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Nandan Nilekani is expected to play the role of a ‘super CEO’ in the short term as he steers Infosys out of tumultuous times. Photo: Hemant Mishra/Mint
Nandan Nilekani is expected to play the role of a ‘super CEO’ in the short term as he steers Infosys out of tumultuous times. Photo: Hemant Mishra/Mint

Nandan Nilekani to adopt 3-pronged strategy to revive Infosys

Infosys will look at improving how it does business, besides re-examining Vishal Sikka's initiatives and charting out a new roadmap for the $500 million Innovation Fund

Life does indeed come full circle—as Nandan Nilekani tweeted on Friday.

Nilekani, who built India’s most high-profile information technology firm from scratch with six others, now finds himself with the unenviable task of rebuilding Infosys Ltd in the wake of unprecedented chaos that saw the exit of its chief executive officer and chairman in the space of a week.

Nilekani, 62, who was named non-executive chairman on Thursday, is expected to play the role of a “super CEO" in the short term as he steers the company out of tumultuous times.

The turmoil peaked with the Infosys board last week issuing a withering six-page statement blaming founder N.R. Narayana Murthy for the exit of CEO Vishal Sikka. That strategy backfired spectacularly for the board and ultimately resulted in the exit of four board members.

In addition to finding a new CEO and reconstituting the board, Nilekani will also work with key executives, including the board’s committee of directors, to help outline a new strategy, that is expected to result in a few management changes, according to comments he made in an analyst call on Friday.

Nilekani declined to comment on the strategy, calling it premature, but said details will be shared in October.

For now, he has tasked board members Ravi Venkatesan and D.N. Prahlad, part of a three-member committee of directors on the board, to work with other top executives such as interim CEO U.B. Pravin Rao, strategy head Deepak Padaki and chief financial officer M.D. Ranganath to formulate the new strategy.

“We are moving quickly to put in place a new architecture of what needs to be done going forward, including getting a new CEO, which is of primary importance to us, as well as looking at the board composition and what should be the strategy going forward," Nilekani said during the analyst call.

Essentially, Infosys is expected to look at three key aspects, according to experts tracking the company: improving the way Infosys does business; re-examining all the initiatives started by Sikka under his three-year-long “new and renew" approach; and charting out a new roadmap for Infosys’s $500 million Innovation Fund.

To improve the way it does business, Infosys is expected to hire more top executives who can tackle newer technologies and also strengthen engagement with top Fortune 500 clients, said an executive who requested anonymity. “If you can hire more top quality people who have knowledge of machine learning and newer technologies, why do you need to acquire firms?" said the executive.

This executive added that Infosys under Nilekani has not looked at acquisitions in the past, and that for this reason some believe the company will continue to shy away from making big-bang buyouts.

“At the same time, we need to invest more in strengthening client relationships. This means offering customers with more technology solutions or more engineers. Agreed, this could mean our profitability in individual projects could be impacted. But then there are other cost levers which can be used to retain overall profitability," said the executive.

This means that all initiatives that were started under Sikka will be re-examined—something which Nilekani conceded. “I will be asking my colleagues to do a quick refresh on the strategy," Nilekani told analysts, as the company formed a small “strategic group" of key executives, CFO Ranganath, Padaki, deputy chief operating officer (COO) Ravi Kumar S. and Joshi to fix the company’s near-term and long-term strategy.

Finally, Infosys is expected to take a long, hard look at the Innovation Fund and decide on its future, as the track record of start-up investments under Sikka was patchy at best. Infosys has spent over $62 million in nine start-ups and two venture capital firms but it had to write off its $15 million investment in DWA Nova—a spin-off from film-making company Dreamworks Animation—after the start-up shut down.

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