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Home > DQTop20 2008 > Best Employers Survey 08

The Hourglass Paradox
In most cases firms were unable to train their technical stars to take on management responsibilities. The result: crises at the middle management levels
Friday, September 19, 2008
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A couple of years ago I had this interesting conversation with a co-passenger on a San FranciscoBangalore flight, Kumar. Id asked him what he did and he mentioned that he was with one of the major Indian IT services companies based in the US, as an account manager. He was positioned in the IT group of a very large insurance company and added that he was bored after being on the same account for over three years. So I asked him what kind of work he did and what he thought of the insurance industry and how it was shaping up. He said that in his accounts he had done a lot of Corba, Java and .Net, and even some IBM mainframe projects. What about the businesses they were supporting? I asked. He talked briefly about the claims processing division, but didnt seem to want to take that further. When I probed about the domain and what difference they make to the business, he hemmed and hawed and seemed pretty vague, almost uncomfortable with the direction of the conversation

His company, like many others, is trying to move up the value chain to higher value added services, providing a combination of technology and business solutions and not just better quality at a lower price point. And account managers like Kumar, who are the face of Indian IT to their clients, are at the forefront of this transition. The increasing complexity of projects coupled with the increasing maturity of customers and their expectations means that IT companies now expect account managers to not only understand technologies but also the customers business. This is so that they are able to use their technology understanding to help with broader business needs. While Kumar, like many others, would have honed his skills on solving technical problems and come up with creative solutions to coding and design issues, he had now reached the level where these abilities were considered basic, or hygiene abilities.

Devapriyo Ghose

Head, Leadership Development Practice (India), Mercer


What then is the Hour-glass
The paradox is that all the skills that got him to where he is, may now be conspiring to hold him back. Narrow focused with high attention to detail, driving tight processes and controlshe epitomizes the great Indian software dreamone that has moved companies from being viewed as suppliers of warm bodies to people who are seen as changing the dynamics of how business is done in this industry. To make a difference and do well at their current level, suddenly the Kumars are being asked to go beyond and engage with the customer, understand customer and business issues and utilize what should be a deep perspective of the customers business to proactively suggest solutions. This creates an hourglass shape for growth and development of these middle managersnarrowing in focus and intensity as they reach the middle but widening out again once they do.

This is probably true of many professionsconsulting for onewhere there is need for depth in the early stages of ones career followed by a need for breadth to complement the depth which is then taken as hygiene. However, the sheer scale of the IT services industry and the numbers that need to be able to squeeze through to the upper section of the hourglass is what makes this a challenge. This middle management layer is the group who translate strategy into implementation, who manage change on the ground and are the pipe through which all communication must flow. More importantly they are the prime source of future executive talent and thus crucial to the continued success of these organizations. Against this need are pitted the issues of lack of time, remote working, work-life balance and maybe even a little bit of the success syndrome.

A Case File
Ashish Mehra was looking out of the window of his cabin in the plush, glass and chrome building of Iridescent Technologies. It was just a couple of hours before the senior management meet.
A meeting which would decide his fate in the firm along with several other middle level managers who were awaiting promotion. A promotion to the senior echelons, which they presumed were being groomed for. But which, looked doubtful now

A couple of months back, faced with a resurgent rupee and declining business from the USA, their most lucrative market, Iridescent decided to ramp up operations and reshape its strategy. It needed to in order to survive. Revenues were falling and costs spiralled through the roof. Employee costs, which formed a chunk of the costs, had to be controlled immediately. The firm decided to reshape its HR strategy, re-look at its priorities and, most importantly, assess what was affecting the productivity and performance of its resources. They set up a cross functional team of senior executives to do a diagnostic study and recommend potential areas of focus to the firm. The study started with having extensive interviews and feedback from a cross-section of employees and clients.

The study seemed to point to the fact that the organization was going horribly wrong in areas like leadership development, career planning and coaching. These were areas which the management prided itself on. Areas which they felt were carefully thought about and clearly articulated. Apparently, there was a disconnect between the HR strategy and the implementation.

Iridescent was known to focus on technical expertise and skills, engineers were hired fresh from engineering schools and trained to be the best in the industry. This was common knowledge. Hence even though they did not pay much at the junior levels, there was always an eager bunch of techies wanting to join the firm. The freshers were trained in specific technologies which the firm worked with and were later given the choice to specialize further if they so wished. Once they completed a few years in the firm, based on their inherent competencies, they were trained, coached and nurtured to take on further responsibilities, both on the technical and the management front. This seemed to be working well till now.

But now the diagnostic brought forward some startling facts. The firm was unable to train its technical stars to take on management responsibilities. The high performers often had a narrow view of the companys overall strategy and vision limited to their team/technology. Few were capable of making the jump from being a technology expert or even a group head to more senior responsibilities which involved less of technical skill and more of people skills and business acumen.

