Leadership Transition at Infosys

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Excerpts

Since the early 2000s, Infosys had focused on grooming future leaders. Toward this end, the company set up the Infosys Leadership Institute (ILI) in 2001 to nurture future leaders and effectively manage the exponential growth experienced by the company. At the ILI, the executives were groomed to handle the changes in the external and internal environment.Amidst the focus on nurturing future leaders, Infosys realized that most of the founders were nearing the retirement age of 60. Some of the founders had left at the beginning itself. In 1989, Ashok Arora had left, followed by NS Raghavan in 2000...

Nilekani, who was involved with the key management people to nurture leadership and implement the succession planning strategy at Infosys, stepped down from the post of CEO to head the government’s Unique Identification (UID) project in 2009. Soon after his exit, in October 2009, the ILI was reorganized to focus hugely on the leadership development needs of the seniormost leaders termed as Tier 1 leaders since the company had witnessed key people stepping down. Thus, Infosys felt that the focus on Tier 1 leaders would help the company groom potential leaders to occupy the seniormost positions and mitigate the risk of leadership succession...

Though the leadership transition was greeted with optimism by some industry experts, it was not received well by some of the company’s high profile employees. Soon after the nominations committee announced the names of Kamath, Gopalakrishnan, and Shibulal for the various posts, Pai quit the company in July 2011. Though he said that he was leaving the company to pursue other interests, it was reported that he had allegedly stated that the founders had overlooked the experience and competence of other professionals and valued seniority over merit. Pai’s exit did not go down well with several industry experts...

Analysts opined that in Infosys, Kamath would face a different set of challenges. The founders were exiting and a new set of leaders had to be found and groomed for major responsibilities. The transition had to take place without causing uncertainty among shareholders and resentment among management and the employees...

Despite the transition challenges faced by the company, Shibulal denied that Infosys was facing such a crisis. He said, “It is a perception issue. The reality is that we continue to win large-scale transformation deals.” He remained optimistic about the company’s future and said that the key management changes would help the company boost sales. He added that the Infosys 3.0 strategy announced in 2011 would also help the company drive growth in the future. The company also believed that its Infosys 3.0 strategy would help it come out of the leadership transition crisis...

Exhibit I: Infosys - Milestones
Exhibit II: CEOs of Infosys at Different Points of Time
Exhibit III: Infosys Financials
Exhibit IV: A Brief Note on Infosys Leadership Institute
Exhibit V: Timeline on Infosys Leadership Institute

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