Corporate crises have been in the news far too much in the 21st
century, but the tale of Satyam Computer Services and its CEO sent
shivers through the IT world. Satyam's learning organization had
the unenviable task of communicating with a workforce that had
no real experience with job loss - or more importantly - the loss
of respect and status that came with the meltdown. On an early
January morning in 2009, Ramalinga Raju, chairman and founder of
Indian IT outsourcing company Satyam Computer Services, told his
board of directors he had inflated the amount of cash on the
balance sheet by nearly $1 billion, incurred a liability of $253
million on funds arranged by him personally, and overstated
Satyam's September 2008 quarterly revenues by 76 percent and
profits by 97 percent. In his resignation letter Raju wrote: "I am
now prepared to subject myself to the laws of the land and face the
consequences thereof." For Ed Cohen, head of Satyam's learning
organization, those consequences were just beginning. Cohen spoke
to Learning Executives Briefing on the role his Satyam Learning
World team played in first communicating the crisis, then helping
the workforce to deal with its unexpected ramifications.
Learning Executives Briefing: When a company
suffers a major ethical crisis, what can its learning organization
do to help the survivors?
Ed Cohen: There are phases. In our case, we put a
halt to everything we were doing. The first step was to convince
the learning professionals that they had to become ambassadors for
the organization, no matter how scared they were. They had to be
there to help and to listen to other people's feelings and to take
in a lot of information to take the pulse of the organization. From
there, we instituted what we called the "lights on" strategy. That
was our determination of what learning absolutely had to happen to
keep the lights on for the organization. In our case, that meant
technology learning that was required and learning programs that
were already in progress or prepaid, vendorsupplied programs that
were already under way.
As the days went by, we asked how we can help the organization. Our
strategy became more of a cumulative effort, rather than a shift.
We had the lights on, now, how do we help the organization? And,
how do we do this with a zero budget? All of a sudden, we had no
budget. Not even for pens and paper. We had previously made an
investment in our web television capabilities, so we worked with
our corporate services people, and in less than a week, we went
from having four hours a day (of programming) - both replay and
live - to having 24 hours a day (of programming). We considered
different methods, but we opted for a talk show format, because we
felt that would keep people's interest. We had topics such as
"weathering the storm," which was a daily series, and "explaining
to your children and family what is happening and how to prepare
yourself psychologically to go through the different stages, which
is like the stages of grief: denial, acceptance, anger,
Then we ran a series we called "The Rise of the Phoenix." We did
that with the help of Harvard Business School Publishing, who
donated the case studies to us. They provided us case studies on
other companies that had gone through a major crisis and survived.
Our business partners helped us tremendously, and with very little
expectation of anything on the other end, because none of us knew
if the company would survive. Our Phoenix series was a 45-minute
segment where we discussed the case study and applied that to what
we were going through. What were the lessons learned? We also had
to take all of our technology training (and make it available) for
LXB: How did you deal with the spirit and attitude
of your own team?
Cohen: When our CEO confessed to what had
happened, it was 11 in the morning, but it was 11 at night for me,
because I was in San Diego. We immediately took advantage of our
web capability and produced a webinar. Within about 30 minutes, we
had everyone in the Satyam Learning World online. And one of the
questions most of them had was: "If we have to take care of
everyone else, who is going to take care of us?" We decided that we
had to take care of one another. I did daily briefings with
associates in the Learning World for several weeks. Then, we moved
it to three times a week and eventually to once a week, and then
every other week briefings. The idea was to provide complete
Then, we ran a series of workshops called RESTORE, which stands
for: Rebuilding Satyam with Renewed Energy. It had three elements.
People could articulate their fears. Then we asked them to take off
their hat of being fearful employee and become a consultant, asking
them what the organization should do to rebuild its brand and to
help people be less afraid. Finally, we asked people what advice
they would have for the new CEO. We did that first with the Satyam
Learning World, then rolled it out across the entire enterprise.
Eventually, we reached 20,000 people with that effort. The RESTORE
program was designed to just help the Satyam Learning World
associates, but everyone felt so good about it, they wanted to make
it available to everyone. We ran them as both live and virtual
sessions all over the world. When the new CEO came in, we gave him
an executive summary of all of the advice we had collected from
across the organization.
LXB: Short of some sort of human tragedy, it's
difficult to imagine a situation that is more difficult for an
Cohen: This may sound crass, but had our CEO died
suddenly, that would have been less of a crisis than what we went
through. The fact that this was the founder and leader of our
organization, and was trusted by everyone, our first reaction was
that he was taking the fall for somebody else. It was difficult for
us to believe this had happened and that he was involved. We
thought he was being a good leader. It would have been less of a
crisis than replacing a CEO who had resigned or died. We not only
lost our CEO, but we also lost our faith and our ability to trust.
We learned the organization wasn't what we had been told it was.
LXB: How did the cultural difference between India
and North America affect how you handled the crisis?
Cohen: There are still things happening culturally
as a result of the crisis. In North America, you wouldn't spend a
lot of time concentrating on the families of the employees. You
would explain the situation to the employees who would go home and
explain it to their families. We had to dialog with our associates
so they could dialog with their parents and families. Their
families would immediately look at them as disgraced and tell them
to get out. How do you explain to your families that the market is
tight and there are no jobs?
An additional problem was that, at the beginning, NASSCOM (national
association of software services companies for India) came out with
a declaration that they would do everything they could to save
Satyam, so they would not look kindly on any company that tried to
hire Satyam employees. The door was effectively closed on Satyam
employees who had nowhere to go. How do you explain that to your
family in a way they will understand? Ninety percent of our
employees are first-generation corporate workers. They are
first-generation college graduates in their families, so there is
not a strong understanding of the corporate world. And, India has
multiple generations who have never seen a layoff. People who are
alive today have never heard of a layoff. We needed to do a lot of
dialoging on why they should not feel disgraced and why their
family should not feel disgraced.
People needed to know that the depth and magnitude of the number of
people who would be let go meant that we were letting go a lot of
high performing people in many instances. And how would those
people hold their heads high?
LXB: What is the next phase?
Cohen: Now we move into outplacement. Because
there has never been a layoff (of this scale) in India, we had to
figure out how to do this in a humane way. We are taking these
10,000 to 12,000 people and putting them into a virtual pool with
partial pay for four or six months, depending upon their level.
During that time they will have access to all of the learning they
had before. They continue to be employees of the firm, [but] they
won't come to office and they won't receive fulltime pay. It's
designed to give them a softer landing as the market comes back.
The virtual pool, from a learning perspective, means teaching
interviewing skills. Many of our associates never had to interview
for a job because Satyam was their first job. They may have gone
through a technical interview and an entrance exam, but they never
went through any other kind of interview where they may have had to
describe their past. Added to this is resume writing and career
counseling, and now we are adding career fairs. All of those are a
new experience for India. Having lived through multiple layoffs in
my career - and I have a few people on my team from Europe and the
United States who have also dealt with layoffs - we have been
teaching what needs to happen. And, they are teaching us what we
need to understand from the context of an Indian family.
Some it can be very complex. We've had many people whose upcoming
marriages were postponed or cancelled as a result of the crisis. In
our part of India, Hyderabad, most of the marriages are still
arranged. Why would anyone want to marry a Satyam associate? Not
only is that person disgraced, there is no assurance that they will
have a job. We had many engagements broken off, and a large numbers
of weddings postponed. I can't think of any other country on earth
where this crisis would have had that kind of impact.