What kind of CEO Infosys chairman Narayana Murthy wants to waltz with

Written by Darlington Jose Hector | Bangalore | Updated: Jun 2 2014, 21:55pm hrs
Narayana Murthy-InfosysInfosys CEO search has now become a bit of a catch-22 situation.
The Infosys CEO search has now become a bit of a catch-22 situation with all possible candidates being mentioned in the run-up to the announcement. All top internal candidates and almost all external possibilities are now being discussed in IT industry circles, but President BG Srinivas resignation on Wednesday has now narrowed down those possibilities. It is now fairly clear that the executive search firms, involved in the CEO hunt, has pointed to someone who has taken the wind out of Srinivas hopes. On the Infosys earnings day in April, Srinivas exuded confidence and even went on to state that he was happy to be in the race. Now, just a month later, he has found himself a brand new job in Hong Kong!

Following are some of the factors that need to be considered and evaluated. What kind of CEO does Infosys need at this stage of trial Or more importantly what is the kind of CEO that chairman Narayana Murthy wants to waltz with While the names of external candidates like Cognizants Francisco DSouza and Malcolm Frank have been tossed around, there is this talk in the industry that the new CEO has already been

chosen. Talk is that the preferred candidate will be someone who enjoys a good equation with Murthy, while also being a soul.

It is unlikely that Murthy would prefer to work with an external candidate who does not understand the cultural ethos at Infosys. It may take him quite a while to blend in. Infosys, which has projected a mere 7-9% revenue growth for FY15, cannot afford to lose time.

So the race has to be between someone who is very palatable to Murthys tastes, even if that means an external candidate, or someone whom Murthy can guide and groom into the role if that candidate happens to be an internal one. While it may be difficult to guess who Murthy and the executive search firms have in mind when it comes to external candidates, it is now becoming clear that younger candidates have a better chance as far as internal options go. This is where the name of senior Sandeep Dadlani comes in. He is young and is someone who can be groomed for the job.

Murthys second innings at Infosys has been a roller-coaster ride as far as senior management exits are concerned. Potential CEO candidates like former CFO and board member V Balakrishnan, Ashok Vemuri and Chandrashekar Kakal have all moved on during this period. In fact, 11 key employees have left Infosys in the last one year, majorly shrinking its once mighty top management bandwidth. The rate at which these employees have left is quite astounding by any standard. It all started with the exit of Board member and HR director TV Mohandas Pai in 2011. At that time, yet another CEO hunt was going on. Pais contention at that time was that the IT major should look beyond the founders. Co-founder SD Shibulal won that race and became CEO. Ever since, Infosys has been in a pressure cooker situation as far as human resource was concerned.

Unfortunately for Infosys, such HR tensions are mounting and not abating. Infosys performance in FY14 has been patchy. From a sequential revenue growth of 2.7% in Q1FY14, it rose to 3.8% in Q2, but in the remaining two quarters, it saw a steady drop with the fourth quarter posting a flattish growth. Shibulals 3.0 strategy is now being talked about as something that came in too early, though at that time it looked like the way to go. So it has been a difficult time for the firm even from a performance standpoint with TCS and Cognizant continuing to lead the race.

This is a time Infosys requires stability at the top, with little distraction. But the CEO search seems to have derailed the focus of the top

management. Hence it is important that Infosys is able to wrap up the search in June. Whether the choice is an internal candidate or not, the key is to find a CEO who can ignite the sales engine, help them win large contracts and make sure the margins are kept up. For other strategic directions, there is always Murthy. And the Infosys Board needs to play its part. It has been a near silent spectator of late.