Think Big! Build a Creative Culture or Transform Into It!

I started writing about Thinking Big and it is turning out to be a serial topic! As Indians, technical stuff comes naturally, business thinking comes naturally, but creativity is a touch-feely subject that many of us are not that comfortable with! We usually give it lip service and move on to more important stuff like coding or making sales calls!

You ask most Software Product Entrepreneurs about their products, and the third sentence will descend into technical details, programming languages and feature sets.

But that’s exactly the opposite of what we need to be thinking about if we want to build globally competitive, big, huge companies right there in India.

The usual disclaimers first – If you are already running a profitable software product company that serves the Indian market, good for you! If you are already running a successful software product company that does not innovate but magically keeps finding customers, revenues and profits, this article is not for you! If you think that Indian Software Product companies need to think small and be happy serving some section of the market, Indian or globally, this article may not be for you.

This article is for companies and entrepreneurs that are wondering how to build a creative culture like that of facebook, google, twitter or Pinterest and scale globally, right there in India.

That starts with the complete buy-in of the founders of a creative culture in the company and they  will be successful in as far as they act and do in keeping with that culture. Not all companies are on the same level with respect to this culture but to smaller or greater extents that is something they all must have and do have in common to succeed.

Being creative does not mean thinking up whole new products overnight, but providing and encouraging creativity in whatever function someone performs in your organization. It can be as simple telling your junior-most engineer, “here’s a problem that I want you to solve. I don’t care how you solve it. But come up with something new”, rather than telling them how to solve it, which programming language and tools to use. If they struggle, you can always jump in and guide them but the key question is “Do you give them the chance to attempt something on their own first?” And do you do this every day?

Do not underestimate the influence of Indian Culture in preventing the creative culture from forming in your company. We act in many subtle, unconscious, hierarchical ways in our companies that can snuff the creative instincts in a jiffy. The first time you quickly overrule something creative your engineer has proposed, is the time when the whole thing is dead. People revert back to a subservient mode and wait for instructions, having learned a painful lesson! Others watch this and have learned the same lesson too.

Building a creative culture is hard. Transforming into one is even harder!

It starts with hiring – are you hiring creative people? How would you know? Classic resumes and classic interviewing techniques systematically eliminate the hiring of creative people! When Microsoft or Google or facebook have “strange” interviewing techniques that pose problems that do not have a single solution or involve coming up with creative solutions, they are looking for those people who can think differently and creatively!

I am not suggesting that you forego looking for basic competencies, qualifications and experience. But what are you doing beyond that? If you have one position and you have 25 very qualified, technically vetted people, nothing prevents an Indian start-up from following the same interviewing and testing strategies that some of these companies follow to unearth the creative five among those 25! And hire across India if you could.

Diversity is the essence of creativity. People with different life experiences approach problems differently and you will be all the richer for it since creative juices start flowing when you have people in the same room approaching problems differently!

Once you have hired the creative people, building a creative culture starts at the top and has to be reflected in everything you say and do. Otherwise people get the wrong signals and clam up quickly. How many times have you NOT decided on something technical for your entire engineering team but instead called for a Brainstorming Session? How are you sure that the solution you have thought of is the better one than something any of your engineering team members may come up with on their own? It is worth going through the whole exercise anyway, even if your idea prevails in the end in the interest of your company. But you have sent a subtle message that ideas are welcome, will be considered and evaluated fairly!

In a start-up company it is very hard to do these things with all the time pressures but is certainly worth those extra hours since it will pay off for you in unexpected ways down the road. In a start-up, just remember that you are really grooming a set of leaders that are trained in this creative culture and when they lead groups of people, hopefully they would follow the same lead.

Flex time, brainstorming sessions, ping pong in the cafeteria, team building sessions with humour thrown in for good measure, are all small building blocks that build a creative culture. But they are only the icing on the cake. The cake is you and the management team’s thinking and acting around the company. Does it say – we value creativity and your ideas are welcome?

Transforming an existing culture is even more painful than building one, but it can be done. Unfortunately, not every employee is suitable for that kind of transformation. You will have to do some weeding first. You may have to get rid of people and leaders that don’t buy into this kind of approach and replace them with those that do. Then all the approaches that are recommended for a start-up apply to a mature company also.

To those who say it cannot be done in India and these are high-falutin ideas from out-of-touch expats, I could not carry more disappointing news! I have personally done it in our start-up company in Chennai. We hired people from the North and threw them in with others from the South. Creative cultures are about TRUST and there is nothing more appealing and motivating to a technically qualified, creative fresher than to be trusted with some big task! Not only did we find creative solutions even though our experienced leaders or me could have suggested the way on day 1, you would be surprised how quickly these people trained themselves on the basics, and solved problems. And in unexpected creative ways!

