Business – Page 2 – 6 am pacific

Can You Write a Full Sentence of More Than 140 Characters Anymore?

In the IT Services industry you have to be able to write code. And English. In fact, not being able to write code may be alright. But without English you just can’t function.

And yet, it is surprising how little attention is paid to written communication skills. The BPO industry trained thousands of people in spoken English, often accompanied with accent training. But English writing skills get little attention.

Why are English writing skills so important?

Internal business communication in an IT Services company is entirely in English. The offshore model means that business matters that could have been transacted in a meeting or over the phone, necessarily end up on email. If an email, or design document is not well written, a whole day might go by before a clarification or correction can be made. Big waste of productivity!

Second, Indian offshore service providers work with clients who are used to dealing with consultants who typically have excellent writing skills. In western markets particularly, writing with clarity and even flair, is a mark of a good education. That’s what you get compared with.

Over time, most clients on the IT side of the house have adjusted their mental models and no longer automatically connect good writing skills with IT skills. But as we start going in front of business, the same problems will start surfacing again with a new set of clients.

Nominally, Indians in the IT Services industry were educated in English medium schools. I would guess that over 90% of the industry took their XII board exams in English medium. But when it comes to writing English, unfortunately, that doesn’t mean much.

Indian high school education is all geared towards college entrance exams. Entrance exams for engineering colleges don’t test on English. The Physics, Chemistry and Math exams are entirely (?) multiple choice. As a result, nobody cares about English at school. Correction – nobody cares about any language, period.

And then came the mobile revolution. The kids coming out of college now write emails, the way they text. Short, unintelligible sentences full of typos. Not surprising since for them words texted far exceed words written in full sentences in email or any other form of writing.

Go to the comments section of any Indian publication online. You’ll see what I mean. I can’t understand half of what’s written there.

This is actually now a crisis. I believe that with the new generation, writing full sentences is just not cool any more. Every idea must be conveyed in 140 characters or less. Much of it will be SMS English. There will be typos galore, because, you know what, I am too busy to review what I just wrote. If you can’t understand what I’ve written that’s your problem.

As always, the industry will have to come up with its own solutions. We can never rely on the Indian education system to meet our needs. But unlike technical knowledge, it is really difficult to start writing well if you have ignored it in school and college.

The Two State World View and BYOC

Facebook on Smartphone — Photo: Johan Larsson

I rejoined Infosys on June 1 as Head of Global Sales. It’s been quite easy slipping back into the saddle on most fronts. The one that took a bit of adjusting to, was on my gear.

Startups don’t have IT policies. For the past few years I have been using email in the cloud, a MacBook, an Android phone and have not been within miles of a securID card. All that changed overnight.

Infosys, like most major corporations, takes information security very seriously. Actually, because its policies have to be at least as strict as its most security conscious clients, Infosys is probably an outlier, even in the corporate world.

All very necessary and reasonable. But I am going to miss my personal tech freedom. Most people who have gone back to work for a large company know what I am talking about.

The world around them is changing, and companies will have to respond to it. Current IT policies are based upon a “two state” view of the world. It sees the “employee at work using company computing infrastructure” and “employee on her own time, on her own device” as two states, separated by time and space. This is increasingly untenable. Not only does it not reflect the reality of the life of information workers, it is also easy to argue that this view of the user is not in the interests of the company.

In today’s shrinking world, a major corporation is open for business in some part of the world at all hours. Employees have to be open to this 24X7, always-on kind of work environment. The boundaries between company time and personal time are blurred. Should the employee have to keep switching between company and personal devices?

If I go for a two week trip to Asia Pacific and carry just my company devices with me, can I put my personal life on hold? I might have to pay my bills, answer personal email and yes, even lookup my friends on Facebook. I might want to catch my favorite weekly show on HBO. Should I have to carry two laptops?

