Why Infosys should not need Murthy And Why Murthy does not deserve Infosys!

In the past two days, almost everyone is singing rah-rahs about Mr Narayana Murthy getting back at the helm at Infosys, India's iconic technology company. The stock jumped 5% today and timelines are full of platitudes saying how it is such great news for Infosys. I am struggling to understand why is this is so wonderful for Infosys and all its stakeholders? No one is disputing NRN’s greatness or his contribution in creating that wonderful institution called Infosys. No one is taking away from the fact that he was the Chief Architect of the Infosys story - creating jobs for millions of Indians. We all know all of this! This story was written ten years ago. We can’t keep repeating the same fable over and over again. Here is the reality that Infosys faces in 2013:

Since Shibulal took over as CEO, sales and profit growth declined sharply. Its stock has taken a huge knock and so has its reputation. Two popular reasons why – Infosys refused to acknowledge quickly that clients in a slowing world want high quality service at bargain-basement price. Its pigheadedness on premium pricing meant Infosys lost the opportunity to grow fast. Infosys is growing slower than the industry and it expects to do so even this year.

Then there is the leadership issue. Ever since the last of the founders, the soft-spoken Shibulal took over, Infosys has seen a churn at the top deck. Industry watchers say he has neither managed to keep his flock happy nor has he managed to communicate the effectiveness of his strategy to clients. The mistake is strategy or leadership. Analysts say it’s both. And Shibu has not been able to disprove either.

So, this is the mess that welcomes Mr Murthy today. But does Mr Murthy really deserve Infosys?

Here are 6 reasons that he does not:

1. Mr Narayana Murthy was CEO during a different era. In the past three years, the game has changed so dramatically that the Global Delivery Model, mastered to perfection by Murthy and team, now faces a serious threat of survival. The days of so called ‘body shopping’ are over and India’s IT companies are fast finding new models to succeed. Add to this the looming threat of a new immigration law that can prohibit Indian companies from shipping young Engineers en masse from Bengaluru to the US. So why should it need a Narayana Murthy in an executive role to build or execute strategy for tomorrow? Why can’t the management team of today's Infosys fix and re-build strategy?

2. India’s best known banker KV Kamath understands growth and aggressive scaling up like no else does in India Inc. That’s exactly what he did at ICICI Bank and I reckon that’s what he’d have wanted to do at Infosys since the day he became Chairman in 2011. My guess is Infy’s conservatism must have crimped Kamath’s natural penchant for risk and style of functioning. It must have been embarrassing for Mr Kamath to be Chairman of company that sits on 24000 crore of cash and yet shows very little signs of aggression. What is stopping Infosys from making one or two large scale buyouts that can catapult it a new rung of growth?

3. If by all parameters the CEO of Infosys has not delivered, why not find a new man? Pundits say Infosys needs a young, agile, nimble-footed CEO who is able to execute a brand new strategy in the next 12-18 months. Look what Francesco D’Souza has done as CEO of Cognizant overtaking Infosys as India’s second largest IT player this year. Why not a new CEO? If not from outside, why not find someone internally? Why does Infosys need a legend from the past to chart the road ahead of the future?

4. The promoters of Infosys deserve all the credit for making Infosys what it was. But for Infosys of tomorrow, it would serve well if the same promoters cut the umbilical cord and let the company be run by the Board that consists of accomplished professionals. Why should the promoters continue to have a say?

5. When Mr Murthy retired in 2011 – he upheld two important values. That every promoter will quit at the age of 60 and that no family member can inherit leadership roles. By coming back, does Mr Murthy not dilute this rule himself? And by appointing Rohan Murthy as EA to the Executive Chairman, does the Board not lower the exalted standards of corporate governance that this institution has set for itself? Why...wasn’t there anyone else within Infosys capable of being appointed EA? Really? If it is NOT a leadership role, why then make an announcement? When was the last time anyone heard the appointment of an EA included in a press statement?

6. Lastly, what if Mr Narayana Murthy is unable to reverse the slide at Infosys? He is putting at stake his reputation and image that has been painstakingly built over the past several decades. So will the Board want to risk his legacy as someone who built Infosys or as someone who could not arrest its decline? At 66, Murthy could well do without this challenge.

Last word, if this move is about fixing perception than fixing the business, then then the jury’s out if they are going to be proved right on either.




(pic courtesy: businessweek)

Sex & Software: What turned Phaneesh Murthy On!

Dear Phaneesh Murthy,

Two days ago, a press release from your erstwhile company woke me up to tell me that you have been fired. I called up your ever-efficient media manager to ask him what the hell was going on. The events that have unfolded since have left me numb, sad and angry. I will tell you why.

I don’t want to sit in moral judgment of what you did or didn’t do. Frankly, I don’t care about your personal life. If what you have done is illegal, I suppose you will have to pay for it. Like you did the previous times. But that’s not the reason for my anger.

What I am most upset about is - WHY - Phaneesh Murthy would you do this to yourself again? That morning I was numb as it dawned on me that sometimes idols do have feet of clay. Yes! I was a fan boy, Phaneesh Murthy. I admired your professional achievements as a business leader and how you rebuilt yourself after your previous attempts at self-destruction.

The first attempt in 2002. You were the rising star of Infosys. Your scorching pace of growth ensured you exclusive access to the high table of ivy-league brahmins who ran India’s IT industry. You belonged there. It was from this pedestal were you hurled headlong to burn for the acts you committed. You deserved it then, Phaneesh.

But what fascinated me about your story was not the rise or the fall but your resurrection. How you remarkably dusted the past off and built a new future. I wondered how you found the inner strength and energy to start all over again. The world watched as you started a small company which got acquired by iGate.

Then as CEO of iGate, I remember distinctly how after every quarter you spoke passionately about your growing business, in your words, “Growth despite a challenging environment.” I noted the measured staccato, your attention to detail and your indefatigable drive to take on the world. It was with this drive that you audaciously led iGate acquire a company twice its size and make it a billion dollar enterprise. I heard from people who know you well that you worked fourteen-hour days and ran a mile daily.

Phaneesh, a lesser mortal would have crumbled by the weight of shame and ignominy of the past; Not you. You chose not to be written off. You meticulously built brick by brick, even as your clan sniggered, to get back on that pedestal arguably even taller.

As iGate completed the merger with Patni, and the company delisted from the exchanges, I thought, your life had come a full circle. I could almost hear you say “Yes, I f*cked up personally. But I still have it in me professionally to build a successful enterprise”. I, like many others, thought you made good and had proved your point. I couldn’t have been more wrong.

Because for you Phaneesh, the lines that divide professional and personal lives never existed. So look at you now....You have come crashing all over again. This time with a louder thud from where I am not sure you will ever be able to recover. Respect, Trust rebuilt painstakingly in the past ten years, all jerked off.

Sad.

So long Phaneesh, and oh before I go here is a piece of unsolicited advice...If you can, try therapy.

Get well soon!
Harsha

(Picture Courtesy: indianexpress)