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Son-rise ruffles feathers at Infosys

The favourite topic for Infosys watchers is founder NR Narayana Murthy, who returned from retirement last June to revive the fortunes of Infosys and his son Rohan, 30, a PhD in computer science who is viewed by critics now as an inheritor paratrooping into the corner office.

columns Updated: Jan 23, 2014 17:00 IST
N Madhavan
Infosys

Earlier this month, Infosys, the showpiece of global success in India’s booming software industry, named BG Srinivas and UB Pravin Rao as presidents in a two-horse race that would determine the successor to CEO S.D.Shibulal who is due to retire a year from now.

The two engineers are high school classmates. Both are 50 years old, slim, clean-shaven, have smiling eyes and like to relax with novels.

However, in the cafes and pubs dotting the Garden City, the favourite topic for Infosys watchers is not their ascent, but founder NR Narayana Murthy, who returned from retirement last June to revive the fortunes of the bellwether-turned-industry laggard, and his son Rohan, 30, a PhD in computer science who is viewed by critics now as an inheritor paratrooping into the corner office.

The 67-year-old Murthy has moved with workmanlike precision to fix things. Infosys has upped its full-year revenue and quelled restlessness in the ranks by restoring regular pay hikes and promotions in the 160,000-strong IT army and focused on short-term rebound. Staff attrition had reached an alarming 18% after profit-linked pay structures resulted in cuts in take-home pay.

But questions loom large on his bringing in his son in a package deal as executive assistant in the chairman’s office. Eight senior executives, including two CEO contenders, have left the company since Murthy’s return, though Murthy has clearly suggested that the son is not in the CEO race.

“I would admit in the past two years, attrition has been high and there has been associated negativity,” said Pravin Rao. “Over the next few quarters, it will get back to 12 to 13%”

Soon after Murthy came in, he expanded the company’s executive council by inducting three of his executive assistants. This was followed by a further expansion that saw several more seniors inducted into the council.

A source close to the development say this happened after some threatened to quit and that even Pravin Rao was made president after he had put in his papers. One source said some executives have been retained with restricted stock offerings and they may leave later this year as they cash out.

Strangely, the 28-member council is being disbanded with effect from April. The company says the two empowered presidents with 7 industry segment heads reporting to them makes it a lean, efficient management structure.

“We have created smaller go-to-market teams that makes us nimbler,” said Srinivas.

But critics say this stymies prospects for managers who saw the think-tank council as a milestone in career growth.

Shibulal said the leadership crisis is blown out of proportion as there are 500 people waiting for higher top-level roles. “The number of people who have left are such that if I cannot count them on my one hand, I can on two.”

While the CEO stays confident, the mood remains cautious among employees, where a bluesy mood in the headquarter buildings contrasts the golfing greens they overlook.

FATHER, SON AND THE FOUNDER'S CURSE

A day after Infosys unveiled market-pleasing results this month, Infosys executives retreated to its picturesque leadership institute campus in Mysore where Rohan Murty got them to a rapturous ovation with a presentation on futuristic approach to automation and productivity. The son of founder Narayana Murthy was clearly more than the executive assistant to his chairman father.

“He is really smart and he is a really good techie,” said Mohandas Pai, a former HR and finance head of Infosys who landed there as a special invitee.

While the young Rohan’s brilliance as an expert on software productivity is lauded, his role in the chairman’s office is another issue. A former Infosys executive said a power struggle was evident.

“People now understand the power centres. Before they go to Murthy, they go and meet the son” he said.

At a deep level, Rohan’s role has raised questions on meritocracy, the founder’s favourite theme for years.

“Rohan’s entry was not taken well by the employees,” said a 26-year-old engineer who quit last month. “What happens to Infosys values? People are now seeing through this façade.”

It is clear that Murthy’s second innings to create “Infosys 3.0” built around his son’s vision of automation must first deal with human issues.

A senior HR executive in a rival company said the elder Murthy relied on his son to create new ideas because he cannot rely on his old worldview.

“It is the Founder’s Curse,” said a senior HR executive at a rival company. “How far can he go?”