Home >companies >news >Leadership at Infosys

The chief executive officer’s post at Infosys Ltd has thus far been the preserve of the founders of India’s second largest software services firm. The company has drawn some criticism because of the practice, especially given the backdrop of its disappointing financial performance over the past few quarters. Some critics have said it’s time for Infosys to consider hiring a CEO from outside the company.

Among the six individuals who left Patni Computer Systems to form Infosys in 1981, four—N. R. Narayana Murthy, Nandan Nilekani, Kris Gopalakrishnan and S.D. Shibulal—have gone on to become chief executives of Infosys. T.V. Mohandas Pai left in 2011—as a non-founder, he couldn’t rise higher than director in-charge of human resource and administration after having served as chief financial officer from 1994 to 2006. He is currently chairman of Manipal Global Education.

An information technology consultant, the head of a proxy advisory firm that advises minority shareholders and an expert on corporate governance offer their take on Infosys’s leadership situation:

1. Amit Tandon, founder and managing director, Institutional Investor Advisory Services (IIAS): Just because someone has been with a company since its inception, it doesn’t automatically qualify him for the chief executive’s post. Despite all the ambitions that its founders may have had, the growth in Infosys’s size and scale has been unprecedented. One would assume that after attaining a certain shape and size, Infosys would have revisited its policy of elevating people to the top chair at the company by benchmarking internal talent with external candidates as well. This way, it would have had a larger talent pool to choose from. This strategy wouldn’t have precluded anyone—be it an insider or an outsider—from becoming the chief executive, and the best person to run the company could have been identified. Infosys should think on these lines once the term of the existing chief executive nears expiry. (As told to Aveek Datta)

**********************************************************************************************************************

2. C. Manohar Reddy, professor of organizational behaviour and human resource management, Indian Institute of Management, Bangalore:

As the Indian economy is becoming more and more competitive and global, finding world-class leaders who can steer and transform Indian organizations into global organizations that can compete and thrive across the world is the need of the hour. It is no more the licence-quota Raj.

Infosys is one organization that has achieved exceptional performance with home-grown leaders. N. R. Narayana Murthy is credited as founder-leader with creating and growing Infosys into a world-class organization. His successors Nandan Nilekani and Kris Gopalakrishnan, also founding members, too have done very well in furthering the growth of Infosys on the foundation laid earlier. Recently, S.D. Shibulal, the last of the founding members, took the leadership role in Infosys and his tenure, unfortunately, has come in synchrony with the slump in the US and Europe, which has badly hit the growth prospects of Infosys.

Shibulal’s efforts to put Infosys on a new growth trajectory with his pet project, Infosys 3.0, are yet to show tangible results.

Keen observers of the Indian corporate world concerned with issues of leadership development are raising the question whether Infosys has outgrown its founding leaders and whether it needs an infusion of fresh blood from outside to once again put it on a high growth trajectory.

There is a view among some experts that the strategy that led to Infosys achieving great success in the past may not work any more and Infosys probably needs to break-away from its tried and tested approach to success and tread an entirely new path. If a successor to Mr. Shibulal were to be an outsider, he/she might be able to find it easier to make a break from Infosys’ past approach to doing business, bring in a new perspective and set Infosys on a new trajectory of accelerated growth. It is still an open question—whether home-grown leadership is better or it is better to induct outsiders to bring in fresh thinking? (As told to Sunil B.S.)

**********************************************************************************************************************

3. Sudin Apte, founder and research director, Offshore Insights: It’s been a tough year for Infosys Ltd, the former poster child of India’s information technology (IT) outsourcing industry. The company has fared very poorly compared to its rivals—Tata Consultancy Services Ltd and Cognizant Technology Solutions Corp. One of the key hurdles Infosysfaces today is issues with its top leadership. Chief executive officer S.D. Shibulal has been on the job since mid-2011, and is constantly being compared to his predecessors N. R. Narayana Murthyand Nandan Nilekani, whose shoes he has found very difficult to fill.

Since Shibulal took over, the company has seen several organizational changes and senior executive exits. And while one would argue that Shibulal himself is not yet settled in, the talk on who will be the next CEO has already been doing the rounds for the past three months. Infosys has a good market understanding and strong client relationships. It also has deep pockets with over $4 billion (around 22,000 crore) cash on its balance sheet, hence is in a strong position to make substantial investment.

