 "'Outsider' Vishal Sikka has a unique opportunity to rekindle Infosys")
Many organisations with a long history of outstanding success for a long time often fail to notice changes around; they become over confident and complacent, and gradually arrogant. This is particularly true for businesses run like a family with promoters’ personal needs dominating the scene.
At some point, they wake up to recognize that the ‘comfort zone’ they have been in has become a ‘panic zone’ with fellow players having moved far ahead. Infosys got itself trapped into such a zone.
New lease of life
The organisation needed someone to provide a new lease of life; someone, who could think out of the box and infuse confidence in the otherwise demoralized team. This is particularly so when there has been an exodus of talent at the top level from the company.
Such organizations are clear cases of major turnaround, with a need to look at the fundamental logic of their product market strategy. Announcement of the appointment of Vishal Sikka as the CEO and Managing Director has come not too early at all, especially given that he comes from a different background with product orientation.
The selection of a successor becomes very crucial for an organization that needs to change its course of direction. The decision of the Infosys board to look outside the company was a bold one; the fact that they had exhausted all the promoters as possible candidates must have made the exercise simpler. Here is a family business like case with no family member available to succeed. It was a blessing in disguise.
Not from `family’
The board should also be commended for its decision to go for someone who is not a close family member but not a stranger either. Sikka is from another ‘haveli’ of the IT family. He has very good understanding of the industry per se, but has proven himself as a good entrepreneur and leader in the product arena. In essence, the urgency shown by the board, and the boldness with which it selected Sikka gives other stakeholders confidence in the future of Infosys.
In Infosys, the promoters realised the need to have a new leader who can direct the organisation to higher orbit and direction such that it would hit the rapidly changing market correctly. This is exactly like firing a missile to hit a moving target precisely.
Sikka will feel fortunate to have a large part of the top team resigning. This has created an opportunity for him to build a team that is ready to innovate and move on. Sikka has a deep pool of talent at the next level to select from. The voluntary (hopefully!) departure of the `family’ promoters from all operational responsibilities is a reflection of their willingness to take a break from the trodden path.
Given his age and profile as a bold mover, Sikka is likely to create his own team from within. He has already paid tributes to the great legacy of the company.
Challenging assignment
Infosys will also be a challenge for him to manage. It is much bigger and has to find a new life of growth. Unlike several turnaround situations, Infosys is cash and talent rich, with a brand that is waiting to be repolished.
Sikka will be better off by a close analysis of the elements of the company’s resources and capabilities to exploit the market opportunities. The board seems to have recognized the need to move closer to the product route, that too entrepreneurially. He will have to flag off a number of initaitives to rekindle intrapreneurial spirit across the organization. One of the possible ways to strengthen this process is by acquisition of mid - size entrepreneurial firms.
Sikka has a fuel-rich vehicle ready to take off. It is up to him to decide where and how he wants to propel it to.
Professor Kavil Ramachandran is the Thomas Schmdiheiny Chair Professor of Family Business & Wealth Management, Indian School of Business.