So before you expect BIG things out of your company, ask yourselves the question – Have I built a creative culture? Have I transformed my existing culture into a creative one or at least on the way there?

Creative cultures ask constantly the question “What If we do or have….” and out of that comes big products and big companies. It’s not just a nice-to-have. It is everything! Not Java or Python, iPhone or Android, not nicer offices and a well stocked cafeteria.

Do you trust your employees enough to be creative? Do you give them the chance?

The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function. – F. Scott Fitzgerald

Product companies will constantly change business plans, product ideas, and offerings to meet the ever-changing market opportunities, Piyush Singh, CIO, Great American Insurance Co.

Piyush Singh is the Chief Information Office (CIO) and Senior Vice President at the Great American Insurance Company—a property and casualty insurance company, and Vice President of it’s parent company, American Financial Group [NYSE:AFG]. Under his direction and vision, Great American’s IT department has transitioned from supporting a legacy IT environment to become a trusted player in the company’s business success—offering agility and adaptability to align with the executive vision. In this interview, Mr. Singh shares his observations on innovation in Indian software companies, product development, and how large IT companies could accelerate the pace of product innovation. 

Piyush, you have been watching the Indian software industry over a period of time. What are some of the changes you see now especially in the context of the software product industry in India?

The Indian software Industry is the envy of many countries around the world, and numerous governments and business associations have been trying to emulate its model. It has made a significant difference in elevating the professional services job market and provided the necessary fillip to the country’s infrastructure—transforming sleepy suburbs into high-tech cities with world-class facilities. The Indian software Industry contributes $67B to the economy in direct revenue, but delivers a bigger economic impact (probably tenfold) when you think of all the tertiary employment it generates and the indirect revenues created.

Yet, this phenomenal growth has been a result of labor pricing arbitrage, and many of the large companies that lead the software services are today challenged by lack of innovation and intellectual property (IP). Yes, outsourcing and large services contracts are definitely attractive but unsustainable in the long-term. Sustainable growth and maintaining unique value propositions demand significant investment in IP—and this needs to be more than just systematizing processes. I do not see IT services companies investing in actual development of product portfolios that might address vertical markets or provide horizontal solutions. Typically, I see global services brands create deliberate pools of internal innovation that harnesses the knowledge of its workforce or buy IP-based companies to provide them the necessary scale for reach and investment. So far, I’ve seen neither processes here, but am hopeful that this will change.

Culturally, do you think Indians (and this is very broad considering our diversity) are risk takers and willing to start out businesses? Or are they averse to taking risks?

I don’t think so, and there are numerous examples of our appetite for risk—numerous Indians in the Silicon Valley have taken their start-ups all the way to public offerings. What I have noticed is, we tend to invest in real estate—really investing for the long haul.

Today, I find ourselves increasingly accepting entrepreneurship and its risks, even as senior executives leave large corporations to do something more meaningful, and different. But these new companies will need significant capital and gestation periods before they begin to show results. This is in contrast to the services industry growth that sets an average 20-30% growth every year—leaving start-ups struggling to showcase such growth. The risks and returns are completely different in a product company—Oracle, SAP, Microsoft, Apple are all shining examples of IP-led revenue-generators. Their valuation and market sizes are incredibly spectacular. But they didn’t grow into such successes overnight.

Product companies will constantly change business plans, product ideas, and offerings to meet the ever-changing market opportunities. These evolutions take time, effort, and capital—ask any Silicon Valley venture capitalist.

On the other hand, if you read the balance sheets of many of the services firms, they have idle cash, and great market reach. It will be a win-win for all if they use the cash to fund or accelerate the incubation of products that they can take back to their markets.

What is your take on emerging companies in the product space? We see, for example, many of them are developing apps and very few seem to be venturing into the enterprise or B2B space. Do you agree?

I agree completely. In the insurance space, for example, of all the companies out of India I’ve worked with, only a few have made any real IP investments—MajescoMastek, PlanetSoft (acquired by Ebix), L&T Infotech, and Mphasis. But if you see the revenue portfolio of the top 200 services firms out of India, the financial services industry is a leader in driving investments. And only a handful companies have made any IP-led investments. Strange, don’t you think?