However, Infosys needs to get out of its denial mode. During the last 2-3 earnings calls, the management blamed the economy, the struggling financial and telecommunications sectors, and slow decision-making, rather than accepting that it had internal issues which it had not dealt with effectively.

The Infosys leadership needs to remember that time is running short. If progress is not made, the company will be caught between challenges stemming out of employees attrition on one side and decreased client confidence on the other. But who will be that leader who will drive that change, take tough decisions, focus more on what it takes to win over clients and bring back growth? I do not know anyone at Infosys who will be that messiah who has that magic wand.

Let us hope Infosys grabs this last window of opportunity. Let’s hope Infosys fixes these loopholes quickly and permanently. Remember, damage to the Infosys brand shadows the overall Indian outsourcing story. (As told to a staff writer)

**********************************************************************************************************************

LEADER IN THE SPOTLIGHT

WHO: Aditya Puri, managing director, HDFC Bank Ltd

View Full Image
HDFC Bank MD Aditya Puri. Photo: Hemant Mishra/Mint

WHY: In July 2012, HDFC Bank surpassed the largest lender State Bank of India as India’s most valuable bank with a market value of around 1.37 trillion at that time. It is a level that the private sector lender has sustained and expanded, taking its current market capitalization to 1.6 trillion.

HOW HE DID IT: Puri, who has been the bank’s managing director since its inception in 1994, has a very simple mantra: stick to the basics and don’t take unnecessary risks. This is reflected in the steady net profit growth of 30-35% that the bank has delivered year-on-year since it was founded.

Some 47.4% of the bank’s total deposit base is made up of low-cost current and savings accounts (Casa)—one of the highest Casa ratios for an Indian commercial bank. This gives it access to cheap funds to lend and earn returns on.

While some other banks took bets on risky financial products and skewed their focus towards retail customers, HDFC Bank has relied on traditional products and maintained equal focus on retail and corporate clients. It has also focused on the so-called “bottom of the pyramid" customers at the right time. Though HDFC Bank began with most of its business in urban centres, in the last five years a sizeable portion of income has been coming from semi-urban and rural centres.

Puri is known as much for his work-life balance (he doesn’t carry a cell phone and leaves office at half past five in the evening), as he is for his common sense and conservative banking approach. He reads magazines and business reviews, often making notes of things that the bank can capitalize on. This is how the idea of supply-chain financing struck him and it became a big business for HDFC Bank. ( By Aveek Datta)

**********************************************************************************************************************

THE BEST BOOK ON LEADERSHIP I HAVE READ

Shankar Sharma, global trading strategist at First Global Stockbroking Pvt. Ltd:

Sharma picks Ayn Rand’s The Fountainhead as one of his favourite books on leadership, a book that has truly inspired and influenced him.

More than 6.5 million copies of the novel published in 1943 have been sold worldwide.

Sharma, who is known for his contrarian bearish view on the capital markets, credits The Fountainhead, which he read more than 30 years ago, for helping him stick to his beliefs though it meant going against the prevailing wisdom. “What I took away from the book was to never be afraid of sitting out of consensus, challenging long-held beliefs, the power of independent thought and to stay with your convictions, as long as you have thought them through to the last millimetre," Sharma says.

The Fountainhead; author: Ayn Rand; price: 259; pages: 704
View Full Image
The Fountainhead; author: Ayn Rand; price: 259; pages: 704

The novel is about protagonist Howard Roark, an individualistic young architect who opts to struggle with complexity rather than compromise on his artistic and personal vision. It details the fight to implement new ideas by challenging establishment-centred practices.

Of the book’s characters, he says: “Ellsworth Monkton Toohey’s wit I still remember. Henry Cameron was also good, but of course, Roark stood out."

Toohey is the self-proclaimed representative of the will of the masses though his intentions are to overpower others. Cameron is Roark’s architect mentor and employer.

“I haven’t gone back to the book... there is a lot more to read! But it did plant the core of contrarian, independent thinking in me," Sharma adds. ( By P.R. Sanjai)

Subscribe to newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Click here to read the Mint ePaperLivemint.com is now on Telegram. Join Livemint channel in your Telegram and stay updated

Close
×
My Reads Logout