It’s time to make Sanjay Jalona a services household name in the IT services industry. He made the jump from leadership positions at Infy to CEO and Managing Director of LTI in 2015. When I pulled up their stock chart I had to rub my eyes – thought for a moment that I was looking at the acceleration of COVID across the globe. But no, that’s the 5-year snap of LTI’s stock growth. Sanjay has lead LTI through an IPO in 2016 to continued momentum in growth across capabilities today.
The COVID landscape has created massive pivots across the industry, so I was deeply curious where he was taking risks and deep dives for the future – as he will say, the capabilities where he’s “throwing the kitchen sink.” And speaking of the kitchen sink, we touch on everything from leading and learning with Shoshin (a beginner’s mind) to the positive changes sweeping India. Let’s begin:
Phil Fersht, CEO and Chief Analyst, HFS Research: It’s great to see you again, Sanjay, and have you join us for an HFS conversation. This is the first time we’ve had a “live” discussion, so it’d be great to have you introduce yourself a bit to our network – a little bit about Sanjay Jalona, how you ended up running a business like LTI, and a bit about how you started out. Did you always want to do this, and was this what you dreamed of? And then we’ll talk a bit more about the industry and where things are going there.
Sanjay Jalona, CEO and Managing Director of Larsen & Toubro Infotech (LTI): It’s always a pleasure to talk to you, Phil. I grew up in a small town, up north in India – six hours’ drive from Delhi in the foothills of the Himalayas. My father worked for a pharma company all his life. I studied there in a Hindi Medium school, and then went to study computer science at BITS Pilani. After that, for the last three decades, I have been involved in nothing else but the technology business.
So, I guess I’d reckon that I would completely be useless outside this industry [laughs]
I have done a lot of coding in my life; I have run delivery functions; I have run large, critical programs for our customers, so I have traversed both sides. I have been here at LTI for over five years now – time flies when you’re having fun, right? – but for the 15 years before that, I was at Infosys.
“I have been very lucky, for the last three decades, to work with great, great leaders and mentors.”
I have been very lucky, for the last three decades, to work with great, great leaders and mentors. I started my career at Wipro, and I got a chance to work with some of the brightest leaders there. Then I worked with a lot of leaders at Infosys: Kris, Shibu, Nandan, Mohandas Pai, BG Srinivas, Ashok Vemuri, and the likes, a very close association, and I learnt a lot from them. It was a great, great experience.
“The world was changing dramatically; the digital technologies, or exponential technologies, as I call them were coming into the fray, and there was a need for a new kind of a tech company, a solutions company. And I saw that as an opportunity…”
I thought I would retire from Infosys, frankly, but, lo and behold, there comes a time in everyone’s life when you say, “What next?” The world was changing dramatically, the digital technologies, or exponential technologies, as I call them, were coming into the fray, and there was a need for a new kind of tech company, a solutions company. And I saw that as an opportunity and met with Mr. A. M. Naik. I went with the simple mindset to go and meet an industry stalwart; I had no interest in leaving Infosys at that time, but you just cannot meet him and not be influenced!
I have worked with some great people who have built India in a definitive way, and I have enjoyed every single day of my work and life here. I thought CEO would be a lot easier, but we have seen so much happening in the last five years; the onslaught of exponential technologies, Brexit, COVID, all kinds of problems all around the world, the protectionist environment. There’s not been a single dull day, ever.
So that’s who I am. I’m grateful to be surrounded by great people. If there’s one thing that I have learned, very early in my life, it was that leaders have to have at least three – if not four – people who could potentially replace them at any given point in time. And I’m so blessed to actually have what industry experts have called a dream team, and we have stuck together. I’m lucky to be working with them to bring the company to where it is now.
So that’s who I am in a nutshell.
Phil: Fantastic. So, you’ve come through some of the biggest names in the industry, you know, I recognize a lot of the people you’ve spoken about, like Shibu, and, in particular, Nandan. What did you learn from these guys that you took into LTI and maybe tweaked a little bit? What did you take from the ingredients from these earlier champions in this industry that you felt you could infuse into the firm you’re in now?
