Salil Parekh’s tall task at Infy: Retain senior execs, continue with biz as usual
BENGALURU: A CEO change, inevitable as it is, is always fraught with challenges, and Infosys’s decision to entrust Salil Satish Parekh as the chief executive will put to test the leadership skills of the former board member at the French information technology firm Capgemini.
Infosys named Parekh as the company’s next CEO on Saturday.
Parekh, 53, who takes over as the boss on January 2 for a period of five years, will have to deal with two immediate challenges in his first six-months: Firstly, Infosys’s ability to retain its senior executives from an already depleted senior management team and finally, to see that business continues uninterrupted.
For this reason, many believe that both Parekh and Infosys non-executive chairman Nandan Nilekani, who is expected to mentor the CEO for at least a year, could look at the playbook of Mumbai-based Tata Consultancy Services Ltd, and to see if both Nilekani and Parekh could replicate the success of Natarajan Chandrasekaran and Rajesh Gopinathan.
Eight months after TCS elevated chief financial officer Rajesh Gopinathan to the rank of CEO, India’s largest IT services firm has retained all its senior executives even as business continues uninterrupted.
Gopinathan replaced Chandrasekaran, who took over as chairman of parent Tata Sons Ltd in February.
Gopinathan and Chandrasekaran’s approach has been simple: Give independence to its senior leaders and respect the team.
Parekh’s predecessor, Vishal Sikka, failed to build a stable sen- ior management team as 10 executives of the rank of executive vice-president (EVP) and above quit the company in his threeyear stint. A churn in senior management ranks is one reason behind Infosys’s growth is fizzling out during the last 12 months. Already, Infosys has cut its revenue outlook to at-best 6.5% in constant currency terms, as against 8.5% growth outlined at the start of the financial year.
Infosys cutting its growth outlook also offers Parekh time to improve the company’s execution and put the company back on a faster growth track.
A few analysts believe Parekh will be careful in bringing a number of his trusted lieutenants from outside to Infosys.
“We’ll see a measured approach,” said Ray Wang, founder of Constellation Research, a technology research and advisory firm. “Infosys is a conservative culture and Salil will adapt as needed and make the case if need be. Infosys in many cases will need to augment its talent for digital skills, AI capabilities, and also design skills. That cannot be organically grown in time for client needs,” said Wang, who has worked in the past with Parekh both at Ernst and Young (now EY), the consultant, and Capgemini.
“It is to Rajesh’s and Chandra’s credit that they have managed the transition successfully until now. So, Salil too could work with Nandan to see at least the company can have stability both from people perspective and from business side,” said a Mumbai-based analyst at a foreign brokerage on the condition of anonymity.
Parekh, who is currently based in Mumbai, will relocate to Bengaluru, where Infosys is based, which according to multiple executives is a good start by Infosys. Again, hearteningly for investors, Parekh is considered to be a people’s manager and an understated leader, who believes in getting the job done, without looking for personal adulation.