B S Raghavan

Change of guard at Infosys

Updated on: May 01, 2011
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Mr Narayana Murthy has reinforced the organisational culture of dispensability that he himself had implanted in the Infosys by voluntarily relinquishing his position as the Chairman in favour of the non-Executive Chairman of the ICICI, Mr K. V. Kamath.

In recommending a banker to the top slot of a technology behemoth, the Nominations Committee, headed by Mr Jefferey S. Lehman, has apparently gone by Mr Kamath's general leadership qualities and overall capabilities in running a sprawling investment and industrial credit outfit with financials as the mainstay.

This is, of course, in sync with the trends in the US with which Mr Lehman, a legal expert himself, is familiar. There, technical companies opt for chiefs whose previous experience may have nothing to do with the products and services of the companies they are chosen to head.

Some thrive under this dispensation, but many are known to fall by the wayside, as happened at the time of the financial crisis that engulfed the US a couple of years ago. Whatever way one looks at this method of selection/nomination, it is a gamble.

Keeping pace with ideas

It is all the more so in the case of a company like the Infosys. Although it is claimed to have diversified in a number of directions, much of it is still technology-dominated.

Maintenance of leadership in the domain of development and dissemination of technology and its applications and, more particularly, lifting the trajectory of the achievements of Infosys to hitherto unscaled heights call for being abreast of the entire range and reach of the knowledge, information and technology revolutions that are simultaneously taking place, and keeping pace with the velocity, volume, variety and versatility of the flow of new ideas.

The person heading such an organisation should have either grown with it and built it brick by brick or been gifted with extraordinary creativity, innovative capacity, intuition and the genius to sculpt and invent the future.

Further, a whale of a reputation in one field does not necessarily mean that taking over an institution in quite a different field will be attendant with the same degree of success.

Some companies in Europe, the UK and the US are not content with putting a high premium on the past performance and reputation, but adopt practical techniques to ascertain the suitability and compatibility by exposing the nominee to a question-and-answer session with selected discerning shareholders. In other words, the reputation is not accepted on trust as a stand-alone criterion to adjudge professional competence in the new field.

Possible embarrassment

It is necessary for companies in India also to undertake a similar evaluation with the needed rigour to guard against any possible future embarrassment.

For this, knowledge of local conditions is important which a person brought from outside the country as the head of the Nomination Committee is unlikely to have.

For instance, a criminal investigation is reportedly going on in Uttar Pradesh into money launderings, black money, and the fudging of finances of the UP Development Council — an industrial development advisory board, headed by Mr Amar Singh, set up during Mulayam Singh Yadav's regime as the Chief Minister between 2003 and 2007.

According to the version of the UP Police published in the Tehelka magazine, (May 7, 2011), hundreds of crores of rupees were earned by Amar Singh's companies while he was helming the Board, of which big shots in industrial, business and banking circles, such as Messrs Anil Ambani, Kumar Mangalam Birla and K.V. Kamath were members.

Mr Amar Singh has expectedly denied all accusations of corrupt practices levelled at him and the Council, but has added ominously that “If I am being investigated, then all those corporate honchos who were on board should also be investigated.”

I have the very best for Infosys at heart in sharing these reflections, as a public duty deriving from 60 years of public service in various capacities as the Commerce and Industry Secretary and Chief Secretary of a State and CMD of four major public sector enterprises.

Published on May 07, 2011

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