I could also argue that IT policy based upon this “two states” world view is not in the interests of the company. Let’s say a new employee is hired into a tax advisory firm. He is an expert in say cross-border taxation issues. For years he has kept notes in Evernote. But now he can’t bring those notes inside the firewall because of the lock-down environment in the company. That can’t be a good thing for the company.

Further, the taxation expert has a twitter account and a blog which connects him to other experts and people interested in his field. These are personal accounts, but the company gains from his network and reputation. The company gets leads because of his online presence.

Another problem is the consumerization of computing technology. There was a time when the IT department could standardize on Windows and Blackberry and few employees would be disappointed. But now Macs are a real corporate alternative. And iOS and Android phones and tablets outnumber RIM devices. Their users love them and will keep the pressure on IT to let them use these devices.

Fragmentation always costs more and IT departments hate it. But how long will they be able to hold up against employees who want their own device?

Which is why regardless of the challenges, Bring Your Own Computer and Bring Your Own Device are here to stay.

How Not to Do a Newsletter

I get most of my reading done via twitter. I follow a bunch of smart people who essentially filter all that’s out there to what is truly worthy of reading. My feed reader is getting less and less airtime nowadays. But there are some bloggers who don’t tweet their posts so one has to go visit Google Reader once in a while.

In spite of these new age consumption methods for news and opinion, I still get the odd email newsletter. One of them is from the Wall Street Journal Online. But I don’t click on the stories much. In fact on most days, I delete the emails unseen.

The WSJ email newsletter is put together for the sole purpose of inserting ads and generating revenue. The ad, as you can see in the image below, occupies pride of place. Most people I know don’t allow automatic download of images in emails. So basically you have a big blog of nothing right at the top of the email.

To the left of that big blob of nothing is, wait for it, another big blob of nothing. Whoever designed the email, decided that the first topic could be next to the ad, but the second topic must begin way below.

The email signup takes up most of the rest of the space above the fold. Its kind of funny that users are signing up for email newsletters in which the first and almost only thing they see in the email is an invitation to sign up for email.

I could go on you know. The use of all caps. The general ugliness of the email. But you get the drift. It sucks.

On the other hand, here’s an email newsletter from GigaOm. This is how its done.

At the top of the email is a list of the top headlines, that is well designed and pleasing to the eye.

If you click on a headline, it doesn’t take you directly to the website. Instead, it takes you to a short blurb about the post that you clicked on, within the email. You read the blurb and if you want to read more click and go to the website.

Isn’t that a little counterintuitive? If the user has clicked on the title, just take him to the website, no? Each click is X ad impressions. Each ad impression is worth $Y…

Actually, no. I like the fact that I get a little bit of a blurb within the email. This saves me from the costly (in time) visit to the website, if I was curious about the title but wasn’t sure what it was about. And this makes me click more.

The fundamental difference in the approach is that GigaOm wants the newsletter to be useful for readers before they start making money on it. WSJ sees it just as a source of revenue. In fact they probably handed it over to the ad sales department to design. It certainly looks like that.

The Role of Management Consulting

The hearings on the Galleon insider trading case have begun. Two of the accused Anil Kumar (turned witness) and Rajat Gupta are former McKinsey consultants. So naturally, there is light being shone on McKinsey and management consulting.

John Gapper in the FT

The calculation every client makes is, in the words of Christopher McKenna, a professor at the Oxford university’s Saïd Business School who studies professional services firms, that “consultants will carry information in and information out. The client has to decide which of those flows is worth more.”

Indeed, one of the main reasons companies hire consultants is to make sure they do not fall behind what their competitors are doing – in return for parting with their own secrets, they gain access to their rivals’ suitably disguised “best practices”. The consultant is a broker who attempts to amass so much knowledge that each company has to hire him, no matter how uncomfortable that feels.

