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July - 2006 - issue > How I Saved the Day
Stay Ahead of Change
Tuesday, July 4, 2006
It was November 2001 and just two months after 9/11. The leadership team of R&D Services, a business unit of MindTree Consulting had gathered for the Annual Strategy Meet. The schedule for this meet was decided much ahead of 9/11 to take stock of the progress and plan the strategies. At the time of scheduling the meeting we had no clue that the world as well as our businesses would change for ever.

MindTree was launched in August 1999 as a high profile start up with Ashok Soota at the helm and a solid team of industry veterans coming together. The first full fiscal year April 2000 to March 2001 had been a record year for the toddler delivering $14 million as revenue.
MindTree entered the software services market with two businesses: R&D services business focused on communication technologies and providing design services for our customers to address the communication product needs of enterprises as well as telcos. IT services business focused on Internet technologies targeting the booming B2B and B2C dot.com markets. The spaces we chose to focus on, the industry expertise we brought in and the timing of the launch of MindTree were so perfect, it looked nothing can stop us from building a successful and fast growing global enterprise.

But, by the time we met in Nov 01, everything had changed. Most of the customers of R&D Services were high profile networking product startups that were rearing to take over the world away from giants like Cisco, Nortel and Lucent. Future of many of those startups came to a grinding halt with 9/11.

The analysts who predicted unlimited headroom for growth for the communication bandwidth and Internet applications just few months before 9/11 realized that world is running with excess capacity of bandwidth and Internet applications cannot fully replace the legacy systems.

Most of our customers who were startups in the communication space ran out of gas in just two months post 9/11 with investors pulling the plug and the bubble was burst. Our business which was growing at rapid pace till Sep 2001 came down crashing to half of what it was with many of our customers winding down their business and some cutting down their investment in technologies, people and outsourcing. The situation for us was like pulling the rug when the toddler is trying to walk.

Hence my leadership team that was gathered in the strategy meet to celebrate the past success and strategize the future was in a somber mood with questions in their face on how we can turnaround the business when we were excessively focused on communications space that was in deep trouble.

We concluded that we need to reduce our over dependence on communications space and leverage our expertise (in the embedded and networking space) to other potential high growth markets. 9/11 taught one lesson for the enterprises that of vulnerability of information access when catastrophe occurs and the need for the ability to recover information online ensuring business continuity. This will depend on storage networking investments and strategies that include storage redundancy, backup–recovery, continuous data protection, remote access and storage management. Hence we decided to focus on the storage product companies to grow our future business.

Major challenge for us to enter the storage space was our credibility and track record since we were new to the space as well as acquiring necessary expertise in the storage domain. We mind-stormed on how to overcome those hurdles and concluded that we need to make investment in newer technologies in the storage space that will not only enable building expertise, but also provide level playing field to counter well-established competition. We did a quick analysis of the newer technologies and decided to focus on iSCSI, an emerging standard that will provide seamless access to information over enterprise storage networks as well as Intranets and Internet. We decided to build a show case technology called iSCSI Validator to demonstrate our expertise in the storage space.

The iSCSI Validator took six months of effort to develop with the best of the breed people working tirelessly and enabling us to build a technology that can be licensed to our prospects in the storage space. By April 02, when we started penetrating in to the product companies in the storage space, the technology we had built from scratch became key entry strategy and enabled multiple design wins. Today we are a leader in the storage space with more than one third of the R&D services business coming in through the design services and technology offerings to our storage customers.

The problem that cropped up with 9/11 through meltdown of communications market was converted into an opportunity for expanding into newer storage market. Also the approach we took of identifying a high growth market, building proof of concept showcase technologies and building credibility in the newer space has become a replicable process. Today MindTree R&D Services address six different product verticals and we have grown the business at an average of 75 percent plus year over year during the last three years.
The lessons I (and my leadership team) learnt with the above experience can be summarized as:
l Never be contended with what has been achieved. One unexpected ‘change’ in the scenario can change the whole situation and can set us back to square one.

l Every ‘change’ can be a problem as well as opportunity. It all depends on how we view it.

l The ‘change’ in business or technology environment can provide level playing field to those who are nimble and willing to leverage the ‘change’.

Peter Drucker in a conversation with Peter Senge said, ‘Every organization will have to become a change leader. You can’t manage change. You can only be ahead of it. You can only make it.’ How true it is. Let us be ahead of ‘change.’

S. Mahalingam is the Co-Founder, President and CEO – R&D Services, MindTree Consulting Pvt. Ltd.
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