MBA = Macroeconomic Business Development Ability?

Spend Matters welcomes a guest post from Sudeep Misra, who works in Business Strategy and Planning for Hewlett Packard in Palo Alto, Calif. This guest post is an analysis based on a recent move by Infosys, regarding the hiring of top business school graduates to improve sales metrics in a macroeconomic-driven industry. The author has worked for Infosys in the past.

From an article that appeared last month in the Financial Times: “The Indian technology services outsourcing company Infosys, recently announced plans to hire up to 200 MBA students from leading business schools such as INSEAD and Harvard Business School, which is the largest recruitment drive of its kind for the company. The hiring exercise will make it one of the biggest recruiters of top business school MBAs in the world.

On a closer examination of the article, all of these MBA hires will go directly into the sales function of the company. This is a smart, albeit somewhat desperate move by Infosys. Historically, the Indian technology services outsourcing companies have had below-average business development and sales numbers. The majority of the sales opportunities that these companies have won over the past few decades could be attributed to organic growth, more so than any other reason. This “organic growth” has been fueled by India’s low costs of operations, availability of skilled workforce, and process maturity – a positioning India has enjoyed for long without serious competition.

The business development and sales organizations of such companies have been manned mostly by account and delivery managers. Most of these professionals have had no sales training or sales experience, as they have “naturally moved” into these positions from other technology roles within the company over the years. These leaders have upsold services to their own client accounts with reasonable success. Over a period of years, they have gained expertise in a specific region, industry, or work-stream and have specialized as a sales leader there.

Fast forward to the current times, and the key threats for such companies, directly affecting revenue, have been decreasing rate of global outsourcing growth and the emergence of new competing countries in terms of operational costs; availability of skilled workforce; and improved service maturity. These changing economic factors are making it even harder to win deals for the account and delivery managers. Since these managers are not really sales or business development professionals, they face an uphill task to meet individual and company sales goals.

So a company like Infosys is left with two viable options – hire outsourcing-specific sales leaders from the outside or hire top talent from business schools, train them on the job, and build competencies in-house with the hope that this could improve the sales conversion metrics. International business school graduates are often credited with sound analytical skills, key business acumen, and good client relations – all three being key to improving sales numbers! The reason Infosys is hiring in large numbers from Harvard, INSEAD, and other B-schools in the developed countries and not specifically from Indian business schools is because the majority of current and potential clients are located in these developed market geographies. These B-school graduates would be expected to know the local dynamics better than the existing sales force.

This move by Infosys seems like a good but ambitious one, since declining sales numbers could be attributed majorly to macroeconomic factors and industry trends, rather than the availability and performance of sales leaders. In the coming years, these macroeconomic threats will only increase. Service and delivery innovations, new technologies, leaner operations, and a smarter leadership would play an even important role in affecting the sales numbers and defining the future of such companies, who have depended on macroeconomic factors to leverage labor arbitrage. Good luck to Infosys… and others!

Comments

  • rajesh panda:

    Nice article sudeep bhai ;)

    • Sudeep Misra:

      Thanks for reading. I’m glad you liked it.

  • Jyotirmoy:

    Very informative and well written article….hiring sales professionals from developed countries is probably the best move so far this year by Infosys (with around than 70-80% of Indian B-school graduates with little or no prior professional experience, comparing the experience and exposure the US B-school grads come with – it’s certainly a win-win move) ….things surely look a lot brighter after the new leadership change as well…

    • Sudeep Misra:

      Thanks for reading Jyotirmoy and I appreciate the kind words! The perspective that you brought in is an interesting one. It is true that the amount of work experience of a typical developing country MBA candidate Vs. a developed country MBA is significantly lesser, making an even stronger case for a developed country MBA hire.

  • Atul Vashistha:

    I am a fan of experimentation but do agree with Sudeep. Sales in this industry does need prior experience in the industry. One is not selling a widget, but selling a service, an intangible. As I see other comments, I will add more.

    • Sudeep Misra:

      Atul – thank you for reading and sharing your thoughts. You are right – this is a complex industry and service providers are facing tough competition from other newer/ smaller providers and from newer geographies. The sales leaders of the future need to have prior industry experience as well as keep a keen eye on the macroeconomic factors driving change in this industry.

  • Abhinandan Panda:

    Very nice article Sudeep. This is good for the company especially after the recent 50+ executives at and above AVP levels left following Narayana Murthy’s return.

    • Sudeep Misra:

      Abhinandan – Thanks for reading. I’m glad you liked the article. Yes I agree – Infosys has had some executive departures of late and this move, although unrelated, might help.

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