TCS Under Ramadorai: A Case of Providential Success?

11 10 2009

S.Ramadorai (Ram) has relinquished the charge of Managing Director of TCS Ltd and has handed over charge to N.Chandrasekaran, (Chandra). Business Standard described Ram’s tenure in TCS as follows:

“ Ramadorai has bid farewell to Tata Consultancy Services after being with the organisation for 37 years. 

Ramadorai joined as a trainee engineer worked his way to the highest position in the company. Ramadorai would continue his association with the company as the non-executive vice-chairman. Ramadorai took over as CEO in 1996 and has been instrumental in building TCS to its present day stature.

When he took over, TCS earned just $100 million and had 6000 employees. Under his leadership, the company has grown to be one of the world’s largest global software and services companies. 

His favorite quote is: No dream is ever too small; no dream is ever too big.”

Being the CEO of a large company for 13 years and taking it from 100 Million $ sales to 6 Billion dollars is no mean achievement. Yet, it is extremely difficult to articulate Ram’s management style or attributing any breakthrough step taken by the company or the IT industry to him.

Ramdorai inherited the TCS mantle from FC Kohli who had already identified and clearly laid down the building blocks for TCS business in software and IT services. The key presence in leading markets like US and Europe was already in place. The business model of hiring engineers and programmers from across India and posting them on projects abroad and earning profits by wage arbitrage was well established. Servicing foreign clients from providing offshore centres in India also began in the late’80s.

In a Business India article which came after Ramadorai took over as the CEO from FC Kohli, Mr Kohli had made a terse comment that ” Ramadorai had no vision for TCS, but will acquire it over time.”

The strategy and business model of TCS from the FC Kohli era was scaled up by Ramadorai and his team to levels no one ever thought was possible. Year 2000 presented a great opportunity to scale up this model and create software factories. Even the decision to leverage Y2K was not really a conscious decision by Ram/TCS but being with the flow. The entire Indian IT industry was gearing up for it and having had a head start in this business TCS and Infosys made the most of it.

There is no clear evidence or information that some of the acquisitions made by TCS were actually driven by any grand vision of Ramadorai. It appears that the CMC acquisition which happened as a part of the disinvestment programme of the Govt of India, was a decision thrust on TCS by Bombay House. The merger of Tata Infotech with TCS also appeared to be a Bombay House decision to strengthen an ailing company. Even the decisions of not launching an IPO at the height of the dot-com boom of ’99-2000 and finally launching an IPO in 2004 was more a decision of the owners rather than the CEO’s.

It has to be said that after TCS ceased to be a division of Tata Sons and became a public limited company and was declaring results Quarter after quarter, visibility of TCS and Ramadorai improved considerably.

In spite of his frequent appearances in media as MD of TCS or as an elder spokesperson of the IT industry, Ramadorai’s statements or quotes had minimal substance and little impact. Even his favorites would not credit him of having any charisma. Ramadorai and TCS always looked pale in front of the well-oiled PR machinery of Infosys.

In the last five years after the IPO, even though Ramadorai was the CEO, it was becoming increasingly visible that the day-to-day operations and much of the strategic decisions were being made by the top team particularly the current CEO, Chandra. The recent acquisition of Citi BPO or the organizational restructuring of 2008 were seen as Chandra’s initiatives rather than Ram’s.

Ramadorai had a very minimalist style of management. Being at the helm of affairs of such a large company, yet appearing very aloof. Sometimes he went along with the decisions and initiatives taken by his bosses in Bombay House and sometimes by his team. He did not make any grand statements of vision or put his personal prestige behind any major decision. Yet, he did not do anything silly. He may appear like a bystander, but he was very much on the ball in terms of facts and figures. He had the wisdom to know he had a good thing going in TCS and did not upset the applecart. He floated on the top of TCS unruffled as if he had a Teflon coating around him.

