by Anil Chawla
Sammy talked about STM’s reputation in the business world, its stellar listing, first in India and then on Nasdaq, and the number of awards STM had won in various areas of corporate governance.
Roma said, ‘You haven’t joined STM yet and you’re already talking like a loyal employee of the company. Isn’t that strange?’
Sammy went on to share how he’d learnt that SVT was a typical American company, with a policy of ‘hire and fire at will’. In spite of his stellar performance over the years, his recent irregular office routine was not acceptable to them. Precisely at the time he needed support, the company had withdrawn it. His boss had given him enough indications that were it not for Hendrick’s restraint, he would have been fired immediately. Sammy had felt humiliated when, in the same conversation, the boss cited his missing a client meeting. Although Sammy had informed the boss and guided a junior colleague to attend it, SVT had lost the deal. The company offered little future for growth opportunities. He contrasted this with STM’s vision and praised RG. ‘He’s the sharpest corporate honcho I’ve ever met, Roma. A real visionary.’
Sammy opened STM’s website and showed her the company’s pedigree, its long existence, its rapid growth over the years, its corporate governance, ethics, and culture. He also took her to the section which listed all the awards STM had won over the years.
Seeing all this, Roma looked less stressed, though not fully convinced. After a few quiet moments, Sammy announced that he was going to send his acceptance letter the next morning. There was an air of unease in the room.
Koel’s stirring on the bed helped ease the tension a bit. Roma got busy with her and later went to the kitchen to get dinner ready. That day’s dinner was quieter than usual as neither of them spoke. They retired to bed with Koel between them. Koel, having slept well during the day, was fully awake and seeking their attention. Sammy was tired after a hectic day and soon dozed off. Roma sang lullabies, one after the other, and it was well past midnight that Koel slept.
Roma lay in bed looking at the ceiling and thinking about the day’s happenings. Sammy had been a very caring husband in every possible way. And if his position at SVT had got weakened, she was also responsible for it. While Sammy had shown a risk-taking streak in the past, none of his decisions had backfired. She had no reason to worry about his latest decision. She felt much more at ease after this train of thought. She moved Koel to the side of the bed, put a long pillow on the edge so she wouldn’t fall off, and moved closer to Sammy. It appeared that all this movement had woken Sammy up, but he was still lying with his eyes closed. She sensed this, raised his arm, put her head on his chest, and whispered, ‘I think it’s a good offer and you should join STM.’
Sammy pulled her even closer, kissed her on the forehead, and nodded.
They slept peacefully in each other’s arms.
Sammy sent in his acceptance letter the next morning. Around lunchtime, he received a call from the CEO’s office.
‘Welcome on board, Sammy.’
‘Thank you, sir. Thank you very much. When should I join?’
‘If you want, from yesterday, or today. It’s your call.’
Sammy politely said it would be unprofessional for him to leave SVT suddenly, and he would like to complete his handover formalities properly so that the company would not be affected by his exit. RG appreciated his professional approach and agreed.
By the next week, the SVT management felt comfortable with the new person who had taken over, and gave Sammy a release date. The next few days were hectic on both work and home fronts, but the last day felt like any other day. A formal farewell had been arranged to which Roma was also invited. Many of his colleagues spoke about their association with Sammy, talked of all the good things, and wished him the best of luck. The SVT CEO and a few other members of senior management personally met Sammy and thanked him for his contribution to SVT’s growth and wished him luck on his journey ahead.
Sammy and Roma went home after a couple of hours as Koel had been left with their maid. There was a three-day gap before Sammy was to join the STM office, and a lot to do.
On Monday, 5 November 2001, Sammy joined STM’s Bay Area office. After a brief round of paperwork, he was taken to his work area, which was pretty spacious. He was given the responsibility of developing the pharmaceutical and healthcare (PH) vertical of STM. The vertical had almost no presence in the US and Sammy had his job cut out for him. A few minutes later, the regional head of sales came over and introduced himself. After exchanging pleasantries, he took Sammy around and introduced him to other senior people in the office. The atmosphere in STM felt very different to that at SVT. STM was an Indian company expanding across the globe at a rapid pace. The work atmosphere was quite formal but Sammy did not take long to align with that. He was a thorough professional and understood the signals quickly. Gone were the days of flexi-time working, afternoon siestas, coming to office in shorts, and cycling around. Sammy didn’t mind. He’d been operating in a Bay-culture company for a while, and he liked the change.
Soon, it was back to business; business development, to be precise. He looked at STM’s financial performance over the last few years. He further drilled down to STM’s PH vertical and how it was doing in the US and, very soon, he realized that he was near ground zero. There was hardly anything happening. He reviewed the existing manpower working for the PH vertical and, to his utter dismay, realized that there were sales people who had the responsibility of developing various regions of the US geography in all verticals but paid little attention to the PH business growth. As he dove deeper, he was both worried and happy. Worried, because there was little being done and the task ahead was mammoth, and happy because the situation offered that much bigger an opportunity, for which Sammy was more than equipped. That day, he worked till late in the office and by the time he was done, he had an excellent view of ‘As Is’ and a vague idea of ‘To Be’.
