It was celebration time !
The team had won a new client which is a global energy major from Europe. It was a multi-year project of software product planning and execution. High value engagement from the perspective of both organizations. First phase involved high level specification and prototyping. The phase 2 and beyond, involved detailed release planning and execution.
The combination of multi-million USD and multi-year engagement is a good story. No wonder the sales person and the delivery leader were stars of the day.
Just when the story was building up, a problem popped up –
- The client side lower management team started insisting on client interviews. They had right concern. It is important to get first few people right. When large team is being built, the first few members would take responsibility and grow along the way.
- Only first few critical roles? Ok. Says the management of the service organization.
- Now the interviews happen. To everyone’s surprise, the leads proposed were all rejected.
- There were other good members. But were ‘lost to different delivery unit’ because they were ‘on bench for too long’. For employees, the ‘on project period’ is an important parameter that affects the performance appraisal. The delivery unit could not hold on to best people till the project was awarded.
- Now different people were proposed. Again they were not very convincing for the interviewers from client.
- With the pressure from both top managements, project somehow started. It went well. But almost all the members involved in phase 1 left the company. No wonder – the client was not convinced about team being prepared for the long term. There can be many dimensions to the scenario. But customer is right, almost always.
The Result? The second phase of the project did not happen. The service organization lost the lucrative project. Further, the client went with someone else and that did not work, which is another story.
The bottom line – Hands-on employees layer is the most critical layer of a service organization. All upper layers are into operations. For product organizations, the hands-on layer is still needed. But lack of it may not harm immediate top line in same fiscal.
Remembered the story as ‘beleaguered IT bell-weather’ went through and still going through the rough weather.
How did it respond to crisis?
- Making rules more stringent
- Making life less flexible and less enjoyable for hands-on employees
- Bring more stars to the Board of Directors from outside
- More attrition and more loss of confidence and contracts.
- How to survive the quarter and face the shareholders? Put more pressure existing employees and client accounts and bill more.
- Some more leave and cycle goes on.
This precisely is the concept of demise curve. It is applicable to organizations, people, products etc. It is funny that everyone knows the theories and models. The issue is in knowing when and where to apply. More than the clout and degrees, what is needed is to stay grounded in the business you are in. Only then one knows where to apply which theory & model.
Most of the shareholders of IT stocks have no clue of software services business. The stock price stays high, on hopes and faith, just like USD.
Life goes on.
For strong fundamentals in service business, focus on the work environment of foot soldiers.
If this happens, the rest fall in place. The business flows in. Stock rises. From that are born, the board room stars.