ET Now: There are two ways to look at it, the top level comes out in Infosys. On the one hand, a lot of people are saying that there was a team that probably didn’t perform well and now they are leaving and that will probably be positive for the stock in the long run. The skeptics, on the other hand, would argue that there are many people who have staffed the company in recent years and that it is not a small business but a behemoth of Rs 1 lakh 70 thousand crore. Why have there been so many high profile exits in the company?
Mohandas Pai: There is a leadership vacuum in the company because they chose the wrong CEO three years ago and it is happening now. The company has not performed and in June 2011 they had appointed three members to the board of directors and now all three have left and all three were extraordinary persons.
Ashok Vemuri is now the CEO of another company, V Balakrishnan had left and started his own fund and BG Srinivas I am told would now join another company as CEO.
So it is clear that all three have been the material of the CEO. Obviously the chemistry didn’t work, or they weren’t fully competent. The board needs to sit down and work out a good succession plan and set up a new team, because the whole layer of people under the board has now disappeared and many of them were excellent achievers.
Yes, a few of them may not have pulled the weight, but it’s not possible they all didn’t. They were special people and they perform in different places.
So there is a need for teamwork and a need for people to come together. They need to forget the past and focus on the future, they need to realign the company with what the market needs.
The market has changed and so the model has to change, the management structure has to change and the people who have ruled the company for 30 years have to step down and hand over the reins because they have been in service for too long. Therefore, I hope that in the next one or two months the board will meet with NRN and close this issue once and for all.
ET Now: Where could the breakthrough come from at this point as you have already indicated in the past that the board and Mr Murthy should take responsibility for the exits. It seems that the series of exits does not end. Does this mean the company may also need to consider forming a completely new outside team and hiring expensive outside resources?
Mohandas Pai: My opinion is that the layer below BG Srinivas, V Balakrishnan and Ashok Vemuri is an extraordinary layer. You have many good people who have led units. But they have run units and it takes them a year or two to come up with an entrepreneurial spirit.
Enterprise position is very different from a unit position. You could be an extraordinary person, but to run a whole business in a highly competitive environment, you need some guidance and some experience.
Now the whole generation of leaders announcing the company is gone. The next layer of people has done a really good job and there is great management, but they need to connect between themselves and NRN, who is the executive chairman and will remain for the next three years. That connection has to be made and it is up to NRN to do it.
Now it can be done by someone who comes on the board as CEO. He will be inexperienced, he wouldn’t have made an undertaking, but because he is very efficient, he can pick it up in three to six months.
However, that requires a different style of functioning from NRN. It also means that there will be some level of bloodshed. In fact, it has to happen when the next generation comes along, because many seniors naturally don’t stay on and there is a need to clean up. So in the next two or three months we should see a radical change.
It is very difficult to speculate whether we will have an external team of people because such a team does not exist in any other company, let’s remember. It’s a very large company, employing 160,000 people and $25 billion or $30 billion in market value.
So it requires a certain level of expertise and the board and the chairman have to work very carefully with them. So they have taken their job off their hands and it will help if Nandan Nilekani is asked to come back because he could provide the link between the chairman and the next layer of people and guide them for years to come as he has an extraordinary connection with people, his style is very inclusive and he is a person who empowers his team and gives them full power to carry on and assist them. So getting Nilekani back would be a great strategy.
This post There is a leadership vacuum in Infosys, time to get Nandan Nilekani back: Mohandas Pai was original published at “https://economictimes.indiatimes.com/opinion/interviews/there-is-a-leadership-vacuum-in-infosys-time-to-get-nandan-nilekani-back-mohandas-pai/articleshow/35716682.cms”