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)

Thursday, April 9, 2009

It’s about the team, silly!

Although the atmosphere in IPL Season 2 may not be as electrifying in South Africa as it was in the pulsating grounds of India.. Star studded, yes. But can IPL-2 repeat the magic of the first edition?

I watched every match of the first edition of the Indian Premier League in the comfort of my living room, usually slouched on my favourite chair, though I did lose my place on occasion to my son who is taller and more muscular and a cricket fan as we ll. The only match I saw live was the final at the new D.Y. Patil stadium at Vashi in New Mumbai, where two teams from other parts of India were playing – the Rajasthan Royals and the Chennai Super Kings, in front of an audience that consisted essentially of Mumbaikars, though there were small contingents from Rajasthan and Chennai who were making their presence felt with the volume of their voices.

Now let me go off on a tangent. Have you seen the Vodafone commercial? The one with the girl who is in the same lift as a celebrity and wants to tell the whole world about her fantastic experience, of course at the nominal cost of 60 ps per message. Yes, I did feel a bit like her as I was sitting just a couple of rows behind Aamir Khan and Sachin Tendulkar and all the flash bulbs were on them. But I didn’t mind the lack of media attention as my own attention was on the tight game and the attendant excitement, the fireworks, the performing artists and the delirious fans who kept chanting “Watson! Watson!”, as they have done for Sachin in the same city and all over the world for years. Yes, the first edition of the IPL was an unqualified success for a variety of reasons. It broke all the myths about Indians supporting Indians only as Chennai cheered for Hussey and Hayden and Kolkata for McCullum. It featured some outstanding cricket, delivered enormous eyeballs to television audiences, got tremendous coverage in every possible medium and made Lalit Modi the most celebrated marketing personality of the year. So what’s in store in April as the IPL gets ready for its next edition? The major difference is that it will not be in the heat and dust of Rajasthan and Chennai or in front of audiences of over 50,000 and close to one lakh people in sweltering heat but in the more salubrious climes of Cape Town and Bloemfontein and in venues as exotic as the Bullring in the Wanderers.

Change of venue, loss of face

The last few weeks have been tense for Lalit Modi, the BCCI, and the franchisees that were getting tenser by the moment with each change of date and with increasing hostility from the politicians, who were concerned with their own future despite some of them being diehard cricket fans. After all a livelihood is more important than entertainment and our politicians know which side of their bread is buttered. Every political party tried to get mileage from this (non) event and the failure to hold the matches in India was branded a failure of the Indian political system and definitely an indictment of the current government, though in all fairness it would have been a Herculean task to juggle the security arrangements of the general elections of this vast, diverse country and the tight security for the 59 matches of IPL planned in different venues at the same time.

Not as electrifying

Having said that, it is interesting to note that South Africa will have its own general elections during the IPL! While South African crowds have taken to the nano version of the game as the recent matches with Australia demonstrated, one must still wait and watch the impact of only a handful of South Africans participating across eight teams. South Africans might not exhibit the same enthusiasm for cheerleaders that some Indian audiences lapped up the last time around. My suspicion is that the crowds and the atmosphere this time around will be nowhere near as electrifying as it was in the throbbing, pulsating grounds of India, as spectators jostled cheek by jowl in every conceivable seat in every venue.

Already some of the cricketers such as Shane Warne have expressed their reservations about the venue and the fact that it will be nowhere near as exciting as it has been so far. The bottom line is that it is only about television audiences and 4 p.m. and 8 p.m. are wonderful times for Indian television audiences.

This leads me to the larger question as to what franchisees will get from IPL this time and what they might possibly lose because it is happening in a distant land and not within our own country, where we clearly know what to expect in terms of crowd presence and participation.

It is common knowledge that none of the franchisees had any serious association with cricket until they forked out enormous sums of money as guarantee money and paid (disproportionately) large sums of money to some cricketers. Of course, the franchisees haven’t learnt their lesson if the current bids for Kevin Pietersen and Andrew Flintoff are any indication. Last time around it was the less fancied and cheaper players who delivered phenomenal value. But, of course, we are being wise after the event while they clearly have to put their money where their mouth is. While it is their money and they are answerable only to their investors, I do feel that this event in South Africa, while it might deliver large, captive TV audiences in India, still has one big disadvantage for the franchisees and that is the complete absence of connect with the consumer.

Based on my own perceptions I can only say that there are short-term and long-term objectives that this entire venture promised. One was, of course, commercial viability, and some of the franchisees have claimed that they have broken even in the first year itself. But I did assume there was a larger objective and that was to build a local connect.

Build following for the teams in their respective centres by having people turn up in large numbers, waving flags, sporting the team’s colours and being passionate about them. Of course, it is unrealistic to assume that the fan of the Chennai Super Kings would feel as devastated if his team were to lose as the Manchester United fan in the same situation. The reason for this is simple. Team loyalties that are not driven by regional, national or parochial considerations will take time and effort to build. Last time was only about excitement, not much else. Stars were still the key excitement. It was still about Sachin and Yuvaraj and Dhoni, not so much about the teams and that is the challenge if the franchisees are to build loyalty and passion for their teams much like the English football teams then they need to simultaneously focus on the long run of this aspect, even as they worry about the profitability in the present.

A brand called Arsenal

I was recently reading an interesting book on Arsenal, which was not so much about the football, but about the club as a brand and that led me to some of the challenges that the IPL’s franchisees are likely to face. The statement by Herbert Chapman in the book, while making interesting reading, also prepares us for the challenges ahead. He says, “A club should be like a great big family with all members of it sticking and pulling together in the same direction.” Clearly building a club is not easy or short term. The more interesting thing for me was the authors John Simmons and Matt Simmons articulation of the four brand values of Arsenal:

Courage in the face of adversity

Loyalty to each other
Positive about the future
Proud of our past

Now I am no football enthusiast and do not know how different Manchester United’s values might be. But I do know that many of the IPL franchisees were ventures with commercial priorities. They were started in a booming economy with lots of IPO generated funds. But they have started with a bang and should not end as a whimper. They must remember that their long-term success will depend on their ability to get and hold fans and their success in engaging with fans. They must also remember that the follower of the T20 format is a completely different animal, who probably prefers excitement and entertainment to class of play. Yet he could be loyal to the concept, the team and the franchisee who engages with him. Having said all that, I must concede that the matches being held in South Africa are a setback for the franchisees, because TV audiences, though valuable can never, ever replace the passionate, adoring fan in the ground.

My suggestion to the franchisees is simple. Think long-term. Articulate the vision for your brand. Remember that we have no history to fall back on. Build your brand. Focus on the fan. The revenue will follow. And please hold future tournaments in India as in the current recessionary conditions it is difficult to travel to South Africa!

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