What I have learnt in the last one year of global uncertainty
Times of extreme turmoil are also times of opportunity and validation. If one can source, create capital and generate free cash flows during difficult times, you can build a good company
I call myself an entrepreneur by accident. I started Mu Sigma as a 28-year-old with a vision to build the world's largest decision sciences company. Prior to Mu Sigma, during my management consulting days, I had sensed a severe lack of analytics and math talent in corporate America and the larger US economy. This convinced me of the need for a company like Mu Sigma that would help organisations institutionalise data-driven decision making in a sustainable manner.
When the global credit crisis hit and the economy turned upside down, companies across industries started cutting business spending and the political climate in the West turned against global delivery. While we, in Mu Sigma, were able to get stellar Fortune 500 companies in our client list during this time of turmoil, I learnt a few key lessons:
I realised that times of extreme turmoil are also times of opportunity and validation. Only good companies can be built during such times because one is tested thoroughly. If one can source, create capital and generate free cash flows during such difficult times, you can build a good company. Investors become very risk averse and will pay a premium for few good companies rather than take chances with many mediocre companies. As an entrepreneur, it is a better validation of your life (not just a validation of the company) because, for an entrepreneur, it is his/her life.
Every company has what I call an LSP ratio. The L is Goddess Lakshmi, who represents wealth. During tough times, companies with better execution capability can command a premium in their valuation. The S is Goddess Saraswati, who represents learning. During tough times, companies can create more opportunities for talented people in the market.
And the P is Goddess Parvati, who enables one to take the right risks without the fear of failure.
During times of turmoil you have to be ambitious and take advantage of each part of the LSP ratio. In 2008, I chose not to sell the company even though we had multiple offers to be bought out. We were able to attract good institutional investment. We invested in our Innovation & Development group within Mu Sigma to develop cutting edge solutions and made key hires in the company. As a result Mu Sigma has built a good foundation during the crisis years and beyond and we continued to attract the best clients, talent and investor base. A new normal has emerged post the 2008 crisis and the world has become increasingly complex with economic crises (currency, policy, etc.,) occurring more frequently. Organisations need to manage risk, comply with regulation, and develop new capabilities, alliances and business models while maximizing profitability in an uncertain world.
Mu Sigma’s focus on Convergence (learning across industries), Inter-disciplinary approach (Business + Math + Technology + Behavioral Science), Innovation (enabling a fail fast culture of experimentation), Agility (flexible global delivery model) are critical enablers in the new environment. As my better-half, Ambiga, often reminds me, “when we started Mu Sigma it was a common noun, today it is a proper noun, tomorrow it will be a verb!”
Dhiraj Rajaram, Founder, CEO & Chairman, Mu Sigma
(Seven years ago, Dhiraj began a journey with a belief that data analytics will transcend to decision sciences. With a fourth round of funding of over a $100 million, he has now institutionalised that, taking Mu Sigma to the core of the next outsourcing play. Today his is one the hottest firms from Silicon Valley to Sarjapur, Bangalore.)
