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New growth mantra at TCS: set audacious goals, then achieve it

New growth mantra at TCS: set audacious goals, then achieve it
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First Published: Mon, Oct 05 2009. 11 00 PM IST

Change of guard: Outgoing TCS chief executive and managing director S. Ramadorai and his successor N. Chandrasekaran. Ramadorai has been at the helm of this company for 13 years. Abhijit Bhatlekar / M
Change of guard: Outgoing TCS chief executive and managing director S. Ramadorai and his successor N. Chandrasekaran. Ramadorai has been at the helm of this company for 13 years. Abhijit Bhatlekar / M
Updated: Mon, Oct 05 2009. 11 00 PM IST
On Tuesday, after 13 years, there will be a change of guard at India’s largest information technology company, Tata Consultancy Services Ltd (TCS). For 13 years, S. Ramadorai has been at the helm of this company as chief executive and managing director. It has been quite a journey for Ramadorai.
Change of guard: Outgoing TCS chief executive and managing director S. Ramadorai and his successor N. Chandrasekaran. Ramadorai has been at the helm of this company for 13 years. Abhijit Bhatlekar / Mint
When he took over the reins of the company, he had a team of just under 6,000 people; that has now grown to 140,000. Revenues surged from $160 million (Rs760 crore) to $6 billion under his tenure.
N. Chandrasekaran will take over as CEO and managing director of TCS. His growth strategy: “We will have a vision statement. We probably won’t make a statement with a particular number but we will put up an audacious goal. It is all about setting up an audacious goal and going after it.”
Edited excerpts from an interview with S. Ramadorai and N. Chandrasekaran:
How do you look back? The figure looks staggering, no question about that—from $160 million to $6 billion. Do you look at it with satisfaction that you have done a job properly?
Ramadorai: I think it is absolute satisfaction. It is a team which is phenomenal, the foundation on which we drove the operation, drove the company across different parts of the world, across different verticals, have all played out very effectively. At the end of the day it is the customers whom we live for and the employees who make it happen. That is the most satisfying part.
Do you live with a sense of a journey unfinished or you think you have done whatever you have set out to do?
Ramadorai: We need to look ahead as plenty of opportunities are out there, we have to capitalize on those and that is what Chandrasekaran and his team would certainly work on and we would certainly support it and make sure it happens.
Big boots to fill?
Chandrasekaran: Absolutely.
You are up to the job?
Chandrasekaran: I am looking forward to it differently.
You will miss Ramadorai’s guiding hand though?
Chandrasekaran: Yes, but Ramadorai is around anyway. I have been working with Ramadorai for a long time now almost all through the 13 years, soon after he took over as the CEO and MD. I joined him as his executive assistant. So I worked with him very closely over the last 13 years in various capacities. I know the company, I know the team and have done different things in the company. I am looking forward to the challenge.
Was this decided a long time back? Was he the chosen candidate and was he being groomed for this position?
Ramadorai: One of the big things or right thing that happened was with regards to thinking about a succession plan. There were a number of people who were looked at on a continuous basis and like Chandrasekaran has correctly said, he performed a number of functions like anybody else in the company. Started by my spotting him in 1993 when I went to the US. He was working on a project and then subsequently he came on a project with British Telecom. And then in 1996, when I took over, I brought him as my executive assistant. Then we built a team around and looked at all the possibilities, gave different roles and the combinations of all of these, with the endorsement of the board, is what made it happen. There was a very well articulated process, a thought-out process at the right time, putting the right processes, metrics to measure people and finally say that there has to be one CEO at the end of the day and the entire team must support him and the clients must endorse it. That is what has happened.
There are many fairly senior and visible high-profile colleagues of yours who might have eyed the position. You think they will accept you as their leader now?
Chandrasekaran: I think one single most important thing about TCS is that we deliver very well collectively; whether it is a project, whether it is a business unit, we have always formed great teams. I think everyone in TCS has worked together for very long and so I don’t see an issue.
What is your role going to be now? I know you will formally be vice-chairman of TCS. Would you spend a lot of time building or adding to the TCS brand? Would you still continue to mentor Chandra in a way if not in an executive fashion?
Ramadorai: Building the brand is extremely important and I will make sure that the brand is visible across different parts of the world. Mentoring is going to be (the) primary role, not just for Chandrasekaran but any of the leadership team or the younger folks in the company who want to be mentored.
I would certainly help in identifying talent across the organization because that is the most important contribution we all can make. In addition to that, some of the other group companies which are in the technology space, I would try to take more of an active role to make sure they are also coached to perform beyond what they are doing currently.
How would TCS want to use Ramadorai’s expertise optimally now?
Chandresekaran: Ramadorai has been in the company for a very long time, almost since inception in 1970-71. My colleagues and I have worked closely with Ramadorai over a period of time. So there will definitely be a lot of inputs from Ramadorai in terms of the branding. Also, there may be special geographies, special markets, where...he can play a guiding role where, as we are developing, there will be specific issues where we will seek advice from Ramadorai.
Mentoring is an important aspect; educational training is very close to him. So there are various ways we will leverage Ramadorai’s experience and his presence.
You are taking over at a very different time. When Ramadorai took over in 1996, it was a different company. It was not a small company...but the challenges would have been very different then. What do you think is the kind of challenge or environment that you take on which is dramatically different from what Ramadorai did 13 years back?
Chandrasekaran: As you said times are very different. First of all, not only the economic conditions...even if you look at TCS as a company, 1996 when Ramadorai took over and today we are completely different. Today, if you look at TCS, it is a very well recognized brand in the IT services space. TCS has got a lot of strength, got a fantastic sort of clients, a great team of 140,000 professionals, mutli-domain capability and integrated full services offerings.
So given all of this, there is a significant opportunity to leverage this strength and then achieve a lot more. Either you can say we are already $6 billion, how are we going to grow from here, or you can say we are at $6 billion, we are only 1% of the technology services spend. So we would rather take the approach of the second view. I think there is significant upside to be delivered from where we are.
Do you have a vision statement because at $6 billion, the market or investors love numbers—that you can set out a number straightaway that I want to see $10 billion, I want to be 5% of the global market, do you have a handy vision statement?
Chandrasekaran: We will have a vision statement but I am taking over only tomorrow, so it is very premature to make any statement.
But you have known that you are taking over after a while. Surely you must have got something?
Chandrasekaran: I am engaged with the team and we will get together as a team and we have some thoughts about where we want to go. We will definitely quantify that and qualify. We probably won’t make a statement with a particular number but we will put up an audacious goal. It is all about setting up an audacious goal and going after it. We will definitely do that.
Was your job more difficult in 1996 or Chandrasekaran’s today in 2009?
Ramadorai: I think there were different sets of challenges then. The industry was itself taking off, the year 2000 problem came up. So with the result the industry had to scale up very quickly and then you had to get the process disciplined so that you could deliver to a set of qualities.
cnbctv18@livemint.com
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First Published: Mon, Oct 05 2009. 11 00 PM IST