First a disclosure: I work in an IT company and this post reflects my personal opinion and not that of my company.
Infosys made the long-awaited and eagerly anticipated event in Indian corporate calendar (nearly as eagerly awaited as the succession-planning event currently on at Tata Sons). The stake here was very high. Infosys is a highly regarded Indian IT giant. It, alongwith a few others, created the IT outsourcing phenomenon that has become part of the standard business model today. The question was can Infosys move to the next generation of leadership. It had been guided all along by NR Narayan Murthy (NRN) and later by the more charismatic Nandan Nilekani. With NRN’s retirement from the Chairman’s position, the top position was open for the first time.
Infosys announced that K.V. Kamath would step in as Chairman and S.D. Shibulal would be the new CEO and S. Gopalakrishnan (the current CEO, better known as Kris) would be the Executive Co-Chairman.
To me, this announcement has effectively taken the company back a few years. Bringing in K.V.Kamath itself is a retrograde step. I am not overly impressed by Kamath’s stint at ICICI. He took a conservative lending organization and took unnecessary and imprudent risks. His successor has had to curb a lot of aggressive lending practices to bring the bank back on track. ICICI is still not out of the woods but is definitely much better off than when Kamath was around. ICICI was one of the worst hit banks during the post-Lehman crisis. All this does not make Kamath a great leader and/or visionary.
Next comes the choice of Shibulal as CEO. That is even worse. Anyone who has watched Infy’s quarterly reports with the media would probably agree that Shibulal is someone who you would not allow with a mid-level manager’s job in a mid-sized company. He does not display any ability to articulate his thoughts clearly, seems forever confused when asked tough questions, does not seem to understand numbers or long-term strategy well. In short, he comes across as someone who is utterly confused and out-of-his-depths in the boardroom of a large company. To make him CEO just because he was “lucky” to be a programmer in NRN’s team and provided a portion of the risk capital when they founded the company defies any logic.
I have nothing to say for Kris’ position as Co-Chairman. A Co-Chairman is a showcase position anyway and Kris does not display any dynamism to bring any new thoughts or actions to the position, so there is no point is wasting more space on his appointment.
What is disturbing is what it does to the morale of the next level of managers at Infosys. Mohandas Pai and Dinesh have already resigned. Although they claim that they were not aspirants to the CEO position, anyone who believes that has to be naïve. Others, may follow suit. If not, you have a complacent set of second level managers, who are mostly all multi-millionaires (if not billionaires) thanks to the great stock-option plans at the company. All this does not bode well for the company.
It would be interesting to see what happens in the future. I, alongwith many others, would be watching keenly.