Building An Indian Outsourcing Leader: MindTree CEO KK Natarajan (Part 6)

SM: Was it easier for you to build expertise in India, or build a larger customer base?

KK: It was definitely easier to build up our expertise, which is one of the reasons we developed our strategy of working to get deep access into our customer base. We also felt we were lucky to have another business, which allowed us to survive the downturn. That made us realize that to build a sustainable business we needed to build around our base. Our focus was then on identifying and acquiring customers who we could experience substantiated growth with.

SM: That could also provide you with maintenance work.

KK: It not only provided us with maintenance work, but also allowed us to move higher up the value chain. Growing into that position was not easy. In reality we got lucky. Volvo is a very large enterprise in Europe, and they decided to leverage outsourcing for the first time. They had looked up the top four or five outsourcing vendors and were making a visit to India to see them. Obviously we were not on their list.

SM: You knew they were making the visit?

KK: I knew they were coming because the local managing director of Volvo was a good friend. I went to their hotel and waited for the Volvo team in the lobby and was able to convince them to give me five minutes of their time. We ended up getting a two-hour visit, during which I focused on this being their first time using an outsourcing company. To the large outsourcing companies Volvo would just be another account. For us it was huge, so we were going to be there for them every step of the way and hold their hands. We were going to help them address every single change management issue that arose; that was important to them because they were an organization that was consensus-oriented.

SM: That was also a relationship which got you into Europe.

KK: It did, and it is still a relationship that we value very much. When they decided to go to China we were one of the first companies they contacted. In the first 12 months of our relationship with Volvo I made 12 trips to their corporate headquarters. We had to be a reactive partner to enable a lot of their change management and consensus style of leadership, and we have been reactive.

SM: Did you build in the margins to allow yourselves to build in that high-touch customer service?

KK: We really didn’t. We were always questioned on our approach in that regard; however, investors have always been very patient with us. In fact none of our investors disappeared; they are all still with us. They see much more growth potential with us.

SM: What year was the Volvo deal?

KK: That was in 2002.

SM: What was your next big milestone?

KK: We were dealing with a lot of US corporations, but they were seeing us as a solutions provider. We were doing a lot of maintenance and sustainment. We were critical but not a mainstream vendor for them. We wanted to get to the point where we were a name vendor. The fact that we could point to our survival through the bubble bursting, and our track record with bigger customers, was really a key to enabling us to move to larger US companies. We then just focused on getting these companies to re-evaluate their preferred vendor list and get us included on that list.

Ultimately that allowed us to pick up AIG as a customer. That was big. Other large companies could then look at us and say “if AIG is using MindTree, why aren’t we?” The credibility that gave us, on top of everything else, was a big milestone.

This segment is part 6 in the series : Building An Indian Outsourcing Leader: MindTree CEO KK Natarajan
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