Sunday, January 11, 2009

L'affaire Satyam-the naked truth

It has been a display of a spectrum of basic instincts. Human emotions -greed, anger, fear, disgust, grief, curiosity, opportunism, vicarious pleasure,'s all happening!
Over the past week- the Satyam saga has been dissected-most surgically not just by the TV & print media , but also by bloggers , office & personal gossip, etc. In fact, during the week 'Satyam' even dominated collective mind share on the hottest 'online searches' . . (Out of the top 100 search threads, a whopping 40-plus dealt with the l'affaire Satyam alone.)

Scams and scandals are part and parcel of business and politics. Across the world, without any reservation among nationalities, creeds, races, ..and I am sure more skeletons will come out of the closets in future too. Just compare Satyam with Enron, Lehman, and even Madoff-it's indeed a hallmark of a truly 'not entirely de-coupled' globalised world!!

As a local Hyderabadi, where Satyam is a household name, it is ironical to see a parallel in an earlier (local) cricketing hero Azharuddin -becoming a pariah as soon as reports of his 'match-fixing' came to light-negating all the earlier achievements and glory attained!! Almost 2 decades of outstanding work-has been wiped out of memory instantly...

Personally, I am not as much surprised by the unfolding events as I am shocked by the 'reactions' by the various stakeholders-almost every section taking a pot shot at hitting some one who was already down and out!! Just imagine the damage that can be caused even on the best of banks, if a decent amount of customers orchestrate a 'run on their money' in a very short time??

Right from the erstwhile Chairman trying to favour his family, to the "ex CFO" selling off close to 100,000 shares a few months ago, one has since read/heard about the pecuniary gains of some board members, the failure/futility of the regulators, bankers, tax officials, et al. It is also amusing to note that even some ' speculative members of the investor community ' joining the bandwagon to sue the management for the losses!

There are also some veiled comments made by competitors, either directly or indirectly -to influence or entice /woo away business from Satyam. To me -the comments made by Mr Omkar Goswami -(who incidentally is among the board of directors of another leading IT major) in his personal capacity as a leading thinker -were most distasteful-especially in the context of 'conflict of interest'!!

Who knows, there could be a lot to gain for a few non-Indian companies , leveraging on "Brand India" and lap up some of the reluctant foreign customers! Some others are proactively exploring if they could attract some of the 'insecure' topnotch employees to their companies.

As a recruiter in the same city, we have been swamped with over a few hundreds of requests and enquiries-from Satyam employees unsure of their immediate future-as nothing could have prepared the 50,000 plus employees for such a situation-where there is no clear management control, and rampant rumours of fearing next months salary, with banks withdrawing credit limits, ...and even thousands of jobs likely to be axed!

My advice to most of them- have been ' not to panic-and not act in haste', 'wait and watch -time will heal' and so on. Satyam's strength today-are their customers and their employees. And a strong existing working relationship that would stand the test of uncertainty for a while. While Satyam may not get new clients for a while, in the present scenario, I am positive most clients would be content to maintain the status quo and not call off any existing contract-which is a decent revenue stream in itself and ensure continuity for Satyam for a few quarters for sure!

As I post this note, a new board of directors has been named by the government ,who would take charge shortly and even if conservative and tentative for a while, Satyam's future is very much different from the Wall Street financial majors who went down under late last year! It is any body's guess if they will spin off the company into several small businesses that could be sold off- or even if there are some M&A bids notwithstanding the huge liabilities.

There is a huge demand for the senior management (above VP level) professionals, as well as specialists, within the IT industry-or for HR/Finance and Business Development professionals whose competencies can be transplanted to other industries/domains. They would best wait for a compelling reason/opportunity to play more important roles leading to faster growth-rather than nodding to the first offer that comes their way.

However, those large numbers in the entry/junior management- would not have the luxury of a proven track record-and will need to draw on their networking skills at their best- to try and latch on to some star performers/mentors/seniors -who can help them navigate through these troubled times.

Those likely to be in trouble-are the generalists-who may end up not adding too much value. And the freshers-as also those campus hires waiting for the joining date. Not to mention a large bunch who have been 'on the bench'. It is a rude jolt-as their bargaining position is pretty much notional-and would even have to consider any avenue -as a stop gap before the economic situation improves. It is time to learn more, upgrade one's skills-and make oneself employable at the earliest inflexion.

It is indeed testing times for all concerned. Not just the stakeholders, but also the society in general. The HR fraternity especially-would do well to be most sensitive to the situation. Hopefully, the heart will rule the mind for a while till sanity returns!!


Anand Reddy said...

Overall picture and concerns pointing out was too good!!

Ramani said...

I agree entirely with Mr.Menon. The tendency to join the stone pelting mob is disgusting to say the least. Forget the Rajus now. What are important are the employees and their families, the customers of Satyam, the stakeholders of the company/group and the image and prestige of India Inc in general. Narayanmurthy said we should leave the new Board to resurrect the company and restore it as much as possible. Why dont we let them do that?