Bangalore: On 30 April, Infosys Technologies Ltd is to reveal whether there will be a break with tradition or not. If there isn’t, then S. Shibulal will become chief executive officer (CEO) of the company, as have three other founders of India’s second biggest information technology company before him in the first three decades of its existence.
This would mean that those on the next rung of the company’s senior leadership will have to wait a while before they can get their hands on the top job.
Mohandas Pai won’t be among them, of course, having unexpectedly announced his resignation on Friday. A non-founder, he insisted that the departure wasn’t because he was going to be passed over for the top job, and that chairman N.R. Narayana Murthy had, in fact, asked him whether he would like to be considered for the post of chief operational officer (COO) or CEO.
Ever since Infosys was set up in 1981, the profiles of its much-storied founders have probably overshadowed that of the company they built. Understandable, given that unlike peers such as Tata Consultancy Services Ltd, which had the backing of the Tata Group, or Wipro Ltd, whose chairman came from a wealthy entrepreneurial family, the founders of Infosys were middle-class folks, who looked like they lived next door. It was this “people like us” appeal, as much as the growth, success and wealth distribution strategy of the company, that helped in creating brand Infosys.
Of the six founders (not counting Ashok Arora who left in 1989, before its growth spurt), N.S. Raghavan left in 2000, Nandan M. Nilekani in 2009 and K. Dinesh quit on Friday.
Murthy will take on an advisory role on 20 August, leaving incumbent CEO Kris Gopalakrishnan and COO Shibulal as the two founders remaining in operational roles. If tradition is maintained, Gopalakrishnan will be elevated to chairman and Shibulal will take over his mantle.
Infosys’ corporate reputation has been built, Murthy says, on planning, transparency and meritocracy. But, if there has been one criticism against the company, it is that there is a glass ceiling against non-promoters, a charge that Murthy strongly refuted in an interview after the quarterly results conference on Friday. To be sure, all the founders who have become CEO have earned the right to head the company.
On the other hand, the founders have always made it clear that none of their children or spouses would ever work in Infosys.
If not Shibulal, then who? The company, which had 130,000 employees as of 31 March, is already being run by several relative newcomers, all of whom have helped Infosys achieve its present status. Any one of them could be given the top job. But just who are these men who could be among those who will lead the company in the coming decades? We present 10 of the likeliest candidates—the inheritors of Infosys.
From manufacturing to software
Chandra shekhar Kakal
Designation:Senior vice-president and global head of enterprise solutions group, executive council member, board member
Revenue of unit he heads: $1.54 billion (25.5% of total)
Education:Bachelor’s in mechanical engineering from Bangalore University, Bachelor’s in materials management from Indian Institute of Materials Management, MBA in international business management from Asian Institute of Management, Bangkok.
Kakal is a mechanical engineer who spent two decades in manufacturing with companies including Ashok Leyland Ltd and Larsen and Toubro Ltd before taking a career break for an MBA, which led him to Infosys. Eleven months after he joined in 1999 as senior project manager, Kakal was deputed to set up the Hyderabad campus, which he led for four years.
S.D. Shibulal groomed him initially, after which Narayana Murthy became his official mentor. “From Shibulal, I learnt how to identify problems by getting into data in great detail, while Narayana Murthy’s lesson to me was (about) communicating with people,” says Kakal. He heads the enterprise solutions business, which, along with consulting and package implementation, brings in 25.5% of the company’s revenue. As one of the founding members of the division with B.G. Srinivas, he helped transform Infosys from an offshore.
Quiet efficiency and quality control
Designation:Director and head, delivery excellence
Education:B.E. (mechanical), Mysore University, and an M.E. (mechanical), Indian Institute of Science, Bangalore
Srinath Batni was reluctant to be a part of this exercise, demurring at being called an inheritor. He pointed out that, given his age, he will be due for retirement along with chief executive officer Kris Gopalakrishnan and chief operating officer S.D. Shibulal.
Since 1992, he has not only been a crucial source of decision-making inputs for Narayana Murthy, but a key man in ensuring that, as Infosys scaled up and began to add people in the tens of thousands, the quality of delivery was maintained.
After all, Infosys’ business, for all the dreams of non-linearity, is still people intensive. It has 130,000 employees and plans to add another 45,000 over this fiscal year.
He also has the important task of grooming the next generation of leaders as part of the Infosys Leadership Institute (ILI), which has helped the board identify 50 senior executives. His work ethic and the stress that he and Murthy place on the ability to defer gratification, comes through in Batni’s reported views that if his generation and the current one invest their blood, sweat and tears in work, the coming generations will enjoy a developed country way of life.
Churning out billion-dollar units
B G Srinivas
Designation:Senior vice-president, manufacturing; product engineering; product life cycle, engineering solutions.
