In a span of six months, K.B. Chandrasekhar found himself in the position of having to reduce his company’s headcount from more than 250 people to a handful of employees between its India and California operations. For the 24 months leading up to 2000, the party had been nonstop, but when the dot-com bubble burst, Chandrasekhar suddenly had to keep the doors from closing on his business.
“So we know for the next two to three years nothing would happen, but you have to keep the lights on and keep the engineers motivated and other people motivated in developing the product,” says Chandrasekhar, chairman and CEO of the cloud technology company, Jamcracker.
“The question is, at that time, how do you move from the party binge to develop a sober mode and still keep the core employees? But at the same time, you have to go through the painful exercise of probably reducing the company size to a fraction of it was before, then grow back up in a manner that positions itself for the market to come back and then take the leadership.”
After reducing head count, it can be just as hard to convince people who are invaluable to your company to remain loyal and stay motivated.
“I think the challenge is constantly looking at what kind of people you need to stay ahead,” Chandrasekhar says. “Our business is all about people business. If they are great people, we know we can scale great heights.
“Many of the times, I think this is where the leadership comes into play, because you have to lead from the heart at that time, in terms of the vision and the conviction and why this is going to be big in the future. In the near term, it’s why we all have to sacrifice. At the same time, keep the faith at a heighted level so we are sustained for success.”
To do this meant opening up the channels for honest and open communication about how Jamcracker would move forward. Because people can see every day what is happening in the company and outside, hiding news just erodes employee trust, so transparency for Chandrasekhar was critical.
“In tougher times, people want to ensure that they hear from you a little more regularly, and you also use electronic communications whenever possible,” he says. “So a judicious mix of the two helps you stay in front of your crowd.
“It is being upfront about it rather than trying to sugarcoat it. But at the same time keep emphasizing the vision, and where we are going and why this is a great opportunity as the next big thing.”
When people’s jobs are vulnerable, it’s critical that a leader demonstrates to the people that he or she is also willing to make sacrifices to commit to the long-term vision.
“I must be willing to put myself up to say, ‘Here is my resignation letter,’ if I’m not performing to what I said I would perform,” Chandrasekhar says.
Even though the company was losing money, Chandrasekhar was passionate about getting Jamcracker back on track. So he invested his own money to show his team his renewed commitment.
“We bought out all the other investors to bring in my own money, because we said this is going to take a longer time and other investors may not be around to make it happen — or rather, may not have the appetite to make it happen,” he says. “That boosted the confidence of all employees by reminding people that, ‘Chandra believes in it.’”
By keeping the vision at the forefront, Chandrasekhar has successfully built Jamcracker back from a low of 11 employees to 200 people in 2011.
How to reach: Jamcracker, (408) 496-5500 or www.jamcracker.com
In addition to empowering your team, K.B. Chandrasekhar, CEO and chairman of Jamcracker says successful growth requires leaders to sense when to let go of conservatism and know when to move into high gear.
Here are Chandrasekhar’s tips for how to prepare your company for when the market turns.
Set a scalable structure.
“Most times companies implode because they are not able to scale effectively. The key is to put in a structure that will enable a company to scale successfully when the opportunity is in the market.”
“Second is what I call the willingness to change the rules as the situation demands, because you are not the only stakeholder in the company. There are a number of stakeholders in the company, which means you must know when to really take risks and when not to take risks. You are constantly juggling between growth, value, creation and just management.”
Feel it out.
“If you are an early stage company and entrepreneur, you may not have all of the parameters to back up everything that you do, which means you are going to rely a lot on your intuition, on your gut and your perception of where the market is going. It’s important to have that third dimension of that.”