The challenge lay in getting them to take a broader view of the business and lead the firm onto newer frontiers.

Ashish Mehras example fit right into this problem. A topper from REC, Nagpur he decided to spurn offers from the other IT majors and joined Iridescent for the learning opportunity and technical challenge which was promised. He was not disappointed. He built his skills in java and soon became a technology expert. He was one of the most wanted resources in the firm. After spending four years in coding and providing design inputs, he grew to become a middle level manager for a product. His clients loved the technical expertise he brought with him and he did modestly well as the product manager. There were certain people management issues and his lack of ability to build new business was evident but not worrying. In meetings where technical issues were discussed, he was able to bring alternative perspectives of how the technical issues should be resolved, and invariably these worked well. However, if there were discussions on how to grow the business or how to find ways to use technology to solve various business challenges the customer was facing, his manager felt that he was uninterested. In addition, he did not seem to be doing anything to consciously groom his team members to take on higher roles.

After spending another four years in the role, he was expecting to be promoted this year to a senior management role. His contention was that using technical expertise and the management skills he had acquired he was all set to be jettisoned to the next level.

But the management felt otherwise. Using the diagnostic findings and probing deeper into the issues, they felt managers like Ashish who were so niche focused would find it extremely difficult to traverse wider management responsibilities. They would be unable to get to the board the most critical skills required at the senior levels: people management, client relationship and business acumen. It was not the fault of managers like Ashish. Iridescent had not paid sufficient heed to the development of star performers and without the right exposure, the right experiences, skill development and coaching, they were trapped in roles where they had no exposure or understanding of the skills they would be required to demonstrate at the next level. The knife-edge equilibrium that Iridescent was on had kept them so busy managing transactions that theyd had no time to focus on longer term issues like career and succession planning or proactive competency development. So now it was faced with a decision whether it wanted to lose someone like Ashish or allow him to be moved up to beyond his level of competence.

They had to make a decision and make it fastand more importantly, think about what they wanted to do in the longer term about all the other Ashishs in the company

Its not just a matter of increased customer expectations alonethere is also a change in the expectations of the next level employees after middle managementits no longer were all in this together and so lets mouth off about the company together. Now the new middle manager is expected to inspire, to filter, to explain, to support. So for the delivery function, which is overwhelmingly the largest part of all IT services companies the issues are even scarier. Somewhere in the transition from being a manager of others to becoming a manager of managers the need for some critical skills is being felt by many organizations. The two that are most significant are around developing people to create succession and acceleration pools and becoming business managers from being a technical/project manager. Again the hourglass kicks inall the skills of following and monitoring process, of quality and productivity have become hygiene and now theyre required to work toward creating a high performing work ethic, of creating a culture of innovation or learning, of aligning strategy to implementable road mapsall things that their successes have ill equipped them for.

Broadening the Mid-management Layer
In fact, while IT services companies have clearly been very successful at creating informal processes through which the people management function hums along at the software engineer upto the early project manager levelsyoung managers take much greater people responsibilities in the IT services industry than they do in many others and its clearly a tribute to their efficacy that the industry as a whole has done so well. So as an added wrinkle to the hourglass shape, it seems paradoxical that those early skills dont seem to be as much in evidence once the same people reach the middle management layers. The buddy systems and informal mentoring systems that work so well at early stages of career somehow dont seem to work as well at more senior levelsevidence from employee engagement surveys across the spectrum show a decrease in satisfaction on this dimension. Again, while this is probably true across many industries, the people intensity of the IT services industry makes this issue more acute here as highlighted in the apocryphal story of Ashish Mehra below and makes the search for answers a critical need.

The bad news is there are no easy answers. Looking at a holistic talent management framework starting with identifying the right sets of competencies, as applicable in their particular context and drilled down to specific outcomes, that will contribute to success is the first step. Tying this up to the performance management systems to ensure that people are judged the way theyre supposed to behave is the next, and its surprising how often this is not done. Aligning career progression and succession planning is criticalhaving the right data and the right processesand being able to follow up with appropriate developmental interventions including cuing up the right sets of experiences through stretch assignments or action learning, supporting it through coaching or mentoring and skill building classroom interventions. Creating feedback processes and building a culture of learning and empowerment all go a long way.

The good news is companies across the board are rushing to introduce better skill development opportunities for their middle management layers. Some are investing in leadership development programs, others at providing the right set of experiences and yet others are looking at e-learning and other technology-driven learning for answers. Many companies have begun to detail out their leadership requirements and drill down into the leadership behaviors that would be required in the future; those that have started on this road are now looking at tying different initiatives including leadership assessment and development career and succession planning, performance management and reward systems into a more meaningful whole.

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