Fluent Essays

Now, for the road map thing, I got further details. So, apparently in the case study, there is several steps like 5 or 10 So you will have to look for those steps, Google them get some information about them Then illustrates how did ‘Mind Tree’ apply the same. It is only a PowerPoint presentation 9 - 3 1 1 - 0 4 9 R E V : N O V E M B E R 7 , 2 0 1 1 ________________________________________________________________________________________________________________ Professor David A. Garvin and Research Associate Rachna Tahilyani prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2010, 2011 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545- 7685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu/educators. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. D A V I D A . G A R V I N R A C H N A T A H I L Y A N I MindTree: A Community of Communities In April 2010, Ashok Soota, executive chairman of MindTree Ltd., a mid-sized $278 million Indian information technology (IT) services firm known for its knowledge management practices, announced the “5 * 50” initiative as a part of its larger strategy for achieving $1 billion in revenues by 2014. This initiative called on all MindTree Minds (the name given to employees) to offer innovative ideas for building new $50 million businesses from scratch. MindTree executives would select five people with the best ideas and would then give them the resources to start their proposed new ventures. Both Soota and N. Krishnakumar (KK), CEO and managing director of MindTree, expected that Subroto Bagchi, one of the company’s founders and now vice chairman, would play a critical role in the initiative. Bagchi currently nurtured key leaders at MindTree. He and Raj Datta, who headed knowledge management (KM) at MindTree, were considering how KM’s roles and responsibilities would change as a result of the new initiative. Bagchi observed, “My expectation is that KM will elevate itself from building out the knowledge management infrastructure to actually co-creating strategy. It will need to reinvent itself.” Datta added: The enabling role of KM will stay the same. We will piggyback on the same kind of processes and infrastructure, but will just take them to the next level. Today we focus on deploying ideas across many parts of the company; in the future we will reach out to partners, customers, suppliers, and academicians as we focus on deploying ideas that will generate new mini-businesses. Industry and Company Background The Indian IT-BPO industry, with estimated revenues of $71.7 billion in 2009, accounted for 5.8\% of India’s GDP and employed about 2.2 million people. At the low end were voice-based services, knowledge process outsourcing, and “body shopping”—supplying overseas firms with information technology workers and contracting out their services on a short-term basis in order to take advantage of India’s low labor costs and large pool of engineering talent. End-to-end business process outsourcing (BPO), in which operations and business functions such as customer service were fully provided in dedicated centers, was a somewhat more costly service. At the high end were the most analytical, value-added services such as consulting and research and development. D o N ot C op y or P os t This document is authorized for educator review use only by DIVYA UPADHYAY, Alhosn University until Aug 2018. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 311-049 MindTree: A Community of Communities 2 The Indian IT industry first rose to prominence in 1999 by fixing the “millennium bug” that threatened to crash the world’s computers. Spurred by the availability of a young, highly educated, English-speaking technical workforce, the industry grew at an annual rate of 40\% or more in the initial years, and helped India become a global technology and outsourcing hub.1 However, experts projected that revenue growth would slow to 20\% annually in the next few years, with single-digit growth forecast for the immediate future.2 The credit crunch, the spending slowdown in the U.S.— the companies’ largest market—and competition from other low-cost countries in Eastern Europe and Asia were among the factors plaguing the industry. Many Indian software companies were looking for new engines of growth and, for that reason, had moved upmarket, expanding from body shopping and BPO services into consulting, business analysis, and system integration, which had long been the domains of global consulting companies such as IBM, Accenture, and Cap Gemini.3 Six players—Tech Mahindra (after its acquisition of Satyam Computer Services), Wipro, Infosys Technologies, Tata Consultancy Services (TCS), Cognizant Technology, and HCL—dominated the industry. They were known collectively as the SWITCH companies. Each of these firms had annual revenues in excess of $1 billion and managed, because of scale and reputation, to attract the best talent and win the largest deals. Most other players in the industry struggled to breach the $500 million revenue mark, even as they continued to benchmark themselves against the larger SWITCH firms. Some industry experts believed that these mid-size companies were “too late” for the big leagues.4 Others believed that they could compete only through lower price or by focusing on niche segments.5 MindTree differentiated itself from other mid-tier players by using its culture as a “soft differentiator.” A business CEO explained: What we sell is the promise of building a relationship. In the IT services industry, every firm is assumed to have the critical skills. What customers