Sunday, Dec 21, 2014

Search for next CEO: It’s a tight race to the top at Infosys

Infosys' urrent CEO, SD Shibulal, is last of the founders’ group to don the mantle and will be retiring before his term ends in March 2015. Infosys' urrent CEO, SD Shibulal, is last of the founders’ group to don the mantle and will be retiring before his term ends in March 2015.
Bangalore | Posted: May 26, 2014 12:20 pm

It is a million-dollar question on who will be the next chief executive officer (CEO) of Infosys, as the country’s second-largest IT services exporter with a revenue of $8.2 billion intensely debates whether to pick somebody from within its ranks or bring in a rank outsider.

In its 33-year-old history, Infosys’s search for its next CEO is now breaking many new grounds. For the first time, it will be appointing a chief executive who does not belong to the founders’ group. Secondly, it has amplified the search by publicly announcing the appointment of two external agencies to prepare the groundwork of the probable candidates from within and outside. The arguments for either side—insider or outsider—remain equally strong for Infosys, as any decision would have a long-term impact. The company has had four CEOs till now and all belonged to the founder-promoter group.

Much before the actual choice has been made, the entire process has created some sense of disquiet.

Partha Iyengar, vice-president and distinguished analyst, Gartner, said, “Unfortunately, I think, it is going to be a slippery slope for them till the new CEO comes around and see what strategies they adopt. The challenge is will the market give them that much time. So clearly it is a race between them getting back to some kind of stability and market moving so far ahead that they are unable to catch up at all. That is the challenge and dilemma for them.”

The conventional wisdom would have it that Infosys will settle for an internal candidate going by its past history of conservatism in term of management coupled with the company’s philosophy of giving insiders the first opportunity. The current CEO, SD Shibulal, is last of the founders’ group to don the mantle and will be retiring before his term ends in March 2015.

Any internal candidate will be a much safer choice for Infosys as the company is unlikely to face any further disruption in management changes. It could also mean a continuity of its current strategy and 1.6 lakh employees are unlikely to face uncertain times.

“They would probably go with an internal candidate for the new CEO as the company and the board would be more comfortable with such a choice,” according to a person familiar with the developments within Infosys.

The big plus for Infosys by opting for an internal candidate will be the alignment with its culture which has a major say as the company moves forward. Any disruption in the culture could create certain turbulence.

An external candidate would take certain time to get into the groove of Infosys culture and the IT major cannot afford this luxury in a fast continued…

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