The value in hiring management consultants lies in broadly three (overlapping) areas:

Superior analytics skills – Firms like McKinsey do hire some of the best business brains.
Expertise – industry or functional expertise.
Best practices

The third – best practices – does overlap with expertise, but differs in a crucial way. Expertise could be acquired either because you were a part of industry or because you have been a consultant to that industry (or function like Marketing or HR) for many years. But best practice is just about knowing what the best companies are doing.

Hiring consultants to get ~~industry best practices~~ analytical skills is quite common. There was a time when smart MBAs were concentrated in management consultancies and were hired by companies just looking for smart analytical types to fix problems that their own managers were not able to.

But hiring MBAs became commoner in the industry as business schools kept churning them out. This redressed the IQ balance somewhat. Which forced management consulting firms to shift more towards hiring people from the industry (acquiring expertise) and to offering best practices.

In many cases, hiring a management consultant for best practices is perfectly alright. In functional areas like HR for instance. Although, hiring somebody with the expertise as an employee might be better.

But if you hire a McKinsey for core business strategy you have to be pretty convinced that your executive row has the wrong people. Even then, if you were the CEO, wouldn’t you make changes to your exec team rather than seek outside help?

Outside of management consulting I see no dilemma. In IT consulting for instance, there is a certain complementarity in the expertise that the IT consultant brings. Assuming that IT is not core to the company (i.e. you are not amazon.com) there is every reason for the company to tap the technology expertise with a consultant.

Management consulting is the only kind of consulting where most of what they do is not complementary to what the client’s leadership is doing. It makes up for their deficiencies.

The companies who therefore use them for core stuff have admitted to themselves that a) their exec team cannot rise to challenge and b) in the inflow-outflow that Chris McKenna speaks of above, they will definitely gain from the inflow more than they can lose from the outflow of information.

You know who’s never used consultants? Warren Buffett.

Why BankSimple Will Get My Business

I bank with a well-known national bank. We’ll call it CurrentBank. I’ve banked with CurrentBank, for more than a decade. I like to keep things simple, so I don’t have any other accounts. But as soon as BankSimple is up and running, I will open an account with them. Read on to find out why.

I recently booked airline tickets on Cathay Pacific for my in-laws who live in India, to come spend a few weeks in the holidays here with us in the Bay Area. I made the booking on Cathay’s website using my CurrentBank debit card. A few days later I was shocked to learn that CurrentBank had hit me with a fee of $234.92 for “international transaction fees”. I scrambled and called CurrentBank, who basically said, sorry, but read your contract.

I of course knew about those international transaction fees. I see them all the time when I use my card outside the US. But how am I supposed to know that sitting in the Bay Area I can be hit by these fees while buying tickets on an international airline. I had never paid any transaction fees on Cathay before this and this was not the first time I was buying tickets online on Cathay, though the trip always originated in the US.

Wouldn’t it be really simple for Visa and/or CurrentBank to pop a message while the transaction is being processed that said “Please note that CurrentBank will charge you an additional fee of $234.92”. Something that is always done at ATMs around the country. But why would they. You see, the card holder might have second thoughts.

The objective, you see, is not to serve your customer’s interests. It is to lure him in by “free checking” and other tall claims and then trap him with well-laid traps.

You might say, “Hey, you should have read the contract.” I offer an analogy to whoever might pose that question. Suppose you went to an e-commerce website. You clicked on the “I agree” button. The agreement that you just agreed to included a line that said “A service charge of 3% will be charged to your credit card for every purchase.” You then did your holiday shopping and then discovered in January that the e-commerce company hit you with an additional charge. You’d be pissed, wouldn’t you? So am I.

Earlier this week I got hit by a fee of $15. My account is not supposed to have any fees, but there must be a good reason why they hit me with a fee. I’ll never know. Their online statement gives no explanation. And it is not worth my time to call and find out what the fee is about. They probably concluded long ago that saying too much in transaction statements just raised unpleasant questions. And who wants to deal with those pesky customers.

