The Issue: For Cognizant, Two's Company

The tech-services provider found an approach, called "two in a box," that eased the headaches of managing—and being managed—from afar

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Cognizant Technology Solutions' corporate infancy was similar to that of many outsourcers. The tech-services provider got its start helping companies resolve potential Y2K flare-ups and other relatively simple application maintenance services. As a result, during the company's early years in the mid-1990s, despite the fact that it's based in Teaneck, N.J., Cognizant had an organizational structure that was India-centric. Teams in other parts of the world reported to managers in India, who also supervised the army of software engineers solving the basic issues on the ground.

But in the years that followed, Cognizant, which now has $1.4 billion in annual revenues, began to get more sophisticated and more complex requests from customers. To be sure of meeting their needs, CEO Francisco D'Souza, then chief operating officer, and his colleagues knew they would need to revamp the organization, putting power in the hands of the managers who were closest to the customers. "We had to find a new way of organizing the company along the customer axis," says D'Souza.

While the redesigned reporting structure helped improve Cognizant's responsiveness to customers, it wasn't working for Cognizant's employees. The company's managers, who were mostly at customers' locations in the U.S., were strung out by the harried schedule. After putting in a full day's work with clients at home, they'd stay up late at night helping to troubleshoot projects in India and managing the careers of people there. And no matter how diligent the managers were, they were still on the other side of the world, and workers in India felt distanced. "It was a little bit like Charlie's Angels. You wake up in the morning, a voice on the phone tells [you] what to do," D'Souza says. "It's very impersonal." After one manager who worked closely with clients threatened to quit—"He was awake virtually 24/7," D'Souza recalls—he knew he and his team had to do something. But what? "Frankly, we were out of ideas."

Learning from What Works

D'Souza knew that some of the company's global teams were working well somehow, with solid performance and tight-knit groups. So they set about studying these units. What they discovered was the teams had informally organized themselves so that two people were essentially in charge: A manager on the ground in India and one on the ground at the client site. "They jointly felt accountable for the outcome of that team," D'Souza says. "We said: Perhaps there's an organizational model that makes sense here that we can learn from." Cognizant decided to institutionalize the co-manager concept worldwide, assigning two equally responsible managers to each project team and business unit, with one close to employees and one close to customers. Managers have to work out issues jointly and are equally responsible for customer satisfaction, project deadlines, and group revenues.

But scaling the co-managed team structure, which D'Souza calls "two in the box," worried some executives. "There were a lot of naysayers," he says. "It bucked traditional management thinking that says you need a single point of accountability and a single point of escalation." But because they had vigorous debate on the issue, he says, he and other senior managers were able to watch for and quickly triage any negative outcomes they'd anticipated, such as evidence that decisions weren't being made, or any situations where the two managers couldn't agree.

So far, the naysayers have been proved wrong. The co-manager organizational strategy is working well, D'Souza says, and it extends all the way up to the executive suite—even managers who report to him share responsibilities equally. As Cognizant has begun extending its offshore tech work beyond India, where some 70% to 75% of its engineers reside, it's even evolving into some "three in a box" teams, D'Souza says, with equally powerful managers in India, China, and at the client site. "We've been able to extend this to create truly global teams," he says. "It's allowed us to extend the business model for the changing business environment."

McGregor is BusinessWeek's management editor.