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Stability Comes Home

Stability Comes Home

Interview with Arjun Malhotra, chairman and CEO of Headstrong

Arjun Malhotra, Chairman & CEO, Headstrong, says that -- over time -- IT has changed the reasons why it is critical to their business. Where it was once the fulcrum of innovation, today it brings solidity.

  • 1975: Six engineering graduates from the Indian Institute of Technology, without a background in business, start what will be India's answer to leading international technology brands: Hindustan Computer.
  • 1998: One of the six, Arjun Malhotra, decides he wants something of his own and started TechSpan, a global Internet consulting company.
  • 2003: TechSpan merges with Headstrong -- a global consultancy and financial services provider. One thing strings three separate successes: Arjun Malhotra and his ability to create templates for success.

Today, Arjun Malhotra, chairman and CEO of Headstrong, still has the magic that made HCL: innovation. Here's his definition.

How is innovation driven in your company?

To me, innovation is very simple -- if anything changes my quality of life, then that's innovation for me. I drive innovation by asking people what they have done to change someone's quality of life -- be it your boss, your colleague, somebody reporting to you, or your customers. We keep it at a very grassroots level because it has to have an impact on an individual. When you put your head to pillow on a Friday night, you have to figure out what you have done in the week that made a difference to somebody's life. If we can't answer this simple question, then why are we wasting our time doing what a million other people can do?

One of Headstrong's innovations is integrating rules and object-oriented methods. Can you give us an example?

Our clients want us to deliver solutions that are different, better, and implemented in a way that has not been done before, so that they can get an edge. We have developed systems for rule-based trading -- if a particular stock dips below a threshold, then sell it. If you take objects and integrate them with a rules engine, you get something unique, something nobody else has done. It gave a client of ours a very efficient solution.

For example, one of our clients wanted to check all the trades for compliance for which there were around 16,000 rules. The engine was taking almost five seconds, but they wanted to do it in real time. With a billion trades, how do you check on 16,000 parameters for each of them? To solve this problem, we suggested a BI system that is hardware-based so that it can work fast.

Over 60 per cent of your revenue comes from the capital markets sector. Will you continue this focus?

It's actually gone up. Today it is probably 75 per cent. Over the next three years, we want to take it between 80 and 85 per cent. Why? Because I have something unique. We have domain expertise in capital markets and we do domain consulting. We can tell you how you can run your business more efficiently.

Did the Headstrong-TechSpan merger face integration issues?

Headstrong's focus was consulting while Techspan focused on capital markets. To understand how we managed the merger from an IT perspective, you have to understand how New York works. You have various businesses in the capital markets space with a business head for each. People understand business, not IT. Also, most of them have legacy systems along with modern ones, which makes integration tough. But we defined the backbone for IT and said that we would use this database, this middleware, and so on. Then, business managers worked with that mandate.

In a merger there is always confusion created by a lack of communication. People were told that Headstrong was acquiring Techspan, but the management team ended up being 80 per cent Techspan. This left people wondering if Headstrong was acquiring Techspan or vice-versa. Sharing a vision and getting people to buy in on it, that creates a seamlessly integrated unit.

When I took over as the CEO, I sent out a broadcast e-mail about myself. I received messages from 50 people who thanked me for my email and said that in two years no one from the corporate office had done something like it. That was when I realized the biggest problem with this company: communication. I decided I would issue an update every month. I started in January 2004 and I'm still doing it.

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