The Infosys Row
“Your time is limited, don’t waste it living someone else’s life. Don’t be trapped by dogma, which is living the result of other people’s thinking. Don’t let the noise of other opinions drown your inner voice. And most important, have the courage to follow your heart and intuition, they somehow already know what you truly want to become.” -Steve Jobs
These were the words which cajoled the first non-founder CEO of Infosys, Vishal Sikka to resign from his position of CEO and managing director today (18th August 2017). As every beautiful thing has to come to an end, the journey of the first non-founder CEO of the 36-year-old Indian IT giant has eventually ended, leading to an uncertainty of the direction of the company. The sudden revelation by the CEO or I would rather quote it as ex-CEO of the second largest IT firm of India has left the investors flabbergasted, and the Indian stock market in an unhealthy state as the share of Infosys plunged by 9.56% on the National Stock exchange(NSC) to a 24-month low at Rs. 923.25/ share costing a mammoth lose of Rs. 25,000 crore to the company. The tensions and divide between the ex-CEO Vishal Sikka and the Infosys founder NR Murthy finally took an ugly turn with Vishal Sikka eventually admitting that his watch has ended.
THE INCEPTION:
Since being appointed as the managing director and CEO of Infosys on 12 June 2014, the company has seen some remarkable changes during the stint of Vishal Sikka at the helm. After taking on the charge from the then CEO SD Sibhulal, one of the Infosys co-founders, on August 1 of the same year, the company has fared well during Sikka’s stint.
But that’s not just it, when Sikka took charge back in 2014, the apprehensions surrounding the IT industries were very strong making the task at hand for the new incoming CEO more difficult, and the very high attrition rate just augmented the anguish. But Sikka’s magic formula helped Infy pull out of the rut, by adding roughly Rs. 43,700 crore, nearly one-fifth of their market valuation during his regime. Moreover, the Infosys stock roughly rose about 22% from Rs. 835 on August 1, 2014, to Rs. 1,021 on August 17, 2017, the day before Vishal resigned. During his tenure as CEO, Infosys revenues have grown from $2.13 billion in Q1 of FY15 to $2.65 billion this past Q1, with strong margin performance and cash generation, throughout his tenure. Besides this, the company has declared dividend six times along with two bonus issues, first in December 2014 and then in June 2015. But let’s not talk about numbers as they can anyways be manipulated and if numbers were everything then mathematician and statistician would be ruling the world.
The day Vishal Sikka joined the company, his mission, and vision for the days ahead were very clearly outlined and were highlighted in every quarterly result which was announced by him. In his tenure, the initiatives such as Zero Distance and Zero Bench were implemented along with the inception of the new AI arm “Mana.” Zero Bench which ensured that every employee is occupied by some of the other work henceforth increasing the throughput and grooming the technical expertise of every Infoscion(a name by which every employee of Infosys is recognized with). Zero Distance initiative ensured that the engineers empathize with the vendor and provide them with more innovative solutions, which in turn will help the vendor to grow its business. These proved to be just the ice breakers which were needed to give a thrust in the right direction after the global economic slowdown, which wrecked the morale of the Indian IT firms.
WHEN THINGS GO WRONG:
There is a difference in the way we think,
But that does not make you leave us on the brink,
I prefer to speak up rather than keeping quiet,
But I think that turned upon me in spite.
If I were Narayan Murthy, I would be reciting this verse before going to bed every day. There are some principles which Narayan Murthy had kept in mind which eventually went into communication and governance and in a way were the very pillars which have held Infosys afloat. Right from not bribing the custom officers when the first computers under the name of Infosys arrived from abroad to admitting publicly whenever the company incurred loss, Murthy had made it very clear right from the first annual report after Infosys became a public company that “we[the company] will always be transparent and we think transparency is a competitive advantage”.
It was this very ideology which prompted Narayan Murthy to question the integrity of the board. Right from questioning the severance package of the ex CFO Rajiv Bansal to the recent Panaya deal in the last 4–5 months, the sound of the “drumbeats” were deafening for Vishal Sikka eventually leading to his exit.
The nagging from Narayan Murthy to change certain policies intact and to appoint specific individuals in the board without questioning him left the board in despair and threating to go public over these issues if his demands were not met just turned up the jury against him.
WHAT LIES AHEAD:
Nandan Nilekani has been appointed to clear up the mess created. The Ghar Wapsw of the man behind UIDAI has some task on his hands right now with the clouds of Automation and Artificial Intelligence hovering over apart from the negative image created in the market because of the spite between Vishal Sikka and Narayan Murthy. The man behind Aadhaar has to find a way to strike the right chord to maintain a balance between “good corporate governance” and ensuring that the money keeps pouring in the vault of the company.
Sources:
1. The Economic times.
