Vishal Sikka has made Infosys relevant again: Ravi Venkatesan

Interview with co-chairman, Infosys

Infosys, the country’s second largest IT services firm, has an uphill task. The Bengaluru-based company, which forecast a tepid growth rate at 6.5-8.5 per cent for this fiscal, sees two transformations — on technology and on a cultural shift from a promoter-led management to one professionally run. By appointing Ravi Venkatesan as co-chairman, the board of directors accepted a recommendation by founder N R Narayana Murthy, who had raised governance concerns. Venkatesan, chairman of Bank of Baroda and a former Microsoft India head, speaks to Ayan Pramanik about his role to help Chief Executive Officer (CEO) Vishal Sikka swim the commoditised business or “red oceans” to identify the “blue one” so that the company bounces back. Edited excerpts:

What will be your role in assisting (Infosys chairman) R Seshasayee? How will it be different from your erstwhile responsibility as an independent director?

There are significant strategy and operational factors, and a fair amount of work on investor relations. The industry is going through a transition. Infosys in particular is also passing through a transformation, from a promoter-managed to a professionally-managed company. There is a lot of work. Seshasayee and I think that in some areas I will lead and he will support. For instance, I have been the chair of the Risk and Strategy Committee, an active one because that is where we look at key issues. So, it is logical for me to focus on Sikka and the team dealing with strategy and execution. I have a particular interest in leadership and was involved in developing leadership teams at Bank of Baroda. Here is an opportunity for me to engage more with Sikka and help build his team. In other areas, Seshasayee is going to lead. He has been active and engaged with investors, which he is good at. We are not going to have watertight compartments. We will partner in areas and make it seamless.

How different is the management transformation? 

Microsoft and Cummins were professionally-led companies, though Bill (Gates, founder of Microsoft) played a significant role. It was interesting to look at Microsoft’s case. Even as the company professionalised, Bill retained his seat on the board. He changed his role; he was first the CEO and chairman, then he became chairman and chief software architect. Later, he became chairman and now he is simply a director and advisor to the CEO. But, he has stayed on the board. It certainly worked quite well when I was there. I cannot comment on whether Infosys is a special case. These things seem challenging for most companies. But, I am hopeful. We all want Infosys to flourish and move from being a wrecked ship to the blue oceans, whether you look at promoters, big institutional investors or Vishal. We may have different views on how to get there. For that, you need intense dialogue. 

When I joined Bank of Baroda, I had no understanding of public sector banking. But, it was clear what the Reserve Bank of India or the finance ministry wanted. Though we may have agreed on where we want to get, how we get there is where the trick lies. It requires intense dialogue to get everybody on the same page. It is challenging but a surmountable transition.

You spearheaded Microsoft India. What are the three things you believe Infosys needs to transform itself?

You have to swim towards new opportunities. To flourish, companies have to swim away from red oceans, where there is intense competition and commoditisation, towards the blue ocean where there are new areas and less competition. 

Traditional IT services such as application development, maintenance, or infrastructure management are like red oceans. This is why you are seeing low growth and drop in margins. However, there are phenomenal growth opportunities in areas such as cyber security, data analytics, engineering services, or the Internet of Things. We have to build capabilities in these new areas. That requires capability building on the front-end, like having different conversations with customers and on technology. This is a shift everybody has to make; those doing so faster are going to be fine. On the traditional services side, you have to reduce cost faster than the prices falling through automation. You have to continuously optimise. 

As a co-chair, how will you rate Sikka?

I would not like to comment on that. He has a tough job and has done something impressively well. For instance, customers would give him high credit for making Infosys relevant again. The performance gap with peers has reduced. Lack of growth is an industry issue and not only an Infosys issue. He has done well in many areas but the transformation is work-in-progress. We have to focus on transformation.