Now, for the road map thing, I got further details. So, apparently in the case study, there is several steps like 5 or 10 So you will have to look for those steps, Google them get some information about them Then illustrates how did ‘Mind Tree’ apply the

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Professor David A. Garvin and Research Associate Rachna Tahilyani prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2010, 2011 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545- 7685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu/educators. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.

D A V I D A . G A R V I N

R A C H N A T A H I L Y A N I

MindTree: A Community of Communities

In April 2010, Ashok Soota, executive chairman of MindTree Ltd., a mid-sized $278 million Indian information technology (IT) services firm known for its knowledge management practices, announced the “5 * 50” initiative as a part of its larger strategy for achieving $1 billion in revenues by 2014. This initiative called on all MindTree Minds (the name given to employees) to offer innovative ideas for building new $50 million businesses from scratch. MindTree executives would select five people with the best ideas and would then give them the resources to start their proposed new ventures.

Both Soota and N. Krishnakumar (KK), CEO and managing director of MindTree, expected that Subroto Bagchi, one of the company’s founders and now vice chairman, would play a critical role in the initiative. Bagchi currently nurtured key leaders at MindTree. He and Raj Datta, who headed knowledge management (KM) at MindTree, were considering how KM’s roles and responsibilities would change as a result of the new initiative. Bagchi observed, “My expectation is that KM will elevate itself from building out the knowledge management infrastructure to actually co-creating strategy. It will need to reinvent itself.” Datta added:

The enabling role of KM will stay the same. We will piggyback on the same kind of processes and infrastructure, but will just take them to the next level. Today we focus on deploying ideas across many parts of the company; in the future we will reach out to partners, customers, suppliers, and academicians as we focus on deploying ideas that will generate new mini-businesses.

Industry and Company Background

The Indian IT-BPO industry, with estimated revenues of $71.7 billion in 2009, accounted for 5.8% of India’s GDP and employed about 2.2 million people. At the low end were voice-based services, knowledge process outsourcing, and “body shopping”—supplying overseas firms with information technology workers and contracting out their services on a short-term basis in order to take advantage of India’s low labor costs and large pool of engineering talent. End-to-end business process outsourcing (BPO), in which operations and business functions such as customer service were fully provided in dedicated centers, was a somewhat more costly service. At the high end were the most analytical, value-added services such as consulting and research and development.

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The Indian IT industry first rose to prominence in 1999 by fixing the “millennium bug” that threatened to crash the world’s computers. Spurred by the availability of a young, highly educated, English-speaking technical workforce, the industry grew at an annual rate of 40% or more in the initial years, and helped India become a global technology and outsourcing hub.1 However, experts projected that revenue growth would slow to 20% annually in the next few years, with single-digit growth forecast for the immediate future.2 The credit crunch, the spending slowdown in the U.S.— the companies’ largest market—and competition from other low-cost countries in Eastern Europe and Asia were among the factors plaguing the industry. Many Indian software companies were looking for new engines of growth and, for that reason, had moved upmarket, expanding from body shopping and BPO services into consulting, business analysis, and system integration, which had long been the domains of global consulting companies such as IBM, Accenture, and Cap Gemini.3

Six players—Tech Mahindra (after its acquisition of Satyam Computer Services), Wipro, Infosys Technologies, Tata Consultancy Services (TCS), Cognizant Technology, and HCL—dominated the industry. They were known collectively as the SWITCH companies. Each of these firms had annual revenues in excess of $1 billion and managed, because of scale and reputation, to attract the best talent and win the largest deals. Most other players in the industry struggled to breach the $500 million revenue mark, even as they continued to benchmark themselves against the larger SWITCH firms. Some industry experts believed that these mid-size companies were “too late” for the big leagues.4 Others believed that they could compete only through lower price or by focusing on niche segments.5

MindTree differentiated itself from other mid-tier players by using its culture as a “soft differentiator.” A business CEO explained:

What we sell is the promise of building a relationship. In the IT services industry, every firm is assumed to have the critical skills. What customers want to know is, “Can these people work with my organization? Will my people be comfortable working with them?” Here, our culture and values are key differentiators.

Bagchi used a colorful analogy to make the same point: “Tadpoles in different ponds all look alike—just like the technical people in our industry. So the challenge for companies is, how do you make your tadpoles glow in the dark?” MindTree also sought to leverage its smaller size to win new business. A senior manager observed, “We say that we are smaller and that you are therefore a much more significant customer to us. We can give you a lot more attention, access, agility, and a positive attitude.”

MindTree’s Early Years

In August 1999, a group of 10 IT professionals from three different nationalities founded MindTree Consulting Pvt. Ltd. Their aim was to build a company with two specific focus areas—e- business consulting and implementation on the enterprise side, and product realization services in the networking domain on the technology side. The company had two headquarters, one in India (Bangalore), and one in the U.S. (New Jersey). Its value proposition was based on a “OneShore” model, blending high-calibre “local feel” consulting with the discipline and low cost of offshore software development.6 Most Indian IT companies were back-end driven, and the bulk of their employees had technical programming skills. Most of their U.S. competitors, on the other hand, focused on significant front-end interaction, and many of their employees were business analysts. Bagchi explained: D

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Consultants are authoritative, confident, articulate, and upfront. They demonstrate high physical and mental energy. In their interactions, form precedes substance; they look for intensity as a prerequisite to commitment when dealing with team members. Software developers, in contrast, are understated and deferential. They have invisible but sustained energy. For them, substance is everything.

MindTree sought to combine both sets of skills. Soota summarized their strategy, “We tried to create a company that was consulting-led in the IT-services business and intellectual property-led in the R&D-services business.”

MindTree experienced rapid early growth. It was the first Indian IT firm to earn revenues of $100 million within six years of its founding. However, revenue growth gradually slowed in the next few years (see Exhibit 1 for MindTree financials). The economic crisis, which led to a reduction in spending in high-end technology, exacerbated this trend, since the company heavily depended on complex, end-to-end projects and R&D services. MindTree responded by adjusting its business model to focus more on steady revenue from long-term but comparatively low-end work such as maintenance and testing. At the same time, it set a goal of reaching $1 billion in revenues by 2014, although some industry experts worried about whether the firm would be able to emerge from the “midsized trap.”7

In 2010, MindTree had seven different businesses: IT services, knowledge services, R&D services, testing, infrastructure management and technical support, software product engineering, and wireless products. The company had a matrix structure, with most employees allocated either to industry verticals such as insurance and automotive or to technology horizontals such as Java and Microsoft. Project teams were formed from the industry groups and technology practices via the delivery organization. For example, when the R&D services business had to create a team to work on truck electronics for an automotive company, the delivery organization created a project team that drew from the automotive industry vertical, a subset of the infrastructure industry group, and the relevant technology practices such as embedded software, systems software, hardware, testing, and user experience.