When he reached home, Roma was rocking a crying Koel in her arms. Worried, Sammy asked what had happened. It turned out that Koel had been cranky since the evening. Roma asked Sammy about his first day at STM and Sammy described it in detail.
‘I’m sure you know how to handle all this,’ said Roma with a smile on her face. Her confidence in him acted as a booster for Sammy. They had dinner, after which Sammy sat down and crunched numbers. It was only around midnight that he switched off his laptop and went to bed.
Having taken stock of the PH vertical’s performance so far, he wrote a mail to RG, the US sales head, and the regional sales heads, suggesting that they meet to discuss the growth plan in detail. He proposed a date ten days hence. Within fifteen minutes, RG wrote back asking why they couldn’t do it earlier—maybe the next Monday—when he was going to be in the US again. While it would have been a stretch for Sammy, he agreed. He knew he’d have to work through the weekend and prepare himself, but he was game. He had a healthy database of the entire PH industry globally. He also knew the main service-providers to the industry. Over the next couple of days, he did a thorough industry analysis, segmented the market, and analyzed its growth over the last few years. The one thing that he had to struggle with was to understand the core competency of STM in the PH vertical.
Although he spoke to other colleagues on this, nothing emerged. It seemed that nobody was interested in the PH vertical. Sammy kept that as an open item on the agenda of the meeting with STM’s management. He kept a 30-minute slot in the meeting to discuss capabilities. While Sammy had done a detailed analysis, his presentation was crisp and to the point.
On Monday, there was an air of alertness in STM’s office as RG had arrived. They went into the boardroom and, at 10:30 a.m. sharp, Sammy took the dais. Before he opened his presentation, RG asked, ‘What do we want to achieve from this meeting?’
‘We want to understand STM’s position in the PH space, identify relevant organizational competencies, and formulate a plan to move up the value chain,’ replied Sammy.
‘I can
tell you a few things straight-away,’ quipped RG. ‘STM has no position in the PH space, we are non-existent. Our competencies are zero. Don’t waste your time in discovering something which is already known. Come to your plan for the future,’ he said, with an air of finality.
While Sammy was taken aback at the bluntness, he continued. ‘We have not made any headway in PH during the last few years. We’ve lost 95 per cent of the deals we bid for, and whatever deals we won brought us a bad name because we executed them poorly, leading to client escalations. This included a lawsuit which had to be settled out of court by paying a hefty sum. Sales incentives are meagre and no sales person is keen to chase PH business. The other reason why they don’t gun for PH business is that they worry about how the engagements would be executed, and who would execute them. But that is history now. The future is going to be different and brighter. I propose the following for a fresh take-off:
•Moratorium on any fresh bidding for three months, till I review all the pipeline bids.
•All new businesses will be qualified by me before the bids can be submitted. We don’t want to be in every deal. We want to be in deals where we have more than a 50 per cent chance of winning, which will be raised to 75 per cent after a year.
•The entire sales team is disbanded forthwith for PH sales; they can continue with other verticals.
•I will recruit a few hardcore PH sales guys from the market over the next three months. We only want the best of them.
•The execution team will be incentivized to work on learning the PH domain and how to execute projects successfully.
•I want to hand-pick a few project managers from across STM. It’s a one-time measure; RG, I need your permission for this.
•My vision is to grow the PH vertical to at least 75 per cent of the growth rate of the fastest-growing vertical of STM, and the time-frame to achieve this is eighteen months.’
Sammy paused. There was total silence in the room. RG looked around; nobody spoke a word. Then he said, in a measured tone which sounded like an order, ‘Sammy has complete authority on each of the points he just made. Everybody will extend 100 per cent support to him. We can and should help Sammy in making it all happen.’
The meeting dispersed. Over the next few days, Sammy was all over the place, chopping positions, creating new ones, recruiting talent from the local geography and putting them on jobs as he wanted. While it was tough in STM’s culture to refrain from bidding, Sammy stood firm. It was only after a couple of months that he gave the go-ahead for participating in a bid. He did not stop at that. He led the bid team, worked on the proposal, did the number-crunching and financials.
There was one thing missing. STM’s market intelligence was rather weak. He had no clue what the clients’ appetite was, and what other bidders were doing. He chose one of the newly recruited Americans and asked him to get the information—at any cost. Sammy told him not to return to him until he had all the facts. After a couple of days, the guy came back smiling and showed what he had done. Sammy was pleased. He tweaked STM’s bid suitably and it was submitted. After a suspense of over two weeks, the good news came: they had qualified stage 1. This was a minor achievement but a big morale-booster. The next stage was where all qualified bidders were to make presentations to client management. Sammy had learnt that one of his SVT client directors, Richard, who had switched jobs too, was part of the management team. When it was STM’s turn to make a presentation, Sammy walked into the room with a couple of his sales guys.
Before starting his presentation, he announced that he had a proposal for consideration. ‘STM is very keen to take up this engagement and is offering that full payment be made after STM delivers the project.’
Some members of the management team shifted in their chairs. Sammy spent fifteen minutes explaining STM’s proposal and closed, repeating the point which he had made in the beginning, and the team left the room.