Sanjay: Many things, Phil. Some 25 years back, I was at Wipro and overseas somewhere. I think I was in the US, and Premji had come visiting. And I was really a newbie with three or four years of experience and was finding it challenging to schedule executive meetings for him. He turns around and says, “I’m happy to meet the Project Manager. He is the one who’s putting the bread on the plate.” So that kind of humility is the first thing that you learn when you get into the professional world.
“Humility is the first thing that you learn when you get into the professional world. …And frankly, you learn a lot from very difficult bosses…. Dealing with being flexible, learning in the most difficult situations, and working with customers to find solutions are some of the things that I learned from these mentors.”
High aspirations, building teams, and working with limited resources, to get the best out of people is what I learned at Infosys. And frankly, you learn a lot from very difficult bosses, as well. Right? So, dealing with being flexible, learning in the most difficult situations, and working with customers to find solutions are some of the things that I learned from these mentors.
Phil: Interesting. And then let’s get to 2020. I think many of us feel that we learned more in 2020 than ever about ourselves and our qualities, and maybe where we need to improve, as well. Do you feel last year has been the biggest learning year for you as a leader?
Sanjay: Oh, in many ways. I think we are frankly rediscovering, or have rediscovered, some dimensions of us that we never knew existed. If you were to ask me if I felt the same way in February/March last year, when COVID actually hit the first time, I would have never imagined that we would be here. There was a sense of panic. I was truly scared at that time about how we would keep our promises? How would we keep our employees safe? How would we grow? If you are a publicly listed company, you are expected to grow. And none of us had ever experienced anything of this sort in our lives before. We had never seen this before.
I think there was great character shown by “LTItes” going that extra mile. We had cases of people picking up their computers in the middle of the night, a seven-months-pregnant lady coming at midnight; there are people ferrying computers all over the place; there are customer calls, people following simple basic principles, like call five new people at 5pm, every day, for five days. This exemplifies the social fabric that binds us all together that has come to bear.
“We never thought we could connect with as many people as we are able to do today. There are days where I connect with four, five customers from all across the geographies. From a single click, I am connected more to people inside our organisation, our 30,000-people organisation, than I ever was in the last five years. So, there are lots of positives.”
We never thought we could connect with as many people as we are able to do today. There are days where I connect with four, five customers from all across the geographies. From a single click, I am connected more to people inside our organisation, our 30,000-people organisation, than I ever was in the last five years. So, there are lots of positives.
But there are things which you start to miss, as well. That social fabric that has bound us together. The individual productivity might be high, but we need ideas flowing in a setting where people are working together, they are fighting, they are arguing, and they bring their best to bear.
“But we need ideas flowing in a setting where people are working together, they are fighting, they are arguing, and they bring their best to bear… I think that energy is what we start to miss.
I think we have discovered that there are great characters all across, be it customers, be it employees, who have all come together to solve a problem and take care of one another, and I think that’s the big positive.”
I think that energy is what we start to miss, but I think we have discovered that there is great character all across, be it customers or employees, all came together to solve a problem and take care of one another, and I think that’s the big positive.
Phil: Interesting. We can talk about some of the challenges, but, I mean, we were predicting 8 to 10% decreases in the services industry back in March, and I actually think it’s been flat to a small growth increment this year, believe it or not. Despite everything, we’ve actually still grown the industry, and I feel very blessed to be in this space.
Are we lucky to be in this space? Do you think this will continue to be a blessed area, where companies will always depend on us? Or do you think this is commoditising and we need to wise up, and be prepared for tough times as well?
Sanjay: I think we are coming to the next phase of the growth curve, Phil, if I were to call it that, and this is definitely a dichotomous world today. On one side, you have a COVID-related impact; there are macro and microeconomic issues. But on the other hand, every industry and every company needs to operate in a new operating model. Insurance companies need to do remote insurance for people, and distribution of insurance, and digital claims. A bank needs to be able to digitally onboard a customer, you or me, without ever seeing us. A retailer has to have the ability to order online and pick up on the curbside.
“I think we are coming to the next phase of the growth curve, Phil…. But today, it’s about survival for everyone, so I think it’s opened a plethora of opportunities for IT companies to operate in.”
There are things which are required to be done for every single company. But today, it’s about survival for everyone, so I think it’s opened a plethora of opportunities for IT companies to operate in.