The industry verticals were responsible for meeting customer requirements and profitability targets, while the technology horizontals were responsible for technology productivity, capability, and knowledge level. The delivery organization was charged with creating project plans, assigning tasks to people, executing projects day to day, and ensuring process adherence. To ensure alignment, the company evaluated all three groups on customer satisfaction metrics.

Culture, Values, and Leadership

Building a Value System

In the initial days, as MindTree’s leaders were wrestling with the problem of how best to manage their multicultural makeup, they reached out to scholars for help. The experts responded, “You do not manage culture; nobody likes his or her culture to be managed. You have to focus on building values and insist that people who work in MindTree share those values.”8 The company had, in fact, already developed a set of values, with elements such as teamwork and integrity. However, when asked at a meeting to articulate the company values, most senior managers drew a blank. This episode led to considerable soul-searching, with the entire 300-person organization engaging in wide- ranging discussions about the kind of company they wanted MindTree to be. The result was a new statement of values, called CLASS (caring, learning, achieving, sharing, and social responsibility). D o

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Caring meant caring for customers, fellow MindTree Minds, and other stakeholders. Learning meant developing oneself as well as others in the organization. It also emphasized innovation and creativity. Achieving meant high performance, with a focus on accountability, an action orientation, and high aspirations. Sharing meant cooperating, helping others, and working together as a team to create knowledge and new ideas. Social responsibility meant integrity, corporate citizenship, and building social capital. Puneet Jetli, people function head, reflected, “The eternal source of differentiation is our values system. When we talk of culture, we talk of values; the two terms are used interchangeably. We believe that values drive behavior and behavior drives results.”

Managers sought to internalize the CLASS values by integrating them into the company’s recruitment, recognition, and reward systems. During interviews, potential employees were assessed on their values and how well they fit with those of the firm. Interviewers focused on one or two values that a candidate cherished and used a sample set of questions to understand the extent of value alignment between the candidate and the company (see Exhibit 2 for sample questions). Within 90 days of joining MindTree, new employees participated in a three- to four-hour session conducted by Soota, KK, or Bagchi that gave special attention to values and the expectation that all members of the firm “walk the talk.” During performance appraisals, a 40% weight was assigned to performance against values, with each value having a clear set of metrics. Senior leaders who managed teams or departments larger than 10 people could voluntarily ask for 360° feedback on how well they were complying with the company values; about 90% did so.

The goal, according to Soota, was for MindTree to be a “high-caring, high-achieving organization.” Bagchi went even further; he believed that MindTree should strive to become an “emotionally bonded organization” (see Exhibit 3 for a detailed description of the elements). A number of efforts, both symbolic and substantive, supported these goals. For example, MindTree renamed its human resources function the “people function.” Jetli explained, “We did not want to commoditize people by referring to them as ‘resources.’” Another example was the company’s policy on sharing wealth. KK explained: “Until we listed, all 4,000 MindTree Minds had options in the company. So when the company generated wealth, it was shared across all the people who had contributed to our success. Our primary driver was, ‘We are here together to create an institution.’”

Together, these efforts helped lower turnover. Between 2002 and 2009, MindTree’s voluntary attrition ranged from 11.4% to 15.8%. Historically, its attrition rate was 3% to 5% below the industry average.

Communication and Decision Making

Transparency and rich, frequent communication were cornerstones of the culture. According to Jetli, communication was based on three principles—emotional security was critical to ensure transparency; systems had to be built for simultaneous communication in a global organization; and information had to be presented in an interesting manner so that people could readily absorb it. One result was the company’s 95-95-95 principle, which Soota originally suggested. It stated that 95% of the people should have 95% of the information 95% of the time. Soota observed, “We feel that we communicate more with our people than any other organization.”

For example, at the beginning of each year, Soota shared with everyone at MindTree a list of the company’s current strategic initiatives; an analysis of strengths, weaknesses, opportunities, and threats; and his own personal goals. Every subsequent quarter, he followed up with a report describing the company’s performance, how he had fared against his personal objectives, and the initiatives that had gone well and those that had not. All business CEOs and function heads followed this same practice. After these reports were disseminated, there was a quarterly “All Minds Meet,” D

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where the results were discussed and internal board members and CEOs addressed employees’ concerns. Soota explained, “The philosophy is that we as a team need to understand what is happening at MindTree and how we are faring. Only then can we go out, meet our customers, and achieve our goals.”

MindTree’s leaders pursued a consensus-based, participative decision-making process. KK explained:

The decision-making process at MindTree involves collective leadership. We have more free-flowing discussions and disagreements than most other companies, but there is still a single decision maker. Our decisions take longer because we want everyone to be able to say, “I had a viewpoint, I was heard, and I understand the other alternative and why it was chosen.”

Managers believed that members of the senior leadership team had complementary talents and perspectives. One senior executive observed:

KK is left-brained: he is very managerial and bottom-line oriented. Subroto is right-brained: he is very leadership and long-term-oriented. Ashok is the integrator: he provides the balancing act. He is the one who looks hard at the numbers and also nurtures efforts like knowledge management whose benefits are intangible.

