Mar 3, 2003



On ISTT my views on:
Core vs Non-Core:

hi folks,

I go with the 'vision and passion of the family member' line of
thinking.

I worked with Satyam Computers earlier. Satyam, for those who are
not aware, was into typically old sectors of having a spinning mill
and a construction company (as an aside, the construction company
still exists, named "Maytas" ...Satyam spelt backwards)

The son of the founder , Ramalinga Raju during the course of his
education in the US was fascinated by computers (he wasn't even an
Engineer!) and brought 9 of them to help in the old family business
around 1987, and to tinker around with...and now his firm is among
the top 5 Indian IT firms...mainly caused by his passion and ability
to spot an opportunity. This percolated down to the rest of the
organization and Satyam's attitude was 'get the opportunity' and
from a pure play IT services it developed competencies in ERP
implementation, e-commerce, CAD/CAM etc

Looking at narrow definitions even something like ITES is not core
to the business of IT firms...but all of them have gone into it..
(Infy with Progeon, Wipro with Spectramind, HCL with e-Serve, Satyam
with Nipuna) , so this question needs to be asked in this respect
too..my answer is that they do not view the IT business as core, but
rather the ability to convert demanding customers, gauging their
needs, and ramping up fast to meet huge requirements them....which
traditional BPO firms like Daksh and Brigade are learning slowly.

I remember Rajeev posted a file on Arie de Gues' work "the living
organization" ...his book says :
"Companies die because their managers focus on the economic activity
of producing goods and services and forget that their organisations'
true nature is that of a community of humans"

Shell (in which Arie worked as head of Strategy) conducted a study
of companies older than Shell (approximately more than 100 years) 27
in detail, of 40.
They asked the question " Why did they survive?" and found the
following points common to these firms:

1. Sensitive to their environment (in harmony with the world around
them - tuned to what was going on).
2. Cohesive, with a strong sense of identity. (People felt part of
them - community - managers chosen from within - "stewards").
3. Tolerant (of activities on the margin - experiments,
eccentricities... - did not exert overly centralised control). This
tolerance usually resulting in these marginal business becoming
growth driving and central businesses of the future !
4. Conservative in financing (frugal, money in land - could pursue
options their competitors could not)

Longevity was NOT linked to…
• Return on investment
• Material assets

Food for thought, as to how we look at organizations... :-)