Designation: CEO and Managing Director, Infosys
Career: Served as the COO of Infosys from 2007 to 2011; also held senior leadership roles in sales and customer delivery, manufacturing and distribution, and internet consulting practice
Education: MSc in physics; MS in computer science
Interests: Electronic gadgets
For the first time in its 33-year history, Infosys, India’s second-largest IT services company, will be led by a non-founder, an outsider—Vishal Sikka. Outgoing chief SD Shibulal sees this development as a mere transition from “one professional to another”. He believes that the Infosys of today is much stronger than it was three years ago, when he came at the helm. He is confident that the current leadership will steer the firm forward. Excerpts:
Q. This is the first time that a non-founder has been appointed CEO of Infosys. How do you view this development?
There are two aspects to this: First, Infosys founders have always behaved like professionals. We have kept our personal lives separate from the company. We have run it with complete fairness. It’s just that we happened to be the founders. However, being a founder affords one a moral high ground which an external candidate doesn’t [have]. At one level, I clearly see this as a transition from one professional to another. On another level, the new CEO has to work a little harder to establish the moral ground. It is about the association with the organisation, the kind of trust and track record, that he will need to build over a period of time.
Q. Your tenure as CEO from August 2011 to July 2014 has witnessed some of the most difficult times for the company. What were your major challenges?
I took over amidst a very difficult environment. Infosys was faced with several external and internal challenges. Externally, we were just coming out of an economic crisis, and the macro conditions were uncertain and volatile. This uncertainty was reflected in delays in the decision cycle as well as cuts in discretionary spends. We were faced with several challenges internally as well. On the legal and regulatory front, we were dealing with employee retaliation cases, investigation by the US Attorney’s Office and the US Department of Homeland Security relating to visa matters. These legal matters consumed a lot of management bandwidth and led to regulatory overhang and increased scrutiny.
Simultaneously, there was trailing business momentum. The incremental revenues fell in Q3 FY12 and the revenue growth turned negative in two successive quarters, Q4 FY12 and Q1 FY13. We had lost ground in the large outsourcing deals. Margin was impacted by lower growth and additionally with compliance-related expenses and short-term acquisition-related charges. We also had significant flux due to the Infosys 3.0 transformation that we’d begun. The new organisation structure and the leadership were just settling down.
Q. Were you able to address these concerns during your tenure?
Today, these challenges are behind us. In FY14, we completed a civil settlement that concluded the investigation by the US Attorney’s Office and the US Department of Homeland Security. A US court also dismissed the lawsuit filed by the whistleblower. We overhauled our compliance processes, completed audits, and put in place improved systems and processes. Through all these challenges, we did not lose a single client and there was no adverse impact on the Infosys brand.We undertook several steps to regain business momentum, arrested two quarters of negative growth and implemented leadership changes for key portfolios to correct performance failures. In FY14, we doubled our revenue growth compared to FY13, crossed significant milestones of Rs 50,000 crore in annual sales and Rs 30,000 crore in cash balances. Our margins are back in the trajectory we want them to be in. In September 2013, we implemented the new structure.
Q. You announced your retirement in April, almost a year before your tenure ends. Were you contemplating it?
My retirement date was always known and the nomination committee was in the process of looking for a person who would take on as the CEO. I was eligible to retire in January 2015, but I stated that if the company could find somebody before, that would be a right time for me to step down.
Q. As an outgoing CEO, how do you see Sikka leading Infosys?
(This story appears in the 11 July, 2014 issue of Forbes India. To visit our Archives, click here.)