The Gardener—Nurturing New Plants at MindTree

As MindTree progressed toward its goal of becoming a $1 billion company, senior management decided that it was critical to develop non-founders as the leaders of the future. Management began to devote more attention to leadership development, resulting, in 2008, in a new role for Bagchi—that of the “gardener.” As gardener, Bagchi did not report to anyone, nor did anybody report directly to him. His job was to nurture the top 100 people at MindTree; he did so by engaging with them in a series of one-on-one discussions about their “personal-professional” issues—all issues falling between the two poles of purely professional matters such as compensation and purely personal matters such as spousal relationships. Few topics were off the table. Bagchi maintained, “You can’t be a first-rate leader and a third-rate parent or spouse—and vice-versa.” In these conversations, which were confidential and not available to bosses or members of the people function, his goal was to heighten leaders’ self-awareness and expand their leadership capacity. He did so by a combination of questioning, listening, and gentle guidance, coupled with assignments and field experiences. Bagchi explained:

A gardener has an organic relationship with each plant in the garden. He is an extremely humble person and sees his task as never ending. In the organizations of tomorrow, I see the role of leadership akin to that of a gardener tending a garden.

The gardening process consisted of six steps (see Exhibit 4 for the process). It was designed to identify leaders and, with Bagchi’s help, take them through a process of self-discovery and reflection, guided by a series of questions that culminated in a plan for the future. Bagchi explained his role, “I am part therapist, part brother, part coach, part mentor. But in the end, I am a sense maker. I help unlock a hidden latch somewhere, resolve a difficult knot, or simply get the person to see himself in a new light.” He gave an example of the process at work:

We had an outstanding analytical person in a strategic role in the organization who found it difficult to empathize with people. He got the right answer to most every problem, but could D o

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not understand why others did not comprehend things as well as he did. I explained to him the role of the right brain vis-à-vis the left brain and took him through the concept of emotional intelligence by assigning readings and discussing them with him. Then I organized visits to the Spastics Society of Karnataka School, the Missionaries of Charity, and the Homes for the Dying and the Destitute. I wanted this person to appreciate his latent right-brain capabilities and develop empathy.

Knowledge Management at MindTree

Knowledge management was another activity that supported and contributed to MindTree’s culture and values. Scholars differed in their definitions of the term, but generally agreed that KM described those activities, processes, and technologies that were aimed at acquiring, organizing, sustaining, applying, sharing, and renewing both the tacit and explicit knowledge of employees in order to improve organizational performance. However, they proposed different strategies for creating a knowledge-oriented corporate culture.

Some argued that building trust was of paramount importance.9 Others stressed the importance of face-to-face interactions and conditions in which sharing led to personal benefit.10 Still others claimed that organizations could best stimulate knowledge flows by creating and supporting “communities of practice,” groups of people who shared a common interest or concern and wanted to learn how to do it better. These communities had three crucial characteristics: members had a shared domain of interest; members engaged in joint activities and discussions, helping each other by sharing information and building relationships that enabled learning; and members developed a shared repertoire of resources such as experiences, stories, and tools in order to enhance their capabilities. An example of such a community of practice would be the early Impressionist painters, who met regularly in cafés and studios to discuss the new style of painting they were inventing and share their techniques and philosophies.11

MindTree adopted a holistic, encompassing approach to KM that drew on many of these ideas. Datta explained:

KM’s role is to help people perform their jobs better and develop themselves. At MindTree, that means four things: enabling knowledge creation, which leads to innovation; enabling the environment, which leads to knowledge sharing and collaboration; enabling processes, practices, and systems, which helps build a knowledge culture; and enabling change and shifts in mind-set.

The company encouraged employees to self-organize and collaborate through communities of practice. In that sense, Datta argued, KM at MindTree was similar to the open source movement in computing, where creating output was not mandated, people set their own goals, and individuals were motivated by the creative process and their interactions with peers. He noted, “KM is as much about culture and social networks as it is about technology. Without this view, KM is reduced to content management and is a dull repository.”12

MindTree had taken a number of steps to ensure a supportive environment for cultivating KM. The people function, as part of its competency framework, had included KM as an organizational competency. The performance management system gave people freedom for getting involved in organization-building activities that went beyond their job descriptions, such as communities of practice. And the company sought to create a comprehensive knowledge ecosystem inspired by Ikujiro Nonaka’s concept of Ba (defined as “a shared space for emerging relationships”), consisting of D

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four reinforcing elements: social space (e.g., communities, knowledge fairs, and technology festivals), mind space (e.g., tools for personal development and creative thinking), virtual space (e.g., collaborative IT systems), and physical space (e.g., an inspiring building and workspace).13

MindTree had received numerous awards for its KM practices, including the 2009 Indian Most Admired Knowledge Enterprise (MAKE) award for “creating an enterprise knowledge-driven culture” and the 2009 Asian MAKE award for developing knowledge workers through senior management leadership. The KM function also received recognition from within MindTree. In 2007, the company’s Enabling Function Dipstick Survey, which measured the satisfaction level of MindTree Minds on the service, responsiveness, approachability, sensitivity, and operational excellence of the various enabling functions, ranked KM the highest among all functions. 

Evolution of Knowledge Management

From the start, MindTree’s founders envisioned that KM would play a key role at the firm. It was an integral part of the company’s original business plan. Soota recalled: “There was no way we could have done OneShore, with its requirement of transferring knowledge effectively from the front-end to the back-end, without a robust knowledge management infrastructure and culture. That culture emerged and spread through the knowledge communities we developed. They became a key part of our success.”

Jetli added, “Ours is an industry where a lot of intellectual capital is still tacit and uncodified. So we asked, ‘How can we motivate more people to share their knowledge?’ That question laid the foundation for our culture and policies around knowledge management.”

Formation of the KM function In 2000, during a visit to MindTree’s Bangalore office, Datta, whose job at that time was handling offshore delivery for U.S. customers for the IT services business, initiated a study group focused on software design patterns. He recalled, “We ended up with rich, deep knowledge through a highly conversational process. The study group was a hit because most of our people had technical backgrounds and saw a common area of concern that would bind them together.”14 Soon thereafter, Datta took on KM as an additional objective, and the MindTree community movement began to develop, based on the model of that first study group. In 2003, MindTree made KM a corporate function, reporting to the chief operating officer, and Datta became its full-time leader and chief knowledge officer (CKO). As Bagchi put it, “Raj had the necessary talent and the madness—he was possessed by the idea—to make knowledge management his life’s calling. The leader of such an organization-wide initiative needs courage, creativity, and perseverance, which Raj had. For most other people, staying in delivery would have been an easier path to success.”

