Rajiv ShahCEO of IBS.
Mr. Rajiv Shah has been Chief Executive Officer at IBS Software Services (P) Ltd. since April 2011 and is responsible for the operation of IBS’ business worldwide. He has over 25 years of experience with more than 15 years in senior executive roles managing several businesses globally including EDS (USA and India), CoFuture (A Kerry Packer Joint Venture), Wipro Technologies (USA) and Bharti – Teletech (India). He served EDS for 14 years, first 10 years in the US and latter 4 years as the CEO of EDS India. Mr. Shah holds a graduate degree in Mechanical Engineering from the University of Missouri (USA) and has had Executive management education at IIM-Ahmedabad (India) and Wharton School of Business (USA).
ORGANIZATION STRATEGY/KEY CHALLENGES
1. What was the mandate given to you by the Board when you took over in your role?
Monetize significant investments that have been made in developing next generation products, grow existing account by taking additional products to those clients, create a culture of measurement, measure and improve ESAT and CSAT, and create one IBS.
2. How much of that has been achieved? What were the challenges faced?
I feel we have been able to improve and expand our relationship with most of large clients by implementing multiple mission critical solutions, have put in a well-structured R&D investment plan, the company continues to grow at a faster pace than before, have been able to expand into other verticals and the teams are working well together.
The challenge faced was creating a culture of measurement. Product and technology companies sometimes get swayed by how to build the best solution vs. what is the most beneficial product for the industry. Organization had to adapt to looking at ROI, numbers, measurable output etc. which was a big change management exercise.
3. How do you respond to the needs of changing market scenario (with an example)?
We build products for Travel, Transportation and Logistics Industry. The industry has high need of technology, need to become more operatically efficient, and is highly regulated.
For example: the airline industry that we build solutions for is looking at how to improve yield per passenger, how can we adapt newer technologies to acquire and retain client and enhance customer value….
4. What are the key challenges your organization is facing currently? And what are the steps you are taking?
I think the key challenges that we face are:
- How do you continue to stay ahead by coming out with industry leading solutions in a timely manner, how do you continue to sustain the level of growth that we have, how do you transform customer engagement for them to derive grater benefits by using our solutions, how do you continue to enhance employee knowledge for them to create greater value for themselves and our customers.
- We have a very well-defined R&D investment plan which includes developing a detail business plan for each of the initiatives, commit the required sets of technology and people resources, measure progress, and redo the plan if required. It is a very structured product development process and we follow it quite diligently.
- We work with our core group of influencers in a very structured way in articulating our product vision and validating our product road map.
5. What are the key drivers in your sector?
According to UNWTO, international tourist arrivals in 2013 were over 1 billion. Only 14% of this was for business/professional purposes. Nearly 80% was for personal reasons. So majority of travel is still discretionary. It is driven by disposable income available to consumers and hence, economic growth is a key driver in this sector. That’s why when economic crisis hit the world in 2009, this number came down.
Growth in trade is another factor. Today’s consumers are not content with local goods; they demand best goods from all over the world. Not only do they want them, but they want them quickly; creating the need for faster transport modes. Same applies to businesses. A manufacturer doesn’t source it raw material from one place only. The supply chain today is global and complex. We all like Apple products for their excellence but do you know Apple sources its components from over 30 countries? Without global trade, we wouldn’t have an iPhone and if we did, it would be pretty expensive.
Thus, at the root level, primary driver in this sector is the need and desire to move people and goods from one place to another.
6. How has the market evolved in the last few years?
While the cargo market has remained steady, it’s the passenger market that has changed significantly. When a consumer goes to a supermarket and gets all his needs under one roof, he wonders why travel should be any different. The consumer has become demanding and rightly so. He wants all his travel solutions at one place – be it air or rail ticket, hotel, rental car, or vacation package. Market is rapidly moving to cater to these requirements. Now it’s not just OTAs that offer end-to-end solutions, but specialists like airlines and hotels have also caught up.
We are also witnessing some real disruptive trends. Hospitality industry is faced with a new competitor. That competitor is you, or me, or anyone with a spare room. Airbnb, an online home-rental marketplace, is disrupting the hospitality space by allowing homeowners to rent their vacant rooms.
7. How has the change in technology/globalization affected your sector?
Technology has had a major impact on travel. Today’s transport systems are smarter and faster, more fuel efficient and safer. But the biggest impact has come from consumer technologies like mobility and social media. Earlier internet changed the way people planned and booked their travel, now mobile is doing the same. Mobile bookings are on the rise as it allows anytime, anywhere access to travel solutions. Steady rise in last day bookings on mobile is an example. Social media has an equally important role in shaping this sector, which can be seen from the example of TripAdvisor. TripAdvisor which provides reviews of travel-related content is valued more than IHG, world’s largest hotels group. That’s the power of an online community of over 300 million unique monthly visitors.
Technologies have also helped improve the operations of travel providers. An Asian Full Service Airline has achieved great results using IBS’ mobility solutions for their cargo operations. Their warehouse automation through iPad based mobility solutions has increased service-level compliance of warehouse operations to 100% and reduced wait times for cargo delivery from couple of hours to under fifteen minutes. Everyone, from ground staff to the management, loves it.
8. Question regarding any recent news in the sector on policy/competition/growth, etc?
Travel transportation and Logistics industry is always in the news with the recent drop in the oil prices, to new airlines starting up or how the industry is looking at taking advantage of newer technologies (Social media, mobility, analytics, etc.) in enhancing customer value.
9. What is your talent strategy? How do you draw the balance between home grown vs lateral hiring at the leadership level?
Ours is a company that focuses on a niche sector and hence it is extremely important to have the right balance between people with domain/product knowledge and people with the knowledge of the industry. We have many programs that specifically aim to enhance the competence of the individuals internally and groom them to the leadership roles.
