Is Narayana Murthy grooming his son for the top post?

T V Mohandas Pai, former board member and head of HR & administration at Infosys, lost in the race for the top post in 2011 when S D Shibulal was appointed chief executive officer (CEO). 

Subsequently, Pai, who had spent 17 years at the Bangalore-based firm, quit.

In an interview with Bibhu Ranjan Mishra, he says while external candidates have now an equal chance for the top post, Infosys should ideally choose an internal candidate.

Excerpts:

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What could be the reasons behind Shibulal’s desire to retire early? 

You need a new CEO in place for the next financial year. And, the CEO has to come before the financial year, so that he can prepare a budget and drive performance.
If it happens in the middle of the year, that year will be spoilt.

Thus, Infosys is planning to complete the search of the person, maybe before December, so there is enough time for the next year’s budget. That is my interpretation.

Do you think a plan is already in place and Infosys is only completing the formalities? 

Yeah, they are going through the process, which is very good. Because (Infosys chairman N R Narayana) Murthy had sought three years to bring the company back to shape.

Of that, one year is already over. This year, they will finish the search for the new CEO, which means only one more year will be left for the CEO to make an impact.

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What is your opinion about the timing of the exercise? The firm is yet to show consistent growth performance...

I think it is the right time. The company requires a change in leadership. That’s what the board has decided. So, they want to do the process and finish it now.

What about the internal candidates at Infosys?

I think the company has got an extraordinary number of people of high quality. They must call the top 15-20 people, discuss with them and make them present their cases, and then find whether they are good.

It is good to do that process and give opportunity for people within the company. But they should meet the next layer of people, not just the two presidents. …

Do you think Murthy is grooming his son Rohan Murty for the top post? 

No. Murthy will run a very transparent and open process because he knows it very clearly that he can’t afford another mistake.

He had made a mistake earlier. He is very clear on this, I think. Because he is a great icon of the industry, he wants to leave a good legacy behind. So he will make a genuine and good search. You can trust him.

But in the current structure, the selection seems limited to just two senior people? 

They have spoken about two people, but I am sure the board will look at many more because there are extraordinary people out there; because (otherwise) the shareholders and analysts are going to question them.

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Given that, do you think the chance of an external candidate joining as the CEO is quite remote?

My own estimate is, there is an equal chance for an external candidate to become the CEO as it is the case for internal candidate. I think there is a 50:50 chance.

Why do you think that an internal person is best suited for the CEO post? 

I am biased in favour of internal people. Because I think the company has got very good people and they must be given the authority and power to run the company under the mentorship of Murthy. I am sure Murthy will take a good decision. 

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But the top leadership layer of the company has almost depleted with the exit of many senior people in the recent past?

It is sad that a lot of good people have left. Ashok Vemuri has become CEO of another company and he is doing well. Bala (V Balakrisnnan) has left. Kakal (Chandrasekhar Kakal) has left.

Starting from August this year, some board members are going to retire. If Infosys makes you an offer to join the board, would you consider it? 

I have always said that it is a mistake to call back anybody who has left the company excluding Murthy. Murthy is an exception because he is the chairman; he is an icon and an inspirational figure.

It would be mistake to call back anybody else. They require a new set of people, younger people to build the team for the next 15-20 years. So let’s not repeat the mistake.