Can Kamath-Kris turn on the magic?
Infosys Technologies,to be shortly called Infosys Ltd,has pulled off a casting coup. By deciding to appoint KV Kamath as the chairman and Kris Gopalakrishnan as the executive co-chairman,it has ensured a win-win situation for the company,forging a technology-execution master class at the top of the management tree.
Infosys Technologies,to be shortly called Infosys Ltd,has pulled off a casting coup. By deciding to appoint KV Kamath as the chairman and Kris Gopalakrishnan as the executive co-chairman,it has ensured a win-win situation for the company,forging a technology-execution master class at the top of the management tree. This has also enabled the quietly ambitious SD Shibulal to scale up to the post of chief executive officer and managing director. The board has shown great clarity of thought here,and the nominations committee did not spoil the party just as well. Now lets examine what has been achieved by these astutely taken decisions.
For a long time,it was thought that CEO Kris Gopalakrishnan would become the chairman of the company,in keeping with the existing practice of elevating founders to the very top.
But,as luck would have it,Infosys went through a rocky patch over the last one year and the period also saw it getting embroiled in a visa-related case in the US. Now,if Kris had gone on to become chairman,the debate about founders being preferred would have reached deafening decibels. And it would have been equally imprudent to keep Kris in the same position after many years as CEO.
Top management officials at Infosys felt that it would have been a travesty of justice if Kris did not make it to the chairmans seat. Under him,Infosys grew from a 3-billion firm to a 6-billion one. This is no mean task,considering that he had to propel the company through the choppy waters presented by the all-consuming global economic recession. It was also important for the board of directors to take cognisance of Shibulals simmering ambition to become CEO.
With the appointment of Kamath,whom founder-chairman Narayana Murthy knew for 41 long years,all issues have been solved with one swish of the magic wand. For the outside world,the new appointments give out the perfect message. Infosys has now broken out of the shackles of being termed as a founder driven company,without having to hurt the ambitions of any of the founders. Kamath is a man of immense stature in the Indian banking circles and industry analysts feel that a man of his credentials is a worthy successor to Murthy,especially when it comes to corporate governance principles. Kamath will also bring in his considerable experience in the BFSI segmenta vertical that all tier-1 IT firms bank upon. He has also shown a great penchant for technology,raising ICICI Bank to one of the most tech-friendly financial institutions in the country.
Having said that,it is apparent that it would be Kris who would still drive the company in his capacity as executive co-chairman. Kris is someone who the analyst community does not rate very highly. But that is not a reflection of what he has done for the company. The industry watchers point out that Infosys has missed profit estimates drawn up by financial analysts repeatedly in the last one year. But what they miss is that Infosys almost always exceeded its own guidance numbers by a healthy margin. Also,Kris has been quite outstanding in his work as the CEOa fact repeatedly acknowledged by Narayana Murthythough the IT industry often fails to give him enough credit.
With Kriss elevation as company co-chairman,Infosys would continue to gain from his immense experience as a master technologist. He is also young enough 56 years to go on to become its sole chairman one day. His mantle has now been passed on to Shibulal,with whom he shares a great passion for the latest gadgets and technology. Shibu is known to be a stickler of processes though,the way it should be in multi-billion dollar firms. His success will lie in how he can help the company win larger transformational deals while keeping the margins high enough in true Infosys tradition. He will also have to drive the company further down the realms of cloud computing and narrow down the revenue gap with TCS. In his journey,he is likely to enjoy the cushioning provided by one of Indias best respected bankers and one of the best known IT CEOs,who have been elevated to occupy the best chairs at Infosys.
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