Patriarch's comeback is a reality check for Infy

Infosys 0.4: Murthy could help win back the big clients

Patriarch's comeback is a reality check for Infy

Calling back N R Narayana Murthy, a happily retired and, by his own admission, a man “pursuing his own joys as a private citizen”, has brought back questions over the emphasis which the Infosys co-founders have all along placed on their policy of letting the next line of leadership take over the reigns.

When Murthy quit in 2002 as CEO of Infosys, the plan of a next-in-line leader taking over the company and steering it to a higher level seemed to work. “When (Kris) Gopalakrishnan made his exit, the company was still growing at 25 per cent,” Murthy said on Saturday, defending the earlier, oft stated policy of moving forward with future leadership instead of falling back on the founders for guidance.

The rather idealistic notion of leadership, however, faced a severe test in April when the company had to announce a guidance that was 50 per cent below analyst predictions. A change was certainly needed and Infosys realised that the business has to rise above its idealistic leadership model.

“If the company or the board wants to call back co-founders, they can spell out their terms and, if the board agrees, they can come back,” was Murthy’s response to persistent questions about the precedent he may well be setting. However, there were no indications if another co-founder Nandan Nilekani would return to the leadership. As for Kris Gopalakrishnan and Shibulal, the current executive vice-chairman and CEO/MD respectively, they still hold important leadership positions in the company.

The entry of Rohan Murthy, albeit not in a primary leadership role, is another indication that the company is prepared to muster all possible strength to revitalise its sagging growth at the expense of romantic leadership and governance model.

Major role

However, it is not yet clear whether Rohan will consolidate his position and be considered for a major role in future, though the possibility is increasingly hard to rule out given his technological and financial expertise.

In the press conference that followed the board meeting that gave the nod for Murthy’s comeback, outgoing chairman K V Kamath mentioned how the board considered internal and external conditions before requesting to invite Murthy back on May 4. From the look of it, both are unlikely to show much change at least for the short term. Externally, US and Europe are continuing to battle economic troubles and companies in those regions are changing the way they did business to cut costs and improve efficiency. That brings us to the internal environment, which has shown little change since Murthy had left.

Not all the idealism is lost though. Most of the executive leadership of the company on Saturday decided to follow the John Chambers (the CEO of networking major Cisco who was the first to take a $1 annual salary) model by drawing Re 1 per annum as their annual remuneration. This was to send out the message that the founders are serious about reviving Infosys and taking it to the dizzying heights of the past.

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