want to know is, “Can these people work with my organization? Will my people be comfortable working with them?” Here, our culture and values are key differentiators. Bagchi used a colorful analogy to make the same point: “Tadpoles in different ponds all look alike—just like the technical people in our industry. So the challenge for companies is, how do you make your tadpoles glow in the dark?” MindTree also sought to leverage its smaller size to win new business. A senior manager observed, “We say that we are smaller and that you are therefore a much more significant customer to us. We can give you a lot more attention, access, agility, and a positive attitude.” MindTree’s Early Years In August 1999, a group of 10 IT professionals from three different nationalities founded MindTree Consulting Pvt. Ltd. Their aim was to build a company with two specific focus areas—e- business consulting and implementation on the enterprise side, and product realization services in the networking domain on the technology side. The company had two headquarters, one in India (Bangalore), and one in the U.S. (New Jersey). Its value proposition was based on a “OneShore” model, blending high-calibre “local feel” consulting with the discipline and low cost of offshore software development.6 Most Indian IT companies were back-end driven, and the bulk of their employees had technical programming skills. Most of their U.S. competitors, on the other hand, focused on significant front-end interaction, and many of their employees were business analysts. Bagchi explained: D o N ot C op y or P os t This document is authorized for educator review use only by DIVYA UPADHYAY, Alhosn University until Aug 2018. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 MindTree: A Community of Communities 311-049 3 Consultants are authoritative, confident, articulate, and upfront. They demonstrate high physical and mental energy. In their interactions, form precedes substance; they look for intensity as a prerequisite to commitment when dealing with team members. Software developers, in contrast, are understated and deferential. They have invisible but sustained energy. For them, substance is everything. MindTree sought to combine both sets of skills. Soota summarized their strategy, “We tried to create a company that was consulting-led in the IT-services business and intellectual property-led in the R&D-services business.” MindTree experienced rapid early growth. It was the first Indian IT firm to earn revenues of $100 million within six years of its founding. However, revenue growth gradually slowed in the next few years (see Exhibit 1 for MindTree financials). The economic crisis, which led to a reduction in spending in high-end technology, exacerbated this trend, since the company heavily depended on complex, end-to-end projects and R&D services. MindTree responded by adjusting its business model to focus more on steady revenue from long-term but comparatively low-end work such as maintenance and testing. At the same time, it set a goal of reaching $1 billion in revenues by 2014, although some industry experts worried about whether the firm would be able to emerge from the “midsized trap.”7 In 2010, MindTree had seven different businesses: IT services, knowledge services, R&D services, testing, infrastructure management and technical support, software product engineering, and wireless products. The company had a matrix structure, with most employees allocated either to industry verticals such as insurance and automotive or to technology horizontals such as Java and Microsoft. Project teams were formed from the industry groups and technology practices via the delivery organization. For example, when the R&D services business had to create a team to work on truck electronics for an automotive company, the delivery organization created a project team that drew from the automotive industry vertical, a subset of the infrastructure industry group, and the relevant technology practices such as embedded software, systems software, hardware, testing, and user experience. The industry verticals were responsible for meeting customer requirements and profitability targets, while the technology horizontals were responsible for technology productivity, capability, and knowledge level. The delivery organization was charged with creating project plans, assigning tasks to people, executing projects day to day, and ensuring process adherence. To ensure alignment, the company evaluated all three groups on customer satisfaction metrics. Culture, Values, and Leadership Building a Value System In the initial days, as MindTree’s leaders were wrestling with the problem of how best to manage their multicultural makeup, they reached out to scholars for help. The experts responded, “You do not manage culture; nobody likes his or her culture to be managed. You have to focus on building values and insist that people who work in MindTree share those values.”8 The company had, in fact, already developed a set of values, with elements such as teamwork and integrity. However, when asked at a meeting to articulate the company values, most senior managers drew a blank. This episode led to considerable soul-searching, with the entire 300-person organization engaging in wide- ranging discussions about the kind of company they wanted MindTree to be. The result was a new statement of values, called CLASS (caring, learning, achieving, sharing, and social responsibility). D o N ot C op y or P os t This document is authorized for educator review use only by DIVYA UPADHYAY, Alhosn University until Aug 2018. