I am an entrepreneur. I started business in the auto components industry and succeeded. When cash flows in the Sona group increased substantially, we looked at expansion. We set up four businesses "" all in the auto components industry and all as partnerships.
Some time in the mid-1990s, we decided to launch a venture in software services. We had been successful in new ventures earlier, so we saw no reason why this would not be just as successful, especially since software services was a booming field at the time.
Besides, we hoped to meet our internal requirements for software with this new venture. Until then, we had been relying on legacy software systems.
So we had separate packages for materials management, accounts, work in progress and so on, and connectivity between the various systems was often a problem.
Building a package in-house, therefore, would prove less expensive and also allow us the opportunity of creating tailor-made solutions.
In 1996, we launched Sona Software Limited (SSL). We deputed people from the electronic data processing systems division of Sona Steering and took on a young, energetic non-resident Indian as the CEO.
He was asked to hire a suitable team for the company and given the mandate of developing a software package for Sona Steering "" to first do a proof of concept internally and then develop similar package for outside clients.
We ran the company for over two years. In 1999, the CEO resigned and we decided to close the company.
In hindsight, I can identify two main errors in how we dealt with SSL. One, we got into a business we knew nothing about.
Two, we put it outside the main business "" it was even located away from the other offices of the Sona group. As a result, the people involved in SSL felt isolated and unsupported.
This was to have been a breakthrough company. Instead, we pushed it to the sidelines and the group management did not give it the support it deserved. Even I as the CEO did not support it enough. We invested close to Rs 50 lakh in the venture over two years "" we lost it all.
I had mentally written off SSL as a bad experience. But recently the Sona Group has been interacting with Professor Shoji Shiba from the Massachussetts Institute of Technology.
Prof Shiba is a specialist in breakthrough management and during our discussions, we also spoke about the SSL experience. What came up during our analysis is that when you're undertaking breakthrough management, you need to go through the change processes systematically.
Great ideas get killed because in most organisations, the management feels threatened by the new concepts. So to ensure that your project succeeds, you need to take certain steps and put proper precautions in place.
We did everything wrong with SSL. This was a breakthrough concept and it should have stayed within the organisation. Instead, we spun it off as a separate company.
But it's taught us how to look at breakthrough projects in future "" we will ask the following critical questions before embarking on any such projects.
Have you done your homework?
Make sure your organisation is ready for change. With SSL, we just let the company start "" we didn't even check whether it would work or not. We went by the track record of other Indian companies that had succeeded in IT "" Wipro, Infosys, Satyam and so on "" and saw no reason why SSL would not do just as well.
But SSL was to focus on ERP, where perhaps the only Indian company that has succeeded is the south-based Ramco. We didn't research the project enough.
Is the CEO capable? Can he command the respect of the top management?
The mistake I made with SSL was that I took on a young boy "" not more than 28 or 29 years old. So the respect factor was missing. Besides, I should have been closer, built an emotional bond with him.
I thought I was creating an entrepreneur, but that wasn't the case, because the CEO wasn't on his own "" he was working for somebody.
Do people in the organisation realise the importance of the concept?
It is critical to promote the concept within the organisation. We didn't emphasise the importance of SSL within the group. And when SSL did create a workable programme for inventory of product spares, we didn't relate the success story to the rest of the organisation.
We were more systematic in our approach when we set up Sona e-Design, an engineering services company. We first determined customer requirements and provided services accordingly.
We started off by offering 2D and 3D drawings and as our customers' demands evolved, went up the value chain to design tools and fixtures. Now we offer reverse engineering and analysis as well.
At SSL, we diverged in a big way from our core activity "" engineering. Sona e-Design is also a service provider, but it builds on our existing strengths.
If SSL had succeeded, it would have changed the shape of the company "" that is, after all, the nature of a breakthrough concept or project. We are now attempting another breakthrough, as we seek to move from being a mechanical engineering company to an electronic-mechanical component manufacturer.
All companies need breakthrough concepts at various stages in their lives. From what I know today, I realise that SSL failed miserably not because the concept was faulty, but because the methods we followed were wrong.
