Mindtree’s people power scoring over L&T’s business logic?

Ashutosh Sinha
As L&T; makes aggressive moves to acquire a controlling stake in Mindtree, its actions are speaking louder than words. The company must have done the mathematics and there is good reason why, in its eyes, Mindtree must be looking good as a target.

The number crunching always begins with an excel sheet. Those hard numbers are used to prepare the ground for a business move. The power point comes in when the financing and other teams prepare a scenario to go ahead with the bold move.

The written or spoken word comes well after that. Preparing the story, hemmed by words that support the measured action, is the most difficult part of the situation.

As L&T makes aggressive moves to acquire a controlling stake in Mindtree, its actions are speaking louder than words. The company must have done the mathematics and there is good reason why, in its eyes, Mindtree must be looking good as a target. With its leadership in the digital space – its ability to help companies put together solutions for companies that can drive their digital strategy – Mindtree has been able to make its mark.

Consider this: It took Infosys Technologies just short of 25 years to hit its first billion dollar in revenues. Mindtree, since being founded a little under 20 years ago, is knocking the doors of that magical mark. Customers must have found value in what Mindtree has delivered to them.

L&T’s big, bold move

L&T is hoping that by writing a cheque of thousands of crores, it could earn a controlling stake in Mindtree. But will it be able to assimilate the company in its fold when the lineage of the two, seemingly, are as different as the proverbial chalk and cheese?

L&T’s tech business has been bred on the old word industries and providing solutions for industries like petrochemicals, semiconductors, transportation and others. Mindtree’s focus has been on the digital business, providing industry-leading solutions in on artificial intelligence, cloud and other platforms including traditional IT services.

L&T’s tech business has a strong input from being a business partner for the engineering companies. That is not surprising, given the parentage it enjoys. In comparison, the founders have taken turns to lead Mindtree to carve a space using technology in bringing about a change in businesses.

The standing of L&T as a giant in the engineering space is undisputed. In comparison, Mindtree’s founders were professionals and they only had their commitment and reputation to fall back upon.

Culture mismatch

Can big companies make mistakes? Of course, they do. When they make a bold move, there is little to doubt the homework they do. It is the issues that are not translated in numbers – culture, soft assets, motivation among employees – where the challenges can emerge.

Tech is a people’s business. If the professionals in any company are ready to give their best, business solutions of companies can find innovative solutions. News reports suggest that Mindtree employees are rallying against the hostile bid. A day after its deal with VG Siddhartha to buy out his 20.4 per cent stake was completed, L&T is having to reassure employees. Its aggressive stand has been diluted. It knows without its committed employees, Mindtree may not be of much value. Little wonder, L&T is now talking ‘dil & pyaar’ or heart and love.

The business logic from either side may have its own merit but the emotional angle and the strong stand by the Mindtree Minds, as the employees are called, is now dominating the narrative. Could that be the reason why L&T is now resorting to some love? “No dil and pyaar in a hostile bid, all hogwash…” former Infosys Technologies board member Mohandas Pai tweeted.

L&T’s initial aggression has given way to emotion. That begs the billion-dollar question – if the takeover bid were to go through, will the two companies, different as they are like chalk and cheese, be able to work together? Without the support of Mindtree Minds, will L&T get what it is looking for? Or, will the unbridled ambition of $1 billion company stunt the growth of another one?