When we look at the now-famous Cognizant CEO factory, probably the best-known of the bunch is Debashis Chatterjee (known simply as “DC” to everyone in the biz), who now finds himself leading the new $4.2bn powerhouse that is LTIMindtree. He’s also one of the calmest and easy-going guys you can hope to meet in this business.
DC originally took the helm at Mindtree in August 2019, and soon found himself contending with a “non-merger” as LTI decided to keep Mindtree separate, and then a pandemic followed. But that all changed in November last year when DC was announced as the first CEO of the newly (and finally) merged LTIMindree entity. So let’s hear directly from DC… what makes him tick and what’s next for the new 7th largest Indian-heritage service provider…
Phil Fersht – CEO & Chief Analyst, HFS: It’s great to see you again, DC. I mean, you’ve been around the IT services space since before the internet. Right?
Debashis Chatterjee (“DC”) – CEO, LTIMindtree: Yeah!
Phil: I can also remember the world before the internet, as well, so you’re not that old 😁. But let’s hear a bit about you, DC. What gets you up in the morning these days? And, as you look back over your career, was running a multibillion-dollar IT services shop what you always wanted to do when you started?
DC: So, Phil, my background is I am a mechanical engineer, by education. I used to be a very avid sportsperson in my school and college days and played a lot of sports, including cricket, which is my favourite sport. And if I was not pushed hard, I would not have become an engineer; I would have rather liked to continue in sports.
And having done my mechanical engineering, I joined an automobile manufacturing firm, spent two years over there, then – and I’m talking about 1989 – that is when I got an opportunity to work in TCS, which was a great opportunity at that point in time. I think IT happened to me by accident because it was just that everybody said, “IT is the future,” so I jumped onto it, and since then, I haven’t looked back.
We went through various S-curves within the industry, whether it is the initial mainframe era, or the client-server, or the internet, and then, subsequently, cloud and Digital, and went through various inflection points as well, like Y2K and the global financial crisis in 2008, in which I was right in the middle of, because I was running the Financial Services vertical at that time. So I think it has been a pretty exciting journey.
And if you ask me what it is that I think, getting up in the morning now, is these two organisations coming together, erstwhile LTI and erstwhile Mindtree, creating LTIMindtree. I think this is the first time, and a very unique scenario, where two listed entities are coming together which are almost of similar sizes, and bringing these two organisations together, the entire integration, and ensuring that we can create value over a period of time – one plus one equals more than 2, you know. I am always thinking about how to make that happen as we go along. I mean, we already have some plans, but how do you ensure that the plans can translate into execution? That’s something which I’m always thinking.
And, to your point, running a multibillion-dollar IT services company – who would not like to do that?! Not that it was the desire when I was studying my mechanical engineering, but definitely, as I went along, I felt if you are in the industry, you need to learn how to run scale, and how do you manoeuvre at scale. And scale is not something that I have not done before, and it’s really not just the scale, it’s the question of how do you leverage the scale, and get the best out of that scale? And that’s what I have been trying to do for several years.
Phil: It must be tremendously satisfying, DC, having spent such a significant career working in some of the biggest IT services companies in the world, actually to run your own shop, and drive some areas that are special to you. I mean, I was an analyst for 15-20 years, and I always had a personal view on how an analyst firm should be led, and getting the opportunity to build my own company, and add my own stamp, was tremendous. So who influenced you along the way as you built your career, when you started to build this vision?
DC: Well, I think there are many people who influenced me; people whom I have met, and people whom I have not met, but have observed – like business leaders like Indra Nooyi, for example. I think what she says, you know, be a lifelong learner, for example, that’s really inspiring, and that’s something which I firmly believe in. I have got a chance to meet Ram Charan, the management guru, and a lot of things to learn from him, and his books.
But your real learning comes when you work with leaders. And I have great leaders in my current organisation, but obviously in my more than two decades of experience in my previous organisation I worked with fantastic leaders. And let me just call out two specific individuals; one was Francisco D’Souza, and the other one was Mr Lakshmi Narayanan, and I think you probably know both of them fairly well.
