Narayana Murthy says high profile exits are good for Infosys

The Infosys patriarch takes questions from analysts, gives candid and tongue-in-cheek replies to most questions, addressing most of the concerns of the market

 

It was a pleasant surprise for analysts to find NR Narayana Murthy present on the call with analysts on Friday morning, along with the top brass of Infosys soon after the company announced its third quarter results. In his inimitable style, Murthy took most questions head-on and replied to them with his archetypal honesty. He did not beat around the bush on any question. On the spate of recent high-profile exits, Murthy said: "Let me answer this in a cryptic way: It is good for them and it is good for the company. We wish them the very best." Murthy also addressed questions on turnaround in the most credible way, peppering his answers with descriptions of smiling faces in front of him in the room. Excerpts from the analyst call:
 
On the disbandment of the Executive Council
We have had several initiatives  on anvil to make Infosys a better company. As a man in a hurry, I wanted to get on with the job and when the recommendation on expanding executive council came, I said let's do it. When the recommendation on the two presidents came, our review demonstrated that this new structure  would render the executive council redundant.  We had to take the tough decision to disbanding the executive council.
 
On high-level exits
As far as the future of this organisation is concerned, that future will not be compromised for leadership. As far as the exits are concerned, let me make a cryptic comment -- It is good for them and good for the company and we wish them the best as they have added value to the organisation. Infosys was the first Indian company to set up leadership institute. We have a three tier programme and these three tiers have developed approximately 600 leaders. If you look at this room, I see a set of extraordinary people most of them in their 40s. We have a large number of enthusiastic and energetic people who report to people in this room.
 
In case the two-president structure fails?
We will change it if it is not working. Our priority is to make this a high performing organisation. This will create an opportunity for nominations committee to consider internal cadre of people along with external candidate for selection of CEO when Shibulal retires. It has created platform where it will be easy for nomination committee to consider internal candidates.
 
On the company's turnaround
In my AGM speech I did say cost optimisation is one of the initiatives that will yield results earlier (6-18 months) than the other two. Sales effectiveness will take 9-21 monhts but delivery effectiveness will take 12-36 months.
 
On margins
We give our guidance once a year and then we revise it every quarter, though I am not sure as I have been out of it for a long time. I cannot make any statement on specific margin movement. I can say that I see can-do spirit and joyful faces. We have been working on several initiatives both in area of sales and delivery effectiveness.