IT companies’ lack of innovation, coupled with growth concerns, has of late resulted in a spate of top management exits.
In May 2009, Bangalore-based Mindtree saw one of its co-founders Anjan Lahiri exiting the company and selling off majority of his stake. Lahiri was the President and CEO of the IT services business of Mind Tree.
His is the second biggest high-profile exit from MindTree. Two years ago, another co-founder, the high-profile Ashok Soota, left the company to start another IT services company, Happiest Minds.
Lahiri’s exit follows a spate of high-profile exits in Infosys and Wipro in recent times, even as domestic IT majors struggle to reinvent themselves to the changing dynamics of outsourcing and a volatile economic climate faced by its clients.
Anjan Lahiri reportedly said he wants to pursue a career in technology but outside of IT services, and is planning to launch a start-up that aims to bridge the gap between business and technology. This gap, according to HR experts and industry watchers, is one of the key reasons for top executives to throw in the towel.
According to a top-level management recruiter, there are two major reasons at play. “There is inertia in decision making, due to bureaucracy within an organisation and a lot of top managers are still not in tune with the changing dynamics — both within their workforce and their clients,” he.
9 exits at Infosys
In 2011 and 2012, Infosys saw 9 top executives exit or undergo a reshuffle, with the latest one being Srikantan Moorthy taking over as its new global head of HR in the place of Nandita Gurjar. Similarly, Wipro, in February, appointed Puneet Chandra as Chief Marketing Officer for the IT business in the place of Suchira Iyer.
The rigid structures within their organisations and comfort levels in their existing roles are the other factors that resulted in this exodus. “Five years back, there was a sense of comfort but now it is a cut throat business and low growth is resulting in people looking for other avenues,” said Pradeep Mukherji, President, Avasant.
However, at the heart of it, there is a lack of innovation, which, according to A. K Prabhakar, Senior Vice President - Equity Research, Anand Rathi, is resulting in these changes. “Low price, low margins, managing thousands of employees, lack of innovation are some of the factors,” he said.