I was talking to the US based CEO of an emerging company focused on the ISV space recently to get a feel of the market. What he had to say made me reassess the general view that the economic recovery is well on its way. It appears not.

Venture funding is still low although it has picked up from earlier quarters. Consider this, in the first 3 months of 2011, 364 tech companies received a funding of $4.8 billion. Of this, Facebook itself accounted for $2 billion of the funding followed by Groupon with $377 M. Removing the Facebook deal, the value of funding has increased by a low 8% only. Of course, the other way of looking at it is that good ideas can still attract funding.

Overall, it appears that the US market is still limping along – both at the enterprise and ISV level. Cisco has already warned about its performance in the coming quarters. For companies targeting the US market, the progress would be difficult but opportunities do exist. Value has to be demonstrated convincingly and cost savings still remain the overall driver.

My take is that the US is still an attractive market for companies large and small. There is no equivalent market in terms of scale and opportunities yet. Of course, the going will be tougher but the returns may be well worth it. Do you agree?

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As a leader this is your constant challenge- how much do I focus on getting things right in my company’s context and how much do I need to keep looking outside and benchmarking? At Prayag, we do a lot of market and competition assessment studies, and we meet a range of clients- some who spend a lot of time in minutely analysing the external factors and others who dismiss the outside and focus entirely on getting their story right!

If I sit back and think, I believe, like with most good things, the answer lies in blending a bit of both approaches. For, any amount of competition and market watching is futile, if we do not apply it to our own context; another danger of looking outside too much is that it can overwhelm you at times. At the same time, having a blinkered approach and not learning from the outside can also be counter productive. I also find that in the latter case, companies and management sometimes become so cut off from the outside world that they lose touch with reality.

Great leaders are those who are able to keep a laser focus on their context while being able to assimilate the goings on around effortlessly, and for their benefit.

What is your view?

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With Cognizant announcing its results a couple of days back, the results of the biggest 4 offshore based IT companies- TCS, Infosys, Wipro and CTS – have been announced for this quarter. Infosys disappointed with the way it finished off the year and Wipro did not impress with its guidance. TCS and Cognizant though have yet again outperformed their peer group. Cognizant is slated to outgrow Wipro and has overtaken Infosys’ revenues in NA. Now, all this has the analysts going wild with their short term analysis and quotes. But to me, there is a deeper significance. It tells me that there are no guarantees, not even for the best in class. Infosys was not so long ago the industry’s poster boy, but TCS and Cognizant have shown that relentless focus can help change the equation. This also shows that Infosys can rebound with some smart thinking and execution and so can Wipro.

The learning of course is more generic, in my view- there is no time for complacency and past success is no indicator of how your future would be. Looking at it another way, this of course means that there is no permanent first among equals. The position is up for grabs all the time. It is up to us to aspire and pursue that goal with laser focus. If that cannot be a motivator, what can?

Any thoughts?

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The many recent changes at the helm in leading technology companies, both in India and globally, as well as our experiences in carrying out strategy assignments for clients, makes me ponder over the many links between strategy and leadership.

At one level, the onus is on the leader to infuse strategic thinking into the company- this is especially true in a company’s growth phase when one would be faced with choices of direction frequently- example, growth over profits, or profitable growth, how much risk to take, inorganic vs organic growth options, diversifying capabilities vs deepening strengths and many more. As a company reaches steady-state (if there is ever such a state in today’s dynamic business climate ), the questions and issues change, but the role of leadership is equally important. One hears these statements- nothing can impact this company anymore- they are on a roll etc. Yes, true in part- but if you look all around, whether it is Nokia and Microsoft or nearer home, some of the problems that Wipro has been facing, and even the recent not so exciting results of Infosys, you realize that no company can take it easy, even for a bit. I am sure all these companies will handle the problems and emerge unscathed eventually, but that calls for leadership.

In this context, one wonders what is the role of strategy consultants? Yesterday I read an article about the turmoil at the Hindu newspaper. Being a family run business, the group has been undergoing problems for a while. They called in McKinsey to help them out, but, according to the report, no one is prepared to heed McKinsey’s advice.

Thus, it is clear that the right leadership is indispensable for a company’s growth and sustenance and the role of strategy consultants is  to act as an objective sounding board, validate approaches and perhaps stimulate fresh thinking. Strategy consultants and leadership teams however can work hand in hand to produce superb results.

What do you think?

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Ever since Infy’s Q4 results and the combo exit of NRN Murthy and Mohandas Pai were announced, the media has been busy sounding the death knell on this company – somebody who could do no wrong just a few months back. One wonders how opinions change so quickly! Even this morning I read an article on how things are going wrong at Infy and whether it would be able to recover etc.