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 311-049 MindTree: A Community of Communities 4 Caring meant caring for customers, fellow MindTree Minds, and other stakeholders. Learning meant developing oneself as well as others in the organization. It also emphasized innovation and creativity. Achieving meant high performance, with a focus on accountability, an action orientation, and high aspirations. Sharing meant cooperating, helping others, and working together as a team to create knowledge and new ideas. Social responsibility meant integrity, corporate citizenship, and building social capital. Puneet Jetli, people function head, reflected, “The eternal source of differentiation is our values system. When we talk of culture, we talk of values; the two terms are used interchangeably. We believe that values drive behavior and behavior drives results.” Managers sought to internalize the CLASS values by integrating them into the company’s recruitment, recognition, and reward systems. During interviews, potential employees were assessed on their values and how well they fit with those of the firm. Interviewers focused on one or two values that a candidate cherished and used a sample set of questions to understand the extent of value alignment between the candidate and the company (see Exhibit 2 for sample questions). Within 90 days of joining MindTree, new employees participated in a three- to four-hour session conducted by Soota, KK, or Bagchi that gave special attention to values and the expectation that all members of the firm “walk the talk.” During performance appraisals, a 40\% weight was assigned to performance against values, with each value having a clear set of metrics. Senior leaders who managed teams or departments larger than 10 people could voluntarily ask for 360° feedback on how well they were complying with the company values; about 90\% did so. The goal, according to Soota, was for MindTree to be a “high-caring, high-achieving organization.” Bagchi went even further; he believed that MindTree should strive to become an “emotionally bonded organization” (see Exhibit 3 for a detailed description of the elements). A number of efforts, both symbolic and substantive, supported these goals. For example, MindTree renamed its human resources function the “people function.” Jetli explained, “We did not want to commoditize people by referring to them as ‘resources.’” Another example was the company’s policy on sharing wealth. KK explained: “Until we listed, all 4,000 MindTree Minds had options in the company. So when the company generated wealth, it was shared across all the people who had contributed to our success. Our primary driver was, ‘We are here together to create an institution.’” Together, these efforts helped lower turnover. Between 2002 and 2009, MindTree’s voluntary attrition ranged from 11.4\% to 15.8\%. Historically, its attrition rate was 3\% to 5\% below the industry average. Communication and Decision Making Transparency and rich, frequent communication were cornerstones of the culture. According to Jetli, communication was based on three principles—emotional security was critical to ensure transparency; systems had to be built for simultaneous communication in a global organization; and information had to be presented in an interesting manner so that people could readily absorb it. One result was the company’s 95-95-95 principle, which Soota originally suggested. It stated that 95\% of the people should have 95\% of the information 95\% of the time. Soota observed, “We feel that we communicate more with our people than any other organization.” For example, at the beginning of each year, Soota shared with everyone at MindTree a list of the company’s current strategic initiatives; an analysis of strengths, weaknesses, opportunities, and threats; and his own personal goals. Every subsequent quarter, he followed up with a report describing the company’s performance, how he had fared against his personal objectives, and the initiatives that had gone well and those that had not. All business CEOs and function heads followed this same practice. After these reports were disseminated, there was a quarterly “All Minds Meet,” D o N ot C op y or P os t This document is authorized for educator review use only by DIVYA UPADHYAY, Alhosn University until Aug 2018. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 MindTree: A Community of Communities 311-049 5 where the results were discussed and internal board members and CEOs addressed employees’ concerns. Soota explained, “The philosophy is that we as a team need to understand what is happening at MindTree and how we are faring. Only then can we go out, meet our customers, and achieve our goals.” MindTree’s leaders pursued a consensus-based, participative decision-making process. KK explained: The decision-making process at MindTree involves collective leadership. We have more free-flowing discussions and disagreements than most other companies, but there is still a single decision maker. Our decisions take longer because we want everyone to be able to say, “I had a viewpoint, I was heard, and I understand the other alternative and why it was chosen.” Managers believed that members of the senior leadership team had complementary talents and perspectives. One senior executive observed: KK is left-brained: he is very managerial and bottom-line oriented. Subroto is right-brained: he is very leadership and long-term-oriented. Ashok is the integrator: he provides the balancing act. He is the one who looks hard at the numbers and also nurtures efforts