Datta believed that a CKO had to have a viewpoint on KM and a vision of how it could evolve. He regarded himself as a change agent who was building a road map for realizing the vision. Datta stated, “The CKO is responsible for enabling the knowledge culture and building connectivity: people-to-people, people-to-knowledge, and knowledge-to-knowledge. It’s not only about content generation. It is about continuously building intellectual capital in all of its forms: human capital, structural capital, and relational capital.”

As CKO, Datta gradually built and led a 25-person team. By 2010, the team consisted of several senior people; the KM systems manager and his 10 direct reports were responsible for working on existing IT systems, as well as developing the next-generation knowledge platform. A five-member KM team supported MindTree’s Kernel initiative on project management. The community support manager provided essential support to communities; the KM operations head was responsible for communications, branding, and generation of various metrics; and the content manager helped D o

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develop a strategy for the knowledge repository. Another member of the KM team focused on encouraging creativity, invention, and innovation. In that capacity, he was working with Bagchi on the “5 * 50” initiative. In addition, there were three people managing the KM function at MindTree’s offices in the Indian cities of Pune, Chennai, and Hyderabad, as well as three librarians.

Communities of Practice—Enabling the Knowledge Environment

Role of communities MindTree’s communities of practice reflected the company’s socio- technical approach to KM, which emphasized social interactions as a means of enabling knowledge sharing and collaboration. From the beginning, communities were self-organized groups that took as their mission some aspect of learning, knowledge, or personal development. They were treated differently than departments, functions, or lines of business. Datta explained, “Communities do not appear on the organization chart, nor do they report to anyone. In fact, as soon as they start reporting to someone, they cease to be a community.”

Communities covered a wide range of technical (e.g., SAP, mainframe), nontechnical (e.g., leadership, innovation), and role-based (e.g., testing, business analysis) areas. The automotive community, for example, focused on building domain knowledge. It engaged in activities such as panel discussions on emission testing and demonstrations of the functioning of an automotive engine to help people working in the area of engine control. Other shorter-term communities focused on software coding, building what were called TechWorks (reusable components, libraries, frameworks, utilities, or tools) in their own spare time. Insight, a log analysis tool, was an example of a TechWork that engineers created to help them in their own project work. In its various releases, Insight was downloaded over 200 times, and the team earned MindTree’s Innovation and Reuse award.

Community meetings provided people with an opportunity to interact face to face and offered a venue for brainstorming, solving problems, sharing techniques, comparing successes and failures, and keeping abreast of market and technological trends. Every day, about three to four face-to-face community events took place at MindTree. Three percent of MindTree’s workforce voluntarily served as community leaders (called champions), and 75% of the workforce were members of at least one community. There were over 55 communities in total, leading Bagchi to describe the firm as a “community of communities.”15

There were a number of benefits from participation. A community champion observed:

I give the community the market’s perspective by sharing with them market research data and customer feedback. I also take the community’s perspective on new technology and new ideas back to my prospects and customers to see if there is any interest from a market perspective.

Another champion explained:

I was handling an account where storage management was the required domain knowledge. We wanted to reduce the time required by new team members to master the basics in this area. I started the storage community to create a base to connect the experts in the domain to the people who wanted to learn more. In the process, the experts honed their knowledge and the novices learned skills without officially registering for a training course.

Communities were also a way of staying close to employees who were geographically dispersed. A champion commented, “Seventy to eighty percent of my teams are in client locations. Virtual communities help bind us together, especially to the parent organization in Bangalore.” D

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The community maturity model Datta had developed a community maturity model to create a vision for communities as they developed over time and tried to achieve greater impact and influence (see Exhibit 5 for a graphic of the model). The first level was a community of interest, a collection of individuals who shared an interest in a topic and enjoyed talking about it online. Its sole purpose was sharing; neither learning nor personal development were explicit objectives. MindTree did not emphasize this type of community because its impact was viewed as too unpredictable, with value generation left completely to chance. Datta viewed the next level of maturity, competency building, to be of much greater importance and value. Communities at this stage stimulated peer-to- peer interactions in which individuals learned from one another in face-to-face meetings, driven by explicitly stated community objectives. At the third level was capability building, which focused on creating an impact on the company by addressing “pain points” and building relationships between communities and other organizational entities. Communities at this level had a direct impact on existing processes, software, or organizational activities. For example, the J2EE (Java) community helped with MindTree’s recruitment process by creating a question bank on J2EE projects. The business planning and control systems (BPCS) community champion described how his community became a vehicle for new business development:

Seeing the needs at their customer’s sites, members of the community came up with ideas on how they could overcome similar problems for prospective customers. They developed generic tools and prototypes to address these needs, which dedicated teams later took to completion.

At the highest level of maturity, communities were engaged in capacity building. These communities would absorb knowledge from and add knowledge to external experts by building “a strong pipe to the outside world,” according to Datta. Their focus would be on innovation, creating new competencies and capabilities. Datta noted, “Although some communities have the ability to sense and respond rapidly and repeatedly to external stimuli, I doubt that we have a community that is operating primarily at the capacity-building level. Yet the concept gets people very excited and energized.”

The mainframe community provided an example of a community that had transitioned through several phases of maturity. Its community champion described the journey:

In 2004, we were a small team working on mainframe technologies. The group was still new, and we started the community to foster a spirit of belongingness. As we grew, we grouped skills by types of databases and types of projects, and then exposed people to diverse areas that the others had worked on. We also conducted research in areas such as optimization techniques in database migration and tried to identify new service offerings in the area of mainframe modernization. The charter of the community went through several clear transitions. Initially, it was about identity; later, it was more about training; and later still, it took on more of a research bent as we tried to identify new service offerings. Eventually, it became necessary for us to find ways of sharing our knowledge across different practices, different physical locations, and different projects.

Forming communities At MindTree, forming a community was easy. A group of people who shared a common passion simply decided to get together for learning, knowledge sharing, business development, or self-development. Champions were self-selected; anybody who wanted to take on the role and was passionate enough to reach out to others could volunteer. To avoid dependency on a single person, however, all communities had to have multiple champions. Every potential champion first attended a workshop with Datta in which he or she sought to weed out those D o

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who were not fully committed. Datta explained: “If someone is passionate about a topic, we will let him or her do it. But we will make it difficult for them by setting hurdles such as collecting similar like-minded champions and establishing objectives for the community. We try to scare away the uncommitted people by emphasizing the extent of responsibilities involved.”

