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By Ellen Pearlman

Strategic Thinker: Ramalinga Raju

Credentials: Founder and chairman of Satyam Computer Services

Big Idea: Distributed leadership works best in knowledge industries

Article: "Spurring value creation in IT services: An interview with the chairman of India's Satyam Computers," by Prashant Gandhi and Joydeep Sengupta, published in The McKinsey Quarterly, September 2007

When your company's revenues have grown at a compound annual rate of more than 50 percent in the last decade and you have 55,000 employees who are servicing clients in 55 countries, you need a business philosophy that allows you to assemble business teams on the fly that can deliver uniform client experiences.

Ramalinga Raju, chairman and founder of Satyam Computer Services has come up with a model that he claims works called the "Satyam Way." In an interview with Prashant Gandhi and Joydeep Sengupta, published in The McKinsey Quarterly, Raju explains that he comes at business from a slightly different perspective than some of his competitors-his background is not in technology but in business. He believes that business value can be created through the proper balance of three critical tasks: thinking (strategy and innovation), doing (operational excellence) and communicating (connecting intimately with stakeholders), which Satyam calls the TDC model.

In many companies, he says, most of the thinking and communicating is done at the top, with most of the doing being done by those at the bottom. But in knowledge industries this hierarchical structure does not work. At Satyam a different leadership model is followed, with leaders created throughout their organization. The advantage of a distributed leadership model is the ownership of results resides with the leaders closest to the stakeholders (who may be colleagues, investors or clients). And with everyone in the company educated in the same philosophy, the hoped for result is a "One-Satyam" experience for all the stakeholders. [Read more about this philosophy]

What is intriguing about this type of organizational model is it empowers people at all levels of the company to act in the best interests of clients, investors and their colleagues. It is not enough to just act in the interest of the client or the investors if that focus has a negative impact on employee morale and motivation. Moreover, with roughly 2,000 groups at Satyam (dubbed "full life cycle businesses") operating from the same set of principles and taking full responsibility for creating value for their particular business, they have a workforce that can be disassembled and put together again-like lego blocks-to achieve consistent results on the next project they find themselves assigned to.

"We consider ourselves in the business of building leaders," says Raju. "The most effective way of realizing our goals and objectives it to grow leaders faster than the competition." With a shortage of experienced personnel expected to be a growing global problem, this fine-tuned focus on leadership will be key to long-term business success.

Also of interest:

• "Our Iceberg Is Melting: Changing and Succeeding Under Any Conditions" by John Kotter and Holger Rathgeber, published by St. Martin's Press, September 2006. Kotter, the well-known Harvard Professor and author of "Leading Change," uses a fable about a colony of penguins facing disaster to introduce eight principles of problem solving.

CIOZ Question: What do you think is the most effective way to create leaders? Post your ideas below.

Comments (3)

	1. 03-05-2008 01:21
	As per my view the model what is spoken is been followed by successful org(s) like IBM, Microsoft and etc.., I also personally believe that once organization grow more than 1000 making them all think like one way might not be possible through segmented leadership. We would have put in process hence we need move towards stewardship style now to seek success. Guest

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	2. 03-07-2008 15:46
	The best way to create leaders is by example and practice. Managing time, money, and people requires practice in a supportive environment. The leadership team must set and distributes clear corporate objectives to team members. Then reward those who meet the objectives and provide instruction to those who need it. Registered

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	3. 03-08-2008 02:28
	Creating a leader is a most challenging job as I think. bcaz to become leader the mental preparation is need. everyone has that quality but someone improve as they feel like leader. The psychological motivation can't show impact on person for long time if person has know inner acceptance towards that. it is conti.. process leader always ups and downs. but real one has no need to say he is leader bcaz he is leader by birth.. Thanks & regards from suhas. Registered

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