I know CurrentBank needs to make a profit. I know that they’ve been hit big time by the cap on debit card fees (which the retailer pays). But I’d be much happier if they charged me whatever they needed in an upfront and transparent way. Don’t lay traps.

That’s why I am rooting for BankSimple. I have no problem paying a fee for checking. I know it costs money to provide a good service. But I want the services and fees to be simple, upfront and transparent.

You might say, why BankSimple, maybe this is just a CurrentBank problem. Try another bank. I don’t have to. I know all of them suffer from the same problem. They are all busy “leveraging their customer base.” After gazillion acquisitions, the way they compete has come down to reducing costs and getting more out of the existing customers. Unfortunately, the latter often means ambushing them in dark alleys with hidden fees.

Bollywood Music – the Android Opportunity

Can Indian digital music become a legitimate business? Or will it stay stuck with a 20th century distribution model?

You might say that Bollywood is already digital. You already get popular music on iTunes and amazon.com outside India. But the problem is that Apple and amazon.com are force-fitting their template for western music onto Bollywood music.

Take pricing. iTunes pricing for Bollywood songs is its standard 0.99c. Amazon.com is the same, though I saw a few songs for 0.89c. The Dabangg CD costs what? Rs. 150? For 10 songs. That works out to 0.33c per song. And the shame is that the 0.99 pricing is not because the Indian studios want that pricing. It is because Apples forces a standard template on everyone.

There are a bunch of other things that I would expect from a music service that specialized in Indian music. Don’t expect these from Apple or amazon.com. Correcting spellings, for instance. I find the “did you mean ….” in Google is very helpful. But when I am looking for music on iTunes for the movie Awaara, I don’t know how it’s spelt. Aawaara picks up something, so does Awara, but neither is Raj Kapoor’s Awaara, which is what I want. It should be so easy to build an intelligent, forgiving search for spelling Indian movies in English.

Here’s what came up when I was looking for Dabang on iTunes (instead of Dabangg).

Indian popular music is about the movies. The movie is part of the experience of the song. It is also a revenue making opportunity. Sell music videos. The cross sell opportunity between music, music videos and the movie itself is enormous. It is not being leveraged at all today.

I am sure Bollywood executives wonder about how to leverage this opportunity. Indian music is just too different. It’s not just a matter of pricing. Waiting for Apple or amazon.com to wake up to the opportunity is not the answer. So what do they do?

There is a way opening up. Because of Android, 3G and more broadband.

As I write this, I am listening to Shreya Ghoshal on iTunes/MacBook – WiFi – Airport Express – Denon receiver – Polk speakers. But most digital music is consumed through a portable player. The world’s dominant portable music player is the iPod (and the iPhone). The iPod never really caught on in India. Neither did the iPhone. Too expensive. So most of the market comprises of cellphone mp3 players.

Android is going to be big in India. People who own cellphone mp3 players today will have Android phones within 2 years. Android is the perfect platform to build a digital music player for. And its user base will have size and depth.

I think Bollywood should do a Hulu. Two or three leading ~~studios~~ [labels] should come together with a VC and form a company. The company’s mission should be to build a digital music business in India.

There are many models out there that could be candidates. Download with/without DRM (iTunes, amazon.com), Subscription (Spotify), Streaming and ad supported (Pandora). The technology too is mature. Scores of Indians in the Bay Area have the expertise to build digital media systems.

The key challenge is on the deal-making side of things. The ownership of copyright in India is a little more complicated than in the US. Also, the industry is more fragmented. To get a critical mass of copyright owners on board will take a lot of doing. But hopefully, the opportunity ahead is what will convince them to sign up.

This Could be the Future of the Print Media

Richard Branson launched Project, a digital magazine just for the iPad. The monthly magazine will cost $2.99 a month.

Meanwhile, Rupert Murdoch is working on an iPad only daily (newspaper) called The Daily.

In related developments, the New York Times online, which has been free thus far, will be going behind a paid wall, at least for some content in Jan 2011.