like knowledge management whose benefits are intangible. The Gardener—Nurturing New Plants at MindTree As MindTree progressed toward its goal of becoming a $1 billion company, senior management decided that it was critical to develop non-founders as the leaders of the future. Management began to devote more attention to leadership development, resulting, in 2008, in a new role for Bagchi—that of the “gardener.” As gardener, Bagchi did not report to anyone, nor did anybody report directly to him. His job was to nurture the top 100 people at MindTree; he did so by engaging with them in a series of one-on-one discussions about their “personal-professional” issues—all issues falling between the two poles of purely professional matters such as compensation and purely personal matters such as spousal relationships. Few topics were off the table. Bagchi maintained, “You can’t be a first-rate leader and a third-rate parent or spouse—and vice-versa.” In these conversations, which were confidential and not available to bosses or members of the people function, his goal was to heighten leaders’ self-awareness and expand their leadership capacity. He did so by a combination of questioning, listening, and gentle guidance, coupled with assignments and field experiences. Bagchi explained: A gardener has an organic relationship with each plant in the garden. He is an extremely humble person and sees his task as never ending. In the organizations of tomorrow, I see the role of leadership akin to that of a gardener tending a garden. The gardening process consisted of six steps (see Exhibit 4 for the process). It was designed to identify leaders and, with Bagchi’s help, take them through a process of self-discovery and reflection, guided by a series of questions that culminated in a plan for the future. Bagchi explained his role, “I am part therapist, part brother, part coach, part mentor. But in the end, I am a sense maker. I help unlock a hidden latch somewhere, resolve a difficult knot, or simply get the person to see himself in a new light.” He gave an example of the process at work: We had an outstanding analytical person in a strategic role in the organization who found it difficult to empathize with people. He got the right answer to most every problem, but could D o N ot C op y or P os t This document is authorized for educator review use only by DIVYA UPADHYAY, Alhosn University until Aug 2018. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 311-049 MindTree: A Community of Communities 6 not understand why others did not comprehend things as well as he did. I explained to him the role of the right brain vis-à-vis the left brain and took him through the concept of emotional intelligence by assigning readings and discussing them with him. Then I organized visits to the Spastics Society of Karnataka School, the Missionaries of Charity, and the Homes for the Dying and the Destitute. I wanted this person to appreciate his latent right-brain capabilities and develop empathy. Knowledge Management at MindTree Knowledge management was another activity that supported and contributed to MindTree’s culture and values. Scholars differed in their definitions of the term, but generally agreed that KM described those activities, processes, and technologies that were aimed at acquiring, organizing, sustaining, applying, sharing, and renewing both the tacit and explicit knowledge of employees in order to improve organizational performance. However, they proposed different strategies for creating a knowledge-oriented corporate culture. Some argued that building trust was of paramount importance.9 Others stressed the importance of face-to-face interactions and conditions in which sharing led to personal benefit.10 Still others claimed that organizations could best stimulate knowledge flows by creating and supporting “communities of practice,” groups of people who shared a common interest or concern and wanted to learn how to do it better. These communities had three crucial characteristics: members had a shared domain of interest; members engaged in joint activities and discussions, helping each other by sharing information and building relationships that enabled learning; and members developed a shared repertoire of resources such as experiences, stories, and tools in order to enhance their capabilities. An example of such a community of practice would be the early Impressionist painters, who met regularly in cafés and studios to discuss the new style of painting they were inventing and share their techniques and philosophies.11 MindTree adopted a holistic, encompassing approach to KM that drew on many of these ideas. Datta explained: KM’s role is to help people perform their jobs better and develop themselves. At MindTree, that means four things: enabling knowledge creation, which leads to innovation; enabling the environment, which leads to knowledge sharing and collaboration; enabling processes, practices, and systems, which helps build a knowledge culture; and enabling change and shifts in mind-set. The company encouraged employees to self-organize and collaborate through communities of practice. In that sense, Datta argued, KM at MindTree was similar to the open source movement in computing, where creating output was not mandated, people set their own goals, and individuals were motivated by the creative process and their interactions with peers. He noted, “KM is as much about culture and social networks as it is about technology. Without this view, KM is reduced to content management and is a dull repository.”12 MindTree had taken a number of steps to ensure a supportive environment for cultivating KM. The people function, as part of its competency framework, had included KM as an organizational competency. The performance management system gave people freedom for getting involved in organization-building activities that went beyond their job descriptions, such as communities of practice. And the company sought to create a comprehensive knowledge ecosystem inspired by Ikujiro Nonaka’s concept of Ba (defined as “a shared space for emerging relationships”), consisting of D o N ot C op y or P os t This document is authorized for educator review use only by DIVYA UPADHYAY, Alhosn University until Aug 2018. