Lakshmi Narayanan turned his back on ‘aggressive' Delhi and IT boom-town Bangalore, thereby bringing the then fledgling company to his favourite seaside city.
If F.C. Kohli, widely considered the father of the Indian software industry, had not sent one of his protégés, Lakshmi Narayanan, to “sort out the mess in Tata Consultancy Services' Delhi office”, he might never have joined Cognizant, where he is now Vice-Chairman!
The young Lakshmi, as he is known at Cognizant, completed his Honours in physics and Masters in electronics from the Indian Institute of Science in 1975, and joined TCS through its first-ever campus interview. The recruits comprising 12 IITians and three IISc graduates were the first to get formal training at the company.
All admiration for Kohli, he says, “What a fantastic man, he was a person of focus, and a great believer in technology. He graduated from MIT in the early 1950s and would say technology can solve anything! He was actually sent from Tata Electric Company to TCS to close it, because it wasn't making money, and he turned it around.”
Lakshmi gives Kohli credit for “creating the Indian IT industry, whether it was offshoring, importing computers and fighting for it, it was all Kohli's work. He took good care of me and gave me huge responsibilities; for 19 years, all my learning happened there!”
And then, in 1994, Lakshmi was sent to Delhi, and though he liked the place, “he couldn't handle the people and their aggression. The way they talk and walk, they just look through you; and there was dishonesty in many of the dealings. So I said: ‘Oh boy, Delhi is not for me.' The cultural shock was too much.”
Within six months he was “aggressively head-hunted” by Dun & Bradstreet for Cognizant. “They told me ‘you don't like Delhi, so go to Bangalore, where we are setting up an office'. When I said I don't like Bangalore and preferred Chennai, where I loved the beach, they said: ‘Ok, let's do it in Chennai'.”
Micro-managing in initial years
Thus Cognizant, which today has 1.3 lakh employees worldwide, including one lakh in India, was set up in Chennai with 25 people. “It was a huge challenge; at TCS I was a senior and everything was taken care of, but here I had to do everything, because I was the only experienced person.”
Though he enjoyed the hard work and the challenge, he admits that in the initial years he would micro-manage, till the second-level people, “those who are running Cognizant today, told me: ‘Hey, you are micro-managing too much. You will burn out. Trust us… we may not do it as well as you do things, but unless you try us out how will we learn?' I listened to them, and that was the first reinvention of myself,” he recalls.
He never imagined that the Chennai team would grow from 25 to 50,000; “it wasn't in the plan. People who joined me from TCS would ask, ‘What is your plan?' and I would say we will become a midsized company.” He had no ambition beyond that, as “we didn't know how long the industry was going to last. It was still developing, neither network nor communication facilities were in place. So I'd say, ‘If you think I have some grand vision and you should join us, that's not true. If you have any ideas I will be happy to listen, and maybe we can make it happen. But we are growing, have a good reputation and are winning in the marketplace, and let's continue that way'.”
Down the years, he recalls, his biggest pressure came from his teammates - 500 by now - reading the newspapers and saying: “Infosys is starting a call centre, or doing something else.”
“They'd look at me and say: ‘Why aren't we doing it', and think this guy is not aggressive at all!”
But Lakshmi was trying to identify areas “where we could be different from others. Like consulting, domain excellence, healthcare.” These were not being tackled by other IT companies. Also, he thought of being different by investing overseas. “I'd say, ‘let us be known as a global company and not only an Indian company'.”
What was crucial around this time was advice from the eminent management guru C.K. Prahalad, a good friend, who said that while doing things different from other IT companies was good, zero in on two or three factors and invest disproportionately in them. “We would meet at industry events and interact as friends. He had bright ideas, a very different way of thinking, and was very helpful. He'd say: ‘I hear good things about Cognizant from your customers and these are the things you should be doing.' I miss him so much… (Prahalad passed away in 2010).”
But the real takeoff point for Cognizant came in the “way we transitioned from the Year 2000 work to the non-Year 2000 work in 1999-2000. That was the first inflection point. Y2K was the big thing, and we grabbed as much as we could and grew during that period.”
Interestingly, at that time the companies that later turned out to be duds, such as DSQ Software, Pentafour, and so on, were considered much bigger than Cognizant. “They were almost 5-6 times our size; they didn't make the transition, we did,” he says.
The second transition happened during the dotcom bust. Cognizant didn't have the high-end capability of some US companies. They wanted to pass on some maintenance work, which some other Indian companies didn't want. “We said we'd be happy to do it; teach us.”
A big opportunity, as well as challenge, came while working with eBay on “repair work”. But it was extremely difficult, says Lakshmi, recalling how Cognizant wanted to back out, saying its people were “burning out. But they said ‘among all the people we've worked with, you exhibit the right culture, the right attitude. We will invest in your training and help you to succeed'. That was the second inflection point. So retaining customers after 2000, and gaining technological capability were two extremely important stages for us.”
