senior management team. He was under the pretense to be next Head of Asia Pacific region and often boasted that he has seen it all and nobody knows more than him about the company.
| Andrew was out rightly rejected by Rajan and other peers and kept telling him that “we have seen many as you coming and leaving the company within a year”. He being a winner throughout is professional career took this as a challenge. Andrew realized that though his job is to generate sales, he needs to work very closely to the operations team which is largely Indian workforce. He soon found that the though the company is global with operation in more than 100 countries, the style of management is still very much local to India. |  |
Initially it was really difficult for Andrew, to understand the working culture and the dynamics of Stylus, and found it extremely difficult to generate enough enthusiasm in his immediate subordinates to support him in his endeavors. Andrew was constantly challenged by Rajan on his initiatives and suggested on various occasions that this is bound to fail as he himself has tried something similar and it has been a disaster. Not only Ranjan will have non-cooperation attitude, he will also influence his other colleagues and create situations to prove that he is giving right inputs but Andrew is not taking steps in the interest of the company. Andrew worked hard for the first six months make his presence felt and also marginally increased the business volume. The business growth came mainly through his personal contacts which he built over years.
Stylus being a giant and global has operations in about 100 countries but most of the focus for last 20 years has been in North America. As part of his induction Andrew was invited to look into the North American model. He observed that North America being the first mover’s has a matured models and company executives has built good rapport with the clients over the years. With the new wave of off-shoring which was mainly due to increasing cost of Indian labor force in the software sector; company has established itself as a niche player and is passing the cost advantage to its customer. North America has been the cash cow for the company and most of company’s resources and competent staffs are engaged to support the North American clients.
Ajay Mallaya, Stylus CEO is one of the most aggressive CEO’s any software company has seen so far and he has been successfully growing the company at a rate of 50% percent for the last 5 years. Ajay has been contemplating that the US slowdown, with bleak chances of recovery will have negative impact to the company’s revenue and he needs to find new avenues fast. During his visit in December 2009 at Asia Pacific headquarters, he gave a tough task to Andrew to replicate the North American model in Asia Pacific and grow revenues by 50% year on year keeping the gross margin more than 40%. Ajay believes everything is possible if there is will and ‘something is not possible’ is not in his dictionary. Ajay has been ruthless in changing the management team if goals are not met.
Andrew knows he has only six more months to prove himself. He sat in his office late that day wondering. Most of his time till now in Stylus has been focused on travelling to various countries, to meet the team, build a rapport and make his presence felt. Andrew is caught completely unaware of this new challenge. He has never failed before and was in dilemma how to prove himself. He brought down all his experience and started to on work his plan. He identified the major markets to be China, Singapore, Japan and Honk Kong. Other potential markets are Malaysia and Indonesia. The dilemma was how to penetrate the market given the fact that Stylus has not done well in these markets before. His experience of working in China has been quite challenging and selling software in China is even a bigger challenge. Japan being a major economy as negligible software outsourcing and also the language and culture poses a big barrier. Only a handful of Stylus employees know how to deal with Japanese. Doing business in Malaysia and Indonesia has its own challenges as company has very strict ethical policies which are to be complied with. All expenses incurred in business developed are to be audited for and business does not come easy in this region without giving a cut to the clients or pay through agents indirectly. Stylus has not invested enough time and resources to build strong relationship in this region in the past. Few of the other challenges he thought about is rampant software piracy and customer’s not paying in time or not paying at all. Further to this there is fierce completion from other international players and over the years, Philippines and China have grown their own talent and giving a tough time to Indian software exporters. Stylus like most of the other Indian software giants is good in software services but not strong in software products. The cost of service offering to Asia Pacific, barring Japan has to be very competitive and Andrew knows that Stylus is not a cheap software supplier.
Stylus has been doing well in English speaking countries but doing well in these nations which requires different language skills and adapting to the culture is a big shift. Considering most of the Indian work force is not equipped to handle these languages and culture, Andrew gets into deep thoughts and more he thinks he is more worried. He decides to call Rajan to discuss and brainstorm the future plan and knowing the equation well Andrew is not prepared to share his concerns. Rajan seemed professional and shared some of his concerns but gave him very vague and hypothetical solutions on how to develop the market. Rajan draws up a training plan to get the Indian software professionals train on local culture and language. Draws an aggressive selling plan to travel and meet prospective clients over the next 90 days. Andrew was thinking how he can go about it without having an understanding of client’s needs and agenda. None of the solutions seems to bear fruit in short term. Andrew knows very well that Rajan is waiting for the opportunity for him to fail.
| Andrew is thinking deeply how a global company like this did not have a long term plan demands to change the game overnight. He is running out of options and is very sure that whatever he does will not meet the set targets. The words “we have seen many of you coming and leaving the company within a year” is echoing in his mind. He has been a winner always and first time in his career he is afraid to loosing. On his way back to his home Andrew is weighing his options whether to go back to CEO and tell the facts and get fired or leave the company and move on. |  |
Question:
Should Andrew continue this challenge?
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