Harnessing the Power of Scale

With fiscal year 2015 revenues of $15.5 billion and a three-year compound annual growth rate of 26 percent, Tata Consultancy Services (TCS) is among the fastest-growing IT-services companies in the world. The company’s current market capitalization exceeds $80 billion, making it the most valuable company in India. Employing more than 319,000 consultants, TCS is the largest private-sector employer in India, and it has the highest retention rate in this globally competitive industry.

A tireless traveler who is always willing to meet face-to-face with customers, Natarajan “Chandra” Chandrasekaran is committed to the company’s customer-centric culture, reputation for high service quality, and tradition of innovation. Corporate responsibility and sustainability are also important to him—particularly in the areas of education, the environment, and wellness. TCS has created health care solutions for charitable hospitals to help them improve the level of patient care and make more efficient use of their resources so that they can treat more low-income patients.

Recently, Chandra sat down with Janmejaya Sinha, BCG’s chairman of the Asia-Pacific region. Edited excerpts from that conversation follow. 

You run India’s most valued company: it employs the most people and is the most global of India’s companies. An organization depends on skill and talent. How do you lead an organization of more than 319,000 people? How do you inspire such a large group?

Scaling has been one of the hallmarks of how we have grown. What I have learned is that we’ve got to see size more from the point of view of scale than largeness. The moment you think large, all the negativities set in—bureaucracy, lack of agility, and so forth. I believe that in our industry, if you have the scale, you’re able to do many things. You’re able to offer a full line of services to clients. So I look at it from that perspective. And how do we go about doing that?

I came up with this structure several years ago. It basically tries to break up the company into smaller units, and each unit is led by an important leader or the leadership team. This gives them the flexibility and agility to be able to run faster but, at the same time, not lose the collective part of the company. A group of people—25 to 30 of us—form this leadership team, and together we run the company as smaller units, but we also collaborate very, very effectively.

Running a company this large, you have the first level of 25 leaders and then the next levels. What do you look for in leaders within TCS?

There are several qualities, and no one has them all. But if everyone knows how we should behave, that makes it easy. For example, teamwork and collaboration are extremely important. If a request comes from a colleague, we should take that request very seriously and at least give it the same priority as our own—if not more. We look for people with passion and high aspirations. Passion, energy, and high aspirations are very important. Then, a set of common core values like dependability and honesty; how they approach people; whether they respect other people.

You once told me something that I often quote: The human brain has a CPU and a RAM, and once you get more senior, you have more CPU and less RAM. Youngsters have more RAM and less CPU. So you have to keep combining them. How do you combine them, the young and the more experienced?

Young people know more about today’s technology. That’s a fact of life. Trying to outsmart them or out-move them is wasted effort. You’ve got to work on what you are good at. The managers and the architects we have are more experienced. They know how to combine the technology for business and what works in business. They also appreciate the fact that just because you have good technology doesn’t mean that things will work. You’ve got to let the young people bring all the technology, but the senior people provide the practicality and the business context.

Roy Amara once said that the impact of technology is overestimated in the short run but underestimated in the long run. You head a technology company. You help others with their technology solutions. What has technology done for TCS internally?

That’s a very beautiful statement. I hadn’t heard that before. It’s not that technology can’t make an impact in the short term. It can. But with persistence, it can make a bigger impact in the long term. So I think it’s absolutely true. When we talk about new technology, we have to realize that it must go hand in hand with business processes, change management, and talent. Unless you get it all right, you can’t get optimal impact. You can get some impact, but you’ll never get the full impact.

You lead a busy life, with competing priorities every minute of the day. How do you find time for yourself, your family, your interests, and your company? How do you prioritize?

I used to worry about this a lot in my early days, how to manage the work-life balance and so forth. At some point, I realized that life is all about doing things that you make a priority. I have a single list, actually. I don’t try to manage a personal list, a work list, a health list, et cetera. If I need to spend time on my health, I slot in running, which I love. If today is an important day for my family, then that’s at the top of the list.

As long as you make a single list and try to do what’s important, I think you’ll find that you have a lot of time, more time than you really need. Otherwise, your time fills up with many activities that you really don’t have to do.  

When you look ten years out, what do you see as the biggest challenges for TCS?

I think TCS has reinvented itself multiple times over. First it catered to the India-based model, and then it globalized the model. Then it expanded into a strong set of service portfolios. It learned to scale. It bought up and defined what the industrialization of software services can look like. So many things it has done by evolving itself. When I look at the next 10 or 15 years, I know that the technology and the pace of change will be far greater.

We’ve got to have the humility to say that we aren’t going to be right all the time. We want our efforts to be right most of the time, but when we know that we are not right, we should know how to change course—and then run faster.

Finally, describe the legacy you want to leave. What do you want to be remembered for?

I’m extremely fortunate to have this job in this company: from a country perspective, from an industry perspective, from a company perspective, from the people I work with, the group I work for—it’s just a phenomenal opportunity. I hope I can do it justice and can make an impact on customers, shareholders, employees, and society. I’ll strive hard to do that, and if I can have a meaningful life and be happy about it every day, I will feel blessed.