And one thing which I learnt, and on which Frank influenced me, is how to challenge the status quo. I mean, you have to constantly challenge the status quo, and that’s something which I have always done in my career, and even this particular job which I have taken, in the erstwhile Mindtree role, was nothing but challenging the status quo, in terms of where it was. And, you know, I didn’t think much, because I love to accept challenges, and that probably is the biggest learning from a person like Francisco D’Souza.
Mr Lakshmi Narayanan was a very different kind of personality. He will help you to challenge the status quo. And the learning from him was, if you are trying to challenge the status quo, then you cannot do everything yourself; you need to have the right people surrounding you. In fact, he used to very nicely put it that you need to surround yourself with people who are probably smarter than you, and it’s easier said than done. But that’s another philosophy I have followed in my journey. And that was a great learning from Lakshmi, in terms of hiring talent, hiring leaders, who could do something better than what I can do. And that really has helped me in terms of shaping my career, shaping organisations as I have gone along.
In my journey as a CEO, I would be remiss not to mention the mentorship I have received from S N Subrahmanyan and A M Naik from the L&T Group – they have provided me with ample support and guidance to excel in my role.
And, you know, if you ask me specifically what I have learned in the current role, it is the whole navigation through the COVID-19 crisis. I think that was something that has redefined business continuity planning in the context of IT, and I think it was a great learning in terms of how BCP can be changed, and BCP can become indefinite, and how you have to still survive and thrive within that environment.
Phil: I think the Cognizant growth story, particularly after the ’08 recession, helped shape the industry the way it is today, DC. I got to know Frank very well, at that time, and he drove Cognizant to seize the initiative to really forge ahead, being a fairly young guy, leading a company of a lot of young folks, as well. So I think that was a real inspiration to many who grew up in that Cognizant environment.
So we’ve talked a bit about you, and what you want to do with the company, and bringing together LTI and Mindtree. So what does this look like, this new culture? What are you trying to blend together, in terms of the two different businesses, in terms of how this is going to evolve ultimately? And regarding (the broader) L&T group, how vital that is to the future growth of the firm?
DC: So let me take a step back, Phil. I think, if you look at Larsen & Toubro, it’s a large conglomerate, with more than $21 billion in terms of revenue, and very well respected in the Indian space, and they had made a foray in IT, and that’s how they formed LTI, way back in 1996.
But they always had the aspiration of doing much bigger things in services, especially IT services, and that’s how Mindtree happened. And when Mindtree happened, one of the reasons why they got excited about Mindtree was the capabilities that Mindtree was focusing on, in terms of both verticals and horizontals, were very complementary to the capabilities that LTI had. Or, I would say, the strengths and the capabilities that each other had – Mindtree was more focused in terms of experience whereas LTI was more of an engineering DNA. And even if you look at the industry verticals, except for BFSI, where we had some overlaps, there was hardly any overlap in terms of the other industries.
So it was a very nice way of bringing two organisations together, and, to be honest, we knew from day one that, at some point in time, these two organisations would have to come together. So that was always the thinking, that, at an appropriate time, we need to bring the two organisations together. Now, the question is what is an appropriate time? I think the appropriate time, as far as I understood, from my discussions with my bosses in L&T, Mr S N Subrahmanyan, as well as Mr A. M. Naik, is we should not merge the two companies unless both were doing well.
And I think that’s exactly what we did. We decided to merge the two companies at a time when both the companies were doing very well in their individual capacities, and that was the right time for us. We felt that these two companies could each stand on their own, and so it would be a marriage of two equals, rather than one trying to pull the other, etc. So that was the way we looked at it.
So if you ask me, what does this new company look like, I would say this is two industry-acclaimed challengers coming together and creating a leader, a new kind of technology consulting firm. And we are right in the middle. We are not exactly the so-called tier 1s, we are not the mid-tiers, but we are somewhere in the middle.
