Leading Infosys 2.0

Leadership in transition is a particularly painful time for companies. But not for Infosys and Nandan Manohar Nilekani. This year's Dataquest IT Man Of The Year continues to take Infosys and the Indian outsourcing story to new heights

By Latha Chandradeep and Priya Padmanabhan of COIL

BANGALORE: When we walk in to meet Nandan Nilekani at the Infosys’s corporate headquarters in Electronics City, Bangalore, he is busy munching an apple. He is on a diet, Nilekani tells us between bites, which he follows only when he is in India.

Invariably so, as his overseas visits are packed morning to night with back-to-back meetings, midnight flights and of course, stay in hotel rooms.

Nilekani, the 51-year-old chief executive officer and co-chairman of Infosys, is firmly in place, meeting customers around the world and ensuring that Infosys is delivering on its value proposition, be it in software solutions or consulting services. And now, destiny’s favorite child—Nilekani firmly believes that he was at the right age, at the right time, at the right place with the right people—is on a mission: to make Infosys outlast its founders and become a successful entity run by multi-generational leaders across the world.

Who better than Nilekani to appreciate the value of preparedness? His predecessor N. R. Narayana Murthy, who stepped down as chairman in August, had prepared the entrepreneur-founders in the early nineties to lay the foundation for a scalable Infosys, the benefits of which was reaped only post-2003 when it went past the $1 billion mark and now on track to achieve $3 billion in 2007. Hence, his obsession with creating longevity of the corporation—going beyond generations of leaders—while continuing to thrive, prosper and retain its value and culture, the basic DNA.

Nanadan Nilekani, CEO & MD, Infosys So far, Infosys strategy has been driven through consensus by a leadership team that has been together for years. Nilekani says: “We have a congruence and commonality of approach. What we have is a collective vision. There may be subtle changes when leaders change. It is not like in western countries where there is a huge change when leaders change. It is more collegial and organic. Core culture and values will be the same. Infosys is really the contribution of many people—not individuals. Sung and unsung people.”

The task, therefore, of creating next gen leaders is easily stated than done. However, Nilekani, naturally inclined to lead and organize, and remain relaxed despite the nature of challenge, sounded clear about one thing: “The children of founders will not work in Infosys. It is a conscious statement. We do not want a company that is inter-generational family set up, but a fully professional one.”

In a way, most of his time today is spent focusing on grooming leaders, empowering them and creating career plans for them. This is similar to changing tires of a car in motion—maintaining the fine and steady balance between achieving rapid growth and scale without compromising on the company’s values, client satisfaction and culture. “The challenge is how to scale up rapidly and also manage execution well so that you don't miss a beat. How do you do things differently from what you have done in the past and achieve your strategic goals of transformation.”

At the very fundamental level, the current leadership team knows it is all about change and managing change. What it has put in place is a three-tiered structured approach to change that lets them do future gazing. Every year, a five-year scenario planning session looks into the basic assumptions (both explicit and implicit) made by the company a few years back to see if they still hold good or is there a need to re-jig to suit a new set of realities.

“Companies run on a set of explicit, tacit assumptions about the market, customers, about the future, world and technology. What happens to them often is that some of those assumptions are changing. There is something happening either in the external environment and internally, where the theory of business is changing,” explains Nilekani.

Once these are set or reset—as the case may be—business units align themselves to the new challenges and business goals. The intermediate three-year strategic planning exercise that follows scenario planning then focuses on translating the strategic stuff into transformation results. It is here, at this point—the nuts and bolts level—that operational excellence is maintained in sync with strategic direction. The delivery of this is ensured through the operational quarterly and annual plan.

This kind of assumption setting has enabled Infosys to quickly capitalize on any opportunity coming its way and hit the ground running at the right time. All of this, in turn, has resulted in 40 per cent of its current revenues coming from services that did not exist five years ago.

Passionate about GDM

One of the country’s most cash-rich companies—close to $1 billion—Infosys’s reluctance to look beyond software services and its Global Delivery Model (GDM) continue to be sore points.

Nilekani refuses to give in and takes the charge head-on, stating, “What we do is very strategic, complex, sophisticated and has many business benefits. We are using knowledge of business, processes, technology, consulting and creating solutions that make global companies more profitable and competitive. Our strength is in harnessing people, processes, technology, intellectual capital to create solutions that deliver our customers outcomes for their business.”

Indeed, by applying the GDM paradigm to consulting—considered to be high-touch business—it has brought about a certain disruption in the business. By reconstituting the services offering in consulting and disaggregating that into high-touch and low-touch, it has been able to deliver services faster, better and cheaper. And, Nilekani believes, anything that is innovative and that which is faster, better and cheaper will substitute the old.

With the confidence of one who knows what it takes, Nilekani adds, “We are setting the agenda globally for how IT services should be delivered. So we think global players who have done things the old way have no choice but to reengineer to look more like us. The model has caused a lot of internal disruption. They (competitors) have to untie and reconfigure the entire biz model. In the mean time, we are doing what we have been doing better.”

