Leadership at Infosys

A more global top management is a likely option

Infosys Technologies is a unique Indian success story in many ways, so its internal process of chalking out its future leadership scenario would naturally generate wide interest. The more immediate, if less important a challenge, is finding a new chairman to succeed N R Narayana Murthy who gives up his non-executive leadership of the company next year when he turns 65. The bigger task is outlining the leadership stakes in the medium to longer term, say in the next five to ten years by when the supply of founders will have run out. The two issues are foreigners versus Indians and insiders versus outsiders. Significantly, Infosys is effectively majority foreign-owned, if you add the 35.8 per cent holding of foreign institutional investors (FIIs) to the 18.6 per cent share of equity held in American depository receipts. Also, the FII holding is more than double the founders’ or promoters’ holding of 16 per cent.

To take up the issue of chairman, Mr Murthy has said that there is no problem in having a foreigner holding the position. He has also indicated that a member of the executive council should become the next CEO. We can, therefore, visualise a situation where the CEO is from the present crop of top leaders and a non-Indian is the non-executive chairman. However, there is a popular perception that the current chief operating officer, S D Shibulal, one of the founders, will also spend some time in the corner office. But as both the current CEO, S Gopalakrishnan, and Mr Shibulal are around 55-56, how both of them will serve out their remaining years remains open. There could be an interregnum with a CEO and an executive chairman. However, this is really not what matters. The bottom line is that no one is likely to come in from outside to take up executive leadership of the company in the foreseeable future. Continuity and stability at the top in Infosys are, in fact, delivered by its collegial form of leadership which both evolves a consensus and implements it.

However, Infosys needs to change and this is likely to come, sooner or later, through the symbolic induction of a non-Indian as chairman. An Indian management, or one anchored in India where most of the employees will continue to be positioned, with a more global board led by a non-Indian chairman can turn out to be the right combination. In order to keep growing healthily, Infosys needs to become more global in terms of both its people and culture. The backlash in developed countries against jobs disappearing as a result of IT offshoring has highlighted the need for leading Indian software vendors to look less Indian and more global. Infosys needs to sharply raise the ratio of not just its non-Indian employees but also have very many more non-Indians among its top managers. This can take place through a rapid growth of delivery centres all round the world so that the offshore and offsite delivery model remains but not necessarily services are delivered out of India or by Indians alone. This will yield not just sufficient numbers of non-Indian employees but managers too.