CEO’s Blog - Persistent Systems

I travel regularly to meet our customers. Normally, we work with the VP Engineering and the CTO of product Companies.  I meet them regularly and most of the time our meetings are technical discussions or discussions about specific projects we may be working on.
As the market was slow, most of our customers were not in a position to discuss specific projects.   Most projects were on hold, and our customers were under pressure from their CEOs and Boards to reduce costs.  This meant that they were pushing us for rate discounts.

As our customers were pushing us for rate discounts, we used the opportunity to get our contact points to get us meetings with their CEO in exchange.  Systematically, since January 2009, Hari and I have met more than a 150 CEOs and heads of business.  During these meetings were able to observe how CEOs think.  This was the best thing that happened to me.  I quickly realized that the CEOs have a very different approach to their business as compared to the VP Engineering and the CTO.

Our customers are of all sizes from Billion Dollar companies to start-ups.  The CEO and heads of businesses we met corresponded well to our customer mix.  By and large, CEO behavior is independent of the size of the Company we met.

Let me share with you the highlights of what we observed from our meetings.  There are many corollaries from these basic observations which I will subsequently share with you.

1. CEOs like to focus on a few important items. CEOs are very concerned about their own bandwidth and want to focus on a few important items and leave the rest to someone else to handle.  For items that are top-priority, the CEO is deeply involved and wants to track the initiative in detail and at a fine level of granularity.  For all other items, the CEO would much rather have someone else take complete responsibility of the task and wants to know only about exceptions.

We observed that management bandwidth of the senior management in the organization is a very big concern for the CEOs.  They are keen to conserve management bandwidth and want to ensure that adequate management bandwidth is being devoted to important tasks and is not being spent on the not so important activities.

2. CEOs want to focus on growth of the Company. Universally, we observed that growth is the most important item for all CEO.  They are far more focused on the top-line of the Company and not as focused on costs cutting and efficiency improvements.  We realized that outsourcing and offshore development when positioned as a cost efficiency exercise is not exciting for the CEO.  Those are items for the CFO or the VP Engineering.  We observed that we could get the CEOs attention when we had proposals that could provide boost revenues and growth for our customers rather than provide just cost efficiency benefits.  We also observed that most CEOs are market focused rather than being focused on internal efficiency.  CEOs want to spend more time in the market to understand market trends as that would help them develop sharper insights for future planning.

I quickly realized that to get the CEO’s attention, it is important to offer the CEO some suggestions on growth of his Company rather than just cost benefits.

3. CEOs are interested in solving the ‘entire’ problem for their customer. We observed that when CEOs sell, they are selling a relationship rather than a transaction.  They want to interact with their contemporaries – CEOs and other C-level executives of the customer and are keen to understand the challenges faced by the customer.  They want to provide a complete solution to their customers.  In many cases, and especially when they do not have a complete solution for their customer, they are open to working with other partners to solve their customer’s problem.  They realize that if their customer views them as a true partner, a partner who can “solve” their problem, business will eventually happen.

In contrast, most sales executives are focused on completing a transaction.  They are completely focused on “the sale.”  In the process they are very keen to sell their own products sometimes at the expense of being concerned about solving the customer’s problem.  Sales incentives play a role on how sales executives approach the sale.

It was very clear from our meetings that to get sustained interest from the CEO, we must focus on finding ways to solve their problems. Instead of focusing on pre-prepared service offerings, it helps to be creative in thinking of ways to address the customer’s problem.  In several cases we realized that we did not have service offerings that solve customer’s problem.  In such situations, stepping back and referring someone else who may be better suited to help the customer solve their problem was much appreciated by the CEO.  Even though, we may miss out on the transaction, I am sure it will help us get business from them in the long-term.

I have been reflecting on these observations and have realized a few corollaries on how to engage with CEOs.

I have also been reflecting on my behaviour … do I behave like a CEO?  Will write more on this subject.

