Infosys underestimated cultural challenge of transforming itself: Co-chair Ravi Venkatesan
Infosys, like many in India’s IT services sector, was affected by a variety of opposing external winds: slowing demand for traditional services, protectionist movements in its most important market, the United States and technological change Disruptive to which it must respond.
But this iconic company must also face an internal line with its promoters, led by NR Narayana Murthy, who has questioned the value systems and effectiveness of the board and the current administration.
TOI recently reported that developers might even consider selling their stakes in the company.
In an hour-long interaction with you, co-chair Ravi Venkatesan said the company underestimated some of the cultural challenges of transformation and is now trying to address.
Infosys is dealing with difficult times. The stock price is not much higher than when Vishal Sikka took over as CEO. Promoters are still unhappy with some of the company’s actions.
When we look at the prospects of the IT industry and Infosys specifically, they go through all the steps. I am very optimistic.
I often use the quotation from Charles Dickens: “It was the best of times and the worst of times.” Obviously, we face significant challenges in terms of all kinds of changes in business models, regulatory restrictions, and each company has specific problems.
But in general, I think we are at the forefront of the largest called the fourth industrial revolution, and is launched the opportunities that make it even modest compared to the Internet. People say that the best times are above the industry.
I really think they are pretty bad and I think Chandra (President of Tata Sons, N Chandrasekaran) said similar things, Bill Gates has said similar things.
The question is how our businesses will navigate from existing models to new opportunities.
And this is a classic case of what Clayton Christensen (Business School professor at Harvard) calls the dilemma of 15 years innovative.
The company has the option of doubling performance, rather than relying on its business model, reduce costs or try to understand how to create new capacity required in new areas such as now AI (artificial intelligence), natural language interfaces, etc. .
In doing so, there is a great challenge: to create new capabilities, make investments, and investments must be funded by existing activities, so they are not optimized for profitability.
To create new skills, you may have to hire talent from the outside, and there is the challenge of integrating new people with the elderly.
These are big problems. This is well painted by Christensen and others. I never thought I would live a textbook of this kind of transition.
Some investors and employees are going to say that you should go back to the past, duplicating the existing model and executing it better.
Others will say that you have to press the throttle fully and move your way into the future. The worst thing in the world is getting stuck in the middle, not good.
And the biggest challenge here is the cultural challenge. Frankly, they all underestimated the cultural challenge during this transformation.
You have mentioned cultural challenges several times. Is there a constant contraction in a certain sense by the developers?
M. Murthy absolutely understands the need for prosecution and, in fact, it was he who hired Vishal Sikka. I do not think the problem is with strategy; I think the biggest challenges facing think about a number of cultural implications of transformation.
For example, part of what you have to do is create new features and what you need to acquire specialized knowledge selectively from the outside.
Now, they have market-based compensation. This may or may not correspond to the existing compensation system. This can be a source of friction.