Game of Thrones and Thorns

While some governments and bureaucrats want to emulate the style and agility of corporations, the vice-versa is also becoming true. I fail to understand why TCS CEO and Managing Director N. Chandrasekharan and CEOs of many mid-size companies are any different than Mamatas, Jayas and Mulayams of the political world?

A closer look reveals that investors are vote banks for corporate houses, while employees are minorities. Freebies in the name of anniversary celebrations is just an excuse to buy the lost employee loyalty, improve morale, contain attrition and quell negative publicity. 

A few months ago TCS ruthlessly terminated employees to contain expenses, showcase better growth to investors and stockholders and a quarter later after being whiplashed by media and facing a negative brand image, they announced INR 2.6 billion in bonuses for its 10th year IPO anniversary. Result: Poor Q4 results, and TCS share tanked by almost 5%.

Like governments, corporates too play this game of starving its employees and investors and taking turns to buy their loyalty and quell negative publicity. A few quarters ago, the new CEO of Infosys gave handsome raises and even iPhones to middle management. And now TCS decides to starve its investors and its share tanked by almost 5%, while other ranged from negative 1-3%.

Human resources is like hygiene; poor hygiene can make the organization sick and weak. TCS is the largest employer in the Indian IT with over 315,000 employees. It looks like Indian Railways with constant stream of people leaving, joining and waiting to join. In 2014, the net addition was approx. 20,000 employees and with a staggering 15% attrition (forced and voluntary) the IT major is finding it difficult to keep its employee engaged and professional challenged and excited. 

Sadly, companies like TCS take pride in showcasing assembly line approach to human resources, but fail to understand that humans are not objects and they carry emotions and are brand ambassadors. They also fail to understand the principle of economies of scale. How can a company operate, manage people, re-skill talent, change directions and stay agile with 300,000 employees? TCS is on its way to becoming an IBM and is bound to suffer from itis of growth, attrition, agility, etc. 

Like regional parties that want to become national parties, a lot of mid-size companies (Polaris, Hexaware, MindTree, etc.) want to reach the scale and mass TCS. Lalu's and Mulayams of the mid-size world must understand the risk associated with operating at that scale. There is nothing wrong in having ambitions, but playing investors and employees against each other doesn't get you far enough. 

CEOs must remember that they need their employees as much as they need their customers to add value to their shareholders. They must be contented with their growth and scale, if not the games of thrones can very quickly become a game of thorns, not forget the famous words "it was like riding a tiger, not knowing how to get off without being eaten".