How Elango R Is Building a Strategic Customer Base to Fuel Long Term Growth
Our team of experts from the Revenue Enablement Institute studies how leading organizations are transforming their commercial models to accelerate revenue growth. We profile growth leaders – CXOs – who are at the forefront of defining, enabling, and leading the execution of the 21st Century Commercial Model.
Elango R is the President of Mphasis (NSE: MPHASIS), a leading provider of information technology services specializing in cloud and digital solutions that helps enterprises apply next-generation technology to transform their businesses.
A former HR executive who has been with the company for over two decades, Elango currently leads a portfolio including new client acquisition at Mphasis and clocks in an annual revenue of over half a billion.
Elango is truly a new breed of growth leader. He brings a very unique perspective to growth. His philosophies on measuring account health, prioritizing top accounts, driving change management, and creating a common purpose across the revenue teams are progressive – and extremely effective in practice.
Under Elango’s leadership, the business leads the industry in customer experience by a wide margin thanks to his hyper-extreme focus on building customer relationships. His team is able to convert world class customer experience into profitable commerce.
Their primary investor and strategic partner, Blackstone, believes so strongly in this growth formula, they recently doubled down in their investment in Mphasis to help the company accelerate its growth and scale new heights.
We asked Elango R to share how he has been able to transform the business unit into a high growth engine with market leading YOY growth and Net Promoter Score (NPS).
Elango advocates an account focus that may seem extreme but in practice is highly effective. Most growth leaders tell us they try to cover too many accounts and that hurts their go to market effectiveness and margins. This is particularly true in professional services where consulting partners have the freedom to pursue a variety of opportunities and the flexibility to address a broad set of client needs.
“Our best accounts are what we call Horizon accounts,” says Elango. “And we only have about 100 of these because of the relationship depth and commitment they require. These accounts have two things in common. First they all have an account exec who is the CEO of that account. Meaning that I as the President work for that person when it comes to that account. It’s an extension of our value system that says we don’t work with each other – we work for each other. So, if our largest account has a deal in flight, and they need all of us to pitch in, that’s what we do.”
“Second, we’ve created something called account cohorts,” Elango continues. “That operates like a business unit to drive growth in an account. Every Horizon account exec manages a cohort that includes delivery architecture, technology, business, finance, and everything they need to develop the account. That unit meets me every month for 30 minutes to talk about what’s happening in their account. Every quarter we spend two hours walking through what they’re going to do proactively to develop that account. That’s why I personally cannot support more than 10 Horizon one accounts, and we as an organization cannot give that level of attention to more than 100 Horizon accounts.”
This level of focus allows Mphasis to excel at the two KPIs that matter most to Elango – Net Promoter Score (NPS) and growth. “Our NPS is the highest in the industry,” reports Elango R. “In our experience, the keys to generating industry leading NPS is to understand two critical factors of execution – meeting the service level agreement (SLA) and meeting the emotional needs of the client.”
But NPS alone is not good enough according to Elango. “Having a good conversation or having a good dinner is great, but you need it to convert to revenue. So, our second KPI is account revenue growth,” says Elango.”
“Our view is that 70% of problems are solved by growth, and the other 30% of the problems are solved by more growth,” he continues. “But when I say growth I don’t mean grow for the sake of growing. You’ve got to have some clear guard rails around growth. It has to be profitable growth. It has to be quality growth. It has to be responsible growth. And it has to be growth that is in some ways changing the world if you want to be relevant as a technology provider.”
“Many times, you’ll have a great NPS score, but the account is not growing,” says Elango R. “There are two reasons for this. The first is budget. But every client you are targeting should have some money to spend on you, even if its budget they’re spending on somebody else that they can push to you. The bigger factor is relevance. If the client sees you as good, but not great enough to buy more from, then you have to go back and demonstrate the relevance of your solutions and innovations. That involves having deeper conversations with the customer that peel back the layers of their problems and actively build the perception of relevance. Building that kind of relevance takes extreme focus to achieve. But as long as you are relevant to your customer, and you’re creating an experience that emotionally stays with them, they will continue to grow with you. We like to say we give our Horizon one accounts 120% focus – 100% to deliver and support the NPS and 20% more to build that perception of relevance with them.”
Like most advanced commercial organizations, Mphasis uses measures of account health as the basis of measuring, motivating, and allocating team resources as customer lifetime value becomes a business model focus, and the customer experience defines competitive advantage with B2B buyers.
Elango also has a very unique but common sense definition of account health. “My golden rule about account health for our top clients is that if I don’t have access to the senior executives in a B2B business client on a mobile phone, and they don’t respond to me in two hours, then then you have challenges,” reports Elango. “That’s my measure for a Horizon One account where we are helping in all aspects of their transformation and working with all major stakeholders. We have about 10 relationships at this level. These accounts are running at 120% focus and we’re doing everything. These are deep and trusted relationships where I know the CIO, CEO and all the key executives,” says Elango R.