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 MindTree: A Community of Communities 311-049 7 four reinforcing elements: social space (e.g., communities, knowledge fairs, and technology festivals), mind space (e.g., tools for personal development and creative thinking), virtual space (e.g., collaborative IT systems), and physical space (e.g., an inspiring building and workspace).13 MindTree had received numerous awards for its KM practices, including the 2009 Indian Most Admired Knowledge Enterprise (MAKE) award for “creating an enterprise knowledge-driven culture” and the 2009 Asian MAKE award for developing knowledge workers through senior management leadership. The KM function also received recognition from within MindTree. In 2007, the company’s Enabling Function Dipstick Survey, which measured the satisfaction level of MindTree Minds on the service, responsiveness, approachability, sensitivity, and operational excellence of the various enabling functions, ranked KM the highest among all functions.  Evolution of Knowledge Management From the start, MindTree’s founders envisioned that KM would play a key role at the firm. It was an integral part of the company’s original business plan. Soota recalled: “There was no way we could have done OneShore, with its requirement of transferring knowledge effectively from the front-end to the back-end, without a robust knowledge management infrastructure and culture. That culture emerged and spread through the knowledge communities we developed. They became a key part of our success.” Jetli added, “Ours is an industry where a lot of intellectual capital is still tacit and uncodified. So we asked, ‘How can we motivate more people to share their knowledge?’ That question laid the foundation for our culture and policies around knowledge management.” Formation of the KM function In 2000, during a visit to MindTree’s Bangalore office, Datta, whose job at that time was handling offshore delivery for U.S. customers for the IT services business, initiated a study group focused on software design patterns. He recalled, “We ended up with rich, deep knowledge through a highly conversational process. The study group was a hit because most of our people had technical backgrounds and saw a common area of concern that would bind them together.”14 Soon thereafter, Datta took on KM as an additional objective, and the MindTree community movement began to develop, based on the model of that first study group. In 2003, MindTree made KM a corporate function, reporting to the chief operating officer, and Datta became its full-time leader and chief knowledge officer (CKO). As Bagchi put it, “Raj had the necessary talent and the madness—he was possessed by the idea—to make knowledge management his life’s calling. The leader of such an organization-wide initiative needs courage, creativity, and perseverance, which Raj had. For most other people, staying in delivery would have been an easier path to success.” Datta believed that a CKO had to have a viewpoint on KM and a vision of how it could evolve. He regarded himself as a change agent who was building a road map for realizing the vision. Datta stated, “The CKO is responsible for enabling the knowledge culture and building connectivity: people-to-people, people-to-knowledge, and knowledge-to-knowledge. It’s not only about content generation. It is about continuously building intellectual capital in all of its forms: human capital, structural capital, and relational capital.” As CKO, Datta gradually built and led a 25-person team. By 2010, the team consisted of several senior people; the KM systems manager and his 10 direct reports were responsible for working on existing IT systems, as well as developing the next-generation knowledge platform. A five-member KM team supported MindTree’s Kernel initiative on project management. The community support manager provided essential support to communities; the KM operations head was responsible for communications, branding, and generation of various metrics; and the content manager helped D o N ot C op y or P os t This document is authorized for educator review use only by DIVYA UPADHYAY, Alhosn University until Aug 2018. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 311-049 MindTree: A Community of Communities 8 develop a strategy for the knowledge repository. Another member of the KM team focused on encouraging creativity, invention, and innovation. In that capacity, he was working with Bagchi on the “5 * 50” initiative. In addition, there were three people managing the KM function at MindTree’s offices in the Indian cities of Pune, Chennai, and Hyderabad, as well as three librarians. Communities of Practice—Enabling the Knowledge Environment Role of communities MindTree’s communities of practice reflected the company’s socio- technical approach to KM, which emphasized social interactions as a means of enabling knowledge sharing and …