"At some point, Infosys had to bite the bullet." That's how V Balakrishnan, former Infosys Board Member and a member of the Aam Aadmi Party described the BG Srinivas joining the `Infosys exit league.'
He emphasized that the company has reached a point where it will have to find a CEO who can connect with the market and can get back the company again on the growth path. Grapevine has it that a new CEO may come in as early as August but Balakrishnan says even that can be "too late" for a company which needs to get into the growth orbit as fast as possible.
"Infosys board should conclude the process of selecting the next CEO soon," he told CNBC-TV18 in a exclusive interview adding "the company should put on fast track hunt for candidates and must prepare itself for instability if it delays the process."
Late on Wednesday, BG Srinivas announced his sudden exit from Infosys after it became clear that there was a high chance of an outsider filling in the post of CEO once it is vacated by SD Shibulal,
Srinivas, President and Member of the Board, Infosys was considered to be the front-runner for the first non-founder CEO at Infosys.
Below is the verbatim transcript of V Balakrishnan's interview with CNBC-TV18's Shereen Bhan.
Q: This one comes as another big surprise, BG Srinivas who was tipped to be possible front runner for SD Shibulal's position has decided to put in his papers. Logic would seem to explain that Infosys and the committee that was looking at the possibility of finding a successor has decided that it isn't BG and hence BG has decided to go.
A: I think so, that is how it looks like. When they are in the process of selecting the next CEO, if somebody is a contender, if he leaves that is a conclusion anybody will come to.
Q: Do you think that Infosys is now steering in favour of bringing an external candidate onboard. That seems to be the information that we are getting, that perhaps both the internal candidates and we knew that BG and Pravin Rao were clearly the front runners from an internal perspective that there perhaps is no internal candidate that the committee has zeroed in on and now it looks like Infosys is likely to get an external candidate for the position of CEO. Does that seem to your mind to be the most imminent thing?
A: The board already said considering both internal and external candidates. Internally they interviewed some of the people and they are in the process. With BG leaving the weightage for external candidate goes up. So, probably the external candidate looks a likely option.
Q: Is this the best thing to do at this point in time because as we were having a conversation with some of the other analysts who were on the programme with us, if you bring in an external candidate the attrition which is already so high, you have seen about 9 or 10 high profile exits from the company including yourself, different reasons for different people, but perhaps we are going to be faced with a situation of even higher attrition if you do bring an external candidate onboard?
A: You have to bite the bullet at some point of time because the biggest challenge for the company today is all about connecting with the market and getting the growth back. So, if you can get a good external candidate who can do that that is good for the company. It may have some short term impact but you have to bite the bullet at some point of time. That is good for the company in the long term, you have to bite the bullet, there is no choice.
Q: You know the pipeline of talent at Infosys. Do you believe that an external candidate is what Infosys needs, is what Infosys requires today?
A: I am not too hassled about external or internal. All I am saying is you need a CEO who connects more with the market, more with the customers and gets the company to growth path, that is the most important thing. So, whoever fits that bill whether it is internal or external the board should consider them, that is the biggest challenge for the company today.
Q: Infosys has prided itself and often we have had conversations with you, with Mohandas Pai, with Narayana Murthy on this large pipeline of talent, this pool of talent that Infosys believes it has nurtured and yet we are seeing such difficulty in trying to find a successor to SD Shibulal, we are seeing people leaving one after another. What exactly seems to have gone wrong? The suggestion is that it is somehow linked to Narayana Murthy's return, it has been linked to Rohan Murthy joining the company and so on and so forth, how much of that is speculation, how much of that is conjecture one doesn't know. However what do you think has gone wrong?
A: Infosys is a strong founder driven company and they are making a transition from a founder driven company to a external candidate who is not connected to the founder to come and run the company. So, when you are making such a big change you will always have some instability in the management and that is what is happening.
The board has taken the call and said they will select the next CEO both from internal and external. All I am saying is they should conclude the process faster because more time they take to identify the next CEO you are going to see more flux in the management and that will hurt the growth, that is not good for the company. So, they should put on fast track the appointment of next CEO whether internal or external so that you can bite the bullet and move on.
Q: Do you think it's been poorly handled, the hunt for a successor for SD Shibulal? They tried to go about it in this organized fashion, setting up a committee, getting Development Dimensions International (DDI) onboard but just the fact that its taken already since the time that committee was setup a month and a half or so and in today's day and age speed is of the essence and do you believe this should have been a matter that should have been dealt with much faster given the fact that SD Shibulal has already made it evidently clear that he wants to move on and he wants to move on quickly?
A: After that announcement that they are searching for a new CEO it is better to fast track and conclude it faster and with BG leaving now the urgency has only increased. I presume that board will consider the next CEO quickly and identify somebody so that the organization can come to stability. More time they take it is going to be more instable for the company.
Q: There are all kinds of source based reports coming in which seem to suggest that perhaps we could have a successor in place as early as August. Do you think even that would be too late?
A: That will be too late. They should do something before the AGM so that clearly the organization gets a direction. More time they take it is going to be more instability for the company.
Q: If it is indeed an external candidate do you envisage more exits? Do you believe that Pravin Rao will also be on his way out?
A: That instability we have to be ready for. Whether internal or external, when you choose the next CEO some people will leave, we have to factor that in and move on. That is the only choice.
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