Is Infosys facing a leadership crisis?
Infosys CEO Vishal Sikka has already reversed two of his decisions on heads of business divisions in a little less than 18 months
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Bengaluru: Is Vishal Sikka finding it difficult to build a stable senior management team at Infosys Ltd? That’s the question being asked by some executives within the company as the CEO grapples with the challenge of identifying leaders who can head independent units.
Sikka has already reversed two of his decisions on heads of business divisions in a little less than 18 months, even as three other executives tasked with reviving Infosys’s three divisions have left the company.
Since taking over as the first non-founder chief executive of Infosys in August 2014, Sikka has hardly put a foot wrong. But the frequent change of leaders is hurting business, with some units lagging behind Infosys’s overall growth.
“I have to candidly say that some of the exits were related to performance,” Sikka told analysts in Pune last month, when asked about senior management exits. During Sikka’s tenure, six executive vice-presidents and eight senior vice-presidents have left the firm.
This is true as Sikka did send out a stern message to the company’s senior management: shape up or ship out. But the question being asked now is why Sikka first appointed leaders, only to move them later.
“The question is not why there are so many exits even after two years, although by now there should be some stability. But why did the CEO appoint leaders in the first place, only to move them out later?” said a senior executive. The executive, who declined to be named, reports to an executive vice-president, who, in turn, reports to Sikka.
In December 2014, three months after taking charge, Sikka replaced Deepak Padaki with Ritika Suri as the head of M&A (mergers and acquisitions). Suri, Sikka’s former colleague at SAP AG, was also given the additional mandate of overseeing Infosys’s $500 million Innovation Fund.
Infosys expects $1.5 billion in new revenue from buyouts as part of Sikka’s ambitious target of hitting $20 billion in revenue by March 2021.
However, in July this year, Padaki was asked to return to head M&A even as Suri was asked to head the large deals team at the company.
Another executive who has seen roles change is Sanjay Purohit, formerly head of EdgeVerve, the products, platforms and solutions subsidiary. Purohit was first asked by Sikka to shift base to Palo Alto and head the Infosys Consulting division in February last year but was shunted out of the unit in July. The current role of Purohit, who moved back to Bengaluru, is not clear.
An Infosys spokeswoman declined to share details on Purohit’s new role.
Meanwhile, three executives who were appointed by Sikka have left the company, raising more questions about the struggle to build a stable leadership team.
Michael Reh was appointed as head of EdgeVerve in October 2014 but left abruptly at the start of the year. In a bigger setback to Sikka, the head of the Cloud, Infrastructure and Security unit, Samson David, left the company in July, a little less than 15 months after his appointment in February last year. Finally, Anup Uppadhayay, who was made Infosys BPO head in November 2014, left in July.
“The most important job of a CEO is to create and sustain a positive culture, which is also the hardest and the most essential part, in support of their operating imperative. This requires assembling the best set of senior leaders and giving them enough time. Clearly disassembling a senior team in 18 months or less reflects poorly on the CEO in my opinion,” said John Mattone, a leadership coach and author based out of Lake Mary, Florida, in the US.
“When there is a massive lack of stability in the senior ranks, it is impossible for people to feel motivated and passionate about the business and it is impossible for people to feel aligned with the mission and vision of the business,” said Mattone.
Take, for example, Infosys’s manufacturing unit. Since Sanjay Jalona, its former head, left the company in July last year, the manufacturing unit was split between two existing presidents. Infosys manufacturing grew 5.3% in the period between 1 July last year and 30 June this year even as the company’s overall growth came in at 10.8%. Under Uppadhayay’s watch, Infosys BPO did not report any growth while Reh could not revive Finacle, Infosys’ core banking platform. Infosys does not report the numbers of its consulting unit, though the management did disclose that one reason behind the company’s poor 2.2% sequential dollar revenue growth in the April-June period was a decline in business from this division.