EXITS and ENTRIES

Exits and Entries

Steve Jobs of Apple Inc. did it. He came back to the floundering company he founded and took to great heights. He had a spectacular second innings as well till his premature death from cancer. But then Steve Jobs was a great inventor, an innovator of genius, a visionary, a man unique, yet with his finger on the pulse of what people wanted.

After he died, Apple is back to struggling and battling competition from Samsung and others. The head- and- shoulders- above- the- rest inventor is gone, and much that Apple does today is business as usual and tweaking existing products.

Infosys decided, in 2011, to go up the value chain in terms of the kind of work it would seek and do. NR Narayana Murthy, the charismatic founder, retired, and handed over operational control to fellow founder member SD Shibulal, and the overall mantle to his old friend Mr. KV Kamath.

As it turned out, Infosys could not make a success of its new strategy and slipped in ranking to No.3 behind its peers. Much of the blame for this come down has fallen on Mr. SD Shibulal, who though known for his execution skills could not pull it off in difficult market situations globally, and in the West in particular. There were few takers for expensive improvements and Mr. Kamath’s non-executive role could not do much.    

To save the company from further deterioration, the otherwise hands-on legendary builder of ICICI into an Indian bank of substance, Mr. KV Kamath, has stepped down as Non-Executive Chairman of Infosys. He has accepted an independent director’s position on the Infosys board instead.

Mr. Kamath hit the headlines some years ago as informal adviser to Mrs. Kokilaben Ambani of Reliance industries, when he helped resolve the battle royale between her sons Mukesh and Anil  with an acceptable division of the empire.

Of course, being “non-executive” meant that Mr. Kamath devoted only a week a month to Infosys, and the rest of his days to ICICI where he continues as Chairman.  Besides, it was not his skill-set to drive the business itself but perhaps present a communicator’s face to the world as a man of stature and credibility. 

His predecessor, and now successor NR Narayana Murthy, knows the business, the technology, the environment, and has the communication skills and stature too. The only thing is he is now 66 though in good health and form.

Though NRN, ( NR Narayana Murthy) brings to his second coming a full-time commitment as Executive Chairman,  he does have his son Rohan, a highly educated, (Cornell, Harvard),techie himself, in tow as his Executive Assistant at large.

Those who criticize the entire back to the future strategy employed here say that there is an inadequacy of leadership at Infosys, large as it is, perhaps because of an insistence to place only the founder members at the top. Now are they up to the challenges of the present and future or just yesterday’s men made good?

Mr. Murthy senior indeed hints at going after lower margin bulk business to restore Infosys’s bottom lines. But perhaps this is appropriate for now and the Western business environment is unlikely to see much of an upturn for years yet.

Elsewhere, it was a departure that tells a story all of its own. Mrs Aruna Roy left the Mrs. Sonia Gandhi led National Advisory Council (NAC). She is amongst a clutch of Leftist economists and thinkers such as Jean Dreze and Harsh Mander to do so, who all feel the NAC is not moving  to implement their far-left ideas fast enough.

Mrs. Roy wanted a uniform minimum wage fixed under MNREGA, but since it is really a variation of what the princes used to do in times of famine to keep starvation at bay, maybe her position is a little extreme.  

The NAC is having trouble funding its ideas already despite a complaisant Government. It can’t afford to drown the country in a veritable lake of deficit that is forming because of excessive welfarism zeal. Besides, widening and deepening freebies and perpetuating them does not necessarily ensure election victories anymore. Still, it seems easier to co-opt radicals than to harness their ideas.

Change does have its boundaries after all.

(707 words)

June 3^rd 2013

Gautam Mukherjee