After a couple of days, he got an invite from Richard to meet the management team. With Richard vouching for Sammy, the deal was awarded to STM—actually, to Sammy.
Sammy created a strong project management team and worked with them over the next six months, guiding the project through. The incentive structure for the execution team made news in STM and there were a lot of employees who showed their keenness to join the vertical.
STM had made a successful entry into the PH space.
During this period, Sammy continued his focus on qualifying bids, and his strategy was paying off. In just one year, his position was well-established in the company. He got a lot of support from the CEO. Sammy was learning that STM typically struggled when a quarter ended. The revenues were woefully short of guidance, the bottom-line was nowhere near projections, but the deal pipeline always looked healthy. At the end of his first complete financial year at STM, as management reviewed the numbers to be announced in a couple of weeks, a sizeable shortfall emerged. Like every quarter-ending, STM stock had shot up in anticipation of excellent results. Over the years and quarters, STM had built an impression in the market of exceeding their projections. So the stock price moved only one way—upwards. This time, the scene was not looking good. A closed-door meeting was held, with all vertical heads in attendance. RG urged everyone to do some advance booking of business to make up for the revenue shortfall. Sammy was a bit baffled but kept quiet. During the break, RG took him aside and said that there was no going back on revenue projections.
Projections are what the world believes in.
RG asked the US sales head to guide Sammy. As they sat down to crunch numbers, the sales head asked Sammy to consider a part of the bids as ‘booked’ business. Sammy was not convinced, but he could not let RG down. The sales head asked him to list the pipeline bids which were nearing decision, and which ones Sammy was sure of winning. There were many.
The sales head asked the value of those deals. Sammy gave him the figure. ‘We’re using only 10 percent of your estimate in the current financial year. What’s the big deal?’ the sales head asked. ‘Remember an unwritten rule: We have to exceed our guidance. And we have to beat it, quarter after quarter.’ Sammy was speechless. He followed the instructions.
STM declared fantastic results and the stock continued its upward movement. The accolades were huge, bordering on intoxicating. In the next management meeting, everybody congratulated and appreciated everybody else. It looked like a society for mutual admiration. As time passed, Sammy also saw verticals inflating the billing rates to show higher revenues. Then there was the option of just showing a higher headcount. This was the simplest method to inflate revenue. In the IT industry, revenues were typically directly proportional to the manpower employed. Some of the accounts inflated their revenues just by showing a larger than actual headcount offshore. Over the next few months, he realized that none of the sales people were ever worried about what business targets were set for them. They knew what to do. And they had so many levers to use. Thus began Sammy’s entry into the world of somehow managing unrealistic projections and expectations.
As the PH vertical progressed into the next quarter, Sammy was bidding more successfully than before. He’d also become better at predicting his ‘hit rate’. Towards the end of the quarter, Sammy sent his projected revenue numbers to the CEO’s office. RG called him after a few hours and urged him to add a few million dollars to the kitty, as another unit was falling woefully short of the revenue target. Sammy tried to point out that he had already done some advance booking, but RG was firm. ‘Somebody has to fill in the gap. And you’re doing well. In the next quarter, the situation may change and you may need somebody else’s support.’ Sammy could not say much. Here was a man who had created an excellent impression on Sammy since the first time they met. He complied. It was easy number-juggling.
STM announced ‘stellar’ quarterly results again, and the stock went up further. After a few days, Sammy got a memo from the CEO’s office communicating the allotment of further stock options to him as a bo
nus. He was delighted. While Sammy had never carefully looked at them so far, he sat down one day and took ‘stock’ of his stock options.
He found that their value had appreciated nearly 200 per cent during his stint with STM, and that they were now worth more than his wildest imagination. His savings were increasing at a rapid pace, much faster than before. When he shared this information with Roma, she was amazed and nodded her head appreciatively, but asked a guileless question, ‘What will we do with all this money?’
Sammy did not have an answer.
Life for Sammy continued in fifth gear with no respite, not that he proactively looked for it. Each successful deal brought him new and greater appreciation and financial rewards. Over the next five years, Sammy made STM a force to reckon with in the IT space. In the process, he gradually lost sight of the three faces dearest to him—Roma, Koel, and Sameer. The most telling proof of his drifting away came at the time of Sameer’s arrival. Sammy was away in Europe when Roma went into labour, although she had pleaded with him several times to take leave around the expected delivery date. Their large circle of friends ensured that everything was managed well, but Sammy himself saw his second child three days after its arrival. He travelled 25 days a month and barely noticed Sameer’s growing-up. Gradually, Roma got accustomed to the situation.
In 2006, RG called Sammy for a meeting in Mumbai. After a felicitation ceremony to recognize Sammy’s contributions to the company, RG told him privately that he was considering Sammy for the role of Chief Operating Officer.
Sammy was very pleased. At the first opportunity, he called Roma. It was late at night and the family was asleep. Roma answered the phone after several rings. He gave her the news, expecting her to be excited, but there was a long silence on the other end. ‘Roma. Are you there? Are you on the line?’
