“AWAY FROM THE NOISE, I’M TRY­ING TO CRE­ATE A CUL­TURE OF IN­NO­VA­TION”

India Today - - INTERVIEW -

VISHAL SIKKA, 49, the CEO of In­fosys, is in the eye of the storm over the gov­er­nance is­sues cur­rently af­fect­ing the iconic In­dian IT gi­ant. Ever since he joined In­fosys in June 2014, Sikka, who holds a PhD from Stan­ford Univer­sity, has strived to ar­rest the down­ward spi­ral that most In­dian IT com­pa­nies have ex­pe­ri­enced be­cause of tech­no­log­i­cal dis­rup­tions. Last Oc­to­ber, he spoke can­didly and at great length to Group Ed­i­to­rial Direc­tor Raj Chen­gappa on the chal­lenges In­fosys was fac­ing and what he was do­ing to over­come them. The in­ter­view was held back be­cause de­mon­eti­sa­tion be­came the na­tional fo­cus soon af­ter. But in the light of the cur­rent con­tro­versy that has hit In­fosys, we are car­ry­ing excerpts. For the record, in­dia to­day did re­quest Sikka to an­swer ques­tions on the cur­rent con­tro­versy, but he said there was not much he could add to what he had al­ready said at the press con­fer­ence held in Mumbai on Fe­bru­ary 13.

Q. What are the chal­lenges you faced when you took over In­fosys in June 2014, and how did you ad­dress them?

A. When I started at In­fosys, there were many struc­tural chal­lenges. Some were generic, oth­ers were spe­cific to the sit­u­a­tion the com­pany was in at that time. These have only be­come worse. The short-term is­sues—like the global de­liv­ery model, which was a very big deal even 20 years ago—have be­come much more dif­fer­en­ti­ated. Things are be­com­ing cheaper; more com­modi­tised and so forth. These days, busi­nesses are un­der im­mense pres­sure be­cause of the enor­mous dis­rup­tion caused by the dig­i­tal revo­lu­tion. By dig­i­tal, I don’t mean just web­sites, mo­biles and so forth; I am talk­ing about the deep-rooted trans­for­ma­tion that Ni­cholas Ne­gro­ponte has talked about. Of atoms into bits. Phys­i­cal ex­pe­ri­ences, phys­i­cal parts of the sup­ply chain, even ma­chines are be­com­ing dig­i­tal, are be­ing con­verted into soft­ware. It has cre­ated tremen­dous pres­sure for in­no­va­tion among big com­pa­nies, and also pres­sure on costs. That goes down the chain and trans­lates to cost pres­sure on us—the sup­pli­ers to the big busi­nesses fac­ing such dis­rup­tions.

Q. What about au­toma­tion and ar­ti­fi­cial in­tel­li­gence?

A. Yes, these are among the most im­por­tant chal­lenges we are are fac­ing: au­toma­tion and ar­ti­fi­cial in­tel­li­gence. Look at com­pa­nies like In­fosys: in the late 1980s and 1990s, most of the work we did had to do with soft­ware devel­op­ment, ap­pli­ca­tion devel­op­ment and main­te­nance. But the new mil­len­nium saw BPO, IT in­fras­truc­tural and ver­i­fi­ca­tion ser­vices be­com­ing much more amenable to au­toma­tion. That is a deep struc­tural shift that is hap­pen­ing in our in­dus­try. Digi­ti­sa­tion, au­toma­tion and ar­ti­fi­cial in­tel­li­gence are three big shifts that were In­fosys-spe­cific. The chal­lenges im­posed by these three shifts have be­come more se­vere in the past three years.

Q. What is your strat­egy for In­fosys to deal with these key chal­lenges?

A. The strat­egy I have laid out is ac­tu­ally rel­a­tively straight­for­ward. It is in­spired by na­ture. If you look around, you will see that there is a con­stant re­newal tak­ing place in na­ture. That is true for our busi­ness as well; there is a re­newal of the work we do, the things we know about and con­stant im­prove­ments to them. So if you look at any busi­ness, in­clud­ing In­fosys, there is al­ways a dual im­per­a­tive. There is a re­newal of the busi­nesses we do in right now.

