The muted guidance for the next fiscal was not the only surprise in the Infosys results announcement (stock was hammered on the bourses losing around 7.2% at the time this was being written) but also in the announcement that K. Dinesh a co-founder and Mohandas Pai, director, HR of the company were stepping down.
While Dinesh’s departure was no surprise, given that the company is in the throes of a large scale leadership change, with younger blood being likely to be given more responsibilities, Pai’s announcement of not only quitting the board but the company, was an indication that he had lost out in an internal power struggle.
A big bear of a man with his 6 feet plus height and proportionate heft, Pai was not one more employee of the company. For a long period of time, he was the chief firefighter and probably the most recognized face of Infosys outside of the founders.
Nandan Nilekani (the current UIDAI chairman and co-founder) and M. D. Pai himself in the past have narrated to this writer how he came to be hired by Infosys. Pai used to work in the finance department of Prakash Roadlines, a smalltime transport, relocation and logsitics company.
Mohandas Pai. Photo: Bloomberg
When one of Pai’s friends once invited him to accompany him to the AGM of a then little known company called Infosys Technologies Ltd in 1994 (the company had gone public the previous year at Rs 95 a share, with the issue barely scraping through), he obliged.
Pai sat through the AGM and on behalf of his friend asked so many questions, that N R Narayana Murthy was impressed. He asked Nandan to talk to this inquisitive man who seemed to have such sharp questions over tea. Rest is history. Nandan convinced Pai to join Infosys which then had revenues of $10 million.
Pai’s rise in the company was meteoric mirroring the company’s rise itself. As the CFO, he introduced several firsts for which Infosys became a model to be emulated by others. The degree of financial discipline and transparency for which Infosys is today known for, Pai can take some credit for that.
As Infosys began building vast campuses to house the thousands of employees it was hiring, it required making investments ahead of the curve. Pai not only lead the financial planning but in most cases even was the goto person for Infosys when it came to ticklish issues like handling land acquisition and political pressures that came alongwith it. In the process he willy-nilly became one of the most visible faces of the company, publicly chiding governments not helping the company or the sector and raising infrastructure related issues.
In 2006 after steering Infosys finances for more than a decade, Pai abruptly quit his CFO role to take over as the HR head of the company and also its infrastructure expansion and management. Some saw this ‘rotation’ as Pai’s way of teaching himself the nitty-gritties of different roles, so that he could aim for an even higher role in the company. He was both respected and loathed for what his opponents internally saw as ruthlessness.
As the HR head however, Pai had a few stumbles. The iRace controversy of 2009-10 and the way the company handled its people during the 2009-10 recession came in for much criticism. Inspite of that Infosys continued to be among the top companies in numerous lists of ‘best places to work for.’
In the last couple of months as a top leadership reshuffle looked inevitable, given Infosys relatively disappointing performance compared to a Cognizant or a TCS, Pai was supposed to be a front runner for a top job, with some speculative reports even saying he would take over as the COO.
However his departure from the company indicates that he has lost out in the internal power struggle (a fact much as the company would like to gloss over it), as Infosys gets ready to announce a new team to lead the company come 30 April.
Even in 2006, a very senior person in Infosys who wanted to remain anonymous had told this correspondent: “Pai has several positive qualities going for him. He is a good caporegime for any Don. He is capable, ruthless and incredibly smart. But he is too ambitious for his own good as he is a bruiser and arrogant. While he aspires for the top job, he has had no sales experience. Remember, all Infy’s CEOs, whether Murthy, Nandan or Kris, have spent time in the crucial US market, wearing out leather and selling stuff. Execution is important but secondary and will happen only if you are able to garner business. While we have become large, selling experience is crucial.”
Maybe that is one reason why Pai lost out to be the COO of the company. A little-known facet of Pai is his incredible passion for the mid-day meal scheme run by the Akshya Patra foundation, which feeds millions of school children. Pai has personally donated several crores of his personal wealth for the foundation. Given the range of his interests, expect to hear more from Pai in the coming days on a range of public interest/policy issues. While both Pai and the Infosys management made the right political noises about the departure, it is a fact that he will be missed in the company.