Building An Indian Outsourcing Leader: MindTree CEO KK Natarajan (Part 7)

SM: What kind of revenue levels did the AIG deal let you obtain?

KK: It was about $16 million in revenue. Unilever was another client who came into the picture around the same time as AIG. Today we have work all over the world just for Unilever.

SM: What was your revenue ramp in 2003–2004?

KK: We expanded our services, including R&D services. We started consumer electronics, storage, computer and communication devices and industrial appliances. In the technology space you need to know the customer’s business and the functionality they are trying to build into their products. On the enterprise side we need to provide a broad range of services.

We had strong revenues, but starting any practice is $2-$3 million. We were also expanding geographically as well. We moved into the United States. We moved into Europe. We started in Singapore, Australia and Japan.

As we expanded the services we were at $16 million, then $29 million. After that, the advantages of all of the expansions I just mentioned became evident. We jumped from $29 million to $56 million, and that was followed by $101 million in year six. Our initial target was to accomplish that in five years, but when you consider the slowdown that happened with the dot-com bust, our results are certainly acceptable.

SM: What year was it that you actually achieved $101 million?

KK: That was in 2005. Our revenue ramp kept up, however. The following year we did $156 million. Last year we did $192 million.

SM: When did you go public?

KK: Initially our goal was to go public when we reached $100 million. We listed in March 2007 when we were forecasting $137 million.

SM: How many people did you have in the company at that point?

KK: About 4,000.

SM: Now you are facing the real competitive dynamic of the Indian economy. How do you handle that?

KK: When we had 250 people we collectively evolved our values. Our values embrace caring for our people, customers and investors, being a learning company, being a high-achieving company, sharing both wealth and knowledge, and being a socially responsible company. All 4,000 people had options in the company.

SM: Did that help you preserve the talent base?

KK: It certainly did.

SM: How do your attrition rates compare with the rest of industry?

KK: This industry runs as 21%. In our early days we were below 10% and in the last two years we have been in the 12%-13% range. People acknowledge us for our people practices. We are the only company that consistently comes out as one of the top companies to work for year after year in all of our practice areas.

SM: Where do you go from here?

KK: We want to be a $1 billion company. We are also looking to be among the top 20 admired companies in our field of business. People want to work for admired companies. We want to be role models in leadership development.

SM: At what point did you switch CEOs?

KK: Our philosophy has been to develop flexible and creative teams which engage their area with the same level of passion. We need those teams to have leadership that matches their passion, and we needed to have someone who could step back and look at the overall strategy of the company. Ashok decided to become the executive chairman and look after strategy. Subroto used to be the COO and he is now called the gardener. He goes to our top 150 minds and helps them become better individuals and professionals. He helps us create a high level of internal leadership. I took over the operating responsibilities as the CEO.

SM: This has been a great story, let’s keep in touch.

This segment is part 7 in the series : Building An Indian Outsourcing Leader: MindTree CEO KK Natarajan
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