January 2001. We were running full steam ahead with e-Business implementation work in the U.S. and India. Work was flowing in nicely. We were busy building infrastructure and channeling organizational value clarification. The company had exceeded its fiscal target handsomely and the thinking was clear that the next year we would double our numbers. It was also a time to rethink the offerings on the enterprise side of the house. Being a pure play e-business company was not going to scale. On one hand, e-business was promising to become ubiquitous. On the other hand, as dot coms were fizzling out, large enterprise customers were asking for a basket of competencies and not just niche capabilities. We were seeing the need not only to expand our portfolio but also to prepare for the next round of growth and geographic expansion. In order to make all of this happen, the time had come to think of a second round of funding, and we set up an internal team to work on the same.
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Meanwhile, it was decided that the best person to spearhead our transformation from being an e-business company in to a full-fledged enterprise solutions provider was KK. So, he returned from the US and started the process along with the charter to set up Europe and Asia Pac. My wife Mita was just about getting comfortable in our newly constructed house in Bangalore but she did not even flinch when I came in one evening and said that we were to pack our bags and move to New Jersey. For her it was the twelfth such move since we married 23 years ago. For all our corporate bravado, where would we be without our spouses!
All this while, not a week passed without a globally recognized merchant banker calling on us to offer money. We were seen as the next great investment opportunity. For us, getting the second round funding was not the issue. Who to choose and how much to raise were the issues. We were confident that we would get a fair valuation. The process of getting the entire thing sorted out took longer than what we had thought it would. Though we began giving out the statement of interest in January of 2001, by the time we settled on the lead investor – The Capital Group and the coinvestors that included Franklin Templeton and the first round investors – it was already summer. Lawyers worked through the summer and finally the money hit the bank account in August 2001. During this time period, the stock market started declining and people began to talk about an impending global economic slowdown.
On the fateful day of September 10, 2001, the newly constituted board of MindTree Consulting met in Bangalore and looked at the new business plan. Everyone acknowledged that the world was beset with the possibilities of a slowdown but we did not think it would hurt our prospects beyond a point. The positioning of MindTree was real, our customer successes were beginning to convert themselves into references and plans for geographic expansion promised to open new frontiers beyond the United States, which was on the cusp of a slowdown. In the second round, we had raised close to $15 million. This was coupled with strong cash flows from operations – we anticipated that the money would be good for at least 2 years. The Board accepted our position and plans.
I had flown in to Bangalore for the Board Meeting and had decided to stay back for a few days.
Exactly twenty-four hours later, on September 11, I was busy with a group of young Business Analysts when Babuji Abraham walked in and said that a plane had just crashed in to the World Trade Center. I went to see the CNN site – the event was still unfolding and I did not have enough data to fathom the situation. Shortly after, we all went out to have dinner at a nearby apartment where the Business Analysts were staying. I walked in there and asked them to switch on CNN—only to see, in real time, the second plane hitting the WTC building. In that moment, I realized that this was much more serious and larger in significance. The horror was quickly overtaken by panic as I remembered we had two MindTree Minds in the World Trade Center who were working on a project from Franklin Templeton. I rushed back to the office, called for an emergency meeting and had a video link activated with the New Jersey Office.
Prince Manuel and Jaya Prakash were in the second tower when the first plane hit. Some people were running down while others were taking the elevator. Jaya Prakash started running down the stairs. Prince took the elevator. Just as both were leaving, another plane hit the second tower, one more hit the Pentagon and a fourth crashed in western Pennsylvania. We knew that the events of September 11th had changed the world forever. But to begin with, we had to locate Prince Manuel and Jaya Prakash. After twelve hours of searching, we were relieved to determine that the two had escaped as the Towers collapsed. But the customer whom they were working with, Rod Wotton of Franklin Templeton Fiduciary Trust, died in the terrorist attack leaving behind his wife Pat and little daughter Dorothea. Only days after the tragedy, Pat went in to labor and on October 4, a baby boy named Rod was delivered.
MindTree Minds all over the world donated one day's wages and after tracing her in Middletown, New Jersey, I handed over the check to Pat Wotton. Though sympathy was pouring in from everywhere, the MindTree check had been the first real financial help that reached Pat. Driving back that night on the New Jersey Turnpike, I knew what lay ahead of all of us.
All new business came to a halt. The world had not prepared for anything like this since World War II. Worse still, most people in the current generation were not trained to handle anything of this magnitude. For us, the writing on the wall was clear: ahead of us was a long winter and we had to conserve energy.
In good times, you will be surprised how quickly you build up overhead. It happens innocently and it crops up all over the place. At the same time, people become soft on performance issues. For example, if a new sales person takes more than six months to bring in the first order, you justify it with a dozen reasons. If there is another person completely out of synch with the job requirements of her function, you tend to over process the matter at the cost of the organization. We all lose sight of the fact that we are spending investors' money and worse, we lose sight of the fact that ultimately, we pass on our inefficiencies to the customer through higher cost. September 11th was followed by rapid lay offs all around. Though we did not do a layoff it was as clear as day that we had to let go of people on whom we had been soft on performance issues. We did away with satellite locations in three places where results had not come even after nine to twelve months of operation.
In the U.S., we cut salaries across board by 10%. In India, senior managers volunteered for an additional 2% cut to keep certain people whom they would rather have retrained than let go.
Following September 11, the US bombed Afghanistan. The economic slow down became a full-blown recession and the world scaled back on all fronts. As the drama unfolded, India and Pakistan ended up having a serious border dispute and the world was concerned that the two nuclear rivals would end up going to a full-scale war. The western countries began pulling out citizens from the two countries and there was a travel advisory prohibiting U.S. citizens to go to India.
