NR Narayana Murthy's formula for speedy recovery at Infosys Ltd

Mar 10 2014, 19:21 IST
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Given the size of Infosys, doubts still remains whether Narayana Murthy would be able to undertake the mammoth task of reviving the company. Given the size of Infosys, doubts still remains whether Narayana Murthy would be able to undertake the mammoth task of reviving the company.
SummaryLustre has gone away from Infosys and it needs Narayana Murthy to set the house in order.

Wipro, Cognizant to name a few.

This also saw many senior level executives creating their own circle of influence within the company while the top level leadership was more focused on articulating a strategy which did not have much of a resonance either with the market or customers. Many industry observers have questioned the role of the Board in the entire saga. The key question was whether the Board was effective in questioning the performance of the company, sources said.

The trigger for the changes came with certain key investors based out of Singapore writing a letter to the board expressing their disappointment with the performance of Infosys. This resulted in then chairman, KV Kamath along with V Balakrishnan, another former board member paving the path for the return of Narayana Murthy to the helm of affairs.

Murthy has said, “When the board of directors invited me to come back and add value to the organisation, I had to create an office consisting of extremely highly qualified people.” The Infosys chairman has gone about weeding those executives especially at the mid-management level and above who were not making their contribution.

This saw at least eight key executives leaving the company in the span of six months, leading to questions whether there was instability in the management, an argument countered by Murthy who said, “There is absolutely no turmoil...barring exceptions, the rest of the people who had to leave unfortunately were people who were deriving very high salaries and we were not getting value from them.”

It was also surprising revelation that the mid & senior level employees of Infosys had not received any salary increase over the last two years and Murthy’s first task was to ensure that there is a compensation increase by 8%. Employees also recount the instance where Murthy enquired even with the lowest level of employees whether they have got the salary increase.

It is very doubtful that whether anybody else within Infosys would be able to take these decisions to ensure that there is a tight controls of costs while making improvements on their sales and delivery functions. The cost structure of Infosys had been bloated and was higher than its peers in the industry. Murthy ensured that these were downsized to manageable level by targetting the highly paid executives who did not bring in the commensurate returns.

Infosys has also gone about putting the right resources in its sales

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