And I think our vision is that this is a company which can provide you end-to-end capabilities, extremely strong, in terms of end-to-end capabilities, when it comes to digital transformation, and also doing the digital at scale, at the pace of the customer. Because we want to be still nimble and agile, and be customer-focused. So we want to be seen as a player who can adjust to any kind of customer and work at their pace, rather than us driving everything the way we want. So that’s the way we look at this company.
And, of course, the other vision we also have, as far as the company is concerned, is that we should help our clients’ businesses to be taken to the future. And when I say to the future, because everybody is reimagining their business model, so can we help our clients’ businesses to be taken to the future? But, as we do that, can we do that faster? Because faster is all about time to market. Can we do that faster? So, as we do future and faster, can we also do it together? And when I say together, it is not only the client and LTIMindtree, but also the partner ecosystem that exists. Because the future is all about how we deliver as the partner ecosystem. So our tagline, in terms of as we look at the two companies coming together, and the future that we want to create is, “Can we take businesses to the future, faster, together?”
DC: And you mentioned about culture, Phil, and that was actually quite easy. Contrary to the belief that these are two different organisations, and two different cultures, actually, we looked at the culture of both organisations, and it did not take too much time for us to devise a very simple definition of culture of LTIMindtree.
The other thing, Phil, I must also say, is that I believe in simplification. So if you have a very simple way to describe your culture, that can percolate through the organisation, and that can also help you to remain agile, in terms of your communications, etc. So the culture of LTIMindtree is driven by purpose. You know? It’s act with compassion, and be future ready. Which means that when it comes to talent, when it comes to solutions, you have to think of the future, and be future ready. And, as you do all those things, driven by purpose, be compassionate, be caring, be future ready, then you are bound to deliver the impact, which is like delivering results. So I think these are the four things: purpose, caring, learning, being future ready, and then delivering the impact for the client. So that’s the definition of the culture that we have thought through.
And, you know, you asked how vital L&T is as a group. As a group, we have got tremendous capability, in terms of engineering, construction, oil and gas, so on and so forth. I mean, you know that, at some point in time, the erstwhile Mindtree acquired the entire IoT and Industry 4.0 capability from the parent, because they had already implemented it within their enterprise. So the biggest advantage we have is there are certain areas where we can borrow significant domain from them, significant capabilities from them, that will help us in terms of boosting our business in oil and gas, for example, or engineering, for that matter, or even manufacturing, for that matter.
So that’s how we are kind of always getting the support from the parent, wherever it is required, but otherwise we pretty much function on our own, as a listed entity, and function fairly independently.
Phil: So we’re in 2023, and we’ve got like a global assault on everything we once knew as stable, right? Inflation, we’ve got a war going on, which isn’t ending yet, and recession, obviously, in Europe especially. Combine that with record low unemployment in the UK, US, and EU, and people not wanting to go back to the office. How do we survive this? And then, how do you run massive multimillion-dollar projects for your clients in this type of climate? What do you think this is ultimately going to do to the IT services industry, DC?
DC: Yeah. So, Phil, I think, first of all, it’s a real VUCA world with so much uncertainty (VUCA = volatility, uncertainty, complexity, and ambiguity). And to all the uncertainties you have listed, let me add one more thing, which is we don’t know when the next COVID wave is, but everybody is talking about it.
So, given that scenario, I think that there may be multimillion-dollar deals, but overall I feel that it’s all about how strong you are, with respect to your clients, as a partner. And, you know, even if there are not multimillion-dollar deals, there will deals which will be getting renewed over a period of time, which will kind of become a multimillion-dollar deal, over a few years.