The print media has had a torrid time, the last few years. Could this be the light at the end of the tunnel?

A paid-subscription magazine on the iPad has a few things going for it. One, it looks really nice. The user experience is better than both print and the internet. A glossy should be glossy, even if it is electronic. A website can’t manage that as well. Paper magazines, on the other hand don’t use rich media – audio and video. The iPad has all of the advantages of online but none of its disadvantages. People, just might pay for it, like they pay for paper subscriptions.

If it’s a new magazine or daily and there isn’t a paper product, or a website, there are a couple of other advantages. One, you can’t get the content elsewhere through any other means, so if you want it, you pay for it. The other advantage is that you don’t have the costs of printing and distribution. And a probable third advantage is that you have a lot more control over the advertising (I think).

But there are disadvantages as well. If your magazine is electronic but is not on the internet, nobody links to your stories. Your stories don’t appear in Google News or any search results. The only way to market your magazine or news daily is the old fashioned way – advertising, PR and sampling.

FT.com, wsj.com and presumably nytimes.com are going to take an in-between position. They aren’t or won’t be completely walled gardens or free. As an unregistered reader, registered reader or paid reader you will get to read a graded number of stories per month. And Google will index the sites. And they all have or will have iPad apps as well for paid subscribers.

The print media is being deconstructed and put back together in front of our eyes. It is fascinating. I believe we will end up having a whole spectrum of models that will co-exist. Higher quality journalism will go behind pay walls in some fashion. And that is how it should be. If you want to read stuff written by smart people, you have to pay for it. Also, if you want investigative journalism to offer some checks and balances in our democracies.

Where Will the Good Jobs Come From

Yglesias rebuts Ed Luce in the FT.

First, Ed Luce:

…a paradigm that has outlived its usefulness – the view that globalisation is an unmixed blessing for the US economy, and that America’s disappearing manufacturing jobs will be replaced by high-value jobs in the service sector. Things do not appear to be working out that way.

Take Applied Materials, a big US manufacturing company, which earlier this year shifted its chief technology officer and research and development operations to China. The company said it needed its R&D to be close to the source of its manufacturing operations and to its biggest future market. This is the opposite of what is supposed to happen. America was meant to keep the high-end jobs at home, while China would get all the low-value added production.

Yglesias rebuts:

In addition to my oft-made point that US manufacturing output is not in fact declining, it’s worth noting that the alleged need for R&D to be proximate to manufacturing options (plausible) cuts in both directions. Conventional wisdom is that manufacturing operations will all drift to low-wage countries. But if the USA is a better location for R&D than China, and if it’s strongly desirable to co-locate R&D and manufacturing operations, then many firms will want to retain manufacturing operations in the United States of America. So if this story is right, then more and better education for America is the key to retaining high-wage manufacturing jobs.

A few general remarks.

One, in my opinion, R&D’s proximity to manufacturing is less important than its proximity to the customer. In the case of Applied Materials, they mention both proximity to “manufacturing operations and to its biggest future market” as the reason for moving R&D to China. Luce and Yglesias pick up on one (manufacturing), but not the the other one (markets) which is probably the stronger driver. From the software industry we know that offshoring development (akin to manufacturing) while keeping design and product management in the US, is now more the norm than the exception.

Two, the US is unlikely to lose its edge on R&D. It has the biggest market by far in the world for anything and therefore the biggest playground for innovators in the world. It also has a lot of other things – the best talent from around the world, great universities, protection of intellectual property, venture capital etc. etc. Much has been said about the advantage that the US has in R&D. Now, in any market, new entrants will always be able to chip away at the leader’s share, just by positioning themselves to do something that the leader can’t do or won’t do. But even if some R&D goes to China and India, it won’t be of a magnitude that can impact the US hegemony over R&D.

