credoas he tells Sushila Ravindranath that he has never thought of India, US or Europe differently
Cognizant vice-chairman Lakshmi Narayanans project as a student of management at the Indian Institute of Science, Bangalore, was on the use of computers in corporates. Nothing could have been more appropriate, as the man went on to set up one of Indias largest IT companies. This was in 1975, when computers were used so infrequently that some companies just leased machines. Narayanan entered the industry when he was selected by TCS at a campus interview, the second-ever conducted by the organisation. In those days, TCS recruited 12 students from the IITs and two from IISC. We were a batch of 15. TCS did not even have a training centre in Bombay; I think they rented a room in BARC and taught us computers.
In those nascent days of the industry, Narayanan learnt programming and also to develop programmes. In 1977, he was sent to the US for a project by TCS, which was a pioneer in software exports. That proved to be a tremendous learning experience. One was interacting with people who were smarter, richer and who seemed to have a lot of money to invest.
When he returned to India the next year, he was given a major responsibility of processing investments for the UTI. Narayanan recalls how once he was hauled up for printing the wrong dividend warrants, mixing up the name of a member of Parliament. The then head of TCS, FC Kohli, told Narayanan to go to the UTI chairman and apologise. The UTI project was the highest volume of business that TCS had ever handled. With the project, Lakshmi got to be known as a man who could build large projects.
Moving on to still bigger things, he was sent to Switzerland in 1989, where he headed a project and also also set up the European offices for TCS. When he returned, he was posted in Delhi, but the city did not suit his sensibilities. This was when he decided to take up an offer from Dun & Bradstreet to move to Chennai to set up Cognizant. It was not an easy decision. His mentor Kohli would not take him seriously at first. Narayanan was, however, pursued heavily by D&B (then a $5 billion company), which was keen on establishing a unit in India for some of its development work. It was too big an opportunity to pass up.
Narayanan chose Chennai to locate the start-up, despite hailing from Bangalore. After various push and pulls, as he puts it, Lakshmi took the plunge in 1994. It was a start-up in the real sense with a very small office. In the first two-three months, I kept wondering what I had got into.
Today, Cognizant has a work force of 1,30,000 people and operates out of 40 locations, 16 of them outside India. Under his stewardship, Cognizant has been ranked on the Fortune 500 and Financial Times FT 500 list.
But this climb to the top was not easy. In the initial years, Cognizant did not take any outside work other than D&B. It was doing business between $1 million and $5 million. However, the employees wanted more. And D&B being a huge conglomerate, every year there were shake ups. People were constantly moving, which led to a lot of uncertainty. Besides, the Chennai operations could not attract good talent. By 1997, Cognizant was allowed to take outside work, just before it went public in 1998. The IPO was expected to raise $70 million, but it was during an investor conference in the US that the news of nuclear tests by India broke. The company ended up getting around $40 million. But this did not perturb D&B, as their investment in the Chennai operations was only $1 million. However, things started moving much faster after the IPO. As a public company, we learnt to stand on our feet. We had to master the art of selling. So we hired sales people. Thanks to D&B, some doors were opened. We started getting tier 2, 3, 4 kind of customers. For instance, we handled Pacific Stock Exchange, which is like
the Madras Stock Exchange, recalls Narayanan.
Cognizant pursued financial services and healthcare as its focus areas. In the first two-three years, Narayanan was the only one with any meaningful experience in the focus areas. It meant working very long hours and travelling incessantly. I had to learn to stop micromanaging. My colleagues told me that I was not letting go! Narayanan says he learnt to delegate only by early 2000.
Today, he is known as a peoples person who spots talent and nurtures it. He believes in making a significant investment in people. You need good people, which will help you get good customers. Though Cognizant is an American company listed in the US, most of its operations are run from Chennai. We have never thought of India, US or Europe differently. A vice-president is a vice-president, whichever part of the world he is working from, says Narayanan.
Kumar Mahadeva, vice-president of D&B, whose responsibility was to help set up Cognizant in Chennai, came in full time when the company went public in 1998. He was the chairman and CEO. Lakshmi was president and COO. After Mahadeva stepped down, Lakshmi took charge as the CEO in 2003. Under his leadership as CEO (2003-2006), Cognizant became the youngest IT services company to reach the $1 billion revenue milestone. The same period saw Cognizant triple its revenue and net profits and enter the NASDAQ 100 and S&P 500 index. The company has overtaken Wipro in quarterly revenues, and also Infosys US revenues. It is close to catching up with TCS in the US.
However, Narayanan remains genuinely self effacing and tends to underplay all his achievements. It is all about teams working together and every individual taking pride in his company, he says. A firm believer in succession planning, he became the vice-chairman in 2007 when Francisco DSouza took over as president. There is no confusion. Only one person can be in charge. We dont believe in management by committees. His role is now to provide continuity.
He guides strategic programmes around customer advocacy, education, training, and leadership development. He is also deeply involved with CSR activities of the company.
Now that he has more time, Lakshmi is actively involved in mentoring young people with entrepreneurial ideas. He is on the board of National Skill Development Corporation, among other things. Cricket is a great passion and he fondly remembers meeting Sachin Tendulkar in Bangalore and getting an autographed bat from him. Building model trains, driving Japanese and German cars and comparing them are his other hobbies.
Vice-chairman, Cognizant Technology Solutions
Date of birth
- March 10, 1953
- Married, with two daughters
- Bachelors in science
- Masters in electronics, Indian Institute of Science, Bangalore
- Masters in business administration, Indian Institute of Science, Bangalore
Awards & positions
- Inducted into New Jersey
High-Tech Hall of Fame in 2006
- Former chairman of NASSCOM
- On board of Indian School of Business
- President of The Indus Entrepreneurs (TiE), Chennai Chapter
- Chairman of ICT Academy of Tamil Nadu (ICTACT)