Having been the CEO of India’s No 1 IT company, does it make him a great technologist in the Bill Gates mould? Hardly. He had an engineering qualification, but that did not make him a great technologist. He started his life as a hardware engineer. But, the hardware he used to maintain, have long become obsolete. Having grown the sales revenue over 60 times in 13 years , was he a great marketing or consummate deal maker. Perhaps not. Although he would never shy away from meeting clients across the world, he did not show any flair in salesmanship or innovative deal making. Was he a great people person, having managed a company with more than 140,000 employees? Most probably not. He appeared distinctly uncomfortable in the company of his employees, majority of whom were less than half his age. He was neither liked nor disliked, because most employees did not know what he stood for.    

Ramadorai remained an enigma. Ramadorai may not have been anywhere close to the textbook profile of a great corporate leader, yet he leaves the top job at TCS as an extremely successful manager. As Ramadorai moves up as the VC, hoping that the elephant called TCS continues to trundle along on Ram’s luck.

– G. Mohan

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4 responses

13 10 2009
Sujai

Dear Mohan,

Nice article. I began my career working for TCS and in those few years, I did get an opportunity to talk to Ram (as he is called in TCS). If I understood you right, despite TCS leapfrogging from where it started under Ram, his role in envisioning TCS to do so wasn’t clear.

In close circles, we did discuss this a great deal. Later, after having left TCS I came across a workshop where Levels of Leadership were being discussed. Then, from nowhere, it struck me what Ramadorai’s leadership style was – Level 5. For clarity, let me explain what a Level 5 leader is as explained in the book ‘Good to Great’.

“Level 5 leaders routinely credit others, external factors and good luck for their companies’ success. But when the results are poor, they blame themselves. They also act quietly, calmly, and determinedly-relying on inspired standards, not inspiring charisma, to motivate.”

Inspired standards demonstrate Level 5 leader’s unwavering will. Utterly intolerant of mediocrity, they are stoic in their resolve to do whatever it takes to produce great results-terminating everything else. And they select superb successors, wanting their companies to become even more successful in the future. Whether on not it has been established (yet), Ramadorai has left a plethora of subtle learning points for organisational behaviour students and generally, future management students. He was never in news for his charisma but one always found TCS in the helm of progress during his term. Such rare leaders are yet to be recognised by the Indian (and world’s) management gurus and pundits. Until then, the most jazzy will always get the biggest sucker points!

16 10 2009
Anon Though

You’ve written very well, Mohan!

You’ve made one comment – knowing every bit of what’s happening, but indecisive. I don’t think it was the case. Guess it was the other way round. Very decisive AND Glued to the numbers and org political scenes, but not bothering about digging deeper to make sense of things – something that’s so important to make an organization great. For all we know, that latter part never on the agenda in the first place.

On the other hand – public memory is short, and media twists and turns perceptions to the hilt. So who’s in the limelight and who gets dumped in limestone quarry – all so often decided by the direction of “what sells” winds…

To borrow and extrapolate a theme from Karl Weick, media passes its verdict first, and creates a suitable story that fits it nicely

20 11 2009
Arindam

I completely agree. Ram may be successful but had no charisma. Also I believe he never struck the right balance between shareholders and his own employees. He was completely aligned to shareholders ignoring the aspirations and welfare of his employees, treating them as resources and not assets.

8 12 2009
Srini

Very succinctly put. Completely agree though never had any chance of meeting. I regret neither. Wnated to share what I observed in a recent Nasscom meeting. When he entered, nobody from Nasscom commitee bothered to receive him and after wondering where he has come, he sat in the third row. While all teh top IT czars where in dias or in front row. After Kamalnath finished his speech and teh Nasscom top team was trying to see him off. He got off sheepishly and tried to shake hands with Kamalnath. Kamalnath did not even acknowledge him and did not shake his hands. After few minutes, i found him missing from the scene. This incident describes his standing in the IT community

regds
Srini

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