Charisma and the Corner Office: Question Time in Infosys

15 04 2008
Infosys Technologies (Infy) has been a company which has adorned the covers of many a magazine, Indian and international. It has received numerous awards as an excellent company , best employer, best annual report and what have you.Infosys campus in Bangalore has featured in many TV programmes as a symbol of modern India. Foreign dignitaries visited the Infosys campus in Bangalore the way they would visit Raj Ghat in Delhi.
 
The founder CEO of Infosys N.R.Narayan Murthy (NRN) has been written about more often than any other Indian CEO in recent times. His rags to riches story, his frugal lifestyle, his professional capabilities have been covered in great detail. His views and advice were taken on even matters outside IT like managing IITs or reservation in corporate sector or Bangalore airport. There was even a strong campaign among his followers to make him India’s President. His wife Sudha Murthy also helped his cause in her own way. Her interview to the Savvy magazine in which she describes how she saved money or pledged her jewels for starting Infosys was one of the most forwarded interviews in the email circuit. Sudha Murthy through her writing and Infosys foundation work added to the image of the Murthys as role models for the new India . On  their middle class indian values  success and wealth has sit lightly.
The second CEO was Nandan Nilekani. Nandan after being under the shadow of NRN came on his own pretty quickly. He came across as a young , suave contemporary manager who was more business oriented. He was also helped by the fact that during his tenure Infy had a dream run in business. Nandan also gained a lot by his mention in the bestseller “The World is flat” by Thomas Friedman. Friedman gave Nilekani the credit for coming up with concept of a flat world. Nandan also showed rare grace by leaving the CEO’s chair at a time when he could have gone on easily for another 5-10 years.
 
During NRN and Nandan’s time, Infosys was a darling of the stockmarkets. Infy as a company was covered by maximum number of analysts. It was a must-have stock in every mutual fund or foreign institutional investor’s portfolio. The quarterly results of Infy was considered as the start of the earnings season even if some other companies would have announced the results before Infy. Infy was known to under-promise and over-deliver, so much so that if the earnings of Infy were in line with their guidance the market would react adversely.
 
Kris Gopalakrishnan took over from Nandan Nilekani. Being one of the original founders, I guess it was his turn to become the CEO. At the time when Kris took over, the going was good but hard times were round the corner. Not that there was any decline in sales or losses. It was just that Infy stopped growing at the rates it had gotten used to. Then the dollar-rupee equation put a question mark on the entire IT industry. IT industry stocks gave way to capital goods, power and financial services stocks. In the bull run of 2007-08, IT industry underperformed and Infy stock declined by nearly 30 %. Infy moved out of the radar of most investors and magazines and TV channels stopped giving it the prime space or time. It did not help matters that the current Infy CEO does not have the stature or charisma of NRN or Nilekani to inspire confidence. He can easily be mistaken for a Chief Engineer of a State Electricity Board or a Jt Secretary pushing files in North Block.
 
Suffice to say that the profile of Infy and its CEOs have been diminishing in recent times. It will be interesting to see if the media gives them back their high profile, if their stock starts performing well. In a company where the promoters own less than 30 % stock, it is time they looked outside the founders for their next CEO. Perhaps a non-Indian, non-promoter CEO brought in from outside will be able to take Infy out of its comfort-zone and also help Infy regain its high-profile. 
– G. Mohan
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