Revenue of unit he heads:$1.17 bn from manufacturing; $144 mn from engineering services; $1.33 bn from Europe business
Education:B.E. (mechanical), Bangalore University
B.G. Srinivas likes movies and is especially fond of Rajinikanth, who makes the impossible all too possible.
Not surprisingly, he is Infosys’ billion-dollar man. He took over the enterprise solutions practice in 1999 (he joined after a 14-year stint at ABB Ltd) and soon made it a billion-dollar unit. It was Srinivas who adapted the firm’s famed “Global Delivery Model” for this practice. His second challenge came in 2004 when he was asked to head Infosys’ Europe business. In four years, he grew the business from $200 million by revenue to a billion-dollar one. Three years later, in 2007, he repeated the achievement with the manufacturing business. Currently, he is trying to do the same with engineering and research and development (R&D) businesses. Already, he says, he has debunked the myth that it is difficult to outsource a “high-end” activity like R&D. After all, you don’t need an aerospace enginner with 30 years experience all the time, as for 80% of the time he does things that can be outsourced. Having done that, he has put in place a three-year plan to raise revenue to a billion dollars. “I like to inspire my team with a larger purpose,” he says.
The products person in a services firm
Designation:Global head, Finacle
Revenue of unit he heads:$295 million in fiscal 2011; 4.8% of overall revenue
Education: Bachelor’s degree in physics and law, postgraduate diploma in management from the Indian Institute of Management, Bangalore
Mangipudi is the quintessential code-jock. And he is a products person in what is essentially a services company. By the time he came to Infosys, he was already hooked to programming. Computer language C, he admits, was his mother tongue. In his first few years at Infosys, he wrote much of the code for a product called Universal Banking Solution, now a part of Infosys’ banking product Finacle. “I was hooked,” says Mangipudi. “by the multiplier effect of these systems. Every day, the systems I created were transacting trillions of dollars.”
Mangipudi is convinced the next big thing in the Indian information technology space will be products. Mangipudi’s Finacle business unit, with a revenue of $294 million, is today the largest contributor to the Indian software product industry.
Like many executives of his vintage at Infosys, Mangipudi spent a lot of time with N.R. Narayana Murthy, Nandan Nilekani and Kris Gopalakrishnan. “Nandan was a great believer in the product space,” he says, “and influenced me with his thinking ahead, and being a disruptive player.” His predecessor as head of Finacle was Girish Vaidya. “Working with him was like batting with Sachin (Tendulkar) at the other end. I was always a techie, so it helped me to see how Girish stepped into the shoes of the banker”.
When he was younger, Mangipudi was an avid ship-modeller and ham radio operator. These days, when is he isn’t working, he is mentoring younger executives.
Designation:Senior vice-president and global head, banking and capital markets, strategic global outsourcing
Education:Degree in physics from St Stephen’s and degree in business management from IIM, Ahmedabad
Last year, he was the highest paid employee at Infosys (not taking into account stock option plans), and there was a reason for this. The protege of Nandan Nilekani manages the crucial banking, financial services and insurance (BFSI) vertical, which brings in a third of revenue and is the company’s largest practice.
From the earliest days, expertise in BFSI was seen as a key strength of Infosys. Six of the top seven US banks, six of the top 10 US securities firms, four of the top five European banks and three of the top five credit card issuers are clients of Infosys.
In the last five years, the former investment banker has led the division to compounded annual growth rate in excess of 30%. However, if Infosys has not lived up to street expectations in the last couple of quarters, part of the blame also rests with Vemuri as it hasn’t been able to take advantage of the bounce-back since 2009 to the extent that others have. He is seen as a frontrunner for the CEO’s post when a vacancy arises—not only does his vertical bring the most revenue but, as a mark of his potential, he already sits on the company’s China board and that of the consulting subsidiaries, apart from being on the executive council.
Building another Infosys in BPO space
Designation:Chief executive and managing director, Infosys BPO
Revenue of unit he heads:$427 million; 7% of overall revenue
Swami Swaminathan’s day sometimes begins at 5am with calls to clients in the Asia-Pacific region. And it sometimes ends at 2am with calls to those in North America. “I have 96 clients today in a diverse range of industries, and I have worked with them across the enterprise value chain. When I think about it, I’d rather run a BPO (business process outsourcing) firm which enables so many industries, than any other single company,” says Swaminathan. This chartered accountant spent 10 years managing multiple businesses in the consumer durables and automobiles space in West Asia. He has also had stints at Eicher Motors Ltd and IBM Corp.
