So, Founders fall asleep sometimes.
They doze off.
They get distracted.
They take their eye off the ball.
They ‘blink’.
Why does this happen?
Founders may:
– Think that there is nothing more to ‘achieve’. (Michael Dell in Dell)
– Believe that here is a ‘magician’ out there who can do a better job than themselves in their Company. (Subhash Chandra’s tryst with Sandeep Goyal)
– Have a board that kicks them out (Apple and Steve Jobs)
– Simply get burnt out (Jerry Yang in Yahoo)
– Think of higher causes and may want to pursue things to better society (Infosys founders Narayan Murthy and Nandan Nilekani)
Usually, while they have been away, their Companies go sideways, and sometimes downwards. Very rarely do Companies perform better.
As long as they wake up and get back to their job, the damage done is usually repairable.
However, if on the other hand they decide that Sleep is their new prerogative, then that’s their choice.
If you look at the returns stories of founders, the results are spectacular – Dell, Apple and Zee have done amazingly well. Google can only get better (!!), while Yahoo continues to drift.
I believe it’s time that Narayan Murthy and Nandan Nilekani snap out of their reveries and come back to resurrect Infosys.
The Infy Stock is beaten and their new ‘value creation’ business mantra seems unclear.
Gorillas like TCS and Cheetahs like Cognizant Technologies are at their doors.
At this critical juncture, the Infosys founders CANNOT PLAY ‘STATUE’.
Why is it SO IMPORTANT to have the duo back at Infosys and make that Company rock its stock again?
– Infosys is the Shining Example of Brainy India.
– It’s the image of a Clean, Corruption-free Indian business than can thrive on passion and ingenuity – not on favors and bribes and licenses.
– Infosys represents what Indians can achieve in the Global Market beyond polishing diamonds and making shirts and underwear.
– Infosys has made 26 year old boys take more salary home than their 60 year old fathers.
– Infosys Girls are now the brides people want. Infosys has given Women economic status in India!
If Infosys fails and stumbles, India will be hurt.
So, if Mr. Murthy wants to do social work; and Mr. Nilekani wants to run the Census Bureau, sure they can – BUT first they must make sure that their own shining example of excellence does not appear rusted. Else, everyone’s dreams will be shattered.
*****
Aditya Babbar
While I agree to the bit of INFY needs to get back their mojo, I cannot but think of ‘this was coming’.
While all the examples you choose are of people who can come back and sort of helped the raise the company from falling over, there is ONE single difference. These are ALL product-based companies (or are known primarily for products).
Infosys is known for SERVICES and that too technology services and most likely “taking care of the backend” ! I will go on a limb and say Infosys provides “Smart Labour” to look after the world’s back office operations. Infosys is NOT a product oriented company.
The reason is not only Leadership but also no clear differentiation from the rest of the pack. X,Y,Z provide the same services. Companies choose X or Y or Z based on Cost and Track Record and most likely Costs can trump decisions.
So yes it’d be nice to have Mr Murthy and Mr Nilekani back on board, but it’d be a better idea to start with a Product Line !
Alok Rodinhood Kejriwal
Awesome point. Just awesome.
Ashwin C Parulkar
ya simply awesome point
Service prroviders suffer this slow death, the key is to turn and innovate to create products, on the other hand if we see closely all the product based companies are brainchilds of the founders and it is bound to get fatigued at some point of time , one cannot simply replicate Jobs, or Speilbergs to that matter.
Animesh Kumar
I have a different view. NRN or Nandan can’t be there forever. Its high time professional leaders take charge of Infosys. There are lot of companies run by professionals and these companies are not doing bad. Cognizant/TCS/HCL are all managed by professionals and they are not doing great so I dont think of any reason as why Infy would not prosper under professional leadership….
Abey John
For a company like Infy their internal processes are not geared to product dev. That said they do have some products. The high end core banking Finacle is one of their “successful” products. It’s successful because licensing fees are in a few millions and implementation which lasts a few years are a few more millions. Very popular in 2nd tier banks who cannot afford the Rolls Royce core banking solutions prevalent elsewhere.
For consumer and mid tier (think Adobe Photoshop) type retail products the shift in mindset is so huge that it can’t come from the suited booted IIT IIM shills running our tech titans. A product is a leap into the unknown and no one who is raking in millions from services will agree to the leap. And even when the risk is fairly well known they have a higher risk of failure primarily due to the their coprorate DNA. Polaris failed with their retail product for precisely this reason (I had a ring side view of the debacle).
I don’t follow the market so don’t know about Infy’s current “value erosion” woes. IMO whatever it is it is just as well. We can do with less career code coolies and have more guts and glory coders who break the status quo and build awesome – like cleartrip.com. Infy is not a coding culture, its a career culture which just happens to involve code and math and some amount of logical reasoning.
