Most IT services organizations spend more time on chasing wrong deals - those they can't execute well - than even on delivering value to clients. While this sounds stupid, there is a deep and wide-spread mechanism of incentives at individual and system level that rewards short-term outcomes, that leads to choices which seem rational while they are not.
One of the primary approaches of capability development in Indian IT has been to pick work, often with lofty claims, and then figure out how to execute it. This opportunity-driven model has often hampered the quality of our delivery and hurt our credibility. But it has also helped us push our boundaries, claim newer capabilities in due course and offer more to clients. It is risky, reactive, but clearly has its rewards when played well.
Those who sell and those who deliver are generally different individuals, and their jobs are incentivised differently. The one who sold is rewarded upfront (although some of the reward may be tied to delivery later) for successfully signing that large deal, while the thing falls in delivery's plate to later grapple with. There's often mess that's unforeseen and needs cleaning, 70-90-120-hour workdays of effort when the budgeted were of 40, and a hush hush consensus that it is going to be a nightmare.
And yet we do it repeatedly.
Deal-qualification calls, which are meant to prevent this, are increasingly becoming a joke. 'Bounded rationality' constrains leaders when making decisions, but is not the root cause for flawed choices when there is lack of effort at processing information available.
Bottomline - (1) Leaders must watch out what kind of risks they are subjecting the firm to. There is a thin line between taking measured risks and going "we'll see later". (2) Qualify opportunities, especially the large ones, coz you are going to spend many people's effort on pursuing it for many many days. It better be something you can deliver, even if it's beyond your current set of capabilities. (3) See what behaviour your incentive mechanisms are driving vis-à-vis the roles people play in the organisation, and optimize them for the best outcomes. When decision makers listen to managers who are incentivised to be selective in presenting information, the outcomes can't be in the best interests of firms.
You announce "large deal wins" to the market, while delivery failure is hidden in the P&L. The former, ironically, has become a short-term metric, while the latter reflects long-term sustainability. The market knows this well. So do firms, but they find themselves struggling to pursue the latter because of large scale internal expropriation. The fix needs meticulous strategic intervention.
Originally posted on LinkedIn on 26 Dec 2025.
