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Infosys and the new order

, Forbes India
May 16, 2011 at 05:40pm IST

Bangalore: If history had had its way, SD Shibulal may have never become the CEO and MD of Infosys. Not too many people know that when Infosys was still struggling, Shibulal took a five-year sabbatical and joined Sun Microsystems.

Upon his return in 1996, Narayana Murthy reinstated him at par with the other founders and senior professionals. According to old-timers, it had led to significant bad blood among the founders and professionals, many of them sharply questioning Murthy’s decision by alluding to the bigger sacrifices that each of them had made by staying put.

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Before he steps down from the post on August 20, 2011, Murthy has once again used the leverage he has with the board to ensure that the management reshuffle makes way for Shibulal to be elevated from the post of COO to the new CEO. Just that this time, Shibulal may no longer have the gentle hand of the patriarch on his head. He’ll have his best buddy ‘Kris’ S Gopalakrishnan though, but equally, he’ll have to contend with the formidable KV Kamath, the first independent chairman in Infosys’ 30-year-long history.

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Ever since his name popped up in the public domain as a frontrunner to replace Murthy as Infosys’ chairman, Kamath has always maintained a dignified silence. A beatific smile would greet every query on the matter. A couple of times in media interviews, he even dismissed the possibility as baseless speculation.

Yet there was never any doubt about his appointment. Ever since the nominations committee headed by Jeffrey S Lehman began the process of selecting Murthy’s successor 14 months ago, Kamath was the clear favourite. For one, the board had ruled out bringing in a rank outsider who wasn’t quite familiar with the company and its culture. And besides, Murthy’s successor couldn’t exactly be a pygmy. No one on the current board had either the experience or the stature to match his.

In the weeks leading up to the announcement, there was endless speculation in the media about the board’s choice, including a seemingly facile opinion poll of Infosys employees at the Electronic City campus. So when Murthy made the announcement about Kamath’s appointment at a packed press meet on April 30, it seemed like a bit of an anti-climax.

Now, here’s the sting in the tail: If you expected Kamath to be his usual, hard-charging, Mr Fix-It persona as the new chairman of Infosys, you’d be way off the mark. The indication is that he will be everything but aggressive or demanding of his wards. When he sits at the helm of the Infosys board, expect a calmer, gentler elder statesman, who gives space to the executive management team of Gopalakrishnan and Shibulal to perform their roles, perhaps occasionally nudging them to look at strategic issues they may have overlooked. He will remain stationed in Mumbai and be available for about 30 days a year at Infosys, staying at the company guest house in Bangalore.

In Kamath’s own words, his job will be to keep a gentle hand on the steering wheel, for at least the first four quarters. He will make every effort not to ruffle too many feathers, as Infosys makes the delicate transition from a founder-led organisation to one steered by a set of younger professionals.

There are some hidden clues to his deliberate restraint. While Kamath has earned a larger-than-life image as the transformational leader at ICICI Bank who would push his colleagues and build aggressive, young leaders, there were a handful of people who he always deferred to. Some of these special people served on the ICICI board when Chairman Narayanan Vaghul brought Kamath to head the bank. Apart from Vaghul himself, they included the late CK Prahalad, Ashok Ganguly and Murthy. "He believes that these people have made a special impact on his life. And so, he tends to go out of his way for them," says a senior industry professional.

As he steps down, Murthy needs Kamath to signal the transition to a new era and satisfy the public perception that the new chairman will nurture professional leaders beyond the founders. At the same time, Murthy also doesn’t want to alienate his band of co-founders. He wants to ensure that their interests are taken care of.

So that’s the delicate balancing act which resulted in the appointment of Gopalakrishnan as the executive co-chairman and Shibulal as MD & CEO. By all indications, Murthy had used all the leverage as the towering personality on the board to strike the best compromise formula. In one masterstroke, he’s ensured there’s no loss of face for Gopalakrishnan while vacating the top job for Shibulal.

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