The challenge ahead is to maintain growth without structurally damaging the company or changing its culture. “The bus is moving so fast, the fear is making sure the wheels shouldn't come off,” he muses.
He says Cognizant is a very open, friendly place to work for. “People talk about flat organisations; to many people a flat organisation is only about access, not levels. To us a flat organisation has a different connotation… it is where the CEO believes that the person who joined the company six months earlier cares as much about its success as the CEO does. He can have as great ideas as the CEO. And, to believe that the customer cares about our success as we do about theirs.”
He adds that the belief that a customer is out to squeeze and push you on price, drive you hard, is not true. They do have to protect their interests, but once that is done “they really partner with you, trust you. When we do well, the first congratulatory messages come from the customers. They are happy to partner with a successful company. That positive momentum… positive attitude is part of our culture. We are a huge company, but have clearly laid out how to maintain the culture of openness, performance, meritocracy,” he adds.
Childhood love for model trains comes chugging back
Favourite holiday destination: New York City. I feel most comfortable here and enjoy it the most. When I have some time to spare, I go there. Many people find this difficult to understand and say that's a busy place and not a holiday destination. But it's such a vibrant city; I love to visit the museums, concerts, games…
Music: I like multiple kinds of music; western classical music, particularly rock, Carnatic music and old Tamil film songs. I don't listen to music on the iPod because I don't like earphones. At home I put on my music system while I am working, reading on the Net or a book or answering mails.
Hobby: The most recent passion, which has surfaced from my childhood, is building model trains. I have started investing in the packages, buy components, put them together. I invest lakhs and lakhs of rupees in it and still it is not adequate. They occupy one room after another; my wife is fed up, so now I build them and give away to friends, nieces.
Fitness: I get up at 5 a.m., take my bicycle to the Besant Nagar beach in Chennai and cover about 10-12 km in 30 minutes, park my cycle at the Theosophical Society and do some walking. It takes a little over an hour.
Reading: Newspapers; I've been thoroughly enjoying the new ad campaign of The Hindu against the Times of India. I felt very happy about that. Coming to books, I recently enjoyed reading Most and More by T.T. Rangarajan, a motivational speaker, which talks about creating new beginnings. I'm now reading Steve Jobs' biography. People said you must read it on the Net. But I felt that would be disrespectful to that man; I must buy a hardbound copy and read it. It is fascinating. What a man! A fearless person, who lived his life the way he wanted to; he never wore a mask nor had inhibitions… I am what you see.
Tech tools: The usual; I use a BlackBerry, as I've got used to it. But I also have a Samsung Galaxy and a laptop. My wife has an iPad, so I bought a Samsung tablet.
Food: Predominantly South Indian vegetarian food. I used to cook… not only for survival but also out of enjoyment. Would do it in New York… when you travel you see vegetables of a quality you can never find here. So I shop for them, and cook them, adding masala. It's not gourmet cooking, but it's different!
Role models: Several people I've learnt from; F.C. Kohli is one. Anand Mahindra is another; look at how he has transformed Mahindra and Mahindra from a tractor company to what it is today. The other is Rajiv Bajaj; he lives the life he wants to. We talked about Steve Jobs; Rajiv wears a T-shirt wherever he goes and says ‘this is what I am most comfortable in, so don't expect me to wear a suit'. Why don't I see Rajiv Bajaj in Davos? He says: ‘Arrey, people at Davos just chat and come back; it's a useless forum.' He speaks his mind; he is a different type of person. You learn from such people.
Outside perception of India: Two things have clearly changed; 2-3 years back, India was right on top along with China, both would be mentioned together. But India doesn't get mentioned so often now. The reason why outsiders are very polite about India and don't talk ill of us is because India offers a huge market opportunity no other country does. They are hopeful that some day India will open up. Even though China is a huge market, China is far more nationalistic. They won't allow outsiders to enter and open their market so easily as India will, or could, but is not doing.
Why China is important to the world: Both India and China have the potential to become world powers. Both will eventually become the top three or four of world powers. But China would flex its muscles and exercise that power; India will not. Which is another reason Western countries like India. They are not scared of India because we partner, we don't ride roughshod over neighbouring countries, whereas China will influence neighbouring countries, global policy and politics, and it has territorial ambitions as can be seen in Africa. It is investing heavily there, has a virtual lock over the resources there and is keeping Western countries out. But India is not like that; even if we had a lock on the resources we will happily share. Which is why the world is disappointed that India is not moving rapidly, but it is willing to wait because India is a better bet than China, even if opportunities in China may be bigger... we are much less threatening and intimidating as a country.