Monday, September 16, 2013
Process or Relationships ?
Within a span of a week, twice I was asked the same question in different forums by different people. I don’t know if that was pure coincidence or what is due to the fact that both belonged to different parts of the world and thus had different perspectives. In both cases they were curious to get an alternative view of how CIOs succeed in culturally diverse environments with dissimilar work ethics and realities. What if anything separates the modus operandi and style of the CIOs in the East and the West ?
I am not sure if this is a fair comparison or should we be listing the divergence in the approaches; both adapt well to their realities and both have had share of success and challenges. Neither can be said to be better than the other as they address similar opportunities a bit differently. One way of working cannot be transplanted as-is into the other world and expect success; even if the second is a part of the same organization in another geography. Thus global best practices remain good to read, not always workable on the ground.
What separates the CIOs between the West (read US, Canada, and EU) and East (mostly Asia, though the comparison set is largely India). You will hear this from almost every vendor doing business in East, and so will you get a similar message from the CIOs of Indian enterprises or CIOs of the Indian entities of global companies with business interests in India. Despite the recognition I have not come across a formal analysis of such differences in the way of working across markets and geographies.
Everyone agrees that India is a value conscious market; products and services vend at lower margins and discounting is normal. The outsourcing boom in India driven by wage arbitration did not leave too much behind for the Indian companies who had to pay higher wages to get quality skills. Due to this the services play for the Indian market was taken up by mid-sized companies who out-priced their bigger brothers who were happy to take the higher margin business from the West until recession dried up their pipeline.
Software vendors realized that to gain market entry and sustain business, the discount levels had to be different from their home markets. For hardware manufacturers the margins stood squeezed to low single digits, enough to cover marketing and administrative costs, not to make too much money. System integrators and consultants fared a bit better though not by too much; only the subject matter experts and high technology professionals could bill at global rates, in many cases reduced to advisory roles.
CIOs in the West are process driven, like standardization, drive scale though tools and technologies and create predictable outcomes with great contracts and Service Level Agreements between the parties. This is fairly well accepted as a way of doing business and everyone internally and externally aligns to the order and discipline. There is limited flexibility and exceptions are indeed rare. Thus everyone knows where they stand and what the terms of engagement and governance are likely to be.
The East shuns order that takes away individuality; everyone believes they are uniquely different. Standard solutions are frowned upon as they take away the flexibility that casts everyone into the same mold. While contracts are drawn up and SLA signed, they are rarely followed if at all irrespective of the size of deal or financial implications. If there is a change in reality, the first thing customer wants is a change in terms of engagement. If there is an adverse event, SLA is damned, immediate service is expected.
People do business with people and that is reality. Standards can change because the relationship manager changed jobs; who you know overrules contracts or SLA. A call to the right person will get you right resources or help resolve a problem. Relationships score over process every time. Value is paramount and cost is always expected to go south. It is a delicate balance which everyone learns to sustain their business interests. So SLA is measured, penalties rarely enforced; contracts are fought over until signing, rarely referred to afterwards.
I believe that for a global business to sustain, these differences are acknowledged and adapted to. There is no other recourse. For the leader, the CIO, s/he continues to wonder about the debate over the different realities. I am sure there are nuances to each country, market and culture; a global entity takes all in their stride. Employees who work across borders get used to this. For management consultants and their elk, they want to create untenable uniform models as global best practice. All the best to them !