You are seeing industries that were typically B2B becoming B2C. You are looking at new operating models; you are seeing people looking at cutting costs so they can fund all of these. Cybersecurity gains even more prominence because people are totally distributed. This is going to lead to tremendous opportunities in fewer areas, cloud, and data, for example – two predominant things that come to mind in a very big way.
“Speed of execution is very important, but the most important thing is the ability to co-create with the customer. And if you don’t have the depth and the knowledge of that vertical, I think you will struggle…”
Speed of execution is very important, but the most important thing is the ability to co-create with the customer. And if you don’t have the depth and the knowledge of that vertical, I think you will struggle to have a discussion on what the target operating model for the customer would look like. And there are many verticals which we don’t operate in. This is not a good time to start in a new vertical because what would you go and tell them? But the depth in the verticals that we do operate in, I think there is room for doing more in our totally trusted advisory kind of a capability, co-creating the solutions.
It’s a great opportunity, but it’s very difficult to do this. It’s easier to do it in our asset base, our customers. It’s even more difficult to go outside that asset base and do that. And that is the tricky situation.
Phil: But is that because we’re only just getting used to the fact that we can actually build relationships with people on a video screen? I know it’s not ideal, but we’re going to have to get used to it for a while, and it’s easy with people you have relationships with, which takes me on to something else, which I think is very pertinent.
The one thing I see in spades from a lot of customer conversations recently is that decisions are getting made much faster, and they’re actually being made, and customers are executing now. Between 2010 and 2020, when cloud appeared and digital evolved, and AI, and everything… we spent a lot of time figuring out what is possible, but we didn’t really execute on it. It was a lot of time just figuring it out.
Suddenly, it’s, “Okay, all that great stuff we talked about, a lot of this now has to happen, and very, very quickly,” with the conversations on the client-side leading to a rapid, rapid desire to execute. I think there’s a focus on, “We need partners who can get us there. They don’t necessarily have to be the best or to have the greatest technology, but they need to be able to get us there. And they need to have the ability to do it fast and understand us as they do it because we need to operate in a cloud environment. We have to automate processes, so they function in a cloud environment; we have to figure out what those are, and then we have to then look at things like AI so that we can orchestrate those processes effectively.”
“Everything is sort of in a cloud model now; it’s much more standardised. …If you’re on the IT side of things, you’re spending more time trying to figure out how to apply this to what your business customers need than to figure out how to actually just make it work.”
Your business customers are trying to figure out, “What is it we do need? How fast can it scale? We don’t have to know how the technology works, per se, but we need to know how it enables these processes to run.” So, we’ve got this rapid change, from great ideas to speed, to get-it-done-fast-and-don’t-mess-it-up.”
Sanjay: Yeah, speed is very critical now. Very critical. And Phil, you’ve got to remember that companies that had adopted the cloud were able to go to remote working a lot less pain than people who had not adopted the cloud. Today, if you look at the kind of roadmap and the speed at which even regulated industries like banking, insurances, life sciences, etc., are moving in the adoption of the cloud, it is next to none.
“We have created a separate unit focused on AWS, a separate unit for Azure, and GCP, and we have taken all our investments… We want to divert the bulk of the investments for the company to all things cloud. The second area where we are investing bigtime is all on data products.”
This is where, Phil, we have created a separate unit focused on AWS, a separate unit for Azure, and GCP, and we have taken all our investments… We want to divert the bulk of the investments for the company to all things cloud. The second area where we are investing bigtime is all on data products. We have great IP in what we build, Mosaic, and Leni, which is an augmented analytics piece – really, really cool, you should look at analysing that.
“We believe there are great opportunities in the marketplace, so we have created these two new growth engines. Looking at COVID, we had to expedite this in a big way, so we are throwing the kitchen sink at these two ideas for the future.”
We believe there are great opportunities in the marketplace, so we have created these two new growth engines. Looking at COVID, we had to expedite this in a big way, so we are throwing the kitchen sink at these two ideas for the future.