With the pace of growth, we come across the need for lateral hiring at the leadership level quite often. The key reasons for settling for external hires include the industry knowledge and the geography knowledge (including the contacts with key decision makers at the CXO levels) needed for the success of the role.
10. How does your organization identify and develop future leaders?
IBS’ performance management process is tightly coupled to the training needs and competency definition of the organization. In addition to this, I run the Talent Review and Planning exercise on an annual basis, where I discuss the performance and potential of each of the Top performers in each SBU with the SBU Head and HR Head. This discussion also enables the organization to specifically discuss about the high potential individuals and put them in engagements that challenge them and enable their growth.
To specifically enhance the funnel for the leadership team, we run a program called Young Leaders’ Program, in which we put high performing employees at the mid management through a wide range of activities. The activities include class room sessions, participating in cross functional task forces for change management, on the job assignments and mentoring by senior leaders of the organization.
11. What are the 3 key aspects you look at when you hire your direct reportees?
The 3 key aspects I look at when I hire the direct reportees are
- Ability to connect with the Customer – Capability to understand the customer and come up with solutions that will help the customer meet his/her targets
- Ability to connect with the Employees – Leadership capability that will drive the entire team together to the goals by working well with the peer functions in the organization
- Ability to influence the industry direction – Capability to understand the industry direction, influence the direction of the industry and enable the organization to develop competencies (people and Intellectual Property) to achieve the same.
12. How much time do you spend on talent development and why?
For a company that is fast growing, playing a lead role in the industry and offering niche products and services to the industry, talent development is one of the key priorities of the CEO. Hence, I spend a significant amount of time on this. I have formal forums where I review the performance management inputs of the employees, Talent Review and Planning and also discusses specifically on generic people competence development programs. Talent development is also a key agenda item in my weekly Leadership Team meeting and in my monthly one to one discussion with the SBU Heads.
SHORT/MEDIUM TERM OUTLOOK & STEPS TAKEN
13. How does the growth prospect of your organization look like for the next 12-24 months?
Travel, Transportation and Logistics industry is one of the highest spender of IT. A the same time the industry has its own sets of challenges in adapting newer technologies, acquire additional customers, how do they become operationally more efficient but at the same time continue to meet all the regulatory requirements.
Based on the most comprehensive product portfolio that we have, great set of clients that we have and our significant R&D investments, the growth prospects for us are very good. Our challenge is not going to be sustaining growth but how to manage growth.
We are quite excited about the market opportunity and growth prospects.
14. Will there be any significant change in the market dynamics in next few years? If so, what steps are you taking for the same?
Technology is evolving and changing at a much faster pace, the world is becoming more and more connected, and there is a greater focus on personalization and enhancing end customer value.
We at IBS continue to talk to industry leaders and our customers to understand their business models and plans, and proactively think about the required solutions and get them validated. From the people perspectives continue to invest in enhancing their skills for them to be well-prepared for these changes/disruptions.
15. In a world full of Volatility, Uncertainty, Complexity & Ambiguity (VUCA), innovation has become one of the most important factor to transform a crisis into an opportunity. How do you promote Innovation?
Being a software product company we have to continue to innovate to stay ahead of VUCA. We invest significantly in our R&D initiatives, give them the freedom to think and innovate, measure only the business matrixes but do not interfere in their thought process. Provide them with a forum to articulate the product vision internally and externally. Personally meet the innovators regularly to make sure they have the tools and environment to be successful.
16. What are the 3 most pivotal moments in your career that you either learned from and/or that got you where you are today?
While I have worked and lived on various parts of the world the following are career related pivotal moments that have brought me to this point.
- After getting my higher education and spending all of my professional life in the US, I got an opportunity to come to India in 1995 as a CEO of EDS India. These were the early days of global companies foray into India. Just an experience of establishing something from scratch (I was the first one to come from EDS), getting all the approvals, putting together an entity structure, build a leadership team, developing and executing business plans, etc. gave me a completely different view of the business world.
- Initiating and establishing a JV between Bharti and Teletech for BPO activities is the second pivotal moment. Gave me an opportunity to merge the views of 2 large conglomerate (with some times differing objectives) in establishing a common business vision.
- The time I had spent with Mr. Kerry Packer when I was a CEO of global IT services entity called CoFuture. His advice on “revenue is good, profitability is better but cash is king”. That has really made me a business person that I am. Grow revenue and focus on high net cash flow.
17. What key lessons have you learnt from any mistakes, if any, made in the past? How would you do it differently?
In earlier part of my career I used to quite impatient with lack of progress and in the process was becoming judgmental about various stake holders. But as I matured and got some great leadership exposure from some the top global leaders, one realized the virtue of being patient and carrying the team with you for the journey.
18. How do you define & practice leadership?
My mantra for leadership is CARE. Concern, Appreciate, Recognize and Encourage. People tend to be more productive if they are cared for.
19. What message would you like to share with young professionals at the start of their career?
- Every interaction is an opportunity to learn. Thus rather than thinking about “why do I have to meet this person, or why do I have to go to this meeting” think about how do gain from those interactions. Build on that experience to enhance your own skills.
- As you go through this journey in building a career there will be obstacles/distractions that will come in your way. Your ability to address them with a sense of urgency will be a key to your growth.
- Put your mind and heart into everything that you do.
20. How do you draw a balance between work and your personal life?
With clients, teams, stakeholders all over the world sometimes it is difficult to find the right balance but spending time and sharing moments with family is an important part of one’s existence. I do make time for my yearly vacations; reading, playing and watching sports, etc.
One discipline that I have followed ever since I started my working life is to not to work on a plane. That is my time which allows me to catch up on a book or a movie or sleep.