ET Now: There are two ways of looking at the high-profile exit at Infosys. On the one hand, many people say that there was a team that might not be doing well and now they are leaving and that will be positive for the stock in the long run. On the other hand, skeptics will argue that there are many people who have been in the company for the past few years and that it is not a pint-sized company, but a Rs 1,70,000 crore behemoth. Why is there such a high profile exit at the company?
Mohandas Pai: There is a leadership vacuum in the company, because they chose the wrong CEO three years ago and it is playing out now. The company did not work and in June 2011 appointed three members on the board and all three are now gone and all three are extraordinary persons.
Ashok Vemori is now CEO of another company, V Balakrishnan has left and started his own fund and BG Srinivas, I am told, will now join some other company as CEO.
So obviously, all three are CEO stuff. Apparently the chemistry didn’t work, or they didn’t have the power at all. There is a need for the board to sit down and make a good succession plan and put a new team in place because the whole class of people under the executive board is now gone and most of them were outstanding players.
Yes, some of them probably did not lose weight, but it is not possible that all of them do not do this. They were extraordinary people and they performed in other places.
So teamwork is needed and people need to come together. They need to forget the past and focus on the future, they need to adjust the company based on what the market needs.
The market has changed and it needs to change its model, it needs its management structure and the group of people who have ruled the company for 30 years, must leave the power and hand over the powers, because they have stayed too long. Therefore, I hope that in the next month or two, the board will come together with NRN and close this issue once and for all.
ET Now: Where can the progress come from at this point, because you have said in the past that the board and Mr. Murthy should take responsibility for the exit. It seems that the series of withdrawals is never ending. It works Does that mean the company might need to build a whole new team from abroad and hire some valuable resources from abroad?
Mohandas Pai: My opinion is that the layer below BG Srinivas, V Balakrishnan and Ashok Vemori is an extraordinary layer. You have a lot of good people running the units. But they have operational units and they need one or two years to come up with the enterprise.
Company positioning is very different from unit positioning. You can be an extraordinary single person, but to run a complete enterprise in a highly competitive environment, you need some guidance and some experience.
Now the entire generation of leaders who could manage the enterprise is gone. The next layer of people has done very well and there is great management, but they have to communicate between themselves and NRN who is the CEO and will stay for the next three years. This connection needs to be set up and it is up to the NRN to do it.
Now it can be done by someone stepping up to the plate as CEO. He will be inexperienced, he will not handle the enterprise, but if he is very efficient, he can raise it in three to six months.
However, this requires a different style of activity by the NRN. It also means that there is some bleeding. In fact, this must happen when the next generation comes up, because obviously people who are too tall will not survive and must be purged. So in the next two to three months, we should see a radical change.
It is very difficult to predict 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, with 160,000 people, and a market value of $25 billion or $30 billion.
So it requires a certain level of expertise and the board and the director have to work very carefully. So they finished their job and if Nandan Nilekani is asked to come back, it will help, because he can provide a link between the director and the next class of people and help train them for the next few years, because he had an extraordinary relationship with people, his style is very comprehensive and he is a person who strengthens his team and gives them full strength to go ahead and stand by them. So getting Nilikani back would be a great strategy.
Ashok Vimori
