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Murthy is as much at risk as Infosys

Last updated on: June 13, 2013 09:17 IST

Murthy is as much at risk as Infosys

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T N Ninan in New Delhi

Murthy created today's situation by pushing into leadership positions people who should not have been there.


If one were to analyse the initial reactions to the news that NR Narayana Murthy was returning to Infosys, with son in tow, it has been sharply divided.

The company's stock price went up following the announcement, reflecting investor perceptions; and there are those who believe that the founder's return will help the company find its bearings again.

There are others who think it is not a great idea to bring back a 67-year-old to take executive leadership, and that tagging on his son as executive assistant doesn't make it any better - surely there must be people in Infosys who can at least be competent executive assistants.

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Image: NR Narayana Murthy, Founder and Chairman, Infosys, during an interview with Reuters at the company's office in Bangalore.
Photographs: Vivek Prakash/Reuters

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No one so far has looked at it from Murthy's perspective; he is probably committing himself to a busier schedule and a knottier set of problems than he might have wanted at this stage, risking a reputation built over a lifetime, and perhaps also disrupting whatever career plans his son might have had.

On the other hand, you could argue that Murthy had no choice - he created today's situation by pushing into leadership positions people who should not have been there, he did so for the wrong reasons (the company's founders were playing a silly and irresponsible game of round-robin!), and he watched while the company lost touch with the market and also lost key human resources.

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Image: Employees walk in a forecourt at the Infosys campus in the Electronic City area of Bangalore.
Photographs: Vivek Prakash/Reuters
Tags: Murthy

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Murthy is as much at risk as Infosys

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So can he make it work a second time? Comparisons with Steve Jobs are not relevant, except to the extent that both are/were inspirational leaders.

Apple is built around unique products, and Jobs was their creator, while Infosys is a service organisation.

Comparisons with Sachin Tendulkar, of the kind that Murthy unfortunately made, are even worse - the cricketer's batting average today is way short of what it used to be.

But it is a net positive that there is no one in the company with Murthy's external stature, so he could perhaps win over customers more effectively than others can.

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Image: Employees walk in front of a pyramid-shaped building at the Infosys campus in the Electronic City area of Bangalore.
Photographs: Vivek Prakash/Reuters

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Murthy is as much at risk as Infosys

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It helps that he is nothing if not a relentless salesman who knows how to pitch to the audience of the moment, internal as well as external, and that is a good starting point for a fresh innings.

The big risk is that an old warhorse tries the same old business tricks that he knows, but they don't work in a changed environment.

And the fact is that the business situation today is radically different from the world full of opportunities that presented itself to Infosys in the second half of the 1990s, with unique cost and other advantages for an Indian firm.

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Image: Employees walk in front of a building dubbed the 'washing machine', a well-known landmark built by Infosys at the Electronics City IT district in Bangalore.
Photographs: Vivek Prakash/Reuters
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Murthy is as much at risk as Infosys

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New US visa regulations are being debated that could put a huge spanner in the works of India's software service exporters.

Competition has got way more difficult, some of India's cost advantages have been neutralised, the old business models will not work today, and Infosys simply does not have the halo it once enjoyed - so that both employees and customers now look at the company differently.

The further problem is that the old-new chairman may be unwilling to rock the managerial boat, and to get tough with people who have been with him for half a lifetime.

Finally, India's tech companies, for all their vaunted reputations, have not always been great at service delivery.

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Image: An employees walks past a signage board in the Infosys campus at the Electronics City IT district in Bangalore.
Photographs: Vivek Prakash/Reuters
Tags: India , Murthy , US

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The lesson this whole episode drives home is that, even if you can build a successful company, it is an altogether different challenge to prevent it from becoming a shooting star.

How do you keep a company successful through different business cycles, changing market realities and successive generations of technology? The answers have to go beyond the personalities of a company's founders.


Image: A view shows workers at a cafeteria inside a building at the Infosys campus at the Electronic City area in Bangalore.
Photographs: Vivek Prakash/Reuters
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