The Infosys lesson for India Inc

Infosys chooses an outsider pro to lead it through transition.

seema

Seema Sindhu | July 7, 2014




Infosys Technologies, a bellwether firm for India’s infotech sector that is making waves across the globe, has defied the traditions of the domestic sector at the best of times. So, as it goes through a transition, it has continued to set what could be new trends.

On June 12, its executive chairman NR Narayana Murthy decided to step aside, and the company named Vishal Sikka as its CEO. What was significant is that the baton was passed on to an outsider professional for the first time since the company’s inception in 1981.
A group of IITians – Narayana Murthy, Nandan Nilekani, NS Raghavan, S Gopalkrishnan, SD Shibulal, K Dinesh and Ashok Arora – who founded the company have taken turns in various roles in running it, but in the face of mounting challenges decided to let the former SAP chief technology officer do the job.

Also read: Sikka at helm, it's time to hit the Refresh key at Infy

During Narayana Murthy’s second term his son Rohan Murthy was appointed his executive assistant, triggering speculation over his future role. At most other Indian firms, Rohan’s further elevation might have been taken for granted, but at Infosys, he will be moving out now that his father is only a non-executive chairman.

Analysts believe this could be a fresh start for Infosys.

Sanchit Vir Gogia, chief analyst and CEO, Greyhound Research, says, “I believe India Inc is moving up the ladder to add value to their business. A business needs a team of leaders; it cannot be run by one person. The leader needs to be professionally sound to lead the company. I see the baton moving from family to professionals with a business sense.”

Harish Bijoor, brand expert and CEO, Harish Bijoor Consults Inc., concurs, “This surely is the trend. Founders and owners reach a glass ceiling all their own. This glass ceiling occurs at different points of time. In the case of Infy it has taken 33 years. This should have happened earlier.”

Although there have been instances of professional CEOs in family-run enterprises, for example at Dabur, Thermax, Jindal Steel and Power, Wipro and some of the Tata Group firms, “Vishal’s appointment is a learning that various other companies will implement in the coming years. Innovation is the key that every company needs to remember. It should be the core competency of any company,” experts believe.

While some look at it from the perspective of an insider-outsider debate, others say the appointment should be seen purely in business sense.

Ganesh Natarajan, vice chairman and CEO, Zensar Technologies, says, “India Inc is run by an assortment of CEOs – some are from families and many are independent professionals. I do not think the second- or third-generation family CEOs are in any way inferior to professionals and every board and shareholder group should look at the CEO appointment on individual merit.”
As for Sikka, there is unanimity in industry that he is a true innovator and thought leader, and that his contributions at SAP have been extraordinary. Experts feel if Sikka can deliver and give a new vision to Infosys, many family-run firms too may consider bringing in professionals at the top.

“I believe it is only a matter of time that these companies consider getting a professional rather than passing on the baton to the next family member,” says Gogia.


(This story appeared in the July 1-15, 2014 issue of the print issue)

Comments

 

Other News

India set to enter 5G era

After years of intense preparation, India is about to take the next step in information and communication technology. Prime Minister Narendra Modi will launch 5G services in India on October 1 and also inaugurate the 6th Edition of India Mobile Congress 2022 to be held till October 4, at Pragati Maidan, Ne

Ram Shravan Manan: A musical venture that leads to self-reflection

There is this popular saying that epics are never told, but always retold. Ramayana is one such epic and needs no introduction. Its plot is grounded in sacrifice and the end brings out hope that the good always wins. But how is a centuries-old tale of the prince of Ayodhya still relevant for today’s

Garib Kalyan Ann Yojana extended for three more months

In pursuance of the pro-people announcement made by the prime minister in 2021 and successful implementation of additional food security under PM Garib Kalyan Ann Yojana, the union cabinet has approved its extension for a further period of three months, from October to December 2022. At a ti

A great literary feast (that could’ve been even more sumptuous)

A Case of Indian Marvels: Dazzling Stories from the Country’s Finest Writers Edited by David Davidar Aleph, 390 pages, Rs 999 Change is the only constant, and India has always been doing so. Yet, after independence, if there was a year when the p

Govt e-Marketplace sellers report more business

“My volume of business has increased ever since I registered on GeM (Government e-Marketplace) in 2017. Earlier, I could supply items only in the vicinity of my shop in Fort area and only within Mumbai. Now, I ship my products all over the country! I have tied up with India Post and three private cou

How the Hindi Newspaper Business Changed

The Journey of Hindi Language Journalism in India: From Raj to Swaraj and Beyond By Mrinal Pande Orient BlackSwan, 188 pages, Rs 1,195.00 In India, the English-language media is considered the ‘national media’, while the language press

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter