Nilekani's challenge change & continuity

Nilekani's challenge change & continuity

Infosys has been bruised by a tussle between its board and founder N R Narayana Murthy. Its CEO, Vishal Sikka, chairman R Seshasayee and two other board members have quit. Nandan Nilekani, one of the founders, is back as non-executive chairman. During his decades in the company, Infosys grew into a multibillion-dollar revenue giant and its transparent management and work culture was a magnet for foreign investors, otherwise bemused by the opacity in many Indian corporations. Yet, for nearly a decade, Infosys has fallen far behind cutting-edge IT; companies like Alphabet, Apple, Facebook, Microsoft and others have raced ahead.

Infosys has failed to progress beyond its core activity as wage arbitrageur for digital grunt work. It has few technologies of its own and lacks a high-value consultancy team. Sikka was imported to whip Infosys into shape, and make good use of its cash pile. Under him, Infosys managed to boost its revenues per employee from the $50,000 mark, where it was stuck with TCS and Wipro, closer to the $65,000 level of HCL. Shareholders were happier, but Infosys' conservative sages could not adjust to extravagant pay and severance packages, acquisition costs and chartered flights that came with the new CEO. Sikka's departure with much of the board owes less to their performance, measured by investor confidence, and more to a clash of cultures between founders and globalised managers.

Nilekani understands the culture at Infosys.Which makes it simpler for him to continue the systemic changes Sikka introduced to raise revenue per employee, without raising hackles or even eyebrows. However, going back to the Infosys of old is not an option. Continue Sikka's good work, even if not in his name or style.