Community champions then determined the process by which others became part of the community. Members collectively and collaboratively determined their community’s objectives, and champions then drove the group toward meeting those objectives. Typically, they based objectives on two questions: What do you want to learn? And what do you want to share?

The community champion’s role The community champion’s role evolved over time as communities progressed through their life cycles. In the start-up phase, champions were responsible for bringing people together, aligning them toward a common set of goals, and generating momentum. In the sustenance phase, champions ensured that their communities made progress on their goals, while motivating people to think and act on their own. For example, a champion might respond to a drop in activity or engagement by planting the seed for a new discussion topic or event. The last stage of a community was the sunset or renewal phase. According to a champion: “During the sunset stage, a good community champion is able to see that the community faces critical choices—to gradually fade away, to morph into a different community, or to transition to a higher level of maturity. A good champion is also one who recognizes when she has outlived her usefulness and is able to transfer the mantle to someone else.”

The champion’s role was challenging because it required continuously energizing and motivating people. For this reason, successful champions were usually thought leaders in their fields.

Creating successful communities Creating an active, successful community was difficult because community members were often caught up in their daily work. To survive, communities needed significant, repeated participation from a number of passionate people. They also needed a commonality of purpose across members. There was disagreement about the precise degree to which a successful community needed to have direct alignment with the business. KK, for example, observed, “No organizational result is expected out of these communities, and there is no organizational drive to measure their output. They are simply collections of like-minded people.” A champion agreed, “There is no need for a metric to measure community effectiveness or contribution. If the community has a certain set of objectives and it meets them, then the community is successful.”

Not everyone at MindTree felt the same way. A few managers were wary of communities, believing that they took time away from activities that contributed more directly to the business. Some claimed that people participated in communities largely because they believed that the organization rewarded them for doing so. Others argued that communities affected only certain segments of employees and that other MindTree Minds did not necessarily realize significant benefits.

Connecting communities to the organization To overcome these concerns, MindTree organized quarterly feedback sessions between community champions and the KM function. It also introduced a new forum, the Community Champions Meet. These meetings gave community champions the opportunity to learn from one another and interact with other senior managers. Bagchi used this forum to establish stronger links between MindTree’s communities and the company’s customers and leadership. He actively worked with communities and their champions, listened to voices from the grassroots, and provided feedback to top management. Bagchi explained: “I give time to these communities in a push-pull manner. I work with them on the ground to question D

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their purpose, their vision, sit with them, listen in to their deliberations, sometimes take them outside MindTree, and sometimes bring the outside world to them.”16

The results of these interactions were often revealing. Bagchi had recently learned that the “geek gurus” in the organization, who were critical for long-term success and technological advancement, were feeling more and more anonymous. These people looked for empathy and intellectual engagement from top management, which was fading away as MindTree became a larger organization. Bagchi passed this observation on to senior managers to prompt remedial action.

Knowledge Management Systems—Enabling Processes

MindTree had built a hierarchy of KM systems, which it depicted as a pyramid. At the bottom were systems that helped people share knowledge, in the middle were collaborative systems, and at the top were systems that helped with innovation. A manager in the KM organization explained: “We believe that you have to have a social process in place first. Only then can you become highly collaborative. After that you start innovating.”

Current systems MindTree created its first system, KnowledgeNet, a centralized knowledge repository, in 2001. It enabled people to share knowledge but many viewed it as “static” and of limited value. In 2004, MindTree launched Connected Minds, a community portal that supported the community movement in virtual space and thus augmented face-to-face community meetings. Connected Minds facilitated virtual collaboration through question-and-answer sessions, blog entries, document uploads, and bookmarking. It also provided details of upcoming community events. All communities were represented on this portal, with each designing its own site and customizing it in terms of membership rules, access control rules, and other features. In 2005, KM introduced Open Mind, a collaborative software IP creation and reuse platform patterned on the open source movement. It allowed people to work collaboratively on software development, creating tangible outputs known as TechWorks. ProjectSpace was MindTree’s system for project team collaboration and served as the backbone of the Kernel initiative on project management. It supported project execution across a globally distributed team by handling all of a team’s knowledge needs. Among its elements were discussion forums; wikis; trackers; mailing lists; tools for document management, release management, idea management, and innovation; tools for knowledge capture and software reuse; and spaces for capturing lessons learned.

Neuron, MindTree’s idea-nurturing system, was influenced by Soota’s 2001 observation that “you never know where a good idea will come from.” Neuron was an open and collaborative system that covered an idea’s entire life cycle. Anyone could contribute an idea on any topic, and anyone could comment on, rate, link, or add to any idea posted on Neuron as long as it was not earmarked for patenting. Neuron was organized by idea categories, each mapped to a business area. The most senior individual in each business area was designated an “idea nurturer.” That role had evolved over time: initially, it meant being an evaluator who accepted or rejected ideas; it currently meant nurturing ideas and exploring ways of making them feasible. In the process, ideas progressed through four stages: submission, feasibility, development, and deployment. At times, top management guided the process by requesting ideas on a particular theme. One example was the theme of saving energy. In that case, MindTree received 83 suggestions; collectively, they helped reduce the company’s energy consumption by over 28% in seven months. In total, MindTree had deployed 24% of the ideas posted on Neuron, resulting in 10 patents.

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311-049 MindTree: A Community of Communities

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Future systems MindTree was building its next-generation systems with the goal of connecting and linking people through distributed touch points, building on the latest trends in social networking such as tagging, livestreams, and microblogging. One such initiative was a 360° user profile that would make publicly available all aspects of a person’s life at work, including ideas they had posted on Neuron, communities to which they belonged, discussions in which they had participated, and training sessions that they had attended. MindTree believed that this information was already publicly available but in a fragmented form; the proposed system would simply collate and assemble it. However, if employees desired, they could opt out of sharing some of their information. The technology would also be “extranet-able,” which would allow for seamless involvement of external parties in MindTree’s knowledge activities.

The Kernel initiative for project management Kernel provided an example of how MindTree used KM systems to support and enable collaboration at work. Muralidharan Loganathan, MindTree’s Kernel expert, explained:

MindTree has long had very good project management practices, but we still did considerable firefighting. There was too much emphasis on process, and not enough on knowledge and experts. We had recurrent problems, such as not getting sufficiently detailed specifications when delivering to multiple geographies, where knowledge management could offer solutions.

