T.V MOHANDAS PAI, board member and HR head of Infosys, announced his resignation in mid-April. A fortnight later, the Infy board announced that S.D. Shibulal—one of the founding partners of Infosys—will become CEO in late August 2011 when S. ‘Kris’ Gopalakrishnan becomes executive co-chairman. The moves are part of a major shift in top management across Indian IT.
Where once companies were headed by CEOs who came from marketing or business development backgrounds, today they are almost all operations people. Tata Consultancy Services (TCS) has N. Chandrasekaran, who was chief operating officer before he was made CEO; Wipro has T.K. Kurien, a chartered accountant renowned for turning around business unit operations; and now, Infosys will be headed by Shibulal—an ops and project management specialist. Pai, who was seen as a contender to the top spot, did not have a strong ops background. He was better known for his intuitive understanding of finance and markets.
One of the main reasons for the rise of ops leaders has to do with the 2008 recession and its aftermath. Profit margins have dampened for Big IT from highs of 30%, to 25% or less. This has prompted company boards to rely on ops people to cut costs and create lean enterprises.
Companies now want a new type of CEO, not the benevolent, strategic thinker of yore. They are looking for CEOs willing to get their hands dirty. Chandrasekaran, CEO of TCS, is the face of this change. “Chandra is a workaholic who gets involved in every detail with business relationship managers. He takes a decision—‘good, bad or ugly, we’ll worry about it later’,” says a former TCS senior manager. This is not different from most descriptions of Wipro’s Kurien.
Big IT is shaking off its past. This year seems to mark the end of an era for several IT stalwarts. In January, Narendra Patni, a founding father of Indian IT, called it quits when he sold Patni Computer Systems to iGate. Before the month ended, Ashok Soota had resigned from MindTree, a company he had co-founded. With Narayana Murthy’s retirement due in August, Gopalakrishnan and Shibulal will be the only founder members on the Infosys board. Many of these veterans bet on foreign markets with leadership spread across the geographic, technological, and domain functions.
With the move toward ops, geographic functions will see less investment. Instead, vertical and technological leadership are being unified, as already seen at Wipro. Client advisories warn that this could be a strategic error for Indian IT. “This is where Cognizant has an advantage over Indian players,” says Sridhar Vedala, managing director of QS Advisory, a sourcing advisory firm in Europe. “It has invested in leaders for geographies and encouraged them to build linkages over five to 10 years. Indian players tend to look inwards, for efficiencies.”