TCS deserved to go public much earlier: S Ramadorai

Subramaniam Ramadorai took the reins at TCS in 1996 when the Indian IT industry was on the cusp of a quantum leap in growth and globalisation. During his 13-year watch, TCS became the first billion-dollar IT company to come out of India, even though it only went public in 2004, more than a decade after companies like Infosys had stolen the thunder in the stock market. Now, two years after his retirement, Ramadorai reflects on the challenges he faced and how he overcame them, in his book that’s just been published, The TCS Story... And Beyond. In this interview with DNA, Ramadorai fleshes out some key takeaways from his TCS experience.

You’ve written about how you changed the TCS tagline from ‘Beyond The Obvious’ to ‘Experience Certainty’. What was the logic behind this change?
We felt we had to clarify the obvious in some way, because obvious was obvious to us but not to the customer. People went haywire in talking about the future, future and future, when you had not even created the future. So we were in two extremes: one was stating the obvious and looking inward, I know what I’m good at, this is what TCS does; the other way was to say, let’s define the future, in three words — Innovation, Technology, Consulting. Then we saw that 100 companies do the same thing (innovation, technology, consulting). It doesn’t communicate anything that is unique about TCS. So we hired a global branding company to interview a bunch of people and come back to us with a definitive statement that exactly describes the TCS DNA and that is easily understandable to everybody. The key thing that came out of all these deliberations was that these TCS guys deliver what they promise and they don’t promise what they can’t deliver. Out of that came ‘Experience Certainty’.   

On the business side, it seems to have suited Tata Sons from an accounting perspective to run TCS as a subsidiary until finally you had your IPO in 2004. On hindsight, do you think you would have been better off if TCS had entered the market 10 years earlier, along with its peers like Infosys and Wipro?
We always had this debate. It’s not as if we decided in 2003 to go public in 2004. It was a continuous journey of looking at what was good for the parent, what was good for TCS’ growth, and what was the right thing to do. It is true we were not getting the visibility we should have had. We had everything that was required for us to be listed earlier than a lot of other companies because we had been in the industry much longer than them. But it was a constant process of dialoguing with the owners, Tata Sons, and coming to the conclusion that we will do it when the time is right.

Did this not rankle, and did you not lose good people who would have been attracted to the stock options on offer at companies like Infosys?
For new people joining, it would have made a difference, as they might have felt they were getting an option there whereas in this company they were getting only a cash reward. So to that extent, yes, there were some implications with regard to attracting the right people into the organisation.  But nobody left because they were getting stocks elsewhere. They left for a couple of reasons, and we did a very scientific job of analysing attrition when it happened: first, people went for higher studies; second, people wanted to migrate abroad. In some cases, we even went to the extent of seeing in which projects there was more attrition, and how the leader in that project was mentoring, because there was a feeling, if this person is in TCS then I must join that team because I can learn a lot. Or if this person is my leader, then I must run away... (laughs)... That happens, right?

You’ve said you almost walked away from TCS because you had a difficult boss, your predecessor as CEO, FC Kohli. How did you cope with this?
You cope with it in multiple ways. You want to see if there is a learning component beyond a person’s external mannerisms, appearance, or the way they communicate. Beyond that there may be an intellectual who is an amazing person. How to extract that knowledge is your challenge. But I think a lot of people get shy or scared with a boss who may have a phenomenal amount of knowledge but is very difficult to interact with. The challenge is to get over that exterior until there is a comfort level for both.

You obviously succeeded at this because he recommended you for the CEO post...
(Laughs) I think both of us succeeded.

But after you took over, you changed the management style in favour of a more relaxed, collaborative work environment...
I didn’t change it because of that. I changed it because the organisation grew drastically. If I had adopted the same tactics (as Kohli) with 500 persons reporting to me, it would have become impossible to give enough time to anybody. So empowerment is something I had to do.

Surely it must also have had something to do with your personality being different, less autocratic...
It’s a combination of multiple things. You have to be willing to let go and that is very, very critical. The best thing is that I could get ideas very freely exchanged.

You even brought in a Harvard professor, Pankaj Ghemawat, to sit in on your think tank sessions. Could people speak openly in front of an outsider?
That’s why an academic is a lot more exciting in that kind of a situation than a consultant. An academic can draw people out. I’m not saying every academic is like that, but he was the right person.

You say in your book that when TCS was looking to expand its portfolio, Ghemawat sounded a note of caution — that “the core business of TCS is a thing of beauty, and not the kind of thing you find elsewhere…”
IT services was the core of our business and we never wanted to lose sight of that. That was where the majority of the money was made.  So you cannot just drop that to go into adjacent businesses (like BPO, consultancy etc). We talked about six bubbles, which were the core and five more. The five others can also become billion dollar businesses in their own time, but don’t lose focus on your core. That’s what came from our deliberations with him (Ghemawat).  

And now, under your successor Chandrasekaran, is TCS again going through a transformation in its management style and business strategy?
I don’t think so, because we have grown together for so long. But if I am 66, and he is 46, it has to be accepted... (laughs)... that there will be some difference.