The leadership team at Infosys is certainly not getting their knickers in a twist over the entry of global service majors like IBM, HP, Accenture and others and increasing their offshore mix and delivery mechanism. Nilekani reckons that they are rather late to the GDM game and would take a while besides effort and turmoil before they leverage the India advantage.

He likens GDM to the running of a very complex sophisticated global supply chain of information. “It is not something that is easy to replicate. We have created significant barriers of entry around ourselves,” stresses Nilekani.

On leadership and longevity

Unwilling to be put into a specific leadership mould, he states: “There is no cookie-cutter leadership style.” But Nilekani is known for being detached and relaxed amidst crisis, and his ability to get to the heart of the problem while everyone around grapples with it, is a pre-cursor to his style of leadership.

He attributes Infosys’s success to different people who brought different strengths to the table. It has over the years perfected a system (thankfully not made into a fool-proof process yet) where the strengths of people are exploited while a collective safety net deals with the weaknesses of the people.

“One of the unique strengths of Infosys is that the organization is more important than any one individual. Loyalty is to the firm and the vision of the firm and its values and mission. Therefore, we have a simple rule—the interests of the firm override the interests of any individual. That is the final glue.”

It is also a question of the sum being more equal than the parts. Nilekani’s theory of organizational longevity focuses on creating a set of leaders such that “collectively they are capable and individually they are more capable in some of the things.”

Nilekani contends that the attributes of an entrepreneur are great in the beginning but not sufficient to build a large company. “When you have entrepreneurs also playing a leadership role like us, you have to change with the times, otherwise you become obsolete.”

These changes include the conscious steps taken in the early nineties: best practices in budgeting, financial visibility, education and training, and processes besides building world-class campuses. “We built a system for scaling up and made sure the right people occupied the right spots to scale up.”

Nandan Deconstructed

For a person who joined Infosys when he was 25, Nilekani has come a long way both in terms of experience and stature. And it is not just by mere luck alone though that is what Nilekani would ascribe to in his desire to be not seen as larger than life persona.

T.V. Mohandas Pai and Kris Gopalakrishnan, colleagues and close friends, say that he is a natural leader. His penchant for driving strategy and rallying people around comes with an almost effortless ease.

Nilekani sees himself as a “relaxed” kind of person, who is more analytical and cerebral than emotional. “I am relaxed, I don't get flustered too often and I can get detached from any situation. That allows me to step back and look at things in a more dispassionate way.”

Nilekani, the unsophisticated, small-town Dharwad boy rubbing shoulders with the city slickers and well heeled at college, grew up literally and figuratively during his stint at IIT Mumbai. He discovered his organizational skills and his ability to remain detached during crisis, when he organized the annual cultural fest of IIT Mumbai known as Mood Indigo.

Reminiscing on those days he says, “Looking back at my contemporaries in IIT, one thing that stands out is that those who had a well-rounded life have been the most successful. An important lesson is that you need to be multi-dimensional in your interests.”

Nilekani’s interests include reading and music. His musical tastes extend to Simon & Garfunkel, Neil Young, Jethro Tull and Don McLean.

He can hold his own with any great professor or CEO on technology and strategy. Be it holding forth on outsourcing with Thomas L. Friedman or dealing with rookies in the company, Nilekani has the knack to get people on to his side. His innate ability to rally around people and drive strategy was demonstrated early this year at the World Economic Forum at Davos. Nilekani conceptualized and took the lead in pushing the India Everywhere campaign that caught the world’s attention and brought to focus India’s strengths and enormous opportunities.

Kris Gopalakrishnan raves about Nilekani’s ability to bring together diverse sets of people and getting them to work as a team. “He stood out as a leader from day one at Infosys.”

Obviously, there is no escaping comparison between him and Murthy. Mohandas Pai sums up the two: “We have two great leaders in Murthy and Nandan. Their personal styles are very different. Murthy’s style is focused, pushy and aggressive and perseverant, while Nandan is more relaxed and lets you work at your own pace. He pushes you when it comes to need.”

Another aspect of Nilekani’s leadership quality is his knack for connecting dots at various levels and then correlating it to present the big picture along with a strategy to match. Pai relates an incident of how Nilekani’s almost intuitive insights took everyone by surprise when an important customer came visiting.

“We all sat around talking, and within 10 minutes Nandan had analyzed the CEO’s problems and told him what strategy he had to take to run his business. Everybody was astonished because it was a business that we were not in!”

Having achieved so much at the age of 51, Nilekani admits that he has been unusually lucky to achieve so much success. While his personal aspirations are fulfilled, his larger public goal is to contribute in whatever way he can to help India take advantage of this “historical opportunity.”

“India is unusually placed to do well in terms of outsourcing, demographics and the global economy. This is something that comes to a country once in a millennium.”

As for the Dataquest jury, there was no question about the choice for IT Man Of The Year. The panel was unanimous in its recognition of the outstanding work Nilekani has done at Infosys over the past year: “Of the smooth transition at the helm at a time of rapid scaling up and intense competitive pressure; and of the continuing, and considerable contribution to 'brand India' that Infosys, under Nandan's leadership has achieved; and to the Indian technology story on the global platform.”

Amen to that!

Original story