After the market slowed down in October 2008, many of our customers decided to reduce their “burn-rates” and this decision impacted our business.  While it was tempting to go out and look for new markets and customers at this time, we decided that it was prudent for us to spend the time with our existing customers even if though they were on a budget freeze.  Our premise was that if we stayed with our customers during difficult times, they will come through when the times improve.  I had adopted this strategy during the down-times of 2001 and we saw significant growth in our business post 2003 when the market improved.  Many of our customers who were hurting in 2001, grew their business with us when the market improved.  While some of our customers did not survive the down-turn and the Companies shut-down, the individuals who worked with us moved on to other Companies and were able to take us along.

With this strategy, starting January 2009, Hari Haran our President and Head of Sales and I have been on the road and we have met more than 200 customers.  Most of these meetings were with CEOs and very senior executives.  These meetings were setup as relationship meetings and with the difficult market conditions, we were not exploring immediate opportunities for new business and hence these meetings were very open-ended.  We discussed with CEOs about their business and sought their guidance on how Persistent can help them when the market improves.  Additionally, we asked our customers about their technology road-map and trends that they thought were important.
After having been on the road over the last eight months, I must say that these meetings were the best thing that I have done. The meetings were a tremendous learning opportunity.  We were able to observe how CEOs think and get their perspective on how we at Persistent could make a difference.

Over the next few blog entries I will share some of what we learned from these meetings.

Seasons’ Greetings to all of you.  It has been some time since I updated my blog and I thought of taking advantage of Diwali season to revive the blog.

I am a big fan of Ram Charan’s books and have read every single one. Sometime back, I read his latest - Leadership in the Era of Economic Uncertainty. This is an excellent book and has good practical tips on things to do in difficult conditions. 

The book has very clear suggestions for every major function in the organization. I adopted his suggestions during a few sales calls and had excellent results. I highly encourage everyone to read this book. Read the rest of this entry »

I would like to congratulate the organizers of the CSI India IT2020 conference in Mumbai for organizing the event despite all odds.

They had a registration of more than 350 people and the event was very well organized. I have always been impressed by the dedication and the efforts of the CSI Mumbai team lead by M. D. Agrawal. Read the rest of this entry »

I had written on December 19, 2008 in my post -  “Powering Business Through Innovation” that we were the top 5 finalists for the NASSCOM Innovation Award.

I am very pleased to note that we have won the NASSCOM Innovation Award 2008! Read the rest of this entry »

I attended the TiE Nagpur event which was held on Feb 2-3. Prof. C.K. Prahalad was the keynote speaker. His talks are always extremely thought provoking.

He talked about India @75 and how entrepreneurs (in the context of TiE) can make a difference to this vision. He was very clear that we must focus on innovation to overcome the severe constraints likely to be faced in India – the need for building products that can be sold at a low price point, low R&D budgets, poor infrastructure, etc. Read the rest of this entry »

I have always believed in the ACM India Council and have been a member since 1987. I have subscribed to their digital library and read the communications of the ACM and ACM SIGMOD records on a regular basis.

It would be good if we could establish a strong presence for ACM in India. Read the rest of this entry »

I read Malcolm Gladwell’s ‘Outliers’ recently. I like his writing style and I find his examples and observations very thought provoking. While all the examples are compelling and Gladwell’s writing style helps in making a strong point, I am not quite ready to generalize the conclusions drawn.

I was most intrigued by Chapter Seven – The Ethnic Theory of Plane Crashes.  In this chapter, Gladwell describes the communication sequence between the pilots before the Korean Air crash and the sequence between JFK’s Air Traffic Control and the Colombian Airlines’ co-pilot. Read the rest of this entry »

I committed to my friend M. D. Agrawal that I will do a workshop at the CSI India IT 2020 Conference in Mumbai on Collaboration Techniques and Tools.

When I signed up about six months back, I did not know much about this subject but was generally curious. I find that committing to prepare a tutorial is a good way to find out and learn about a new subject. Read the rest of this entry »