The IT Industry in India is clearly reaching an inflection point. There are the large and successful software exporters reaching the much admired Billion Dollar status, employing tens of thousands of professionals, and winning acclaim and business from global corporations. And then the hundreds of smaller companies, in every sector of the industry, from software and BPO to hardware to Networking and even Consulting, all looking for their place in the sun and an opportunity to develop a differentiated value proposition for their customers.

While the challenge for the smaller firms is more obvious, CEOs of larger firms are also worried-not just about the stock markets or getting more business, but to do what the legendary General Electric Company says in its 1995 Annual report: "shape a global enterprise that preserved the classic big company advantages while eliminating the classic big-company drawbacks. What we wanted to build was a hybrid, an enterprise with the reach and resources of a big company but the thirst to learn, the compulsion to share and the bias for action-the soul-of a small company." And while the Annual Report goes on to describe the various steps GE took-de-layering the organization, setting stretch goals, compensating people with stock options, annihilating bureaucracy and providing high quality leadership-to deliver on its promise, this inflection point can well be the key to sustaining success in this industry.

One of the key challenges that CEOs in any successful industry always face is the ability to deal with rising inequalities. At Harvard, we were exposed to the shocking reality of an American CEO pay sometimes being as high as 250 times the pay of the junior most employee; and if one compares the compensation of the chairman of Nike Corporation with that of the lowest paid full-time NIKE employee, in the factories of Indonesia where maximum economic value is actually added, we are faced with the shocking statistic that the NIKE chairman is paid as much as seventy thousand of his Indonesian factory workers put together. There is no doubt that the compensation and opportunity divide that exists everywhere and becomes accentuated in large organizations can sow the seeds of discontent and low morale in a any fledgling industry.

On a larger scale, the issues of "digital divide" which many of us talk about are real issues that the industry, led by the front runners, will have to deal with all the time-the recent Gowda-Infosys argument has shown how a disgruntled set of politicians can attempt to divert attention from real value add by successful companies. It is not reassuring to say that inequality in India is a milder problem than in China, where millions of rural peasants feel compelled to leave their children for months at a time, going in search of higher wages in cities.

Finally, back to the very successful GE, and to one more pearl of wisdom from their annual report-the four types of managers that grow in organizations and the ways in which GE deals with them. Type I are people who share the values and meet the targets-for them the sky's the limit; Type II are those who neither share the values nor meet the numbers-they're dead meat; Type III are those who share the values but miss the numbers-they deserve one more chance, maybe two; and, finally, there are the Type IV-managers who don't share the values but deliver the numbers-and this is where GE makes its strongest statement: "We made our leap forward when we began removing our Type IV managers and making it clear to the entire company why they were being asked to leave, for not sharing our values." How many CEOs in our young industry have developed the courage of conviction and the ability to act this way?