This echoes back to your cheif worrying officer story Alok. The talent crunch has nothing to do with education but motivation. When we develop the indegenuous inheritor to Ruby on Rails (or whatever else HTML 5 etc) then we’ll have transitioned from being wannabes to contending for the center of the tech universe. Till then we are just the world’s back office – coding backoffice or BPO backoffice. And the funny thing is its not that we dont have the framework to do it. We do. Its just that we put a higher priority on RKM (roti kapada makan) still.
Hopefully by the next gen we’ll want to hearken back to our Aryabhatta roots and break through the glass ceiling of (intellectual) reasoning we seem to have hit with Western Platonic thinking. When you merge and marry Indian pre-history with western science you see how much more is possible but for the want of a rationale framework….
I guess I am going off topic now. In essence: Infy going down the tube? Yay. Let Coders rule and management shills burn.
Ajay Nandalike
Infy is sitting on one of the largest cash reserves. But what do they do with it? Nothing.
1. They don’t want to expand into new areas (except in the same domain)
2. They don’t want to buy any products company (Thank God for that coz they still have service industry HR policies which don’t work well in product oriented companies).
Infy started with a simple goal, make use of the fact that 1 dollar equaled 50 bucks. Now that everyone else has jumped on to that band wagon, the comparative value addition that infy can bring has reduced. Also, other countries are offering cheaper alternatives.
I don’t think that the founders are taking a nap but they founders never wanted to grow beyond this. There is a level of satisfaction. I see no hunger in Infy. They don’t set impossible targets and work towards them. They are ultra conservative.
Infy is sitting on so much information (collected while providing service) which it can use build better products. But no, they don’t want to do it.
TCS is looking India-ward for business, even IBM is looking at Indian govt. for business, but Infy still wants US clients. Hedging is the biggest source of revenue for Infy.
Infy can do so much even in Service industry. But it has not been doing so. Pai’s resignation may be coz he wasn’t made CEO.
The founders have been sleeping since the year 2000, Rodinhoods are trying to wake them up now. 🙂
Ashwin C Parulkar
I think founders have to decide at one point of time , when to hand over the companies that are running successfully in the hands of people who are best at running them.
Abey John
Interesting. A lehman (banker) on the control bridge. Infy is now a money making machine. Not a value creation engine or even a tech innovator.
Abey John
Either one of two things – the outsourcing market has reached a level of maturity and stability that all the variables are known and it is purely a matter of keeping the machine running and eking out efficiencies from it. Or they’ve gone nuts. Kamath is a banker the CEO designate….
Dunno but it looks like they are getting into hot water with this. At least if their primary revenue stream is still code. Code is unlike brick and mortar. I’d like to know how of their revenue comes from coding and how much from non IT BPO stuff.
The nature of code requires someone who understands its intimately and thereby understands how it permeates into the brick and mortar ecosystem. Bankers can only see the money flow. Most people get boggled eyed by the zeroes and fail to appreciate that money is a representation of value. For a tech company its value is in the bits and bytes the money they earn is a representation of how they translated that value into useful products/services….something only a coder entrepreneur can see at the wordless level of pure instinct….
oh well better switch off my religion and get back to work… lets see how it goes… burning through s 3.8 billion $ war chest will take a while. About 10 years I would think…
Abey John
End of an era…we should hold a 21 gun salute or is it too early for that?
Elroy Serrao
You forgot MSFT. Possibly the company with most shareholder value lost under a non-founder CEO…
Aditya Babbar
So it happened, Narayan Murthy came back out from retirement.
Call me really twisted, but here’s what my first thought, while everyone rejoiced that Mr Murthy is coming back after retirement, the first couple of things my mind focused on were
1. The Management Team which was handed over the reins really really screwed it up. They got new business and started concentrating on India, since all other markets dried up. They won government contracts but subsequently lost ground overseas and most recently in India. What a track record, bring on board new clients, losing the new and old clients to our Indian rivals, AND share prices go southward. So now, No one likes their products and most places they sold their wares, don’t like their services as well anymore.
2. There is NO management (trench strength) to run the show !
Tejas Vishnu Nimbargi
And they bring K V Kamath on board as a Chairman. A core banking expert into services domain while ignoring their core work areas. I also think t would take time for Murthy also to bring back things in order. The only saving grace of this decision would be the share prices which can see a positive rally next week.
Abhik Prasad
Aditya,
TCS and Cognizant also provide pretty much the same services as Infy. How do you explain their stellar performance.
I have worked both at TCS and CTS and can tell you this much about their top leadership…Both their CEO’s are very empowered with an amazing level 2 team to drive the business.
Infy was also pretty much similar till they started playing their round robin game of changing CEO’s to accomodate all founders. And a certain level of arrogance had crept up in their sales model (including oh we will not cut prices to impact margins while other players were not only cutting prices but also improving productivity to regain the lost margins)
And Infy does have a product called Finacle, which is a core banking product and pretty successful.