Secret Diary Of A CEO 2017

"Focus on what you're good at and nail it. Get great teams to execute what you're not good at"

Secret Diary Of Rajan Anandan Part-1

Photograph by Vishal Koul

personal information of Rajan AnandanDad was just such an incredible sportsman. Every New Year’s Eve, I just couldn’t wait to see what world record he was going to break next. A world-class swimmer, he swam the Palk Strait from Sri Lanka to India and back in 51 hours, a feat that got him into the record books. At one point, he had the maximum number of individual Guinness World Records — non-stop cycling for 187 hours, balancing on one foot for 33 hours, doing 165 sit-ups in two minutes, walking non-stop for 159 hours, treading water for 80 hours, non-stop twist dancing for 128 hours and there were many more. So, I grew up in a household filled with optimism where everything was possible. That really was my first life lesson — nothing was impossible!

my dad, the world's best!My brother inherited my father’s sports gene — he got on the diving board and boom! He was a national champion at the age of 13. He didn’t even have to train. How do you not play sport in a household like this? So, I did andI was passionate about it. I even enjoyed my time on the field, just that I sucked at it! I tried my hand at everything on offer — cricket, rugby, soccer, swimming. You learn winning is important but I realised trying to win when you don’t have the skills is very difficult. It meant you had to work really really hard! And boy, did I slug it out.

Many years later, my cricket coach told me the only reason I was on the team was because he felt bad for me as I was trying so hard! I would train for about four-five hours every day and would be the last kid coming off the field. I could pick any sport but I was never going to be awesome. That didn’t faze me then. I was this self-driven kid. The closest I came to being successful was the time I came first in one of the 100 metre races in school, which clearly didn’t have the best sprint team in town. That became very evident when we got killed at the inter-school competition held soon after!

passionat about sport but sucked at itDad never once told me, “Maybe sports isn’t your thing”. I guess he wanted me to discover that on my own. I was heart-broken when dad passed away in 1984 trying to cross the English Channel. By the time I was a teenager, I figured out that sport isn’t my cup of tea. That’s when I learnt my most important lesson, one that would guide the choices I make all through my career — you have to figure out what you are good at and nail it. When you are good at something you are more likely to succeed because it starts getting easier. Since you are winning, you also begin to enjoy what you do. So, you have to focus on what you are passionate about and good at. I was really passionate about sports but I would have never made it to the Sri Lankan cricket team. Was playing sports the best return on investment on my time? Probably, not. But I was having fun hanging out with my buddies and back then we had limited options. There was no plan B. Had we had the internet, maybe I would have started a company. I didn’t know them to be as options. Those days, it was only academics and sports and, luckily, I aced one of them. The ethnic conflict had broken out in Sri Lanka and anybody who could leave the country was doing so. 

Grand slamIn 1987, it was my turn to leave the country for higher studies. My school counsellor suggested I apply at Cambridge, Oxford, MIT and Harvard. I got into the first three but MIT was only one that offered financial aid. It was immediately clear where I was headed for college. 

Damn! America is nothing like how it is shown in the movies. Where the hell are the convertibles, beautiful people and the parties? It’s nothing like whatI had in mind plus it’s freezing cold in Boston. But there was no going back. As a student on financial aid who came to the US with no money, I had to work 30-40 hours a week if I wanted to have a life beyond classes and even back then I knew I wanted to have a life. So, I took up almost every job I could find — I worked at the cafeteria and the museum, taught classes, graded papers and even tested tennis rackets. By junior year, I was done washing dishes at the cafeteria and discovered that testing rackets paid slightly better. So, every Sunday, I would measure the performance of various rackets against various metrics for three to four hours. Chances are that all the best tennis racquets in the world manufactured between 1988 and 1990 were tested by me.

Rajan Anandan at MIT reunionMIT was pretty intense. It was hardcore engineering and very challenging academically. How do you survive in such an environment when you are clearly not the smartest in the class? When you don’t have options, you have a different mental make-up, you just make things work and I did. Despite going through the ringer when it came to academics and working 30-40 hours a week on campus, MIT gave me some of my life’s best memories and friends. I met my wife, Radhika Chopra, and some of my closest friends there. Radhika went to Wellesley and I spent as much time on her campus as I did on mine. I remember our first date. Things didn’t exactly go as planned. I learned the hard way that you never ask a bunch of nerds where to take a girl on your first date. But I didn’t know better back then and I asked my friends where I should take Radhika. They said I should try a place called Café Algiers. Post a bus-stop mix-up, getting wet in the rain and a subway ride later, we landed up there to find a dark dingy place that didn’t even serve proper dinner and I thought to myself, “Boy! I am toast!” However, I survived that nightmare and swore to myself never to ask any socially-challenged mates for dinner-date options.

hello s unshineBut by the time we left MIT in 1991, my friends and I went from being a bunch of nerds to having our own table at the hottest nightclub in Boston — M-80.All through first year we stood in line but never got in. By second year, we figured out we had to tip the guy at the door to let us in and in our third year, one of the guys finally managed to get a membership to the club. Even four years after we passed out, we were still paying off the membership. Mortgages didn’t happen but it was the best investment we ever made.

