What will Infy Do After they are Gone?
The rock stars of Infosys are getting ready to leave the stage to a new band of boys. Will Infosys be the same ever again?
by Mitu Jayashankar | Jun 5, 2009
C handra Shekar Kakal may not be known widely to the outside world, but at Infosys Technologies, he is the leader of 12,000 people bringing in business worth over $1 billion. But there is a more important reason why this vice president of enterprise solutions must be watched. He is among the handful of future leaders who will shape the new Infosys in the next decade or so. He is one of the faces the world must get used to once the company’s iconic founders bow out in deference to age and change. But Kakal should do just fine. His mentor? Narayana Murthy himself! Subhash Dhar, Ashok Vemuri, V. Balakrishnan and B.G. Srinivas, all Kakal’s peers, are now coming under the same limelight. These five are among a band of leaders being groomed to take over from the founding team of Murthy, Nandan Nilekani and S. “Kris” Gopalakrishnan. Imagine being asked to lead the Roman Empire after Augustus. Infosys is no ordinary company; its reputation is globally enviable. Its leaders enjoy an iconic status. Inside the company, they virtually have a demi-god status. “They are brands and personalities of their own. It will be extremely difficult for anyone to replace them,” says Sudin Apte, country head of research firm Forrester. As if that wasn’t tough enough, the new leaders would be required to develop their own script for running Infosys. If that means overturning the precepts under which Infosys has been run until now, so be it. This new band of boys is already tweaking the so-called Murthy Doctrine — a financial model that has invariably helped the software giant beat market forecasts over and over again. It will be one of the most keenly watched corporate transitions in recent times — and one that is fraught with huge risk. Not without reason. No other promoter group perhaps has caught the public imagination in Indian corporate history in quite the same way as Infy has. The story of how seven middle class engineers created Infosys in Pune in 1981 with a modest seed capital of Rs. 10,000 is now part of business folklore. Yet, in five to seven years, practically all the promoters will no longer be involved in the day-to-day running of the company. That’s something Murthy had scripted back in 1998. He ordained that all founders would step down from operational roles when they turn 60 and leave the board at the age of 65. Starting August 20, 2011, when Murthy will retire, the old guard will start putting more and more of Infosys in the hands of the new leadership. Within the next decade the remaining founders, who are now in their mid-50s, will start retiring too. The bench of leaders is already deep. Infosys Leadership Institute (ILI) has helped the company’s board to identify 50 senior executives. The founders as well as Infosys veterans Mohandas Pai and Srinath Batni each will groom a few of them. Kakal is one of the eight people being mentored by Murthy. “The key that we look at is consistent performance, because that gives a good indication of his ability to run a long-term marathon. The second, is he building something which is of long-term value?” says Girish Vaidya, who heads ILI. Infosys without its founders at the helm is a difficult animal to define — a bit like Apple without Steve Jobs or Microsoft minus Bill Gates. No one quite knows how the transition will pan out. There’s a chance that it may not be as orderly as most things inside Infosys tend to be. “I have been associated with founder-managed companies. The succession issue is a very difficult one, loaded with emotions and personal factors. It doesn’t go like a Swiss clock watch,” says Claude Smadja, independent director on the Infosys Board and president of Smadja & Associates Strategic Advisory. For over three decades, all the key operational roles have been looked after by one of the founders. Murthy ran a very tight ship which had little space for anyone beyond the circle of founders. In three decades, only three professionals — Phaneesh Murthy, Batni and Pai — could get a seat on the Board. Of course, this could change with the relatively new Executive Council (EC), the highest decision making body in the firm, just below the board. In December, 2007, Gopalakrishnan drafted five newbies — Kakal, Dhar, Vemuri, Balakrishnan and Srinivas — into the EC. They could eventually get a chance to join the board. One of them could even take over as CEO. Before the EC was formed, Infosys had a more informal way of working. If there were any decisions to be taken, three or four executive board members — mostly the founders — would arrive at one. Now all those decisions are put to the council which meets every 15 days. Responsibilities are fixed, timelines are allotted and progress is monitored closely. The EC has also made the decision making process more inclusive by taking it one level below the Board. It is an important part of grooming the next level of leaders. By assisting Gopalakrishnan and Shibulal, these leaders learn what it takes to run a large corporation. “It is a big step forward, because people who were only looking at their unit and thinking it was the world… now they have to look at the whole organisation and try to execute it,” says Srinivas, who is the senior vice president for the manufacturing segment. The new leaders are exposed to the Infosys Board and also have to handle analyst calls and media interviews, says Marti Subrahmanyam, independent director on Infosys board and New York University professor. But here’s the moot point: Can a bunch of young leaders step out of the shadow of an iconic team of founders to bring in the discontinuity that Infosys now needs? |
Find this article in Forbes India Magazine of 19 June, 2009
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Recent Comments
H Rai :
June 19, 2009
I'm keen to know how the leadership skills (as propounded in interviews and books) by the Infosys founders are been practiced down the line (say the bottom of the pyramid - a team say at the bottom of the totem pole) in an organisation which is fast becoming highly bureaucratic - because of size? Its like the rain forests where the roots are unable to get any sunshine - not a trickle! The cracks are visible - and Infy is fast dropping down in terms of its ranking in latest Best Place To Work Survey. High sounding fundas are fine - what is the level of SHARED understanding of these approaches within the organisation today? A serious round of organisation-wide introspection appears to be the need for the day... unless Infy reinvents itself these cracks down below are only going to fester and spread. (How many of such PR Exercises - involving premier business publications - actually go and meet the Infy staff at the grassroots level, as that would provide the real feedback..
June 19, 2009
I'm keen to know how the leadership skills (as propounded in interviews and books) by the Infosys founders are been practiced down the line (say the bottom of the pyramid - a team say at the bottom of the totem pole) in an organisation which is fast becoming highly bureaucratic - because of size? Its like the rain forests where the roots are unable to get any sunshine - not a trickle! The cracks are visible - and Infy is fast dropping down in terms of its ranking in latest Best Place To Work Survey. High sounding fundas are fine - what is the level of SHARED understanding of these approaches within the organisation today? A serious round of organisation-wide introspection appears to be the need for the day... unless Infy reinvents itself these cracks down below are only going to fester and spread. (How many of such PR Exercises - involving premier business publications - actually go and meet the Infy staff at the grassroots level, as that would provide the real feedback..
Kishor Tilokani :
June 12, 2009
Home Grown Hero's ? - please read the annual report to know the years each of the executive directors have been with Infosys.
June 12, 2009
Home Grown Hero's ? - please read the annual report to know the years each of the executive directors have been with Infosys.
Meera Raman :
June 11, 2009
Super story! But what is surprising is that Infosys which prides itself on its campus training programs and has a huge campus recruitment drive, does not have a single home-grown hero on its current EC. Did the founders wake up too late for the succession planning exercise? How else would one explain the four lateral recruits on the EC! While the company's GE-like leadership institute initiative is commendable, it probably needs to take its initiative to the grassroots level (i.e. its engineer level) for the company to last well beyond its founders.
June 11, 2009
Super story! But what is surprising is that Infosys which prides itself on its campus training programs and has a huge campus recruitment drive, does not have a single home-grown hero on its current EC. Did the founders wake up too late for the succession planning exercise? How else would one explain the four lateral recruits on the EC! While the company's GE-like leadership institute initiative is commendable, it probably needs to take its initiative to the grassroots level (i.e. its engineer level) for the company to last well beyond its founders.
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