Considering the fact that recession and slowdown [and even depression] is at the top of everyone’s minds, the air at the NASSCOM India Leadership Forum seems very optimistic. At least everyone is still smiling. And there are 1250 delegates present.
As N.R. Narayan Murthy of Infosys said this morning, “Prepare for the worst, but hope for the best.” Probably easy for Infosys considering its $2 billion cash reserves [“real cash” said Murthy amidst laughter]. The worry however is for the Small and Medium companies who are probably out on a limb with a receding order book and impatient investors and bankers knocking on their door.
Some others take the view that we have ridden out three negative phases in the industry, including the dot com bust between 1999 and 2002 so perhaps we will be able to ride out this one too but the real test is in how prudent we can be to ride the wave and not get washed away.
Narayan Murthy provided some very practical tips to the smaller companies and said cut costs – travel economy [travel by bus if required], eat at smaller restaurants, take pay cuts [especially at the senior management level ]. The key is really to lead my example [not like some American financial institutions] and take employees along and get them to appreciate the need for these prudent measures rather than sack them. Layoffs should ideally be the last resort.
This is going to be a long and rough ride that we need to be prepared for. Lasting probably through 2009 and [as some say] well into 2010.
I was talking to a veteran from a leading IT company during the coffee break yesterday and she had this to say: Getting to this stage in the industry was no bed of roses. Look at the challenges we had to face in getting business in the early 80’s and 90’s. We struggled hard, convinced customers [in many cases learnt from them] and found a way out. We have it in us to be resilient and ride the storm, she said confidently, and we will find a way of getting over this as well no matter how tough the market conditions are.
Perhaps the newer entrants to the industry started their businesses in better times and have a lot to learn from the older companies who started their existence with bag in hand, staying at cheap motels, knocking at the doors of the West with great patience and perseverance. We must not give up easily, rather innovate to survive.