Any discussion on the latest development in one of India’s iconic IT firms tends to be coloured either by the admiration many people in this country have for N. R. Narayanamurthy (aka ‘NRN’), or by the cynicism brought on by the company’s slight fall from grace in the last few quarters.
Possibly, the only way to evaluate both the challenges and the opportunity is to set this development in the broader context of the environment today -- and the leadership challenges that any individual will face in the quest for success.
NEW FRONTIERS
The environment for the $100 billion dollar IT and Business Process Management (BPM) industry today is clouded by the weak economies in most of our traditional customer geographies.
With Europe continuing to flirt with recession and many of the fast growing economies in the Asia Pacific slowing down, the hopes of an early or mid-teens constant currency growth in FY 14 for the industry hinge on the ability to enlarge the scope and scale of existing services and embrace new services, pricing models and delivery mechanisms to supplement traditional revenues.
Every company of significance in this industry has investments in intellectual property and platforms and has made SMAC (Social Media, Mobility, Analytics and Cloud) a key driver of future strategy.
For Infosys, the expectations would be even higher, because the much-talked-about 3.0 promised to give the company a march over the competition and drive new revenue streams.
The challenge for the new leadership team will be to deliver on that promise on the one hand and on the other, dispel the notion that the company is not nimble enough to compete in the “revenue at lower cost” game or deliver good growth in both market share and margins. Given the reputation that Infosys led by Murthy enjoyed as one of the creators of the offshore development centre paradigm and its reputation for quality and values; given this, this will not be too steep a mountain to climb for a company with the width and depth of talent it undoubtedly possesses. Some tweaks in the business model and the selling processes may be required which does not take too much doing.
LEADERSHIP ROLE
However, if the leadership were just about excellent communications and vision creation for customers, there would be many more super success stories, in a world where outstanding communicators abound. The harder task for a leader, particularly in a turnaround situation, is to restore morale when it tends to sink either because of a reversal in company fortunes, or the absence of a morale-boosting vision and robust positive action.
For an outsider, it would be difficult to surmise that there are morale problems in a fine company like Infosys, but clearly there is an opportunity for a visionary and charismatic leader to chart out an exciting new agenda for the company.
A strong committed group of leaders and managers will have to be built by being very open to feedback, reaching out to connect, building development action plans for teams in all geographies and enabling global teams to re-engage with the challenges of organisation and business-building.
The path is often hard and not entirely free of thorns, but the rewards that a well-motivated organisation can aspire to are worth the effort.
This is an industry was many companies have risen to the occasion and overcome difficult internal and external odds. Through the years, the Indian IT and BPM industry has sustained and increased its competitive advantage against all competition.
The top 20 software companies have much to be proud of, and a new generation of companies, many with a product and solutions agenda, are waiting in the wings to grab their place in the sun.
There is no room for complacency, and it will be good to see great icons like Murthy and Infosys rub shoulders with young start-ups and a host of new product and services firms in the next sigmoid of growth for the sector. Let a new race begin!
(The author is Vice Chairman & CEO of Zensar and leads Innovation, Knowledge Management and IP initiatives for the CII).