“When I joined, I saw it as an opportunity to create another Infosys in the BPO space,” he says. In 2004, the back office services arm of Infosys had 200 people and an annual revenue of $10 million. It currently employs 18,113 people, will likely grow 18-20% this year, and has revenue of around $427 million. “The industry was call centre-based then. But today, it is the only industry that can partner with any company in finding effective ways for process redesign.”
Swaminathan, who was promoted to head the BPO business in 2010, goes on a trek, or to his weekend home in Coonoor every time he feels the need for a break.
Mixing excitement and innovation
Designation: Senior vice-president communications, media and entertainment, global sales, alliances and marketing and independent validation solutions
Revenue of unit he heads: $750 million telecom business; $300 million in products
Education: BE (computer science) from Birla Institute of Technology, Mesra , Ranchi; post graduate diploma in business management, IIM Bangalore.
“What excites me is the potential of Information Technology to change the average person’s life. It is not just a geeky thing or a corporate thing. IT will touch the lives of individuals in an individual way,” says Subhash Dhar.
It is this sense of excitement that Subhash, who joined Infosys in 1997, brings to his work. Until recently, he headed the firm’s large and profitable telecom business. Under the firm’s new structure of four so-called verticals, or business groups (BFSI-banking, financial services and insurance; manufacturing; retail, consumer products, lifestyle, pharma, and energy and utilities, telecom) and three so-called horizontals, or offerings (transformation, innovation and operations), he will head innovation. Infosys hopes to get at least a third of its revenue from new products and platforms, and increase dependence on intellectual property to improve service offerings in the next few years, and Dhar’s new job is to figure out how.
The dark horse
Designation: Chief executive and managing director, Infosys Consulting, and head, consulting solutions
Revenue: $200 million
Age: Not available
Education:Bachelor’s degree in electrical engineering from Northwestern University and master’s degree from George Washington University
Stephen Pratt was hired in 2004 to take charge of the company’s ambitious bid to move up the value chain and join the likes of IBM and Accenture. Infosys Consulting, as a standalone entity, has been a mixed bag. While it did not take off in the manner that the company anticipated (a contention that Kris Gopalakrishnan has refuted), Pratt has been able to scale up the business to a revenue run rate of $200 million. Measuring downstream revenue has been harder.
Pratt is an industry veteran who spent two decades at Deloitte Consulting and Booz, Allen and Hamilton, before coming to Infosys.
With his CXO relationships, Pratt is crucial to Infosys as it seeks to break the long term duopoly of Accenture and IBM in IT strategy consulting in the crucial North American market.
Also, as Infosys seeks to go beyond being an Indian company, having a multi-cultural representation at the highest levels is crucial. Pratt could end up being the first CEO to be based in the crucial North American market from which the company gets 63% of its revenue. This could also help Infosys attract talent in the US market besides mitigating the political backlash over outsourcing concerns.
Designation:Senior vice-president and head, energy, utilities and services; global head, systems integration; director, Infosys China
Revenue from unit: $676 mn, 11.2% of FY11 revenue
Education: Bachelor’s degree in mechanical engineering from Bangalore University and an MBA from the Indian Institute of Management.
Thrikutam, who joined as regional head of business operations in the US, is credited with growing the business from nothing to 10% of Infosys’ revenue between 1996 and 2000. He has also been a member of the board of Infosys China since its inception. While he heads the energy, utilities and services practice, Thrikutam is slated to head media and entertainment, telecom and energy verticals, once the current restructuring process is through, according to Infosys spokespersons. With over 18 years in the industry, he is also responsible for the systems integration practice globally. Prior to this current role, he led the hi-tech and manufacturing units, which grew at a 35% CAGR (compound annual growth rate) between 2004 and 2008 under his tenure.
The bean counter
Designation:Senior vice-president and chief financial officer
Education: BSc from University of Madras. ACS, ACA and AIWCA.
At every Infosys annual general meeting (AGM), one of the most eagerly awaited presentations is from a diminutive man who usually follows the chairman and the chief executive officer. Bala, as chief financial officer (CFO) V. Balakrishnan is widely known, enlivens his presentation of numbers with animation and Bollywood tracks. He’s also not above skewering the competition or poking fun at the company itself, revealing a surprising side to a man with the reputation of being a bean counter.
Balakrishnan took over from Mohandas Pai, who was CFO from 1994 to 2006, when he decided to move to human resources. A key challenge for the finance head of any Indian IT firm is that its earnings are mainly in dollars, euros and yen, requiring adroitness in currency hedging. Infosys also keeps $3.6 billion on its books, money required to run the firm on an on-going basis as well as for any quick merger and acqusition (M&A) opportunities. The CFO needs to effectively manage the short- and long-term demands on this purse to the maximum advantage of shareholders, a delicate task he has pulled off without a hiccup.
There’s very little doubt that, at the very least, Balakrishnan will soon be offered a seat on the board.