Sometime last year, N.R. Narayana Murthy, chairman and chief mentor at Infosys Technologies, asked Jeffrey Lehman, chairman of the nominations committee at the company, if he could take time out to meet with M.S. ‘Vindi’ Banga over dinner in New York City. Lehman is entrusted with the task of finding Murthy’s successor by July next year. Banga, one of the front runners to take over as chief executive from Patrick Cescau at Unilever, the world’s largest consumer goods company, had just been beaten to the post by Paul Polman of Nestle. Murthy was keen for Banga to take over from him after his term ended. Not much is known how the conversation progressed that night.
Later in the year, Murthy invited Banga to Infosys’ headquarters in Bangalore to meet the others on the board. He’d pitched Banga to the others as a strong contender to his chair. At the meeting, Banga made a presentation on corporate governance, which he delivered with much élan. “I have enormous respect for Vindi. Yes, I’d like to see him on the board,” Murthy told Forbes India.
Soon after Banga left though, Lehman informally told Murthy the board would much rather back K.V. Kamath, non-executive chairman at ICICI Bank and an independent director on Infosys’ board. Kamath’s formidable reputation precedes him. Credited with building the largest private sector bank in the country, he’s got a lot going for him.
The younger leaders on the executive council (EC) at the company like him because they see him as the guy who asks all the tough questions at board meetings. To his credit though, he hasn’t shaken things up too much, perhaps in deference to Murthy’s presence. That said, fact remains, his tough guy image has spooked the founders a bit.
He’s popular with the second line of leaders at the company as well. They appreciate his incredible ability to groom professional CEOs, a breed almost missing at Infosys now because all along it has had one of the original promoters at the helm. Add to all of these the fact that Kamath is a Kannadiga — which can be handy when managing tricky political winds in Bangalore — and it’s pretty obvious why the board is rooting for him.
But Kamath isn’t the kind of man given to lobbying for a job and is said to have remained quiet through all the noise around him. Sources close to him say he wouldn’t mind taking on the challenge at Infosys. His legacy at ICICI bank is at the crossroads. Chanda Kochhar, his successor as chief executive, is now driving her own agenda. Besides, many of Kamath’s carefully nurtured CEOs have chosen to move out of the bank. It is a very different place now from what he had built.
Kamath declined to comment. Lehman says, “The board and founders have been thinking about it for quite some time. It’s a matter of great importance to this company. Murthy is a truly remarkable person and not easy to replace. The process of finding his successor is well on track.”
Infosys under Murthy was all about predictability, sustainability, profitability and de-risking — the PSPD model as it is famously called. That is now under threat from a new phenomenon — cloud computing — a moniker for delivery of services over the Web on demand.
In the past, when Infosys was selling offshore services, it always had a compelling story to tell its clients. It didn’t need to invest too much into building a brand. But in a world veering towards the cloud, clients have to be educated all over again. “To adapt to the new environment, Indian IT firms will have to invest in sales and marketing. They need to find people who can talk to a client how healthcare works or how a bank operates,” says Partha Iyengar, VP, Gartner, a consulting firm.
(This story appears in the 05 November, 2010 issue of Forbes India. To visit our Archives, click here.)
This is a story in which Forbes has served as a mouthpiece for Infosys without applying its own mind. A few in Infosys' board say that the future of the company is strewn with risks and maybe Kamath can steer it better. Forbes seems to have reproduced that thought. Kamath's ICICI has had a poor record with regulators and he has done investors worse in his software mis- adventures. Forbes hasn't had the intellectual bandwidth to examine if he is the right guy for the job or even analysed what the job is in depth. A Shame!
on Nov 7, 2010Great article, Infy has got itself stuck in a box and needs to do something dramatic to come out of it. From where I see it, TCS has overtaken Infy as the new " Bellwether of Indian IT" they have shown great volume growth reduced the margin gap too. Other peers like Cognizant, HCL are catching up & TCS might soon overtake them. The second part of the problem could be the migration to newer/ energetic/aggressive leadership.
on Nov 1, 2010