Im wary of money that you did not work hard to earn

Written by Darlington Jose Hector | Darlington Jose Hector | Debojyoti Ghosh | Debojyoti Ghosh | Updated: Sep 30 2013, 06:51am hrs
It has been 18 months since Subroto Bagchi took over as chairman of the $435 million Mindtree, which he co-founded in 1999. The Bangalore-based mid-tier IT company, which has seen its share of tough times and seems to have ably weathered it, is now preparing for the next growth phase which involves scaling up despite the difficult times. Early last year, Bagchi filled in the top post at Mindtree, nearly a year after one of its co-founders and chairman Ashok Soota quit to start his new venture. Prior to his chairmanship, Bagchi spent most of his time grooming the next league of leaders at Mindtree. In an interview, Bagchi talks to Darlington Jose Hector & Debojyoti Ghosh about the challenges for the company and the industry, and how his latest book The Elephant Catchers draws from his experiences at Mindtree. Excerpts:

As far as Mindtree is concerned there were quite a few curve balls in the last ten years including 9/11, economic recession, chairman (Ashok Soota) leaving the company and other issues. How do you assess Mindtrees growth as its chairman, 14 years after its inception

I dont want to hold Mindtree as an example of scale, but we have scaled significantly. Today we have 222 customers and more than 20 nationalities working in Mindtree. In the last 90 days, Mindtree shares have touched its life time high more than three times over on the stock market. But the challenges of scale are still not over for Mindtree.

How do you see Mindtree picking up from those challenges and keep moving forward

The way I visualise Mindtree at 2020, I know there requires a whole lot of new scaling. Today we are almost half a billion dollar company and have chosen four verticals. Five years from now, not just each of those verticals have to scale at the same level, but we have to come down to micro verticals. The second aspect is related to globalisation. For me that means five years from now, in 20 parts of the world, 20 people not connected to your business in any way should say good things about you. Globalisation is about building a memorable company that feels local.

How have you implanted some of the things that you detailed in your latest bookThe Elephant Catchersinto Mindtrees growth

In the book I had to use Mindtree examples as this is my high sea rig, I take off and land from here. So Mindtree gives me legitimacy to say that everything I have written in the book. Also the crux of the book is that scale is not equal to volume growth. Sometimes you will not have volume growth, but during this time can you stop scaling intellect, reputation or people You need to build scale multidimensionally and work on all those factors simultaneously.

The depreciation of the rupee has been the story of the season. Obviously there are going to be benefits out of that for the software sector, but it will also drive cost. Please comment.

These are ugly benefits. Im wary of windfalls. Im wary of money that you did not work hard to earn. I got a mail from one of my top-three clients, who is coming in October for our usual reviews, saying that they are really concerned about what is going on in the country. They wanted to speak to people outside of Mindtree to build that view and picture of India. I dont want to sensationalise this, but we need to read patterns. We need to understand a simple thing that I cannot succeed, if India fails. And the danger is that today Indians are succeeding but India is not. The rich population is getting richer but the country is not succeeding. It is not a happy situation.

What is your view on the US Immigration Bill

I went to start Wipros operations in Silicon Valley in 1992. The Immigration and Naturalization Act (laws relating to immigration, naturalisation and nationality) was on the table even at that time. There was no issue absolutely to get a six months visa those days and you could extend the visa for another six months quite easily. From that time the immigration rules in the US have only got tighter and tighter and more conservative. At the same time the business has doubled and then doubled again. So water will find its own level. The driver for business is globalisation. So rhetoric apart, the fact of the matter is that the world requires software. You cant hold that back by regional approaches to immigration.

Do you think its fair to assume that Indian IT firms are threats to the US

I think you cant be an Indian company based out of India, for India, and build memorability. I was talking to a Mindtree customer in England. We have a long-time relationship with him. Once in a sobering moment he told me, You know what Subroto, the Indian IT industry here looks like a revenge to East India Company.

Is the image of India getting affected globally in the backdrop of atrocities on women and corruption

When visitors come to India, they pick up a national daily to invariably see two kinds of news on the front page: scams shaking up the government and violence against women. The scams tell them that we are a corrupt country. The reports on violence against women tell them that we are a lawless country. Now sum it up: corrupt and lawless country is what the front page conveys to a visitor.

Now lets get into his shoes: what would be our level of confidence, would we risk our capital here, would we do long-acting stuff here or would we be cautious, would we be opportunistic I believe we the nation, are trivialising corruption and lawlessness.

In the light of the weakening rupee, will Mindtree go ahead with its expansion plans

Are you also exploring the acquisition route

Last year, we drew up a plan to build Mindtree for 2020. The central idea here is to create a memorable company. The engagement with Bain & Co (management consulting firm), the subsequent verticalisation, the senior management reshuffle, large investment in infrastructure creation in Florida, Bangalore, Chennai and Bhubaneswar, a relook at the way we train entry-level talent, are all a part of that bigger picture. We are focused on these irrespective of what may happen in the short or medium term.

As far as acquisitions are concerned, we are continuously scouting. If it makes a strategic sense my recommendation is to go for it.

If Mindtree decides to go slow, then which are the projects that could take a hit

We are not going slow. The train has left the station...

...Or will Mindtree go contrarian, and invest heavily taking advantage of the rupee-dollar equation

What if the rupee goes the other way We are not running a slot machine here. We are growing a tree.

What plans about leadership transition

It is about taking verticalisation to its next level. The importance of giving a different meaning to globalisation. Transition is an inevitable thing. It has to happen and if we dont do that we wont be a relevant company in the future.