“On a Horizon Two account, we may be working on one or two meaningful engagements with one or two business units but we’re probably only at 30-40% of account potential – so there’s still 60% to explore,” says Elango R. “We’re probably only in email conversations with the business leader. That’s about 34 relationships in my view.”
“The third level, Horizon Three, has large account potential and fit with our capabilities, and we are presenting ideas to them to build the relationship,” he continues. “Our revenue portfolio is around half a billion and in all we are focused on 100 core customers. I think of them like a conveyor belt. At the end of the belt are your fully developed Horizon one accounts. In the middle are the Horizon two accounts which you are growing into fully developed accounts. And at the front of the belt are your Horizon three accounts where you are at the pitch-in prospecting stage. Using this approach, we’ve been able to win large deals of greater than $20 million in total contract value (TCV) year over year.”
Elango has applied principles he learned in human resources to create a common purpose across his revenue teams and lead change in a dynamic marketplace. “If I was pushed to identify the one thing that’s worked for me as a leader to drive growth it is the fact that I’m able to take an organization and rally them around a common purpose,” he relates. “When it comes to motivating people and creating incentives that drive common purpose I’ve learned some hard lessons from working in HR.”
“The first is you don’t reward implicit motivation by explicit rewards,” he shares. “When you throw money at things that people do out of discretion, you’re actually discouraging them. If somebody’s putting in that extra effort, don’t send them a $50 voucher. Most likely they’ll expect to be recognized. We learned you need to put your arm around them either virtually or physically.”
“The second lesson is to be very transparent in how people are rewarded, including yourself as the leader,” continues Elango. “So, everybody knows what my targets are because I tell them these are my targets. There’s no guesswork.”
“The third thing that we’ve done to create common purpose is to make a large part of individual performance incentives based on unit performance,” says Elango. “Most of my leaders will get 50 to 60% of their variable compensation paid out because the whole unit meets the numbers and not just their unit. What happens when you do this is you will see team members ahead of their goals picking up others who are lagging behind to help them make it up and achieve the unit goals. This leads to common purpose across the team. It manifests itself in something we jokingly call a “you’re an awesome guy call” – where a peer calls another and asks can you back me up or push something to help me make my number because I’m down by 5%, and I’m not able to meet my numbers to hit the team goal.”
Commercial transformation requires change management and the ability to adapt to frequent changes in customer behavior, preference, and demand for innovation. Elango R regards his ability to bring all customer facing employees to buy into and execute change quickly as a key to Mphasis success. Here he has drawn upon the lessons of history to find effective ways to improve the agility and adaptability of his organization. When leading this team, he applies the principles of deciling employed successfully by Roman Legions and Mongols to centrally manage and quickly re-direct thousands of soldier’s mid-battle. Elango manages his teams in units of 10 much like Genghis Kahn structured his Mongol armies. Kahn managed armies of 10,000 soldiers (called Tutems) by breaking them into 10 Mingghamns, which are broken into 10 Zouts, and again into 10 Aravts which were small units made up of 10 soldiers each. “In every role, what I’ve done is I’ve taken a group of people and said here’s my top hundred, says Elango. So, I have 10 people reporting to me and they each have 10 people working for them and they have 10 people reporting to them. What I call the 10 by 10 by 10. I modeled it the same way they ran the Mongol armies that conquered half the world. This way if I want to make a change in direction, it takes me a week because I just need to whisper in the wind to these 10 people and it just goes down the chain really fast.”
He extends this focus on speed to innovation. “Our clients are global enterprises who look to us to help them build, deploy, and scale innovation in their processes, capabilities, and offerings,” says Elango R. “Speed and open innovation are important because if we don’t go fast and build out the next generation of technology for our financial services, healthcare, and industrial clients they are going to get disrupted by new competitors and technologies like blockchain.”
“We cannot afford to have pride in authorship when it comes to helping our clients find and deploy the best next-generation technologies to transform their business,” shares Elango. “Our philosophy is open innovation. We’ve developed platforms that allow us to share grass roots innovations our 29,500 people created for clients, or leverage innovations from outside the business by building a large ecosystem of third party solutions partners and startups. This way our clients get access to the best innovation relevant to their business needs.”
Elango R is President –North America-New Clients Acquisition
You can learn more about the next generation of growth leaders and the state-of-the-art management tools, skills, capabilities, and practices they are using to accelerate revenue growth and adapt to the new buying reality at the Revenue Enablement Institute Web Site. You can nominate growth leaders for our CXO 100 list.