“DIGI­TI­SA­TION, AU­TOMA­TION AND AR­TI­FI­CIAL IN­TEL­LI­GENCE ARE SHIFTS THAT IM­PACTED IN­FOSYS. THESE CHAL­LENGES HAVE BE­COME MORE SE­VERE IN THE PAST THREE YEARS”

You can think of that im­per­a­tive as ‘be­com­ing con­stantly bet­ter’. But, in par­al­lel, in or­der to be rel­e­vant in an ev­er­chang­ing world, we also have to be dif­fer­ent; we have to do new things, things we don’t have ex­pe­ri­ence or ex­per­tise in. So there is this du­al­ity: re­new­ing the ex­ist­ing work, and do­ing some­thing com­pletely new. These two things have to be done in the con­text of the cul­ture of the or­gan­i­sa­tion. Our val­ues and pur­pose also have to be trans­formed, so that we can re­main con­tin­u­ously rel­e­vant.

Q. How are you im­ple­ment­ing these changes?

A. What I have been try­ing to do is to cre­ate an at­mos­phere of trans­for­ma­tion of the ex­ist­ing busi­nesses, as well as cre­at­ing new busi­ness. This is led by the two im­per­a­tives of au­toma­tion and in­no­va­tion. Ar­ti­fi­cial in­tel­li­gence is im­por­tant for us, to au­to­mate the work we do as far as pos­si­ble. When we look at ar­ti­fi­cial in­tel­li­gence or AI, we are tempted to see it as some­thing that dis­rupts in­dus­tries, makes peo­ple re­dun­dant. But in re­al­ity, go­ing all the way back to the in­dus­trial revo­lu­tion, tech­nol­ogy has al­ways am­pli­fied us. It helps im­prove our pro­duc­tiv­ity. I deeply be­lieve that AI is a great am­pli­fier of peo­ple. When we equip our­selves with AI, we save time, en­able our­selves to ex­er­cise cre­ativ­ity and am­plify our abil­ity to in­no­vate.

Q. What does one do to fos­ter cre­ativ­ity and in­no­va­tion in In­fosys?

A. My dream, my en­deav­our is very sim­ple, but also very au­da­cious. I want ev­ery sin­gle In­fos­ysian to em­brace au­toma­tion, to be­come more pro­duc­tive and there­fore more pow­er­ful. The only way we will be able to em­ploy mil­lions of peo­ple is to cre­ate mil­lions of in­no­va­tors. Since I joined, my en­deav­our has been en­tirely about bring­ing in au­toma­tion and ar­ti­fi­cial in­tel­li­gence, and, most im­por­tantly, cre­at­ing a cul­ture of in­no­va­tion. We have around 200,000 peo­ple do­ing roughly 9,500 projects at the mo­ment: I want ev­ery sin­gle per­son, ev­ery sin­gle pro­ject to in­no­vate.

Q. How does one speed up the big ele­phant that In­fosys strad­dles—IT-en­abled ser­vices—and make it adapt­able to the chal­lenges you have men­tioned?

A. In ev­ery gen­er­a­tion, there is a new tech­no­log­i­cal wave. The big thing in to­day’s world is that ev­ery in­dus­try is be­com­ing dig­i­tal. It is cre­at­ing dig­i­tal ex­pe­ri­ences for peo­ple, for cus­tomers, for con­sumers and even for economies. It cre­ates a new set of op­por­tu­ni­ties for us—to go and help busi­nesses be­come more dig­i­tal. That means we have to im­prove our own skill sets; not only when it comes to tech­ni­cal abil­i­ties, but also in our prob­lemfind­ing and prob­lem-solv­ing skills. There are also other im­por­tant skills, such as how to en­gage with a cus­tomer and iden­tify what it means for their busi­ness to be­come dig­i­tal. In­fosys has a tremen­dous learn­ing cul­ture. We have to be­come a key driver for peo­ple to learn.