Other project management problems were how best to reduce people dependency, provide knowledge continuity when individuals changed assignments, and enable customers to collaborate on an ongoing basis throughout the life of a project.

The solution was the Kernel initiative. It strove to improve productivity by enabling collaboration within teams; encouraging reuse of software, learning, and expertise; and stimulating systematic innovation. For example, Kernel included a tool called the Knowledge Map (K-Map) to address the challenges that teams faced at the inception of a delivery project (see Exhibit 6 for a sample Knowledge Map). The K-Map helped teams identify requirements for a project in terms of needed areas of expertise. It then compelled members to identify sources of knowledge that they could leverage, as well as any gaps between needs and sources. Teams filled the gaps by charting out a time-bound action plan. Each map was revised and updated over the life cycle of a project. A manager in the delivery organization described the benefits:

The K-Map helps me tabulate all the learning needs and puts a structure in place. I can then control the team ramp-up and track progress against it, which is critical since the ramp-up has a direct effect on the bottom line. The more people understand the technology used in the project, the business domain the application serves, and the operational environment, the better is your delivery process.

Projects that adopted KM systems and practices such as collaborating on ProjectSpace, reusing content, and creating K-Maps generally performed better than those that did not. A comparative study of projects using KM practices versus organizational averages showed that the former’s effort overrun (Number of People x Number of Days) was lower by 2.3%, schedule overrun (Timeframe) was lower by 3.0%, and gross margin (Revenue – People Cost – Expenses) was higher by 4.6%.

Critical Success Factors for KM

In contrast with MindTree, the KM movement and communities of practice had limited success elsewhere. Soota observed: “Knowledge initiatives are amongst those with the highest percentage of D

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failure in organizations. The conventional wisdom is that this is due to excess focus on technology and inadequate attention to the back-up processes and associated reward and enforcement practices. Rolling out such a program needs missionary zeal, as well as a holistic outlook.”17

At most organizations, KM was a narrow, mandated activity that encompassed only data repositories and content management. At MindTree, however, people viewed KM as a strategic initiative, and the company adopted a human-centric approach that emphasized the importance of socialization and communities. According to Datta:

The KM and community movements are interdependent. The fact is, KM will fail if you do not allow people to channel their passion. The best way to do that is to let them self-organize in order to create the right kinds of conditions and enabling environment. The other fundamental psychological shift is to believe that people are intrinsically motivated to share and do not have to be motivated by external factors.

Even so, some senior managers felt that KM’s impact was limited in important respects. A business CEO observed:

I think knowledge management has done excellent work at the project level. It has implemented simple but fantastic systems such as Neuron. However, it has not significantly influenced the areas of customer acquisition, sales, and other externally oriented domains. KM affects 95% of the people. However, it does not affect 50% of the business.”

Bagchi added:

KM has done an excellent job creating the digital infrastructure, generating content, building momentum through the community movement, contributing to MindTree’s brand awareness, and helping senior management appreciate KM. The next big leap would be for KM leadership to enable business strategy by becoming trusted advisers to line CEOs. While KM remains an enabler of overall organizational purpose, its leadership does not currently have to directly engage with businesses on shaping their future.

Datta believed that this was an outcome of the fact that the KM function’s priority to date had been improving the delivery process and having an impact on billable roles, which constituted a large majority of the company’s head count. As its mandate broadened, he expected that KM’s direct impact on other aspects of the business would increase as well.

Toward a $1 Billion Company

In April 2009, Soota announced that MindTree would strive to become a $1 billion company by 2014. In the past decade, only one Indian IT services company had managed to break out of the mid- tier and join the billion-dollar league. However, Soota was confident that there was room at the top, especially since no single player had a dominant market share in IT services.18 To achieve this goal, MindTree planned to use a three-pronged approach. The CEOs of the company’s seven current businesses would have to grow them from their current collective revenues of $275 million to $500 million. To do so, they planned to use a “Trojan horse” strategy; MindTree would use its expertise in an area to establish credibility and expand its reach within a client organization—sometimes leading through high-value services such as strategy consulting, and at other times leading through low-end services such as testing.19 Another $250 million would come from acquiring $80 million to $100 million companies and growing their revenues to $250 million. The final $250 million would be generated by the “5 * 50” initiative. D o

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311-049 MindTree: A Community of Communities

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“5 * 50”

Soota announced the “5 * 50” program in April 2010 (see Exhibit 7 for his e-mail to the company). All MindTree Minds were asked to think of an area that they felt they could build into a $50 million business and to post the idea, as well as the reasons why they were the right person to develop it, on Neuron. Senior managers would review and evaluate the proposals, and invite the short-listed candidates to attend a one-week mini-MBA program taught by MindTree’s founders. After attending the program, which would focus on strategy, finance, and innovation, participants could either abandon their ideas or modify them and write a supporting business plan. Senior management would review the plans of 10 finalists and, after hearing their presentations, would grant those with the five best plans the resources needed to develop their businesses. These individuals could then select the job they wished within their new business.

The Future of KM

Bagchi was convinced that the success of the “5 * 50” program depended, to a great extent, on the KM function. KM would help in the ideation process and would provide critical IT systems support through Neuron. Experts had already begun modifying Neuron so that it could become a harvesting and tracking mechanism for thousands of ideas. Neuron would also be linked to the company’s new enterprise content management (ECM) system so that MindTree’s partners, such as customers and academic institutes, could work with employees to develop ideas. Shahnawaz Khan, MindTree’s ECM expert, noted, “ECM will allow MindTree Minds to work together seamlessly with stakeholders, facilitating discussions, sharing, and collaboration.” The Innovation Council, which the KM function had set up and Bagchi chaired, was also expected to play an important role. It brought together idea nurturers from every functional area to discuss and help develop the top few ideas.

