‘Our order book is $1 bn; rolling out salary hikes’
chief executive officer (CEO) and managing director (MD), Mindtree, had joined the IT services firm about 17 months back, when it was facing a leadership crisis and L&T had acquired it. A few months later, the coronavirus pandemic struck, creating a lot of uncertainty for the industry. But a lot has changed in the company under his leadership since then. In an interview with Peerzada Abrar, Chatterjee says that in the first nine months of this financial year, Mindtree reported strong deal wins touching $1 billion in terms of order book. Edited excerpts:
How do you see the company’s business performance?
This quarter has been pretty good for us. We had a broad-based profitable growth. Revenues came in at $274.1 million. Traditionally, this is a seasonally weak quarter. But we had a 5 per cent sequential growth and our Ebitda came at 23.1 per cent. This was also significantly high than the previous quarter. The growth was broad-based across industry verticals, geographies and service lines we operate in. We built a strong pipeline and our order book has been healthy. In the first nine months of this financial year, we touched $1 billion in terms of order book. Clients have been satisfied. We have now reached a stage where we are ready to accelerate our growth in the new normal.
You joined
Mindtree in late 2019 at a critical time when it was facing a leadership challenge and was acquired by L&T. What was your strategy to overcome these challenges? The situation where I got in was
very unique and challenging. I had to figure out a way to fix it. We came out with some shortterm immediate and medium-tolong-term measures. We formed a large-deals team. We wanted to create certain deals which are more multi-year ones because that was something which was lacking in Mindtree at that time. The CEO-1'S leadership team was all gone by the time I came in. So, I had to completely rebuild the leadership team. I decided that I will hire leaders from tier 1 organisations. I wanted to have a leadership which has seen growth and knows how to scale. Now, the entire leadership is in place with experience from tier 1 companies. Also, the strategy was, this company had reached a billion-dollar mark (revenue) over the last 20 years. So, there must be some good things in it. Rather than reinventing the wheel, I tried to understand the key strengths of Mindtree. Then my strategy was driven around how to leverage the strengths and build further on that but at the same time stay focused in terms of our efforts over those specific strength areas. That is how the 4x4x4 (strategy) evolved which is the 4 geographies, 4 industries and 4 service lines. I feel confident that the challenges I saw almost 17 months back are over. Now, it is more about accelerating growth in the new normal.
A few months after you took over as CEO, the coronavirus pandemic struck. What was your strategy to deal with the pandemic?
The first thing that crossed our mind during the pandemic was that we need to ensure that clients are safe and we can still deliver for them. At the same time, Mindtree Minds (employees) are safe and we can assure their safety and health needs. We also had a peculiar situation where a lot of Mindtree Minds had to be brought back from onsite locations to offshore because some clients, especially in the TTH (travel, tourism and hospitality) sector, started ramping down. It was very challenging. We set up a war room. The first focus of this was to make sure that those (employees) who need to come back were brought back safely and second was how do we (start) work from home (WFH).
What has been the impact of the pandemic on the industry and for Mindtree, in terms of acceleration of technology and winning large deals?
The pandemic has taught customers that you can really work with a company like Mindtree and you can do offshoring as long as you can cover all the risks. During the pandemic, we actually closed the deals where we did not have any physical interactions with clients.
“WE ANNOUNCED EARLIER DURING THE PANDEMIC THAT WE WILL DO THE NORMAL PROMOTION CYCLES –WHICH WE DID. WE ARE ACTUALLY IN THE PROCESS OF ROLLING OUT INCREMENTS ACROSS THE ORGANISATION” DEBASHIS CHATTERJEE
CEO & MD, Mindtree
How are you preparing your employees for such scenarios and motivating them, including giving salary hikes?
We have been strongly focusing on reskilling because if you look at the last 2-3 quarters, our utilisation has gone up significantly.
Last quarter it was almost 83 per cent. We now have the ability to hire more and the bench would increase over a period of time to some extent. We also announced earlier during the pandemic that we will do the normal promotion cycles –which we did. We are actually in the process of rolling out increments across the organisation. The current percentage of Mindtree Minds working from home is 98 per cent. Some people will have to come back to office and a hybrid work model will emerge.
How do you view impact of the new Biden presidency on the Indian IT industry, including issues such as H-1B visa?
From Mindtree’s perspective, we have always been more reliant on local hires. If you look at our US employees, more than two-thirds of the staff members were hired locally. So, dependency on H-1B visa is relatively low in our organisation.