R&D is not an end in itself. It is a means to an end. R&D itself creates millions of jobs but you have to have an advanced degree in Science or Engineering to get one of those. Not everyone will get (or want) a job like this. If the US continues to preserve and grow “innovation” related jobs, that is good, but not quite enough. Where are the millions of middle class American jobs going to come from?

This is a serious problem. The future of globalization might depend upon it. When manufacturing started moving to China, services jobs took their place. They were well paying (and a lot more comfortable). As now more and more of the white collar services jobs are being offshored as well, where will those middle class jobs come from?

Richard Florida might have the answer.

Among the fastest-growing jobs categories, according to the BLS, are what are called personal services – everything from day care and elder care to home health aides, food preparation, hair-cutting, home maintenance, and the like. These jobs are nearly impossible to offshore as they involve direct face-to-face human contact. A key platform in a national jobs strategy must include increasing the quality of these currently low-paying service jobs, turning them into higher-paying, family-supporting jobs.

Florida also says that these jobs have seen very, very little investment in technology and skills. Jobs pay better if they require higher grade skills. Jobs require grade skills if they are complex and need the use of tools and technology. Higher productivity can enable higher wages. Higher productivity requires the use of technology.

Consumer Electronics Packaging and Wrap Rage

New York Times has an article about amazon.com’s battle against consumer “Wrap Rage” – the frustrating experience of unpacking stuff that you buy from them.

I have long been amazed at how stupid packaging has gotten, especially for small electronic items that are sold in transparent clamshell type packing which is very convenient for retailers to display, but require industrial shears to cut away. I love what amazon.com is doing. It not only addresses “wrap rage” but also cuts down on waste. The packing material is less in quantity and is both recycled and recyclable. It costs less for the manufacturer. The box that carries the item can be smaller which saves money for Amazon. All in all it is good for consumers, for the manufacturers, for amazon and for the planet. So shouldn’t it be a roaring success?

Apparently not. From the same Times article

Environmental experts attribute the slow response to the intransigence of big manufacturers, the complexity in having different packages for physical retail and electronic retail and a lack of coordination among the major e-commerce companies.

While this implies that the manufacturers are intransigent, the real problem is that retailers still want the pretty clam shell packs. Their stores are designed so that those batteries can be hung on hooks, looking pretty while providing consumers easy access to them. Let’s call this the “display value” of merchandise.

My first job after business school was at a consumer marketing company and I saw the impact of display first hand. In Indian kirana stores in the early 90s it worked. Better displayed brands sold better. But in 2010, in the US, I believe the value of display is overestimated. Retailers haven’t adjusted to consumer behavior.

Consumers don’t just walk around a store and buy a Philips electric shaver on impulse. They know they need one and they research it – on the internet, ask friends on Facebook – before they decide which one to buy. When they come into the store they know exactly what they want to buy. Maybe they have a question or two to ask of the store sales rep. Otherwise they just take the shaver and go.

There are shades of grey of course. What I am saying is that today, when a product is likely to have been researched to death outside the store, the “display value” of that product matters less. Much less that what retailers think it does. But I will also admit that “display value” for many products has not dropped to zero. I do get reminded that I need AA batteries when I walk past them in the grocery checkout line. And that is worth something to the retailer.

But I don’t think that the trade-off between display value and consumer frustration with packaging is being made correctly today.

Let me give you another example. I just started going to a different grocery store because their produce is better. Now, most grocery store layouts have a certain macro level logic to it. But when it comes down to looking for Rice Milk or something like that, I am rendered completely helpless. Like most males, I hate asking for directions. Until I am forced to, which is like after 15 minutes and two trips across the length of the floor.

Wouldn’t it be easy for the store to put up kiosks in the store and even something on their website, where you could check availability and location of a certain product? Its probably the most obvious solution to a common problem. But the store won’t do it. Why? I’m now guessing here, but I’ll bet it is because they believe that if I wander through their aisles looking for Rice Milk I am likely to pick up a few more things that catch my eye (essentially another form of “display value”).