Phil: And in terms of who clients are picking as partners now, it feels very different. “Brand” is kind of out of the window a bit now; it’s who understands us, who knows us, who can get us there. How are you making sure that LTI is on that final three trusted list with your key clients? Do you feel that you’re there at this point, that you’re in the place you want to be? Or do you think this is still a lot of jostling for position where everyone’s kind of looking at each other trying to figure out what to do?
“We want to be positioned very simply as small enough to care, but large enough to deliver… We strongly believe we have the depth in capabilities.”
Sanjay: We want to be positioned very simply as small enough to care but large enough to deliver. So as the deal sizes have shrunk, we strongly believe we have the depth in capabilities, and that’s the part on which we have seriously focused over the last five years. You would not find anybody who has probably built as many alliance partnerships, as many capabilities internally, or acquired six companies all on capability – none of them more than $15-20 million – but really creating a niche for ourselves. We were the first ones to build up with Snowflake, for example. We have the lead partnership there.
“If you have the capabilities, people will come to you. And, frankly, we like the positioning of the number one challenger. For us, growth is a lagging indicator; capability is the leading indicator.”
If you focus, if you build the roads, people will come on the roads. If you have the capabilities, people will come to you. And, frankly, we like the positioning of the number one challenger. For us, growth is a lagging indicator; capability is the leading indicator. Do we have the right capabilities?
Five years back, if you reflect, we had zero capabilities on core banking. Today, we are the second-largest partner in the world for Temenos, for example. Second largest partner globally. And this would not have been possible if we did not methodically go on filling up these white spaces, so to speak. And that’s what we believe we do well.
“Customers used to source for scale. But now, companies source for excellence, source for capabilities. And that is the difference.”
Customers used to source for scale. “Which company has the ability to serve me globally? Can give 5,000 people at any given point of time?” But now, companies source for excellence, source for capabilities. And that is the difference. This is a phenomenon that has changed in the last five years.
Phil: Yes. It’s been a rapid, rapid shift. And I think we will continue to have a tough winter during the next few months, I think people are getting savvier on the length of time it’s going to take for a big global population to be vaccinated, but at least we know it is going to happen, right?
Sanjay: Yes, exactly.
Phil: And 95% success probability. So, this means this situation will drag way into the latter parts of 2021. I’m hoping we open up a little bit, at least, because there was a period this year when we had some ability to move around a bit, but there’s a long time ahead for us here. This is a situation now where we have to look after ourselves and look after our jobs, and our friends, and everything. So, what should we do next? Because I sense a lot of people are getting fairly tired; they’re struggling. I spend most of my day trying to motivate people.
My 11-year-old son tries to motivate me. [Laughs]. But this has got a long period to run still. The good news is there is an end, but there’s still a long period to run, and I think we’ve held up amazingly well. Can we keep doing this? Or do you think there’s going to be some rough patches in the next few months?
Sanjay: You know, I hope this thing gets over a lot more quickly than probably what you’re pointing out, and we are at least able to meet people. We need a social fabric. There are kids who are starting colleges and who are starting their professional lives at this time. A lot of us have survived because of the connections that we had built earlier.
Lots of them have to build them still, to do well, and to understand who they are. So, life after COVID, I hope it starts very rapidly. But, frankly, there are a few things that I am concerned about. One is health. So, within our boundaries at LTI, I write a lot about people needing to find ways and means to exercise and eat healthily.
Mental health is a very big issue in these times. How do you connect with more and more people? We are starting some initiatives on mental health and the ability for people to call one another, having a central desk for people to call up, and so on and so forth.
“I am a big proponent of something called Shoshin, which is a beginner’s mind, and this is a great time for people to invest in themselves. How do you learn? How do you use this time to learn new capabilities?
It’s very easy to go to that next email rather than investing some time in yourself. So, I’m talking a lot about people creating “me time”…to learn new things at this time and to just connect and be there for one another.”
I am a big proponent of something called Shoshin, which is a beginner’s mind, and this is a great time for people to invest in themselves. How do you learn? How do you use this time to learn new capabilities? Because it’s very easy to go to that next email rather than investing some time in yourself.
So, I’m talking a lot about people creating “me time” and applying the basic principles of Shoshin, a beginner’s mind, to learn new things at this time and to just connect and be there for one another. It’s very important for all of us to do that. Frankly, I think productivity is very high because people are paranoid, but I think people need to have more than just work and focus on some of the things that I have just said.