The KM organization would also provide essential content for the mini-MBA program. Balachandar Ramadorai, an expert on innovation and creativity and a member of the KM organization, was working closely with Bagchi to design the program. Moreover, once the five new businesses were launched, Bagchi believed that each one would require KM’s active, ongoing support. He explained, “KM will help build out each idea, customizing itself to their engagement with an idea. The top people in KM will have to take on different roles. They will need to build one- to-one relationships with the CEOs of the new businesses. Their focus will shift to supporting business and strategy development.” Datta noted:

Thus far, KM has focused on building a culture of ideation in the company and improving the delivery process. Now, with “5 * 50,” we will start facilitating direction. We will assist with business planning, as opposed to just the qualitative approach that we have taken with Neuron. Our contribution will become quantitative and stringent; for example, some forecasting will be involved. So KM will have to change.

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MindTree: A Community of Communities 311-049

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Exhibit 1 MindTree Profit and Loss Statement (US$ millions)

2009– 2010

2008– 2009a

2007– 2008

2006– 2007

2006– 2007

2005– 2006

Income Income from software development Overseas 267.7 258.0 152.6 123.0 88.2 46.4 Domestic 20.3 17.0 11.8 8.2 11.5 8.3 Other income 17.1 2.6 6.2 1.6 1.5 1.1 305.1 277.6 170.6 132.8 101.2 55.9 Expenditure Software development expenses 177.4 154.9 105.0 78.0 60.8 35.6 Administrative and other expenses 56.0 93.0 31.5 28.8 21.7 13.6 Amortization/impairment of goodwill 0.0 0.0 0.0 0.0 0.5 0.1 233.4 247.9 136.5 106.8 83.0 49.3 Profit before interest, depreciation, tax, and minority interest

71.7 29.7 34.1 26.0 18.2 6.6

Interest 0.6 3.6 1.3 0.7 1.2 0.5 Depreciation 14.5 12.7 7.9 5.4 4.6 2.3 Profit before tax and minority interest 56.6 13.4 24.9 19.9 12.4 3.8 Provision for taxation 8.4 3.1 2.9 0.9 0.4 0.0 Deferred tax (benefit)/charge 0.4 (1.6) (1.0) (1.0) 0.0 0.0 Net profit before minority interest 47.8 11.9 23.0 20.0 12.0 3.8 Minority interest 0.0 0.9 0.0 0.0 0.0 0.0 Net profit after minority interest 47.8 11.0 23.0 20.0 12.0 3.8 Balance in profit and Loss brought forward 54.1 43.6 25.0 8.7 (3.3) (7.1) Amount available for appropriation 101.9 54.6 48.0 28.7 8.7 (3.3) Dividend Interim 0.9 0.8 0.8 0.7 0.0 0.0 Proposed 1.8 0.0 0.9 0.8 0.0 0.0 Total dividend 2.6 0.8 1.7 1.5 0.0 0.0 Dividend tax 0.4 0.1 0.3 0.2 0.0 0.0 Amount transferred to general reserve 4.6 0.2 2.3 2.0 0.0 0.0 Balance in profit and loss carried forward 94.2 53.5 43.7 25.0 8.7 (3.3) Earnings per share Basic 1.2 0.3 0.6 0.6 0.4 0.2 Diluted 1.2 0.3 0.6 0.6 0.4 0.1

Source: Company documents.

Notes: 1 USD = 45 INR (Indian rupees) was used as the conversion rate.

aThe sharp increase in year-on-year revenues was due, in part, to the acquisition of Aztecsoft Ltd., which contributed revenues of $50 million. D o

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311-049 MindTree: A Community of Communities

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Exhibit 2 Sample Set of Interview Questions for Assessing Values

Value Questions Caring  Describe a project where you had to stretch yourself significantly. How did you feel?

What are your thoughts when you look back?

 Describe a situation where you displayed empathy towards your fellow teammates.

What was the conflict you faced?

 What makes you trust others? Tell us what your close friends think of you. What would

your supervisor say about you?

Learning  Describe your cross-domain, cross-functional exposure.

 Describe your most humbling project experience.

 Give an example of an initiative that you took that had organization-wide impact.

 What kind of books do you read? Who is your favorite author? What is the last book

that you read? What did you like about it? Who was the key character? Describe the

person.

Achieving  Who is your role model and why?

 What was your last role? How was your performance rated? What could you have

done better?

 Tell us about two risks and experiments that you have carried out for improving your

results.

 Describe two failures that you faced in your life. Why do you think they happened?

What have you learned from them?

 Tell us two proactive steps that you have taken to improve your career decisions.

Sharing  What feedback did your team give you during your last assignment?

 How do you share knowledge with a team?

 How do you motivate your team members? What are your expectations from your

team members?

 What rewards do you expect from good performance or for excellence in the area of

your work?

 Do you write? What kind of articles? Have you published any papers?

Social Responsibility

 What are your personal values?

 How would you describe your personality? What motivates you as a person?

 What did your professor tell you during your college days?

 Have you ever counseled anybody on integrity? What was it about?

 Describe your ideal company. What characteristics should it display?

Source: Company documents. D o

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MindTree: A Community of Communities 311-049

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Exhibit 3 Elements of an Emotionally Bonded Organization

Factor Questions a Leader Should Ask

Proximity Do my people feel that I am distant or “next door”?

Do my leaders up and down the organization practice pull-based, as compared to push-based, leadership?

Rich Communication

How openly, how frequently, and how well do we, as an organization, communicate? Who can communicate with whom?

Myths and Rituals

What are the core myths and rituals that define our organization? How widespread are they? Who owns them?

Bonding through Adversity How well do we handle adversity? Do we view adversity as a crisis or an opportunity?

Voluntary Support Networks Do our people at every level have a support network? Do we, as an organization, encourage the creation of these voluntary networks?

A Bold Vision Do we have a bold, even unrealistic, vision? Do the majority of our people understand and embrace it?

Deeper Values What are our organizational values? Do they go deeper than just business choices to acknowledge more fundamental societal needs? How well do we adhere to them? What price have we paid recently to uphold our values?

Extreme Exclusivity How selective are we in setting entrance criteria?

How unconditional is our acceptance of those who become members?

Source: Vijay Govindarajan and Subroto Bagchi, “The Emotionally Bonded Organization: Why Emotional Infrastructure Matters and How Leaders Can Build It,” March 3, 2008, p. 29.

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MindTree: A Community of Communities 311-049

19

Exhibit 5 Community Maturity Model

Source: Company documents.