Back in the US, everyday that I went to work, I recognized the invisible layer of anxiety. It was as if the toxicity in the world around us was leaving traces inside and we needed to get the pent-up feelings out of us. It was not unusual— people in the office had neighbors who had lost family. Almost everyone knew industry colleagues who had lost their jobs. There was a pall of gloom, uncertainty and insecurity. In times like these, the workplace becomes an extension of the world outside. As a leader, I realized that we needed to talk – we needed to get people to talk. We needed to do some serious introspection at a personal level and at a collective level so that we could move forward. But to facilitate this, I needed help.
I requested Professors Raghu Garud and Roger Dunbar of the Stern School at New York to help our leaders do some "sense making" of both internal and external events outside and inside. Both Raghu and Roger had a long association with MindTree because of an on-going project we have with the Stern School. The project is called "Mindful Mirror". In this unique collaboration, these researchers use periodic dipsticks in MindTree and try to see how an organization is raised from the ground up, as a study of "potential success in the making". Their approach to the study is not interventional, meaning they are not "consultants". They take the inputs, put them in a relational database, do periodic sense making of the data and let us have the benefit of their reflections. Our understanding was that the Stern School would share the value of the research with the world, at a later time.
When Raghu and Roger came to facilitate the exercise with the leaders in our US operation, we uncovered an emotional low of a magnitude, which I had never seen before. As a backdrop to the exercise, I had asked each person to raise issues that bothered him or her. We collated the entire set before we went into huddle. The issues and questions that came forth were straight from people's hearts. When we read some of the questions, we realized how deeply uncertain people feel in times of upheaval. And these were the people who led employees in the trenches. It becomes critical to detoxify the workplace and the only way to deal with it is to face each question squarely, honestly and interactively. But first, look at a sample set of the questions – as they came:
"How long can the company survive as it is presently organized?"
"Obviously, the uncertainty surrounding continued employment is extremely stressful as I represent the single source of income for my family"
"I feel tremendous uncertainty about meeting our revenue and profitability targets. The numbers were ambitious 1 year ago, but with the nosedive our industry has taken since and the recent terrorist attacks, the stated goals appear impossible to achieve. While this is disheartening initially, I personally feel a sense of urgency to work as hard and as creatively as possible to bring in new business. I recognize that the process will be long and arduous but we don't have a choice"
"How will the actions in Afghanistan affect our business? Will India be perceived by ignorant US buyers as being "Middle Eastern" and hold a bias against doing business with that part of the world? Will US companies feel safe putting their data and systems in that part of the world?"
"How far will pricing go down and what final affect will this have on salaries?"
"Is the financial market being artificially propped up because of the federal interest cuts? Is the money from the interest cut findings its way back to the Nasdaq and artificially propping it up? [something akin to what happened in '97?] If so, is what we are seeing just the beginning of the downward spiral?"
"On a personal front, the apprehensions are: is US going to be the same place it was? [..in terms of neutrality and equal opportunity?] Are we going to see racism becoming predominant here...much like to the UK and other parts?"
"Is being *brown* going to have similar connotations as being *black*"
"Uncertainty of staying power: With so many companies going out of business and new business hard to come by, do we have the staying power to ride out the storm and ride the waves again"
"Will companies continue to spend on 'new software 'development?"
"Many many people are facing downturn for the first time. These same people -- now in their late 20s have been possibly the most pampered professionals in history. Everyone expected to be able to have the 'option' to buy a Lexus by their mid 20s. Now not only is all that history, they need to understand that if an economic Asst Professor at UCLA earns in the 70s, their is no reason that a Java programmer with 3 years experience should expect a 80K salary. The market was allowing this behavior in the past, but no longer. And people will have to become aware to the new reality. Where will MindTree be and what do we need to do to ensure that our future is secure?"
"'Keeping the Faith. Many people will question their careers, question the industry and question the company. How does one deal with it?"
"Suddenly making money from the software business is not all that easy. What does one do to change the dynamics so that one can again make profits?"
"How is all this affecting me? There is to some extent a sense of paralysis internally. I wake up in the morning and do not know what is the best way to use my time. So I feel that my productivity is much much less that what it should be. In these times, one needs to be even more productive not less."
So we assembled the leadership team in the New Jersey Office and talked about each of these questions and issues. We spoke with passion, debated and let people completely open up their hearts and minds. That was the first step.
In the days and months after 9/11, we had to carefully manage a multiplicity of emotions. No one was trained for something like this before. The key was honest, clear and continuous communication with our people. This came naturally to the management team.
Peter Drucker once said, "many problems cannot be solved – they have to be survived." He also said, "you do not solve problems, the only way to cope is to be ahead of them." Months after, as I look back at the events and the emotional low we faced in the aftermath of September 11, the recession, the war and whatever else, I am grateful that we survived them as a team and emerged intact. I am sure, though, that we all grew up by a few years.
It was Ashok Soota who helped most of us stay sane as we sorted through issues and helped us continuously to remain in the middle of the road. All around us, companies of all sizes just evaporated. Ashok was never ruffled with the events around but was always confident of a positive, fair outcome. One day in the middle of all this, a leading financial analyst came to see me. He saw pervasive gloom and doom all around his industry and wanted to ask me about my perspective on MindTree's future. I told him something that has since become part of me in a deep, personal sense. Think of the farmer. He tills the land, sows the seed, replants the saplings, removes the weeds, irrigates, fertilizes, guards the crop now standing tall with the harvest ready to go home. Then one night, a hurricane comes and uproots everything. What does the farmer do? He moves on. He waits for the monsoon to come again and goes back to till the land. Enterprise builders need to learn from the humble farmer. We need to look at enterprise as a piece of land God has given us and not as a slot machine that has just broken down. When we take the former view, a lot of things fall in place and we develop the inner strength to move on to the task we see as our destiny.
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