Phil: Yes. Well said. I very much agree with some of this. And I’m not as pessimistic about next year as other people are. I think April, May, maybe June time is about the time I’m hoping to at least do a little bit of travel, a little bit more face to face. Just getting out and seeing people once or twice a week has been huge for us, by the way…
Sanjay: Well, I’ll tell you my thinking, Phil, on this. My wife decided over the weekend that she was going to book our vacation for next year. This is the summer before my daughter goes to university, and we are optimistic. We need to be optimistic! We have made a booking and will see what happens. Hopefully, we’ll still get to travel in the summer.
Phil: Certainly. So, we’ve spoken about COVID, and the industry, and things like that. Let’s look beyond that. We talk a lot about the new dawn, and the fog lifting – new ideas, new paradigms, energy, recessions end, and things replace them. What do you think, honestly, when this thing lifts, and we’re back in a world where we can do everything we want again? What do you think are going to be the differences from what life was like before?
Sanjay: Look, I don’t think we would ever go to 100% people working from the same offices, but I do not think it’ll be 70% or 80% working from home, either. There will be a hybrid model. It will allow you to get to the best talent which might not be able to come to locations, but I think it is important for us to have the exchange of ideas and flows there. We are not in an individual sport; we are a team sport. And it’s very important for people to ideate together to make this happen. So that is the first change that’ll happen.
It will create a gig economy. It’ll create the ability for people to tap out, you know, “Phil is an expert in some technology, which is good, but he lives in a nice, fancy place which he doesn’t want to leave and come to some part of the world where it’s required. But it’s okay, Phil can be tapped into this model, and it’ll be perfectly fine.”
“I think there is a big change coming for India, and I think it’s a positive change. …We have not created very many women leaders.
…They don’t need to have gaps anymore. They can continue to work even when they are pregnant or when they are working from home. We need to create an umbrella and an opportunity for them to do that. This should create a lot more leadership from women, and I think the world will be a lot better place…
As the COVID response itself has shown us, that wherever you have women at the top, the response has been far stronger and far better.”
I think there is a big change coming for India, and I think it’s a positive change – and I’ve talked very passionately about this. I think one failure if I have to associate one with my work for the last 30 years, we have not created very many women leaders. And I think this gives an opportunity for women, who have a bigger role in India, because of lack of social security, and frameworks in there, where they play roles of not only professionals, but wives, and mothers, and daughters, and daughters-in-law, and a lot more responsibility falls on their shoulders.
They don’t need to have gaps anymore. They can continue to work even when they are pregnant or when they are working from home. We need to create an umbrella and an opportunity for them to do that. This should create a lot more leadership from women, and I think the world will be a lot better place… as the COVID response itself has shown us, that wherever you have women at the top, the response has been far stronger and far better. So, I think that will be a positive.
I think things that will not change Phil; if you have a story to tell a customer, the value definition might change, but value creation will not. Customers will always find the money for you to work on that. That will never change.
“I think being passionate about clients’ success is never going to change. …We are in a people industry; valuing our own people is never going to change. I hope one thing will change is that we start to think in a much more unconstrained way.”
I think being passionate about clients’ success is never going to change. It might morph itself into something different. We are in a people industry; valuing our own people is never going to change. I hope one thing will change, is that we start to think in a much more unconstrained way. You know, humans, and more so probably the IT industry, think in a much more constrained way than we should, and hopefully, all of us have had some downtime to think about things that can dramatically change for all of us.
Phil: That’s wonderful. Well, I think we’ve conducted a lot of conversation, and I really look forward to sharing this with everybody. I think it’s been fantastic to hear your views, where you came from, where you want to go, the challenges, the opportunities, and Shoshin, and some of your values as well. I’ve really enjoyed hearing from you, and I’d love to catch up again with you soon because we have some great stuff coming out of our company. And maybe, when it’s nice and sunny again, I’ll be back, hopefully, stateside, and we can have a chat in person.
Sanjay: I look forward to doing that, Phil. I’ve really enjoyed our conversation, and we hope to build an even greater partnership.