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