Mid-sized IT firms poaching senior
executives from larger rivals to gain management bandwidth
Mid-sized technology services companies
are poaching senior executives from larger rivals, forming a new
partnership forged by ambition for rapid growth.
The smaller companies are gaining management
bandwidth with the skills to handle scale while the executives are handed
powers they may not have had in a larger organisation.
The best example of such a trend is Ashok Vemuri, who moved from
Infosys, India’s second-largest software exporter, to iGate, a firm that was
one-sixth its size. As a member of the board and the head of key units, the
45-year-old may one day have become CEO of the Bangalore-based company, but
there was no guarantee. Therefore Vemuri settled on a trade-off which allows
him to conceptualise and implement his strategy in a way which he could not
have done if he had continued at Infosys.
“At every milestone – be it $5 million, $10 million or $50 million
– a company needs a different escape velocity to move into the next orbit. But
the kind of escape velocity that is needed to take it to the next orbit from a
revenue size of $400-$500 million is very different,” said NS Parthasarathy,
co-founder and president at Mindtree, which has hired proactively from
larger peers.
Earlier this month, it hired Ramesh Pillai, an executive who
spent about 13 years in HCL Technologies and was heading segments
such as automotive, aerospace and medical devices globally, to lead its hi-tech
vertical. A month ago, it hired Paul Gottsegen from Infosys to lead its
marketing and strategy.
Similarly, another mid-sized IT company, NIIT Technologies,
hired senior vice-president Sudhir Chaturvedi from Infosys as COO because of
his experience across verticals and in scaling the businesses within Infosys to
over $1 billion. Chaturvedi will help NIIT in its ambitions to grow from
revenue of around 2,000 crore now to $1 billion by 2018.
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Despite analysts earlier questioning the future of mid-sized IT
companies, they have proven themselves with consistent financial performance
and marquee customers. These companies are also hungry for growth and are eager
to get to the billion-dollar revenue club.
“Mid-sized IT players have become more credible and they are now
of a size where they can afford to pay top-dollar salaries,” said CK
Guruprasad, principal at executive search firm Heidrick & Struggles. “The
leaders joining them have more often than not been with the large IT service
providers for 10-12 years, from the time they were the size of these mid-sized
companies. So they come with valuable perspective.”
The challenge was what prompted Raj Mamodia, who was part of
Cognizant’s global leadership team, to quit and join Collabera, a $450-million
IT and professional services company, as CEO. Mamodia is now restructuring the
business and thinking through a strategy that will differentiate and grow
Collabera’s IT services.
“The clincher for me was the quality of the challenge. But you
have to have the mental preparedness for it because it is a lot of work.
Rewards are usually tightly coupled to performance,” said Mamodia. “For me it
was certainly attractive, and I know for many of my industry peers, it would be
the same.”
Mindtree’s chief people officer, Ravi Shankar, who has been
instrumental in some of its recent hires and who himself joined a year ago from
HCL Technologies, said the biggest motivation for the new leadership joining
the company is the potential to build something and leave a mark.
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