Can Nandan Nilekani Bring Infosys Back On Track?

by Sohini Bagchi    Aug 25, 2017

A decade after his exit from Infosys, Nandan Nilekani, who is back at the helm as non-executive Chairman, said this morning that he will focus on bringing in stability and assured the investors that he will bring Infosys back on the growth track. However, times have changed, believe analysts, who have warned that Nilekani’s comeback to the ‘revamped’ Infosys after a decade would bring unenviable challenges.

According to some, Nilekani is returning as chairman to a different Infosys than the one he left when he stepped down as co-chairman to run India’s National ID project in 2009. Can Nilekani restore Infosys’ ‘renewed’ culture or would he take a completely new direction to run the company differently? In other words, can Nandan Nilekani bring Infosys back on growth path is something investors, tech analysts and enthusiasts in the corporate world are trying to figure out.

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While the dramatic exit of Infosys’ chief executive Vishal Sikka last week took uncertainty to new highs, it was clearly visible that Sikka formed a cult of his own, in every area, starting from operations, to leadership, to collaborating with academia and even in bringing changes in the company’s dress code, - all of this marked a big cultural shift from the Infosys run by Nilekani a decade ago. 

Over the years, the traditional outsourcing business faced a margin squeeze and newer ventures were yet to see profits. Anticipated work visa changes in the United States, the biggest market for Indian IT firms, also become another issue for the company.

Read also: Infosys Crisis: Can Founders Ever Walk Away From Their Companies?

“I think the challenges that Nilekani faces are the same as the challenges that Infosys faces, which are how do you steer the company through this transformation and how do you get growth,” Malay Shah, a senior director at Alvarez & Marsal, who worked with Infosys during Nilekani’s stint told Reuters. “To that extent he has now put his reputation at stake, his name will get associated whether the company will be successful or not,” said Shah. [Read the full article here]

The company also needs to tackle the retention crisis that it experienced in massive scale prior to Sikka’s joining. Sikka’s departure may rattle the senior level executives yet again. On Friday night itself, prior to Nilekani’s appointment, Infosys Chairman R Seshasayee stepped down along with two other independent directors. Co-chair Ravi Venkatesan has now moved to an independent director role.

Under Sikka’s guidance, Infosys revamped its uptight work culture - from relaxing a formal dress code to allowing staff to check Facebook or Twitter during work hours. Infosys also replicated startup models, by  encouraging creative events like hackathons.

Read more: Infosys Saga: Leadership Lessons For Founder-CEOs

Nilekani who appears poised, is an iconic leader, a successful entrepreneur and investor, and someone who has played a pivotal role in India’s transition to a digital economy. Among his many achievements, he led the implementation of India’s ambitious Aadhaar program, which has now enrolled over a billion Indians and which is transforming the lives of ordinary Indians every day.

The co-founders of Infosys who served as its CEO from 2002 to 2007 said in an investors’ call, “The hunt for the company’s new CEO will be a “global one”. He also said that the nominations committee to select the CEO will be headed by company director Kiran Mazumdar Shaw. 

He also assured investors that he has the support of company co-founder Narayana Murthy. “I now have a fairly good idea of what to do to make Infosys stable…. I want to put Infosys on super stable, high growth path…. I don’t want any corporate governance lapses,” he told PTI.

Currently, Nilekani owns about 2.3 percent of Infosys and is worth $1.7 billion according to Forbes, is known for his networking talent and this is something he needs to explore.

Nonetheless, if the return of the former boss would bring normality for investors and Infosys’ 200,000 employees and whether Nilekani would retain the ‘renewed’ culture are things only time can answer.

 

Read also: Infosys’ Blunder: Throwing Baby With The Bathwater