Deep surgical cuts for speedy recovery

Mar 10 2014, 03:36 IST
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SummaryStatements made by Infosys chairman NR Narayana Murthy during investor calls late last month are being viewed in industry circles as a wake up call for the company’s top management. While some employees may clearly be surprised about Murthy’s points of view, for those who know him well this was just what the doctor ordered

The lustre had gone away from Infosys, once the bellwether of the Indian IT industry, having run itself almost aground with indifferent performances over the last two-and-half-years. It needed somebody of the stature of NR Narayana Murthy to set the house in order for the $8 billion company with some bold and courageous decisions.

Murthy’s return to Infosys in June, 2013, as the executive chairman gave renewed hopes for the company as some huge questions marks lay before it. The company was steadily slipping on all counts be it, growth, profitability or customer connect.

However, given the size of Infosys with over 150,000 employees, doubts still remained whether Murthy would be able to undertake the mammoth task of reviving the company. The core of any IT services company always revolves around its employees as they are its biggest asset and any such changes is certain bring about the tremors.

Transparency and admission of mistakes have been hallmarks of Murthy’s stint at Infosys. In a recent analyst call, Murthy said, “I must admit that we are not happy with our performance over the last 2-2.5 years. In the financial year 2012-13, our growth plummeted to 5.8% which is almost half the Indian software industry growth rate which was proclaimed to be about 11%.”

He further went onto to say, “Next year, that is the financial year 2014, as we have already forecast our growth is expected to between 11.5-12% compared to about 13% growth that Nasscom has articulated....But even this is slightly short of the average industry growth rate as enunciated by Nasscom and therefore we are not happy with it.”

The questions remains how did things come to such a pass? The decline was gathering moss over the last three years with a culture not based on achieving certain performance standards but more aligned to managing the diktats of the superiors. People familiar with the working of the company said that in the last few years, a culture of complacency had set in, which saw many of the high performers leaving Infosys and joining rivals such as Tata Consultancy Services, Wipro, Cognizant to name a few.

This also saw many senior level executives creating their own circle of influence within the company while the top level leadership was more focused on articulating a strategy which did not have much of a resonance either with the market or customers. Many industry observers have questioned the role

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