When it came to grad school options, I wanted to go somewhere warm, less intense and more fun. Stanford ticked all these boxes and plus the campus pictures looked really awesome. I didn’t get a scholarship but I still went. That’s how badly I wanted to go to a warm place. Once I got there I had to convince my financial aid officer real quick that I really was a deserving candidate. On a percentage basis, I would have attended more classes in Stanford than in MIT only because jobs in grad school paid much better and you didn’t have to work that many hours. I studied mechanical engineering at MIT and manufacturing systems engineering at Stanford. The dream was to work for Ford Motor Company when I graduated from Stanford in 1992. America was being attacked in manufacturing and it looked like a good problem to solve. I also didn’t know better. Nobody told me that if I had joined Goldman Sachs, I would make $100 million when I hit 30, but, by the time I was aware of this, it wasn’t important anymore. Kids today can take better-informed decisions because they are aware of all the opportunities available. That’s the power of the internet and information. Also, Silicon Valley in the early ’90s was nothing like how we know it to be now or even what it had become in 1996-1997, which marked the beginning of the internet revolution. Today, if you are graduating from Stanford, you are not leaving the Valley.

Rajan Anandan training ground - McKinsey Chicago But Ford wouldn’t hire me because I didn’t have a green card. They refused to hire the top graduates from the best engineering colleges if they didn’t have green cards. Incredible, isn’t it! One of the many reasons companies fail is because they focus on the wrong things. Many years later, I was glad I didn’t land up in Detroit. So, I got into McKinsey. I wanted to work out of their Silicon Valley office but Radhika got a job in New York and I didn’t want us to be on different coasts. There wasn’t an opening in the New York office , but Chicago was on offer, so I took it up. I got to as close to New York as I could.

Those formative years at McKinsey and the people I worked with went a long way in helping me become what I am today. I strongly recommend that everyone get a little consulting experience under their belt since it is a great training ground. McKinsey had just begun hiringnon-MBAs for their business analysts and to bring them up to speed, they would put the new recruits through a 30-day mini MBA. So, I went through the course and it was my first brush with business. It was at a centre about two hours away from Copenhagen. I can never forget those 30 days because we were served salmon for lunch and dinner every single day. So much so, that for the next seven years I couldn’t bring myself to eat salmon. Thank God I wasn’t a vegetarian! But it was all good in the end.

power of ideasI went on to work for McKinsey for 11 years. When you work with some of the smartest people in the world, you understand the power of collaboration. I learnt the power of doing the right thing. I was astonished at how consistently senior partners would tell their clients that some of their ideas were just bad ideas. Can you imagine telling a Fortune 100 CEO that his best idea is a really bad idea but they would do it over and over again.! They wouldn’t shy away from telling the truth and that’s what built their credibility over time. While I worked with many great senior partners at McKinsey such as Mark McGrath and Steve Coley, the one person who had the biggest influence on me was Ranjit Pandit, who was heading McKinsey’s India operations. I was working out of India for two years from 1994 to 1996. He was the first guy who taught me what unconstrained thinking was and urged me to think big. Client meetings with him were always a revelation. If a CEO was thinking of scaling his revenue from Rs.2,000 crore to Rs.6,000 crore he would ask them why not Rs.20,000 crore? To a CEO who hasn’t looked beyond India or travelled out of the country, he would ask, “Why not go global?”

ranjit panditI also learnt a lot from Tino Puri. He was intellectually very pure and embodied the McKinsey spirit of seeking and telling the truth. I came back to the US and led the internet practice in 1997-98 in the Midwest where I worked with a lot of companies. John Cook taught me that you can’t do client management sitting in your office. He drove home the importance of always engaging with clients because that’s what builds relationships. I took that to heart. I remember working with one of the largest animal pharma companies in the US. We were working on developing a vaccine that accelerated the rate of growth in pigs. So, I had to talk to large industrial farmers and get their inputs. One day I found myself in Texas with one such industrial farmer. Minutes into the meeting, he asked me if I have ever seen a pig. I said no. He then asked me have you ever gotten close to a pig? I said not really. Before I knew it, he had me out of my suit and in a jumpsuit and we were having the discussion in the middle of apig mud pit. Did you know pigs are pretty aggressive? You will, if you ever get into a mud pit with them like I did. But it was worth the effort, his answers helped me build a complicated model on how to estimate the productivity improvement in pigs. (Yup, you read that right). I think they call it big data these days. My partners were blown away. They hadn’t seen anything like this before. Thus, began my Texas saga. After pigs, I worked on cows and a whole host of animals. They were a very large client of ours. You get the drift.

client is kingI loved building complicated mathematical models. Only there were times I didn’t have to complicate it. Like the time, I was going to build a neural network to improve the efficiency for a large steel company in the Midwest. If there were two things that steel plants did consistently, it was to produce more steel and cut costs. Twenty minutes into the presentation, one of the senior partners gently asked me, “Rajan, how many plants do they have?” I said, four. He then asked, “And how many of them are making money?’ I said none. He then followed it up with, “So, how many units should they be running?” and I responded “Probably, none”. Of course, his idea was not to shut down the plants but to get me to focus on the basics. A company with four steel plants didn’t need a neural network to get them back on the path of profitability. So, the neural network was out the window and we worked on increasing sales and cutting costs, which worked just as well for the company. So that was another thing that was drilled into our heads at McKinsey — keep it simple. The more you complicate the problem the harder it becomes to solve. I also learnt that you can’t take the best management and put them in a structurally challenged industry, the outcomes will never be great. Like it is with the Indian start-up industry, if you can’t differentiate your offering it doesn’t matter what you do. Thanks to my stint at McKinsey, you throw a new business at me and I can quickly figure how it works in a couple of weeks. But my next role would require me to do more than just figure out businesses very quickly.

This is the first of a two-part series. You can read part two here.


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