Meritocracy and accountability were diluted at Infy: Murthy

Infosys had during the last decade somehow diluted its focus on meritocracy and accountability, and to take it back to its industry-leading days, some “hard and tough decisions” had to be taken, said company co-founder and Executive Chairman N R Narayana Murthy on Saturday.

He was addressing shareholders at the 33rd Annual General Meeting (AGM) of Infosys held in Bangalore. Murthy and another co-founder Kris Gopalakrishnan stepped down from their positions on Saturday to become non-executive chairman and vice-chairman respectively.

Murthy said that since rejoining the company’s operations as executive chairman on June 1 last year, it had been clear to him that the company needed to improve its sales effectiveness, software delivery and cost optimisation to get back to the market-beating performance of its heydays.

This required taking quick and objective decisions based on data and facts and eschewing biases.

“I set about identifying hidden jewels in the company and giving them the opportunity to lead in its resurrection, and identifying not-so-well performing people and moving them to tasks that they were best suited for. Everyone of these decisions was discussed and approved by the senior management,” Murthy said, as he summed up his revival plan over the past year.

He said the company also focussed on how it could address the challenges posed by the commoditisation of software services.

“We repurposed our Infosys Labs to focus on how we can use technology to better automate services and create competitive differentiation for ourselves, just like we are doing for our clients.”

Infosys also set about the problem of addressing anomalies in promotions between internal people and outsiders who were being hired at higher salaries.

“This had led to low morale and attrition. We changed that practice and mandated that 80 per cent of the promotions should go to internal people based on competency,” Murthy said.

“When the board of Infosys invited me to come back last June, they wanted me to do two things. First, build a strong foundation for growth, and second, assist them in finding an able CEO to take the company forward… after a detailed and thorough exercise extending to two months, the Nominations Committee (NC) zeroed in on Dr Vishal Sikka… Dr Sikka is well known globally for leading the creation of HANA, and has been hailed as a wonderful leader and visionary,” Murthy said.

He went on to describe the company’s selection process for its next CEO as rigorous, transparent and speedy, Murthy said.

“I have served on the boards of two huge multinational companies and have watched their CEO selection process from close quarters. I can say confidently that the CEO selection process adopted by the NC and their advisor here at Infosys is second to none in its rigour, transparency and speed.

Commenting on the prominent middle senior level exits which the company witnessed after Murthy’s return at the helm, he said that some of them had been identified as low performers by the management.

“A small number of them left since they had higher aspirations and their aspirations could not be fulfilled in Infosys,” Murthy said, adding that the company has been going out of its way to retain high performers.  “We were the first Indian company to start a full-fledged Leadership Institute, which nurtures and develops 585 leaders at any time,” Murthy said.

The company will soon start a Fast Track career program for its high performers with a separate technical stream for those who do not want to become managers.

It has improved its training programs in software development and sales, and invested heavily in quality and productivity areas, creating systems like measuring and improving individual productivity.