One day, retailers will make that trade-off between display value and security on the one hand and customer frustration on the other and come up with some solutions. Perhaps display things whichever way you want to but sell things in friendlier packaging. Until that day arrives, I’ll shop with amazon.com thank you very much.

IT Services Companies Should Empower Middle Management

Last week was quite eventful in the “Workshop of the World”. Foxconn, a Chinese manufacturer for companies such as Apple, Dell and HP, gave a 20% ad hoc raise to its workers after as many as ten suicides which called into question the working conditions at its plants. Fox Conn employs 800,000 workers in 20 plants across China.

Then it was Honda’s turn. Workers in Honda’s four factories in China struck work bringing all production in China to a halt. Yesterday Honda gave a 24% raise to workers, who were still not happy.

The strike in of itself was quite surprising. From FT

The right to strike was excised from the Chinese constitution in 1982, and attempts by workers to organise outside the official All China Federation of Trade Unions are frowned on by Beijing.

Amenities at Chinese factories like Foxconn are actually considered to be good. From Guardian

Foxconn is proud of the fact that it provides a swimming pool and other facilities to its staff, as well as organising chess, calligraphy, mountain climbing and fishing.

At both companies pay is not great but is above the legal minimum wage. Many workers make much more by working overtime.

How is this, in any way connected with the Indian IT employees’ angst? They are both about employees having nowhere to go with their problems.

Even though their demands and managements’ responses have been focused on pay increases, Chinese employees taking on their managements, is not really about salaries. How can it be when most employees come from the hinterland where wages are poor, that is, when there are jobs available? It is because the workers feel powerless. They are lost in these huge organizations. Foxconn has 800,000 employees. Honda also employs a similar number across its four plants. The “official” trade union is not elected and is really part of the establishment – a proxy for management. The workers have nowhere to go with their problems.

Cut to the Indian IT Services industry. Most of the successful companies of today are very centralized in how they operate. Historically, this was necessary. To scale up they had to build an organization which ran efficient, repeatable processes. For that it was necessary to have strong central control. But the very thing that helped them scale engineering and business processes, made the middle management powerless and weakened the bonds between the company and employee. It failed at the most important aspect of scaling a company – in building a loyal, motivated workforce.

When a company is small, the founders or the members of the top management know everybody themselves or with one degree of separation. They infuse the whole company with their values. Employees form a relationship with the company based upon these shared values.

But as the company grows, one degree of separation becomes two, three, four and more. Pretty soon what top management gets to hear is what they hear from their direct reports. What they have to say is said to a select few or to the media. How do you continue to build trust with your employees? You can’t do it yourself. So you must have your middle managers become interlocutors for you.

The problem is that middle managers are so disenfranchised that they feel powerless. They are the ones who run the delivery teams, who make the company tick. But they don’t have the leeway to solve their own day-to-day problems. When they take their problems to their superiors they discover that they too are powerless. So they just keep punching the clock. If somebody in their team comes to them with a problem, they just say, “I can’t help it, that’s the way it is”. When the rank and file IT worker starts griping about the company, some of these managers stay silent. Others join the griping. Nobody defends the company. They can’t. They don’t believe in it themselves. That’s where the battle is being lost.

In the case of Chinese workers, establishing a union that is truly representative might actually be the solution. Empowering middle management is less effective. In manufacturing there is a “class divide” between managers and workers, often based upon education and qualifications. Very few workers will ever be promoted into management. So the “us vs them” feeling almost guarantees strife, especially if as in the case of Honda, the Japanese managers earn much, much higher salaries.

But in an IT Services company every engineer has the qualifications to become the CEO of the company. It should therefore be easier to bridge the divide. Also, regardless of the quantity of outpouring on the internet, it still does not represent widespread disaffection.

Winning back middle management is the first step in turning things around with employee relations. Stuffing their mouths with money just pushes out the day of reckoning.