Jun 7, 2009

Infosys' Succession Plans

Interesting article in Forbes India (a welcome addition to the range of Indian business magazines) on how IT behemoth Infosys is going through as it tries to put into place a succession plan from its founders to the next generation over the next decade:

Starting August 20, 2011, when Murthy will retire, the old guard will start putting more and more of Infosys in the hands of the new leadership. Within the next decade the remaining founders, who are now in their mid-50s, will start retiring too. The bench of leaders is already deep. Infosys Leadership Institute (ILI) has helped the company’s board to identify 50 senior executives. The founders as well as Infosys veterans Mohandas Pai and Srinath Batni each will groom a few of them. Kakal is one of the eight people being mentored by Murthy. “The key that we look at is consistent performance, because that gives a good indication of his ability to run a long-term marathon. The second, is he building something which is of long-term value?” says Girish Vaidya, who heads ILI.

Infosys without its founders at the helm is a difficult animal to define — a bit like Apple without Steve Jobs or Microsoft minus Bill Gates. No one quite knows how the transition will pan out. There’s a chance that it may not be as orderly as most things inside Infosys tend to be.
“I have been associated with founder-managed companies. The succession issue is a very difficult one, loaded with emotions and personal factors. It doesn’t go like a Swiss clock watch,” says Claude Smadja, independent director on the Infosys Board and president of Smadja & Associates Strategic Advisory.

For over three decades, all the key operational roles have been looked after by one of the founders. Murthy ran a very tight ship which had little space for anyone beyond the circle of founders. In three decades, only three professionals — Phaneesh Murthy, Batni and Pai — could get a seat on the Board.