Friday, April 24, 2009

A new, improved Satyam?

Ramanujam Sridhar
The brand must make an effort to show it has changed for the better..

When I was young (Oh God, there I go again!) a movie running for 100 days was a significant achievement. (Today however, I see posters heralding a triumphant ten-day-run of movies.) Aradhana, the Hindi movie with immortal music byS. D. Burman ran for 100 weeks in Tamil-speaking Madras, when I was just finishing school. But sadly, this is not about movies or music or even about my schooling, but about another significant achievement that has happened in the last 100 days. I refer to the takeover of Satyam by Tech Mahindra, which will fork out a small sum of Rs 2,889 crore to gain a controlling 51 per cent equity in the company whose troubles started 100 days ago, in the media at least, on January 7 with Ramalinga Raju’s confessions.

How quickly things have moved since that fateful day! No one must be more relieved than the 53,000 beleaguered employees of the company. These 100 days have also seen a tremendous achievement by the newly constituted board of Satyam to get its act together and get the interest of the corporate world in a brand which had come under a phenomenal cloud. It is also a significant achievement for India and Indian business when globally, larger, higher profile brands have bitten the dust and others are still out begging bowl in hand. But let’s return home and to our own concerns.

What does this takeover and change mean for brand Satyam? Will it regain its former glory? What must the company do? Let me hazard a few guesses as it is always easier to make predictions in turbulent times like these, as one can always take refuge under the unpredictability of the times that we live in, should the predictions turn out to be horribly off the mark!

Takeover - who wins, who loses?

Of the four who were serious bidders, maybe Cognizant was best suited from a technology and business fit perspective, but that was not to be. L&T too did the rumour rounds, having already had a presence on the board and showing its interest in no uncertain terms to all who cared to listen, media included. Now that the deal is done, it is pertinent to observe that perhaps the deal might benefit Tech Mahindra more than it might benefit Satyam, as it immediately catapults the combined entity into the elite stable of Indian software.

However, one must quickly add that though the Mahindras are not dominant players in the technology space (they are in the telecom space in technology) they are most certainly a respected name in the Indian industry, with a track record of success in business and the acknowledged ability to launch successful brands across categories. The troubled Satyam brand will certainly benefit from the solidity that the mere name implies and the consistency in management that the earlier leadership sorely lacked. Having said that, it might perhaps be better to concentrate on the road ahead and the challenges that lie in store than focus on the immediate past. For it seems apparent to even the casual observer that the road ahead is going to be reminiscent of the challenges and frustrations that the Indian industry faced in the times of the Licence Raj, full of unexpected road blocks and with hardly a dull moment!

The name of the game

Individuals do not have control over their names, by and large as parents and astrologers (in India, at least) determine how one is called. As my favourite author would say: “Imagine going through life with a name like this!” Brands, fortunately, have some leeway. They can even change names midway through their lives should the need present itself. And if ever there ever was a need for Satyam to change its name, it most certainly needs to do so in the present.

During my youth I made some feeble and ill-directed attempts to leave the country. Thankfully, I was unsuccessful. As part of those ill-fated attempts I wrote the GRE. (If you do not ask me my score, I promise you I won’t lie to you!) But back to that exam, which had a section on antonyms, where the student had to find the word that meant exactly the opposite to the word in question from the choices available. The word Satyam reminds me exactly of this, because the company has certainly stood for everything except truth which is really what Satyam means. So, is it a “no brainer” to change the name?

Well, sometimes research throws up answers that we already know, something that we realise much later, after spending considerable amounts of money. Doing research on the efficacy and relevance of the Satyam brand name in this case, might in my opinion, throw up the same result. While certain companies have built and refined their brand names from the past, such as Sasken, which was earlier known as SAS, I feel that the company ought to now make a clear break from the past. So that is one strategic brand decision out of the way. What next?

The essence of the brand

Ideally brands have an essence that defines their very being. Their raison d’etre. Too often these are tributes to the dexterity in word play of the brand consultant or advertising agency and not anchored in reality. Satyam or the new brand, as the case may be, will not have this luxury the second time around. Its mission and vision statements must be anchored in reality and not mere feel-good statements that adorn the walls of corporate boardrooms and that no one reads barring the office attendant who has the unfortunate job of dusting it occasionally!
Staying on the subject of brands, a successful brand is relevant to its publics and different from its competitors. There is no doubt that Satyam will continue to be relevant to most of its customers and to several thousand of its existing employees. (I must confess my cowardice in not addressing the relevance of the brand to investors at this point in time.) It must, in its new avatar, too be different. Not so much from its competition, but from the way it was, or has been perceived to be recently. In fact, this is the greatest challenge, particularly for existing employees. How do they keep demonstrating that they are “new & improved” in every aspect of their customer service and delivery? This is something that is easier to talk about than deliver, but the very success of the new venture, as I choose to call it, will hinge on this important difference.

Communication is in

Troubled times call for extensive and continuous internal communication. In this case, it is not only the environment but the company too that is under stress. Never has there been a greater time to communicate. The company should resist the temptation to talk to an ever eager media and focus internally on its most important target, its own people. An audience that has lived on the edge, fed by rumours and threatened by fears, some of them justified and who are now seeing a change of ownership. The company has to focus on retaining talent as that will be crucial in ensuring stability for its customers who have stood by it by during turbulent times. Communication of stability and a reassurance to existing employees will have to be punctuated with a clear articulation of a new set of values and a new direction that will be the basis of the company’s functioning.

I am sure the Mahindras are shrewd businessmen and know what they are getting into. They might do well to remember what Hector Liang, Chairman of United Biscuits, said: “Buildings age and become dilapidated. Machines wear out. Cars rust. People die. But what lives on are the brands.”

May the new brand that is being formed out of this acquisition live on!

(Ramanujam Sridhar is CEO, brand-comm, and the author of One Land, One Billion Minds)


Ram said...

Nice piece. You are right satyam has overnight become a name you wouldnt want to get associated to because the company has been everything but what the name suggests.
My feeling is ramalinga raju was quite aware of what he was doing and that is why he named his other concern as maytas which is actually satyam spelt out in the reverse.So he knows a thing or two about brand names.
Only time will tell whether the mahindras did the right thing. Quite outside of the price they paid what will be under scrutiny will be why did the want to get associated with a company with such a dubious bacground and with class action suits pending in the US.
To me what will go against tech mahindra in terms of establishing credibilty with the satyam clients would be the fact that they have won this auction with no other IT major bidding for it. Why wasnt an Infosys or a wipro or a TCS not even interested! Althougth they are all stil interested in clinching satyams clients.
Probably because the IT industry is not about plant and machinery which you buy out but more about clients and people which you can buy out anyway without buying the brand satyam.
Accepted the mahindras are shrewd busnessmen but maybe this time they have made a mistake. And the company and it employees could soon disintegrate and get distributed amongst the other IT majors. Only time will tell !

Lavanya Venkatesan said...


I landed in your blog, after reading the column "Tamil CEO" in "Nanayam Vikatan" featuring you this month.
I am thankful to Vikatan for describing your success through which anybody can gain confidence.
I do know that Patience and Perseverance are keys to success. I didn't know that these 2 virtues along with Creativity in an equal portion is a MUST BE.

Loved the blog about Tech Mahindra's acquisition.