Infy after Murthy

All leaders have one attribute that, above all, defines who they are. With N.R. Narayana Murthy, founder of one of India's most respected companies, Infosys, it is hard to pick only a single attribute.

Be it his integrity, simplicity, ability to speak his mind, visionary outlook, or ability to take his team along — there are just too many qualities that define the man.

So what will be the impact of his exit on the company he built?

The analysts eWorld spoke to are not worried about Narayana Murthy leaving since Infosys is a process-driven company with a strong Board and Executive Council.

Says Sanjeev Hota, Associate Vice-President - Institutional Equities at Sharekhan, “In the long term, there is no big concern. The management is very diverse and strong and the recent additions of people such as Balakrishnan and Vemuri to the Board have made it a very strong team.”

Srishti Anand, IT Analyst, Angel Broking, echoes a similar view. “What we have to look at is day-to-day business management. Infosys' succession planning is strong and even if Murthy is moving out, it is okay because people who are running the show, such as Kris Gopalakrishnan and Shibulal, are still there.”

Industry leaders, too, say that values built by Narayana Murthy over the years will continue to drive his company.

Krishnakumar Natarajan, Chief Executive Officer and Managing Director of MindTree, says, “Though he moved out of operations several years ago, as chief mentor he was building the brand. Even when he is outside of Infosys, he will continue to do so. I don't see any dilution. Murthy brought in new perspectives and a focus on the ability to manage business through data.”

Adds Ashok Soota, Chairman and Managing Director of Happiest Minds Technologies, “Murthy has left behind an excellent team. He has moved into a Chairman Emeritus role and his advice will still be available to the company.”

Market watchers believe that Narayana Murthy's high standard of corporate governance is now a part of the company's overall DNA.

That said, Infosys does have immediate issues to deal with, particularly given its below par performance in the previous earnings season.

According to a recent report by Kotak Securities, the uncertainty in the global macro environment continues to pose near-term challenges for the company. Kotak Securities sees the company's turnover growing at 19.8 per cent during FY12, slower than the 20.9 per cent growth that the company registered in FY11.

Yet, the author of the report, Dipen Shah, Senior Vice-President (Private Client Group Research), Kotak Securities, is full of admiration for Narayana Murthy and the company.

“The processes that have been set up by the company are so strong that the impact of anyone leaving or coming in is minimal. People such as Kris Gopalakrishnan have been with the company for a long time, so they can carry forward the work done by Murthy,” he says.

Still, in these troubled times, won't the personal brand equity of the main founder be missed?

Karthik Ananth, Director, Zinnov Management Consulting, doesn't agree because he feels Narayana Murthy has not been customer-facing for a while.

“When Vivek Paul left Wipro, it was difficult for them because he was customer facing,” he points out.

Potential problems

But while analysts are not worried about Narayana Murthy's exit affecting the company, they point to other potential problems.

For instance, Hota of Sharekhan is of the opinion that the exit of Mohandas Pai and Subash Dhar is more worrying for the company.

However, Srishti Anand of Angel Broking feels that this is not a cause for concern.

“Pai was supervising HR in a holistic manner, while Dhar's telecom division was underperforming for the last two-and-a-half to three years.

His other non-linear contributions to the company were also only around 6 per cent to 7 per cent. In fact, if somebody like Vemuri, who is the face of Infosys to its BFSI clients, had quit, it would have been a cause for concern,” she notes.

Meanwhile, Natarajan of MindTree points out that, “Some unique perspectives that Murthy brought to meetings and his individual value addition — those probably will be missed.”

And this will be something that will get noticed more and more, if the company slips up.

As Amneet Singh, Vice-President - Global Sourcing, Everest Group, puts it, “In case Infosys falls short of expectations, the comparisons will be inevitable. It's a question of success — that will determine the strength of Infosys, going forward.”

But no matter what happens, Narayana Murthy can be assured of his place in the IT hall of fame. If Infosys succeeds in the era after him, the success will be attributed to his process-driven approach.

And if the company runs into rough weather in the future, people will talk about how things were so much better when he was around. He will be respected no matter what happens to Infosys.

And therein, perhaps, lies the true measure of his achievements.

>Balaji.n@thehindu.co.in

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