No one can be stopped from leaving for better incentives: TCS boss Krithivasan

K. Krithivasan took over as chief executive officer (CEO) of Tata Consultancy Services Ltd (TCS) on 1 June last year, after the previous CEO, Rajesh Gopinathan, stepped down abruptly in March. Krithivasan, 59, who joined TCS in July 1989, had taken over in April 2007 as the president of the banking, financial services and insurance (BFSI) division, which accounts for a third of the company’s total business.

In his first short sit down interview with , the soft spoken Krithivasan came across as guarded. Under his watch, TCS has done better than smaller rival Infosys Ltd for two straight quarters, with the boss sharing that the company is now focusing more on growth and expects the next financial year to be better than the current one.

Edited excerpts: What explains the investor optimism in the information technology (IT) sector as seen in the rally in IT stocks today despite not so great numbers? I can talk only about TCS and not about other companies. Investors wanted to know if we are more optimistic about FY25 than FY24. The answer to that was yes, we are more optimistic about FY25 than FY24.

I think that is what is reflected in the market. We are not saying that Q4FY24 or Q1FY25 will be strong. We are saying that we believe, based on what we see in the environment right now, that FY25 will be better than FY24. What is the reason behind this optimism? We said that the demand environment in Q3 has not deteriorated further compared to Q2.

We have close to $40 billion of order book as of Q3. We are continuing to execute as per plan. Some of the work that we started in the past is not coming in or getting deferred (as much as before). This brings us to the classic leaking bucket theory—are we losing more business now than we are winning? The answer to that is no.

We are continuing to add more business because of our strong TCV (total contract value) and that is why there is reason to be optimistic about FY25. Has TCS got its mojo back under your watch? I don’t want to look at my watch and compare it to any of my predecessors. This is because TCS is a continuum at play.

Our strategy continues. We have not gone for drastic changes. We’ve been trying to push the sales teams to win more because eventually, in a tight market, you must gain market share. If you don’t gain market share, you cannot sustain growth. And hence, we have increased the focus on market share.

Increased or sustained margins are a by product of operational excellence. What do you say on the role of Tata Sons chair N. Chandrasekaran? He knows the industry better than anybody else. We don’t expect him to make decisions on our behalf nor do we expect him to do our operating plan on our behalf.

We don’t go to him seeking direction on individual RFPs (requests for proposal) or opportunities also. There are strict lines that we don’t cross. We seek him out as an advisor, a mentor and our consultant. Probably the best advisor available to us and he’s always willing to give us time. To say I speak with him every day will be a stretch.

I started working with him in 1992 and he has been my boss for most of these years. When you work with someone for three decades, your relationship is both formal and informal. I’m comfortable talking to him any time. But I need to respect his position. Because as CEO, I have a job to do and I cannot expect him as the chairman of the board and the company to do that job.

There are areas where we take his guidance. For instance, the conversations around generative AI (artificial intelligence). We discuss the kind of investments we are making in gen AI and seek his opinion, but seeking guidance on operational issues is not fair on my part and I do not do that. On talent mobility...

Like most TCSers, the thought of working outside has never crossed our mind. It’s not something we debate or think about at all. Organizations must provide the right work environment. People have the freedom to work where they want to and where they feel they are valued and cherished. You need to retain people by your values.

Why don’t senior executives leave TCS? Because we ensure that there is a long term value we offer. All CEOs before me joined this company as trainees. Anybody who joins TCS knows that they have a shot at becoming if not the CEO, at least reaching the senior most levels. There is a joke internally here at TCS, that when you join TCS, it’s your decision.

But when you are thinking of leaving, the family weighs in. The whole family decides. I believe that if organizations must retain people, they need to do so through positive incentives. If somebody finds more incentives elsewhere, they will leave the company and we cannot stop people from doing that.

On slow campus hiring... We are doubling down on going in person to campuses for hiring. Last year, we hired about 40,000 freshers. This year, we will start with a smaller number and see how it plays out based on the demand situation. But our belief remains that we should go to the campuses. I can tell you that our retention among trainees is higher than the experienced professionals.

Also, if all companies are only going to hire experienced professionals, then who is going to make the freshers experienced? On the $50 billion aspiration target by 2030... What we conveyed earlier was that if we keep growing 8 9% over the next eight to nine years, then we would become a $50 billion organization, and we want to accelerate our growth.

We’ll be happy if it touches $50 billion in 2029, and if it happens in 2031, even then, we will not be too unhappy. We don’t work by keeping $50 billion as a target. Is double digit growth possible at TCS’s current size of nearing $30 billion? Our aspiration will remain to continue to grow in double digits.

The way our company is structured, every client partner works like a CEO for that client relationship. We have to ensure that all the small and big units of our organization aspire to grow, at 15% or even 20% every year. If we look at ourselves as a $30 billion organization, it may look like a mammoth task.

But if we look at ourselves as many $50 million or even smaller organizations, each having the right leader and aspiration, there is no reason that we cannot have double digit growth. This is not the first time we have been asked this. When we reached 10,000 associates for the first time, we were asked how much bigger we could grow.

We are now at over 600,000 people..