Published on November 09, 2021
In an insightful Leadership Series EDGE Webinar on November 03, 2021, titled 'Tata Elxsi - Our Transformation Story', Manoj Raghavan, MD & CEO, elaborated on how the company overcame a period of fluctuating growth rates to achieve consistently healthy numbers.
Mr Raghavan kicked off his address by explaining Tata Elxsi's business ecosystem. Tata Elxsi is amongst the world's leading design and technology services providers across industries, including automotive, broadcast, communications, healthcare, and transportation. The company helps customers reimagine their products and services through design thinking and the application of digital technologies such as IoT (Internet of Things), cloud, mobility, virtual reality, and artificial intelligence.
For over the last three decades, Tata Elxsi has carved a niche in the IT engineering domain deploying IT solutions to tackle complex engineering challenges. It has acquired a reputation of delivering exceptional outcomes in the engineering R&D domain by blending technology, creativity and engineering.
In 2019, Tata Elxsi's management realised that the company's growth rates, especially quarter-on-quarter (QoQ) figures, were a tad inconsistent. In early 2020, it set out to identify and plug the gaps.
A tumultuous start
No sooner had it started its planning process, the Covid-19 pandemic put a spoke in the wheel. Like most other enterprises, Tata Elxsi struggled to make sense of the business ecosystem in uncertain times. Soon, however, Tata Elxsi got its bearings right and started planning with a single-minded agenda of achieving consistent growth rates.
Tata Elxsi first focused on the development of a strategy and devised go-to-market plans. Moving away from its practice of planning for the next and adjoining quarters, it began planning for a longer time horizon.
The plan and its implementation
Mr Raghavan gave details of the company's vision for 2023, which included three critical goals:
- Double the revenue
- Maintain segment-leading margins of 22 percent
- Mitigate business risk by diversifying its revenue profile
He also elaborated on re-crafting Tata Elxsi's vision and mission. The thought process behind the exercise was transmitted across the organisation through its new values, aptly symbolised by the acronym ACTION:
- Agility - Speed of actions and decision-making
- Confidence - Taking the world on by thinking big and not shying away from taking risks
- Transparency - Building trust through openness and sharing
- Improve collaboration - Introduce a culture of winning together
- Ownership - Committing and taking responsibility and doing it well
- Nurture learning and growth - Adapt, retool and re-skill
In December 2020, Tata Elxsi enlisted the services of a United States-based consultancy and rolled out a framework of its objectives and key result areas (OKR). OKRs enable a company to track progress, create alignment, and encourage engagement around measurable goals. The objectives of Tata Elxsi's OKRs were:
- Create sustainable QoQ growth to ensure consistent business growth and achievement of financial goals.
- Grow the customer base and provide best-in-class customer journeys to scale the business.
- Improve and optimise internal processes to drive accountability, collaboration, and agility.
- Build competent and motivated innovation teams to continue exceeding customer expectations while scaling up the business.
Tata Elxsi is now showing consistent and healthy revenue and profitability figures for the last ten quarters. The cumulative quarterly growth rate (CQGR) for revenues is at a healthy six percent, and the profit before tax shows a robust CQGR of 10 percent. Tata Elxsi's stocks have appreciated nearly nine times at the bourses since October 2019.
Even within the Group, Tata Elxsi now occupies a leadership position. It has become the eighth company within the Tata Group to be recognised as an 'Industry Leader' by TBEM Assessors.
The company's employee satisfaction scores have also improved creditably. Tata Elxsi has met and even exceeded industry benchmarks for the same.
Mr Raghavan was buoyant about the company's prospects, evident from his responses to the attendees' interesting queries about the future.