Q. Nan­dan Nilekani told me we now live in a ‘hyper-flat world’, that there is a big shift from en­ter­prise to con­sumers. Is that im­pact­ing In­fosys?

A. Hyper-flat is a great phrase. When it comes to the shift from en­ter­prise to con­sumer, look at it his way—in the phys­i­cal world, there are many dis­con­nects be­tween the pro­duc­tion of a thing and its con­sump­tion. Take the ex­am­ple of con­sumer pack­aged goods (CPG), like a bot­tle of sham­poo. When you make a bot­tle of sham­poo, you don’t ac­tu­ally know who is go­ing to buy it. It is made in a fac­tory, from where it goes to a ware­house, then to ship­ping, then to a dis­trib­u­tor or a re­tailer, and so on. Fi­nally, the con­sumer buys it, and then the data be­gins mak­ing its way back to the man­u­fac­turer. In a dig­i­tal world, on the other hand, ev­ery­thing is im­me­di­ate. With Uber, you know ex­actly where the car is and who the driver is; the driver knows ex­actly who and where the pas­sen­ger is, all in real time. The en­ter­prise world is be­com­ing more con­sumer-ori­ented and is a re­flec­tion of the fact that there is tremen­dous con­nec­tiv­ity in the world around us. More than the con­nec­tiv­ity, there is a tremen­dous con­nect­ed­ness. We are on the verge of be­com­ing a hyper-con­nected world. That cre­ates huge op­por­tu­ni­ties to help busi­ness— for in­stance, CPG com­pa­nies—be­come con­nected to what their con­sumers are do­ing.

Q. How will the In­dian IT sec­tor change its busi­ness model to profit from these de­vel­op­ments?

A. We have to be able to re­late to our cus­tomers and our busi­nesses in a very deep way about these ex­tremely im­por­tant strate­gic prob­lems they face. We have not

“I DEEPLY BE­LIEVE THAT AR­TI­FI­CIAL IN­TEL­LI­GENCE IS A GREAT AM­PLI­FIER. IT AM­PLI­FIES OUR ABIL­ITY TO BE CRE­ATIVE” “WE ARE ON THE VERGE OF BE­COM­ING A HYPERCONNECTED WORLD. THIS CRE­ATES OP­POR­TU­NI­TIES TO HELP BUSI­NESS”

“IN­NO­VA­TION IS THE ACT OF LOOK­ING AROUND A ROOM AND SEE­ING SOME­THING THAT IS NOT THERE” “WE HAVE TO DE­VELOP A MIND­SET WHERE WE OF­FER SER­VICES BE­CAUSE NO ONE CAN DO THEM BET­TER THAN US, RATHER THAN BE­CAUSE NO ONE CAN DO THEM CHEAPER”

done that. The IT ser­vice in­dus­try, es­pe­cially the In­dian IT in­dus­try, has been very con­tent with its achieve­ments. We need to be­come much more pro-ac­tive, much more re­spon­sive to things that re­ally mat­ter to the CEOs and COOs of our com­pa­nies, and then work on those crit­i­cal prob­lems. If we don’t, we will be­come ir­rel­e­vant; we won’t be the ones who are grow­ing. We have to make this shift, and do­ing it will not be easy. It re­quires us to ac­quire com­pletely new kinds of skills and de­velop re­la­tion­ships with our clients. In the past, all one had to say was that we are from In­dia, and we are In­fosys; the doors would open. Now, you have to go and en­gage with the CEO and un­der­stand their con­text and prob­lems. In­creas­ingly, it is about prob­lem-find­ing. For ex­am­ple, we use a tech­nique called ‘de­sign thinking’. We have trained more than 100,000 peo­ple on de­sign thinking, for pre­cisely the rea­son that we want to cre­ate a cul­ture where our peo­ple can en­gage with cus­tomers, un­der­stand what is im­por­tant to them, how to ar­tic­u­late the prob­lems they are fac­ing, and then en­gage to solve it.

