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Nilekani: A Complex Leadership Transition is in the Cards
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Nilekani: A Complex Leadership Transition is in the Cards
Leadership n Vision
A. Let me just give you my point of view — what is the challenge that we have. Infosys has been growing rapidly. [In the] last one year and this year it has slowed down but there has been huge fundamental growth. It’s gone up from $500 million in 2001 to $5 billion. So clearly, just to manage that scale, complexity and sophistication, you need leaders. The second thing is that an entrepreneur-led firm has to very carefully evolve as the role of the entrepreneur recedes and a new generation comes up. Often entrepreneur-led firms don’t get it right. Because the entrepreneurs have been there for a long time and they have been very hands-on. Then something happens and there is no leadership. We are very conscious that we want to build a company for [the] long term.
The idea is not to build a company for ourselves but to build a company for a long term. It must have multi-generational longevity and therefore, having a deep bench of leaders and preparing this company for the eventual day when all of us [the founders] will not be here is a very important step for the company. The other challenge is that we have to do [that] while we are still here. So we have to add value and at the same time we have to give space for them [the next generation of leaders] to develop. If we are adding value we have to do it in a way that they are also able to grow. So it is a very tricky thing to do.
Part of it is happening by natural retirement. [N.S.] Raghavan retired and now [chairman of the board, chief mentor, Infosys, N.R. Narayana] Murthy will also retire. Even I am not involved in day-to-day operations, Kris [S. Gopalakrishnan, CEO and MD] is running it but I am involved with customers, strategy, brand building and so on. Increasingly, the number of founders itself is coming down and secondly, we are saying that we need to start empowering the next stage of leaders. Which is why we have created the EC [Executive Council] — they are more and more taking on the responsibility of the company. So we are slowly transitioning and building them up. That’s a very important part.
Our retirement age is 60. Murthy will be 63 this year. [The] rest of us are in our mid-50s. I will be 54 in June. So over the [next] six-seven years all of [us] will have to retire. We are very clear with that rule and we want to make sure that people don’t mess with that. We are going to enforce that very strictly. Or if they become CEO they can continue for a few more years. So in the next decade there will be a complete transition of leadership in this company.
Also what happens when you have a founding team which is as active as we have been? A lot of it has to do with the bonding of the founding team [as] we have been through thick and thin. [Over] years of struggle, they have learnt to accommodate, they have learnt to make sacrifices, learnt to adjust, learnt to put the company before self. So we have it in our gene pool. But as you move forward you will have people who are not part of the founding team so we have to make sure that the culture that we create of putting the company before ourselves, of having team spirit and adjusting, should continue. Otherwise things would not be the same.
It’s a very complex leadership transition that we are going to face over the next decade.
Q. Where are you with respect with this transition?
A. The process of the founders going through this process of transition is happening. Murthy stepped out and I came in as CEO, now Murthy is retiring so that is very much happening. It’s happening with the next generation — with the forming of the EC. They are taking on more and more important roles. They are taking on corporate roles instead of taking divisional roles. They have been given a companywide view instead of getting a division view, so that builds team spirit. Then the overall leadership development that is going on through ILI [Infosys Leadership Institute] and the mentoring process, it’s all related to this. How do we create a deep bench of leaders and how do we transition the founders out over the next decade? How do we make sure that we retain the culture and DNA of this corporation?
Q. What was the trigger for this? Somewhere around 2007 this process started gathering steam.
A. In fact, the ILI was set up in 2001. The leadership change with Kris coming in was one trigger. Second, as we looked down the next 10 years, we started projecting these issues. Then the scale of the company became larger so we needed more leaders. And we realised that more empowerment and more decentralisation was critical to long-term growth. All these decisions played a role.
Q. So now there are five next-generation leaders that you have identified. The CFO plus the four Independent Business Unit (IBU) heads on the EC. Will there be more people?
A. Oh, absolutely. There are certain criteria for being on the EC, so as the company grows, more.....
Source:
http://www.business.in.com/interview/magazine-extra/nilekani-a-complex-leadershi
