Interview Questions

Full Interview with Anand Mahindra

Anand Mahindra:

I remember when I joined M&M, we were still a company using age old IT gear. Although we had outgrown IBM 1401 machines, we were still stuck with AS400s. The company wasn't working on a distributed como a post-mortem of the return on investments (ROI), the operations people in the company inevitably said that they would have achieved it any which way.

The boundary between what operations people obtain and what IT enables is very 'fuzzy'. We also struggled with it for a while before I found a simple approach to resolve it. It's important that you look at your business goals first. Ask yourself what you want to achieve.

Ideally you must look at it from your customers' point of view. Think of those business processes that will help serve customers better. Then you set those metrics independent of IT. If IT helps you achieve any of those metrics efficiently, bring it in and don't worry about doing 'post mortems' because it is now a part of your business and overall Internal Rate of Return (IRR).

One should look at IT as an enabler and only as an enabler. If IT helps me enable my business and strategy, I am going to put it in and not ask any questions about its cost.

 

In this situation, any strategic discussion cannot be possible without involving IT. IT cannot be de-linked from the core strategy of any company. It certainly has changed our culture. People look at IT as a strategic tool now.

 

Anand Mahindra:

Just to clarify, I did not refer to the word 'enabler' in any derogative sense. To me, the 'Enabler of Strategy' is a very complimentary term. If IT helps M&M to become a 3C corporation, then it can't be just an 'enabler'. It has to be something which is of utmost importance.

IT to me is as legitimate a tool as any-thing to develop a robust strategy to run a business. Clearly one doesn't invest that kind of money if you're merely building IT as a utility.

 

Anand Mahindra:

Implementing SAP was clearly in the direction of changing the way we had worked. It changed the whole culture of M&M. There was a very rigorous procedure that we adopted. It came through our Business Process Re-engineering (BPR) exercise, which commenced in 1991. The essential glue in BPR was to have system that can connect the whole corporate together.

 

We were aware that we were going in for a BPR but also knew that there was a vital link missing; one that would allow parts of the system to talk to each other. We decided to take a utility approach and decided to auto-mate the way we did business. We wanted to make M&M a real time enterprise because until then none of the changes would make any sense.

 

That way IT was not just a utility. Today, we have a real-time enterprise within the organization but are yet to achieve this outside the M&M network. Interestingly, that's the moving target. My dream is to have an interactive web interface where the customer can get real time information and should be able to configure and order the product.

 

One agenda that I am personally driving is a '3C' approach - Customer Centric Corporation. In M&M, we don't get overly obsessed by IT or ROI or platforms or technologies. Obviously we want the best but it's not because we want the shiniest new toys. Everything has to serve the customer.

 

There is an old story about NASA researching a pen that would work in a low-gravity environment. They spent a fortune over it until the Russians suggested a simple remedy - using a pencil. So, where a pencil can do, why use a pen? That anecdote works well for me as well.

 

Anand Mahindra:

If you set a time frame it will be unrealistic because you can create a situation where people perceive themselves as having failed for not having achieved it. I always tell my people that I want this 'yesterday' rather than putting a time frame to it.

Anand Mahindra:

We do it through the mechanism of our War Room structure. When I took over as Managing Director of M&M in 1997, I started the culture of the 'war room'. We had already created a well-structured company by the year 1994. The big question in front of us was how to manage an organization that had a six-sector conglomerate, with a president for each one of them? I wanted to genuinely empower them and not be intrusive at all.

 

One of the mechanisms that I found effective was the war room review. We stared by having monthly reviews for each business sector that we had. It is typically a half-day or a full-day review with the senior corporate staff, the sector presidents and their teams. It's the time of confession for them. They have to be completely trans-parent. We also help them in whatever way we can. We negotiate the goals, cost corrections, strategies and then we tell them to go out and prove themselves.

 

That is the way a corporate center adds value and at the same time monitors and provides direction to any project. It is the same for IT projects too. That's the balance mechanism between autonomy and control. The CIO is an integral part of these meetings. At one stage the CIO was participating from the outside, but soon we realized that the CIO needs to be an integral part of the meetings. Today the CIO is as important a part of the team as any executive in the senior corporate team. This has resulted in tremendous synergy between our various business interests.

 

In these meetings we also debate the various opportunities that can be created within the conglomerate. And IT certainly helps us doing that in a big way.

 

Anand Mahindra:

We have a company called Bristlecone (earlier Mahindra Consulting). When we finished implementing SAP at M&M, we were left with a pool of bright IT professionals who were trained on SAP and Windows NT. We realized that if we wanted to retain those people, we'd have to generate the excitement and opportunity that they would find outside in an IT company. You can't do that in an engineering company. In an EDP department they would end up being mediocre and frustrated. We re-grouped these trained people and created an entity called Mahindra Consulting. All the employees were transferred there. We first asked IBM to do it but they refused. I must say this created a great opportunity for M&M to do it on its own. We created our own in-house outsourcing company, which also serves M&M. We have done that in Mahindra Engineering too, where we have created an outward-facing engineering services company that markets its skills. Outsourcing is destined to happen because businesses have to focus on core business processes and customers. In M&M our way of doing that has been a little different.

Anand Mahindra:

Mercifully there has been no large, critical IT project that has gone wrong. But the most recent one I can think of was when we were upgrading to the new SAP version. May be we got a little too complacent because we had achieved a seamless implementation in 1996 (which we completed in just 90 days). There were delays in upgrading the system. Although there were no complaints I could easily predict the out-come. There were problems in selling the targeted spare parts. I inquired about the problem and the answer was that systems were not in place. To me, implementation has not always been seamless and fault-less. I think we have to take every IT project as a challenge until it is successfully implemented in time and yields proper results. There was another project where we attempted an HR module. That wasn't a part of our enterprise sys-tem and it didn't work well for corporate HR. These are the only two occasions for which I can say that IT did not come through.

Anand Mahindra:

When it is a customer centric corporation, you don't have to do anything. It's the customers who scream. I just amplify the screaming so that it reaches the ears of the concerned people. My concern is my customers and if they are not getting served efficiently, the whole purpose of putting in place gigantic IT systems is defeated. The most powerful way of making corrections is to listen to customer problems and solve them immediately.

Anand Mahindra:

I would say that, if need be, the CIO should go on a satyagraha

(peaceful protest) to ensure that they are included in the top decision making body of an enterprise. The rest will follow. The vision of a company is made by the core management team. If the CIO is buried somewhere down the line in the organization and just works as a utility provider or a cost reducer, IT has no meaning. The CIO must be seen as an inseparable part of the strategy forum of an enterprise. -