Shanker Annaswamy: People Leadership is Important

Image: Gireesh GV for Forbes India

Name: Shanker Annaswamy
Profile: Managing Director, IBM India
Age: 56
Why He Won For transforming IBM’s India business and making it the nerve centre in servicing 174 local markets through its global delivery network. The telecom service model it pioneered for Bharti has become the de facto industry standard worldwide.

Barely two months after I joined, in July 2004, the first non-IBMer and non-IT person to lead IBM India, I had my first interaction with the chairman [Sam Palmisano]. He said he didn’t like what he saw in the systems and technology business with respect to market leadership position. He wanted us to get our due. Later that year, IBM made the announcement that it was selling its PC business to Lenovo. What happened then? A substantial portion of my business was gone. In that environment, the real challenge was to work on the mandate of market leadership. I think my general management skills and being a non-IBMer helped since I didn’t come with any historical knowledge or baggage; people saw a new style.

We realigned our business and targeted some sectors like telecom, banking, etc. We focussed on the referral side, new technologies, even leveraging the new platforms that IBM had released worldwide. The chairman came again in 2005. He was pleased with what we had done of course, but set fresh targets: “Why don’t you get overall market leadership in the country?” Remember, 70 percent of the market in India at that time was in services. He said, “If you do this, I’ll hold a big celebration in a cricket stadium.”  

That was also the time when the delivery of the Bharti deal was on our hands. You know how the first year of any strategic relationship is critical. So, I decided to integrate all the core capabilities of IBM. We had Research Labs, working for the global market. We asked what they could do for India. Then we had Software Labs, working for the global platform. We decided to bring them to serve local clients like Bharti. By 2006, we had achieved market leadership.

[Palmisano kept his word and held the annual analyst meeting, the first ever outside the US, in June 2006 in Bangalore; not in a cricket stadium though, but in the sprawling Palace Grounds.]

For me, market leadership in India is important because we are partnering with clients who are transforming their business. It wasn’t a traditional outsourcing deal, a vendor-supplier relationship, but real partnership and it held true for Tata Steel, Tata Motors, Cadbury, Eureka Forbes and others. For MNCs, market is important no doubt, but often the India market turns out to be very small. The excitement at the headquarters comes not just with size and growth, but also the pace of growth; your innovative technologies and business models that can be replicated elsewhere.

For that, I had to overcome another challenge — of business leadership. So, I created a forum called India Leadership Forum. I used to take top 100 leaders from different business groups who in their normal routine jobs wouldn’t be talking to each other. For instance, a software lab guy wouldn’t know the challenges in the domestic market and vice-versa. For three days, I’d keep these folks together tied to various activities including a full day session with renowned business academicians from all over the world and an outdoor event. This bonded them well. I also gave them cross-functional projects, those that would impact India or global business. They had to then present it before a panel of leaders and explain how they’d move the needle.

All this integrated the team. They stopped viewing IBM India from their verticals’ point of view. This helped us go after big projects like the Indian Railways for which we developed and deployed the crew management solution. Subsequently, big global capabilities became available for local use.

Such people-development programmes were necessary; you can’t run business leadership without people leadership. This was particularly significant during my early days of joining IBM. The Lenovo transition was difficult for many of my colleagues, who had to report to other locations. That had to be handled in a certain way. Moreover, when I took over, the speed with which we moved was nothing short of a blitzkrieg. That meant moving many people from their comfort zones and getting used to my style. (I am an in-your-face type of a guy, always pushing and challenging.) Because of IBM’s values and ethics, we stayed away from a lot of business, but we still had to grow. Additionally, there was this fear that India was so hardware-centric, what were we going to do in services?

But we proved many fears wrong. Nothing succeeds like success, they say. We closed many big deals with tremendous support from the global team. I remember in 2005, the media used to ask me: “When is your next Bharti [type deal]?” By 2006-07, we had replicated the Bharti deal with Idea Cellular and Vodafone and now we have expanded all of them beyond their initial mandate.

After consolidating business and people leadership, came the act of aligning the two to the national agenda. This is uppermost on my mind as well as on IBM’s strategy. It’s not philanthropy; society sits right at the intersection of technology and business and opportunities are ripe today. This also allows employees to connect with the company so that they don’t think they are working just for a multinational. Our entry into several infrastructure projects such as in banking, NSDL [National Securities Depository], CBDT [Central Board of Direct Taxes], Delhi-Bangalore-Mumbai international airports, etc. provided the evidence.

We still pick and choose where we want to be in the government; commodity business is not for us. However, one good thing is that more public-private partnership is happening in government. But still there are challenges: If the government can have trust and a rigorous, transparent procurement process, this country can be transformed faster.

Our business mix will keep changing, but the leadership challenge is far from settled. A substantial employee population today is the next-gen. You need newer abilities to connect with them and keep them excited.

(As told to Seema Singh)

‘He Gives People a Long Rope, and Allows Failures’
Jeby Cherian, Director, Strategy and Business Development, IBM India/South Asia. He has seen various leadership styles and has watched IBM India transform itself

IBM is not an easy company to assimilate into; Shanker is right. It has a complex structure with no command and control system. There’s no one person who’d say this is the way things need to be done. This is how IBM has evolved over 100 years. So it requires a particular type of person to succeed here: One who can recognise when to play the role of a benevolent dictator and when to act as a serving leader, sometimes many times over in a day or in a particular scenario. In that way, Shanker’s transition was complex; he had a learning path of six to seven months, like anybody would have. Soon after, he integrated the company in a way that no one had ever done.

He created an IBM India strategy, in one aspirational line: We want to be considered as a national asset.

Being a multinational company in an adopted country, it was a very bold statement. He then went about delineating how we were going to become a national asset: By transforming sectors that would in turn transform India. He didn’t take credit for the Bharti deal [which was done before he took over], but instead chose other industries like banking, railways, infrastructure, etc. Moreover, even in the Bharti deal, the tougher part was the delivery of services, which he oversaw. If that didn’t happen well — which, in fact, has become the de facto telecom industry standard worldwide — Idea Cellular and Vodafone deals wouldn’t have happened. That’s his strongest point: Customer focus. Even in our weekly reviews, he constantly asks what the customer is saying and why he is saying so. Which is why he sits on the steering committee of some of the most difficult clients, which, mind you, are not the biggest clients, but small ($10-15 million) and medium companies that have trusted IBM.

If I were to describe Shanker in one word, it’s integrity. It’s the core of the man. He’s let many deals go by for want of enough transparency in the processes, and that includes the tough economic period of 2009.

He is very passionate about India and has been able to align that well with the company’s strategy. After the initial setting up of the India Leadership Team and the Domestic Market Team, he has recently turned to Focused Forty, a programme under which he wants to groom 40 technology leaders from India who can contribute to the global business. This is significant given that India is one of the nine countries [out of 174 that IBM operates in] that have the full footprint of IBM businesses.

Knowing him thus far, I can say he’ll get great results. He is very tough, very much ‘in-your-face type’, but also extremely fair. He selects people based on their potential and track record and then pushes them, sometimes even to the edge. In my initial few weeks of working with him, I used to think, “What have I got myself into?” But when I saw my own performance, I realised what he was up to. He gives people a long rope, and allows failures.