7 Key Takeaways From Vishal Sikka's Resignation Letter
Vishal Sikka, who tried to ingrain the concept of design thinking, automation and a gamut of innovative measures into the traditional IT services culture at Infosys Ltd in his three-year tenure, indicated that his exit from the company was on account of the continued criticism of his functioning from within and outside the company, pointing at Infosys Ltd founder and patriarch N R Narayana Murthy (without naming anyone).
The trouble has been brewing for past several months between the founders, who own some 13 percent stake in the company, and Infosys management led by CEO Vishal Sikka. Former SAP executive and scion Sikka happened to be the first non-promoter CEO of the country’s second-largest IT company. Here’s a look at some of the key facts Sikka wants to highlight on his mail. [Read the full blog here]
1. The Shocking Revelation
After a lot of reflection, I have resigned from my position as your MD & CEO effective today. A succession process has been initiated, with Pravin serving as interim MD & CEO, and I will work closely with the Board and management team over the next few months to ensure a smooth transition. In addition, I have agreed to serve as Executive Vice Chairman on the Board to further ensure continuity until the new management is in place.
It is clear to me that despite our successes over the last three years, and the powerful seeds of innovation that we have sown, I cannot carry out my job as CEO and continue to create value, while also constantly defending against unrelenting, baseless/malicious and increasingly personal attacks.
2. Turning Things Around
In 2014, we started with a very challenging set of conditions, and in the last three years, we have decisively turned things around. That time, around and before June 2014, was a difficult time. Our growth rates were low and attrition was high.
There was a sense of apprehension all around and I came here to help enable a great transformation as our core business faced intense pricing pressure, and clients looked increasingly to innovative partners to help shape their digital futures. Now, a bit more than three years later, I am happy to see the company doing better in every dimension I can think of.
3. Transformation Amidst Distraction
Sikka said, he was always passionate about the massive transformation opportunity for this company and industry, but one needs to allow the company to move beyond the noise and distractions.
“For sure this journey has been a difficult one. No one, especially me, thought it would be easy. Transformations are hard to begin with. A massive transformation, of such an iconic institution, with such groundbreaking achievements behind her, would be even tougher, and the exponential rates of change all around us, further amplified by geopolitical matters, would add that much more headwind,” e,” he mentioned. But all this was known, and clear, and in many ways added to the calling that I felt.
For as the legendary architect Daniel Burnham said, “Make no little plans; they have no magic to stir man’s blood.”
4. Renewal And Empowerment
The founding principle of the strategy I laid out for our renewal was personal empowerment, working in an entrepreneurial environment. I need this for my own work as well. I now need to move forward, and return to an environment of respect, trust and empowerment, where I can take on new lofty challenges, as can each of you.
As I look back on the three years as CEO, what brings me the most joy is the new roads that we all have traveled, the new frontiers that all of you have enabled. From embracing the new ideas in education, teaching ourselves Design Thinking like no one else ever has, learning AI, new development processes, and more, to applying these learnings via Zero Distance, a one-of-a-kind program of massive grassroots innovation, powered by education, by the amazing Zero Bench, and by your creative confidence. Our AI platform, Nia, now with 160+ scenarios deployed at more than 70 clients, is helping drive both automation within the company, and breakthrough new business scenarios outside.
5. On The Path Of Growth
We have grown our revenues, from $2.13B in Q1FY15 to $2.65B this past Q1. We did so while keeping a strong focus on margins, closing this past quarter at 24.1% operating margin, beating some competitors for the first time in many years, and improving against most in our industry. Perhaps more importantly, our revenue per employee has grown for six quarters in a row.
Our attrition has fallen, from 23.4% in Q1FY15 to 16.9% this past Q1, and high performer attrition is hovering at or below the single-digit threshold for a while now. We grew our $100M+ clients from 12 when I started, to 19, and increased our large deal wins from ~$1.9B in FY15 to ~$3.5B this past year.
We’ve done all this while improving our overall utilization, to a 10-yr high this past quarter, and an all time high including trainees, while improving our cash reserves, rewarding employees with a new equity plan, and returning cash to our stakeholders. And we have done all this while improving our standing with clients to the highest ever in the 12 years since we’ve done our client satisfaction survey, and a jump of 22 points in CxO satisfaction.
6. The ‘Never Give Up’ Motto
However difficult the noise of the last several months has been, I wouldn’t trade our time together for anything. I would not give up the experience of seeing the gleam in your eyes as you described a new idea, invention, or contribution.
Together we have achieved a lot. Even in the midst of all of the distractions, even as the tendency was to return to the familiar, we still managed to persevere and make wonderful progress. We have laid the foundation for the next 30 years of Infosys, and I feel deeply proud to have worked alongside all of you in sowing the seeds that will return this company to the bellwether it once was.
7. Life Moves On For Good
Sikka quoted a 2005 commencement speech made at Sikka’s alma mater Stanford University by Apple’s Steve Jobs in the course of a mail to Infosys employees about his exit. “Your time is limited. Don’t waste it living someone else’s life. Don’t be trapped by dogma, which is living the result of other people’s thinking. Don’t let the noise of other opinions drown your own inner voice. And most important, have the courage to follow your heart and intuition, they somehow already know what you truly want to become,” Sikka said quoting Jobs in his letter.
“I now need to move forward, and return to an environment of respect, trust and empowerment, where I can take on new lofty challenges, as can each of you. As Steve Jobs said, I must follow my heart and my intuition, build my buildings, give my givings, and do something else,’’ he stated.
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