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Biking up the Slope

Cognizant's Francisco D'Souza is, in many ways, a metaphor for his company

Published: Dec 30, 2009 08:27:17 AM IST
Updated: Feb 28, 2014 05:01:21 PM IST

Francisco D’Souza, the 40-year-old chief executive officer (CEO) of Cognizant Technology Solutions, felt the changing terrain sometime in late 2007. Customers were taking more time to decide on budgets, projects were getting delayed. Taken independently, that was no cause for concern. But taken together, it seemed ominous.

In March 2008, he called for a meeting of his top executives. They would fly to Frankfurt, meet at the basement of the hotel at the airport, and over the weekend, without once stepping out of the airport, take a hard look at themselves, and the industry.

He feels on top of the world. One of the world’s youngest CEOs, he managed Cognizant’s business through the worst downturn
Image: Maurico Lima
He feels on top of the world. One of the world’s youngest CEOs, he managed Cognizant’s business through the worst downturn
For D’Souza’s counterparts are giants. TCS, Infosys and Wipro have all been around for a quarter of a century. They are led by men, tempered by age and experience. If D’Souza were to visit one of their campuses, he would be taken for a software engineer. Even in good times, the trio would be difficult to take on. But, on that day in Frankfurt, things really looked bad.

There, the battle-hardened executives exchanged their thoughts. The ‘wow’ moment came from Malcolm Frank, senior vice president, strategy and marketing. He said in Tour de France, you get little advantage when you are on the flat surface. It’s only in the mountains that the real separation takes place. “If we are smart, we can come out of this slowdown stronger,” Malcolm said.

As 2009 ends, D’Souza has a reason to flash his boyish smile. Consider this: Cognizant has been consistently outperforming its Indian rivals in growth rate. In the three out of last four quarters, it added more absolute revenues, a better measure considering the difference in size. In the US, still the key market for Indian companies, Cognizant went past Wipro in revenues in June 2009. It added more people during the last 12 months than either Infosys or Wipro.

Cognizant has built a strong sales team over the years, but the role of D’Souza in managing the crisis cannot be underestimated.

Francisco D’Souza did not found Cognizant, but in some ways, he is a metaphor for the company. Son of a globe-trotting, art-loving diplomat, he attended schools across the world — Panama, Zaire, New Delhi, New York, Trinidad, Hong Kong and Pittsburgh. As a teenager, he got interested in software, and soon got an exposure that only a global soul can expect. In New York, he got to know of software as a science, and when his dad moved to Hong Kong, he was surrounded by enthusiasts who looked at it as an art. As he followed his father to different places, he was getting lessons in managing globalisation.

After an MBA at Carnegie Mellon, global consultancy Dun & Bradstreet selected him for an elite, fast-track programme designed for its future leaders. Robert E. Weissman, its CEO then, says that even in that small group, D’Souza stood out. “It was obvious that he was going to be successful.”

Soon, D’Souza was put in charge of business development at a technology arm that D&B was just incubating. The software would be written at its centre in Chennai. Once, during the initial stages, the fledgling centre was trying to get a satellite link up and running from VSNL for months, in vain.

Frustrated, D’Souza, then 26, called up the CEO of VSNL in the middle of the night, and complained bitterly to him. The CEO gave him a patient listening, and in the next few hours the problem was solved. “He is fearless and impatient with mediocrity,” says Lakshmi Narayanan, now vice chairman and till 2006, CEO of Cognizant.

D’Souza was still in his thirties when he took over the mantle from Narayanan on January 1, 2007. But, Weissmann, who is also on Cognizant board, says his age did not matter at all. “Frank is very mature. That is one of the reasons he stood out.”

That promise was put to test during the crisis. After the Frankfurt meeting, D’Souza had a clear goal: To emerge stronger. Shine through the fog, was how he communicated it to the 60,000 people on the company’s roll then. This meant continuing to invest in the business, and fund it from the savings by running a tight ship.

“We were aggressive in confronting the facts early. We went to customers, collected data, and listened to our customers,” says D’Souza. Sudin Apte, who looks at sourcing and vendor management at Forrester Research, says that in financial services when others lost customers, Cognizant got more customers because it went with specific solutions.

The tough times also gave an opportunity to look at its own operations. “There were areas of operations that were not as efficient as they should have been,” says D’Souza. Cognizant was never good at using all its employees (it had too many people on the bench) and in billing all their work (it had too many non-billable employees in any project). During this crisis, it corrected that.

More than anything else, D’Souza did one thing that many leaders tend to get confused about at extreme times. He struck to the strategy that helped Cognizant immensely in the past. It continued to hire more client partners, account managers and high-end consultants to be closer to customers. Its SGA spend (selling, general and adminstrative expenses, an indicator of marketing spend) has nearly doubled in the last 12 months. (In comparison, Infosys’ SGA remained flat). It continued to make what it calls tuck-in investments — small acquisitions that would not dilute the culture of the company. All these, evidently paid off.

The insight from the first Frankfurt meeting also had a personal lesson for D’Souza. “I personally made it a point that I too would come out of slowdown stronger. I knew it was going to be gruelling time, mentally and physically. I spent more time on the plane than before. So, every day I try to run or go to gym. Now, I am probably in better shape than I have been ever before.

 

(This story appears in the 08 January, 2010 issue of Forbes India. To visit our Archives, click here.)

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