• Building relationships between communities and the outside world

• Focus on environmental scanning and building a sense-and- respond mechanism

Capacity

Building

• Building relationships between communities and other organizational entities

• Focus on organizational development and building structural capital such as content, methodology, and systems

Capability Building

• Building peer-to-peer relationships through face-to-face meetings

• Focus on creating collective objects and developing individual human capital

Competency Building

• Assembling a collection of individuals sharing a common interest

• Focus on sharing

Community of Interest

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MindTree: A Community of Communities 311-049

21

Exhibit 7 Ashok Soota’s E-mail Announcing the “5 * 50” Initiative

From: Ashok Soota Sent: 07 April 2010 14:44 To: MindTree World Subject: An exciting new program - 5*50

Dear MindTree Minds,

You will remember, we have articulated as part of our overall Vision for 2014, we want to build a $1 billion enterprise. In terms of revenue, that is over 3 times our current size. There are 7 growth engines that are contributing to the current revenue stream and each has drawn out its strategy for growth. Due to the flat year in 2009-10, the asking rate for achieving this has gone up from 30% CAGR to almost 40%. In order to ensure we achieve the billion dollar goal and lay the foundation for future milestones, we need new ideas within our current businesses or new businesses which are IT driven.

This is the interesting and exciting part. We want MindTree Minds across competencies to come up with 5 great ideas that each can lead to $50 million in 5 years. With this in mind, Subroto launched the 5*50 program for the company on the final Osmosis Day in the West Campus. If you individually or, along with a team, have a great idea that you want to push forward as a business, log on to Neuron and tell us why is this such a great idea and, secondly, why should the person creating the new business be you? Since we want the idea to be well- considered and well thought out, we will allow a period of about 3 months for idea submission – i.e., by end June 2010.

In all businesses, it is the people who convert a great idea into successful businesses. People, who learn from successes and failures, who are good at implementation and who can make a dream come true.

Once we scan the submissions, we will select about 5-7 ideas along with the respective people. Some or all of the ideas may need market studies, which can be initiated by our Business Planning and Strategy department, internally or through an appropriate external agency. We will probably need to provide about 4 months for the same. After market validation, the shortlisted ideas and teams will be prioritized and the chosen teams enter the next phase of the program, which is a week-long mini-MBA. This mini-MBA program will be taught by the founders of MindTree and senior MindTree Minds. You will learn three things: innovation for 2 days, business of business for 1 day, finance for 2 days during the course. After you go thru this program, you may end up scrapping your basic idea or morph your idea. This is when you will actually write a business plan for your idea.

When the business plans are ready, they will be screened again and the approved ideas will be presented to a panel comprising Internal board (Jani, KK, Subroto and myself) plus the CFO, Rostow Ravanan, the CSO, Salil Godika and, if applicable, the CEO of the concerned business. If you can convince the panel on the viability of the business idea, resources will be allocated to you to fulfill your dream. You will be provided assistance in building the dream team from within and outside MindTree.

To the best of my knowledge, this is the first time such an intrapreneuring initiative has been launched anywhere in the world. We are quite excited about the possibilities. We believe that our core competency is organization building and the 5*50 program will demonstrate the same. In the process, we want MindTree to be one of the most memorable companies to work for.

So, if you are living an idea and want to bring it to life, log on to Neuron when you have thought it through and are ready.

Best wishes,

Ashok

Ashok Soota | Executive Chairman | MindTree Ltd. | (Source: Company documents.) D o

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311-049 MindTree: A Community of Communities

22

Endnotes

1 Niraj Sheth, “For India’s Tech Titans Growth Is Waning,” Wall Street Journal Online, August 20, 2008, http://www.expert2business.com/itson/IndiaITslowdownn.pdf, accessed February 2010.

2 Shivani Shinde, “Indian IT Services Will Soon See Double-Digit Growth: Gartner,” Business Standard, February 8, 2010, http://www.business-standard.com/india/news/indian-it-services-will-soon-see-double- digit-growth-gartner/384976/, accessed April 2010.

3 Shinde, “Indian IT Services Will Soon See Double-Digit Growth.”

4 Saritha Rai, “MindTree’s Gardener,” May 19, 2008, Forbes, http://www.forbes.com/global/2008/0519/020. html, accessed April 2010.

5 Mitu Jayashankar, “Forbes India: MindTree Aims to Join Top 6 IT cos,” IBNLive, August 4, 2009, http://ibnlive.in.com/news/forbes-india-mindtree-aims-to-join-top-6-it-cos/98549-7.html, accessed April 2010.

6 Subroto Bagchi, “Making of the MindTree Part II (1999–2003),” p. 11, http://www.mindtree.com/aboutus/ making_mindtree.html, accessed February 2010.

7 K. Raghu, “MindTree Tries Turning a New Leaf to Grow,” livemint, August 20, 2009, http://www.livemint. com/2009/08/20001834/MindTree-tries-turning-a-new-l.html, accessed April 2010.

8 Raghu, “MindTree Tries Turning a New Leaf to Grow,” p. 12.

9 Thomas Davenport and Laurence Prusak, Working Knowledge: How Organizations Manage What They Know (Boston: Harvard Business School Press, 2000), p. 24.

10 Jennifer J. Salopek and Nancy M. Dixon, “Common Knowledge: How Companies Thrive by Sharing What They Know,” Training & Development, April 2000, http://findarticles.com/p/articles/mi_m4467/is_4_54/ ai_61949979/, accessed April 2010.

11 Etienne Wenger, “Communities of Practice: a Brief Introduction,” Communities of Practice, http:// www. ewenger.com/theory/, accessed April 2010.

12 Jerry Ash, “Ideas Emerging,” Inside Knowledge 9, no. 10 (July-August 2006): 22–25.

13 Ikujiro Nonaka and Noburu Konno, “The Concept of “Ba”: Building a Foundation for Knowledge Creation,” California Management Review 40, no. 3 (Spring 1998): 40–54.

14 Ash, “Ideas Emerging.”

15 Subroto Bagchi, Gardener, The Symbolism and Substance, an interview, MindTree Ltd., 2008.

16 Bagchi, Gardener, The Symbolism and Substance.

17 Ash, “Ideas Emerging.”

18 Jayashankar, “Forbes India.”

19 Jayashankar, “Forbes India.”

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