Q.How come we don’t see In­di­ans in­vent­ing the next big things, like Google or Face­book?

A.We still live in a world where in­no­va­tion is an ab­stract idea for most peo­ple. They think that one has to be a Mark Zucker­berg or a Steve Jobs to in­no­vate. But the re­al­ity, I think, is that in­no­va­tion is no more than the act of see­ing some­thing that is not there. When we force our­selves to be limited to do­ing what we are told, when we force our­selves to just take or­ders from oth­ers, we lose sight of what is ‘not there’. Ev­ery in­no­va­tor and ev­ery in­no­va­tion we have ever had was a re­sult of some­body see­ing some­thing that was not there. Some­thing that, if in­vented, would make things bet­ter, would be de­sir­able to peo­ple and would be fea­si­ble to make. Steve Jobs used to say that an im­por­tant thing to re­mem­ber is that ev­ery­thing around you is built by peo­ple like you and me—ev­ery­day peo­ple who are not su­pe­rior in any way. You and I can do the same thing. This is the cul­ture I am try­ing to cre­ate at In­fosys.

Q.Won’t the fo­cus on bring­ing AI into busi­ness—to save on costs—lead to ma­jor job cuts for In­fosys? Is that an area of con­cern?

A.In terms of over­all job cuts... I don’t see that hap­pen­ing. What I do see is that dif­fer­ent kinds of jobs are be­ing cre­ated, and there is a re­duc­tion in the over­all rate of job growth. Even so, I have spo­ken pub­licly about my as­pi­ra­tion to get to $20 bil­lion in rev­enue at 30 per cent mar­gin and at $80,000 rev­enue per em­ployee by 2020. We are a com­pany of 200,000 em­ploy­ees. If you di­vide $20 bil­lion by $80,000, that still re­quires more than 250,000 peo­ple. So there is still scope for in­creas­ing the num­ber of em­ploy­ees, just not as rapidly as be­fore. When it comes to the jobs that AI dis­places; those are the jobs of yes­ter­day. AI cre­ates op­por­tu­ni­ties as well. But the point you make about costs is in­cred­i­bly im­por­tant. We have had our tra­di­tional busi­ness mod­els—which, iron­i­cally, are cost-driven—be­com­ing a vic­tim of the cost pres­sure. We can­not cut our way to suc­cess. The need is to de­velop a cul­ture that is driven by in­no­va­tion, rather than by costs. And peo­ple are re­warded for that.

Q.And what will it take to achieve that?

A.You asked ear­lier about why we are not in­no­va­tors. The truth is, we were mostly rent­ing out our ideas; we were not mon­etis­ing their in­no­va­tion, we were rent­ing out the per­sons them­selves. And that will con­tinue to be the case for the im­me­di­ate fu­ture. How­ever, I be­lieve this is not the model that will help us sur­vive in the long run. We have to de­velop a cul­ture of in­no­va­tion, and move away from a cul­ture of cost. From a mind­set where we de­liver some­thing be­cause we are cheaper than the other guy, we have to cul­ti­vate a mind­set where we de­liver some­thing be­cause we do it bet­ter than any­one else. Be­cause we de­liver value and find in­no­va­tion in things in a way that no­body else can. This is what has to be done. And we have to de­velop the skills needed for in­no­va­tion in a mas­sive way. That is our fu­ture. In my case, with In­fosys, we are a young com­pany. We don’t have the bur­den of a man­u­fac­tur­ing econ­omy; we are a knowl­edge-ori­ented econ­omy. We are also a deeply ed­u­ca­tion-ori­ented cul­ture, so I think if we are able to re­di­rect our en­ergy in these di­rec­tions—to­wards in­no­va­tion, to­wards ac­quir­ing skills of the fu­ture—then the sky is the limit.

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