The only thing I would say is, unlike the 2008 scenario, the global financial crisis, where everything came to a grinding halt, I think the scenario in 2023 is a little different. And my hypothesis is that, in the last two years, clients did not talk about cost savings. They were so focused in terms of transformation, they were so focused in terms of reinventing themselves, reimagining business models, and as a result of which, they have invested significantly in terms of cloud and Digital. And even within the same industry, no two clients are running at the same speed. So you have a scenario where every client, in every industry, is at a different stage in terms of their overall transformation plans.
And by the way, we are already seeing that cost takeout conversation is taking the centre stage, as we speak. But the difference is that the cost takeout is very critical for funding this transformation. So I think 2023 will be a year where there will be great opportunities for cost takeout, but at the same time there will be also opportunities for taking the cost out, and funding and continuing with the transformation. And if you can come up with innovative ways of doing that, then I think that it will definitely help you to continue to forge the partnership, and help your clients to transform themselves, as I said, to the future, faster, and together.
Phil: So when you look at the next couple of years down the road, where is LTIMindtree going to double down? What does success look like, if you could define it now, for maybe two years’ time?
DC: Well, I think, from a longer-term perspective, aligned with the vision of the group, I think that generally we do want to become a $10 billion enterprise over years. I mean, whether it’s four years or five years, we’ll have to see, and it has to be a blend of organic as well as inorganic. But in the short and the medium-term, I think we want to have the unique combination of the resources, scale, and confidence of a leader and the energy, hunger, and ambition of a challenger. Let’s put it that way.
And we also feel that the focus of the organisation should be… clients should be able to see that one plus one equals more than two, in the short to medium term. Which means that I am going to focus, I am going to double down in terms of cross-selling and upselling. The beauty is, I’ve got 750+ clients, across the two erstwhile organisations, which is all part of LTIMindtree, and only a handful, ten or so clients, where we have strong relationships from both the organisations, and are not working in the same areas – so it’s quite complementary. Which means that I have 700+ clients where I have the opportunity to cross-sell and upsell. And, of course, as I described the transformation journey the clients are on right now, if I can help them, in terms of both playing on the cost efficiency side, as well as the revenue enhancement side, which is the transformation. I think that’s a great opportunity, for me.
So, to your point, I think we want to scale, but want to maintain the nimbleness and the agility, we want to ensure that we can work at the pace of the client, but at the same time do a significant amount of cross-sell and upsell, over the next one or two years, which will help us in terms of solidifying those relationships, and increasing the share of wallet in those clients.
Phil: So, final question, DC. If you could change one thing in this industry right now, what would it be?
DC: Rather than saying just one thing, I’ll talk about two things. One is our behaviour. This is an industry which everybody is proud about, and everybody is benefitted by this industry, in some shape or form, countries, individuals, organisations. I think it also adds a lot of responsibility to us, which means that we have to act with integrity, we have to act with responsibility. I think, given the fact that we have gone through the pandemic, I think we have really acted with a lot of responsibility, we have been very, very innovative – hybrid working, all these things have come into play, but even going forward we need to ensure that we don’t get prone to any bad behaviours. Because, you know, bad behaviours can kill this industry, like we saw so many ransomwares, and all those things. So we have to also be careful, as we are working in this industry; everybody in this industry has to really be at the highest level of integrity and ethics, and ensure that there is no bad behaviour. That’s one thing.
And the second thing, from an industry standpoint, I think the next wave is going to be more IP, and platforms, and SaaS. And if that is the case then I think, going forward – though we have been talking about it for a while – what I really want to see is IT delivering through business outcomes, so you can relate the business outcomes to the work that you do. I think, if we can do that, that is something which will be very fascinating to see. I’m not saying that it is not happening – it is happening in pockets, but I want it to become more pervasive as we go along. And that should be the aim for everybody in this industry: How do you drive the business outcomes in a very tangible fashion, and how can you relate those two things?
Phil: Okay. Very well answered, DC! Well, this has been fantastic. I really, really enjoyed our conversation and can’t wait to share it with our network.
DC: Thank you, Phil. Have a great day. Talk to you again soon and hopefully meet in India next time you visit.