Cognizant is a $8 billion startup: Sridhar Thiruvengadam [Software & Services] [Times of India]
(Times of India Via Acquire Media NewsEdge) In the two decades since inception, Nasdaq-listed Cognizant has outshone its Indian rivals Wipro and Infosys. The New Jersey-headquartered firm is now inching up to TCS. In an interview with Sangeetha Kandavel, Chief operating officer Sridhar Thiruvengadam spoke about the hits and misses over the last two decades and what the future looks like.
Thiruvengadam, 49, has been with the firm since its inception and held many leadership positions across geographies and divisions. Here are the edited excerpts:
You have been with Cognizant since inception and have spearheaded some of its key segments. How has the journey been so far?
It has been a wonderful journey; growing from about 200 associates in 1994 to well over 166,000, and from $2 million (Rs 12.5 crore) in revenue to over $8 billion (Rs 49,700 crore) in 20 years.
During these 20 years, we have seen multiple changes-we transitioned from a captive to a third-party, from a privately held company to be a publicly traded one-and also seen multiple structural shifts in economies, businesses and technologies. But all through these changes, two fundamental cultural tenets have remained the same at Cognizant-customer centricity and employee orientation. In making every single strategic decision, we asked one simple question: "Is it in the best interest of our clients?"
Cognizant had brought in talent from other big firms such as Dun & Bradstreet (D&B)and McKinsey. What attributes did they bring in?
While we imbibed a number of powerful attributes from each of them, we created our own "one Cognizant culture." Specifically, from D&B we learned to think global, think big and act with honesty, integrity and transparency. And from McKinsey we imbibed the culture of meritocracy, where people advance based not on tenure or role, but purely on merit.
You have worked closely with all three CEOs. What were their strengths?
Among the many attributes that each one of them brought to the table, let me highlight one or two.
Kumar Mahadeva was a master strategist. During his period many of our core strategies-such as focus on a limited number of clients, industries and geographies, and our reinvestment philosophy (managing our operating margin in a target range of 19-20% and reinvesting the excess back into the business)-were defined and implemented.
Lakshmi Narayanan's ability to nurture an army of leaders and scale the company with great operational discipline is legendary. Francisco D'Souza embodies the power of reinvention. Every few years, he has reinvented himself-and thereby Cognizant. Frank has the spunk of a serial entrepreneur and venture capitalist rolled into one.
What's the broad sentiment like, in your biggest markets?
Secular shifts in the economy, business and technology are forcing enterprises to re-examine how they operate. They have realised that merely incremental levels of performance efficiency are no longer enough. For them to position their businesses better for longer term success, it is imperative to conceptualise, architect and implement new-and increasingly different-business capabilities that help challenge the status quo, drive fundamental innovation, and unleash new potential across organisations.
How has the employee value proposition changed over the years?
Companies are made great in part by how their employees feel about them. In the drive to scale newer heights, what ties employees to Cognizant is a sense of not just contribution, but participation in the organisation's growth. The promise of well-defined career paths, unique learning opportunities, and experience of working with marquee clients around the world attracts top talent to Cognizant and helps the company retain that talent.
One of the cornerstones of our human capital philosophy is to share the rewards of our success with our employees. That we translate our industry-leading growth into enviable opportunities for our employees is well known.
Your over-reliance on North America is something that industry watchers criticise you for...
That is a question of the past. We did begin with a focus on the North American market because it was-and still is-the largest IT market in the world. Organisations in North America are traditionally aggressive adopters of technology and generally have more mature global sourcing programmes.
But today we are also growing rapidly in Europe, Asia Pacific and Middle East regions on the back of our differentiated value proposition. In the September 2013 quarter, our revenue from Europe, Asia Pacific and the Middle East was approximately $2 billion ( 12,500 crore) on a run rate basis.
The acquisitions over the years-how have they helped?
Our "tuck-under" acquisitions have helped us expand our geographic footprint (for example, Galileo Performance and Equinox in France, and the six companies of the C1 Group in Germany), complement and enhance our solutions spectrum (for example, CoreLogic in mortgage processing and Invensys Operations Management in industrial manufacturing), and strengthen our domain, consulting or analytics capability (for example, our acquisition of marketRx in analytics and PIPC in program management). Our strategy is to acquire for "capability" and not capacity, because at our size and with our proven recruitment and talent management programs, we can deliver to almost any client need at scale and grow fast organically.
The firm started its journey as a startup. Does Cognizant maintain the same culture?
Despite our size, we are an $8-billion startup. We behave like that-entrepreneurial, nimble, collaborative, and agile.
Our model is built to ensure that our associates are empowered to take charge of a part of the business, act like mini-CEOs with a customer focus, and think about innovating to achieve that goal.
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