What’s interesting is that it’s not that India doesn’t have the talent: every large US-based company (Microsoft, HP, Cisco, IBM) have a lot of product development out of India. The capabilities and talent definitely exists—we need the larger Indian companies to show the way.  They should make use of the talent that exists in their own setups, sponsor ideation, build incubators and make a directional investment in product development. They should stand up to explain their actions and the promise it holds. Analysts might not like the idea initially as it does not fit in their current forecasting models  but as they realize the potential and see results over time, they will warm up to the concept and probably push for higher investment. I would argue that Indian companies do bring in a lot of process expertise in any project that they manage, so  they can definitely build processes that would seek ideation and lead to valuable IP.

What’s your view on innovation in the Corporate environments?

Innovation has become a necessity for existence. As Robert Murdoch, Chairman and CEO of News Corp aptly said, “The world is changing very fast.  Big will not beat small anymore.  It will be the fast beating the slow.”  Innovation is being taken out of R&D labs and becoming the fabric of the entire company and an integral part of the culture at all levels. If it’s not happening, it can hurt them. Look at what’s happened to Kodak—they invented the digital camera concept but now the only value left is in the patents which they filed.    Blackberry (RIM) is facing a similar situation – in May of 2008, of the corporate companies surveyed 82% of them were looking at buying RIM based Blackberry’s.  Their lack of innovation in the world of user experience design has left them in a situation no one wants their company to be.

Do you think a major contributing factor in the last couple of years has been contributed by bandwidth availability, relatively easier capital and technology disruptions from areas like cloud computing? Have these leveled the playing field?

Well, these not only level the playing field but also give you an opportunity to differentiate your offering. For example, cloud computing levels the playing field, making it a lot easier for people to invest in or explore new products as long as you provide open integration points,a level of flexibility and a blueprint for future innovation. Commoditization brings prices down but forces you to decide on the USP that would help your company stand out.  You need to balance commodity with strong uniqueness so you can leverage both benefits. People who are going to be nimble and fast, and people who respond to these paradigm shifts are going to emerge the winner.  The key lies in how quickly you react to market forces and how adaptable you are. Any country that can produce a model of constant adaptability becomes a much more stronger player in the long haul.

Five years ago a typical software strategy didn’t take into account elements like user experience design, predictable analytics/big data, mobility and enterprise social networking. If you’re a ten-year old product company or a large services firm, it’s a little tougher to make a shift to embrace these elements. If you’re a smaller company though, and you’re nimble and watching these trends closely you can adapt to them quickly. It depends on how leading edge you are, because people are always talking in the context of ‘now.’ Mobility has been on the forefront since early 2008—but companies are still exploring mobile apps. Big data has been there for 3 plus years—but how many people are truly exploiting the value of this data? Enterprise social networking helps companies capitalize on people, collaboration and sharing better. It provides individuals more command and control—if the person at the lowest level comes up with a bright idea, everybody knows who to give credit to!

So you Piyush – if you had to give some advise to product companies or people who are venturing into the software product element India, what would you say?

  • Identify a domain where you see that there is market opportunity and don’t look at what is currently being offered as a solution.  Try to look 3 years ahead and try to build it around the emerging model of doing business—it’s about how you’re going to do business tomorrow, not how people work today.
  • You’ve got to balance domain expertise with people from outside so that you can think differently. You can’t have people who think the same way all the time. You need to understand how to incorporate User Experience Design—making people react and say “It is obvious.” Product companies have the advantage of disrupting the existing ways and changing the model—that’s what DELL did with PCs, Amazon with the book store, and Netflix changed movie watching at home.
  • You should be willing to find a charter partner who can help you to bring about change and  break the current paradigm.  Once you have this, you’re on the path to building a product that will succeed.
  • Don’t just be happy with what you have and what you build. You really have to be dissatisfied with the present and galvanize resources into action. This requires a fundamental shift in the group mindset, how we operate and how the company is structured. We need to learn from the old Chinese saying ‘let a thousand flowers bloom’ – not just the management ranks!
  • Don’t make random calls and hope that there will be sales. Learn the market, understand the potential buyer fully and then target with laser focus. Do not take a shot gun approach and hope that it succeeds.

Which 5 product companies or fields are you interested in meeting?

I would rather choose three fields that are of interest for me:

  • Companies that are working in the insurance sector – what are they doing and what’s innovative
  • Companies involved in infrastructure–what are you doing to improve the end user experience/reliability and availability in the modern complex world
  • Companies that are involved in new and novel concepts that challenges any business model. I want to be challenged to look outside my standard thinking model.

If you are keen to meet with Piyush at NPC. Do drop in a mail to us at [email protected] and we will get back to you.