Seen as a frontrunner to the CEO post, V Balakrishnan, director and former CFO of Infosys, has resigned, effective December 31, 2013. He speaks about the reasons behind the move, his future and the future of Infosys.
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Below is the verbatim transcript of his interview on CNBC-TV18
Q: What prompted you to take this move?
A: I have been thinking about it for sometime. I wanted to do something outside Infosys. I wanted to spend more time in the private equity space. Recently we have set up a fund which is awaiting Securities and Exchange Board of India (Sebi) approval. So, I want to do something in the private equity space. I have been thinking about it for sometime. I thought it is the right time to do that.
Q: This may be the right time from a personal point of view for you but this comes as the 8th in a string of senior management departures from Infosys. That in a sense is sending out a negative message for an organization that is undergoing a fairly serious transformation at this point in time. Did you or were you asked by the management to reconsider your exit at this point?
A: Any large company you will see some exits when changes happen. The beauty of Infosys atleast is that it has got good leadership bandwidth which can come and take that role and play. I don’t think leadership going out in Infosys is a big challenge.
Q: You were a contender for the top position in Infosys. Your name was on that list and so therefore this exit comes as a bit more of a setback, doesn’t it?
A: That is the making of the markets. That was never in my mind.
Q: There is a perception that has been built in over the last six months as we have seen several senior management people leave that this is connected in some way to the return of Mr Murthy. Are these changes being driven by Mr Murthy? Are these changes that don’t deal with the personal ambitions of all you senior management people who are leaving?
A: I think Murthy coming back is the best thing to happen for Infosys.
Q: Why would you leave the company at a time when the best thing that ever could happen to Infosys is happening to it?
A: Each one has got some liking to do in life. My liking is right now, trying to work with young entrepreneurs to build companies. I thought that is a much exciting space for me now.
Q: Is this something that you have been toying with ever since you moved away from this CFO position at Infosys?
A: Yes. That is what I am saying. I have been thinking about this for the last one year and I thought this is the right time for me to do this.
Q: Can you share with us what your future plans are going to be?
A: Right now it is more in the private equity space. We have set up a fund. I will be spending some time there. Slowly I want to expand more into more private equity funds and try to see how we can add value.
Q: You do not have plans of moving on to larger IT, may be Accenture or an IBM. They have been on the look out for executives. Any plans of moving on to another IT company at all within the space?
A: Right now nothing of this sort is in my mind.
Q: I want to understand if I am correct, over the last three to four months there have been concerns raised by clients and we have understood that from our sources as well that there have been concerns about attrition, about senior level exits, what really will you say to clients right now?
A: Any large company when it goes through a large transformation you will always see some exits, you can't avoid that. You have to see whether the company has got good management talent which will take the ball and run. Infosys has time and again demonstrated that it has got good leadership bandwidth which will come and take this space. So, I don’t think clients should be more worried about this.
Q: Have they been concerned about the recent exits and the attrition in the company currently?
A: I don’t think so. Even if they are concerned probably we will address that. I don’t think that is a big issue.
Q: Could it be that your private equity ambitions are sort of a transition ambition given that many senior executives at your level would have non-compete etc that don’t allow them to join a competing company immediately?
A: Right now, I don’t have any such thoughts. Right now I am spending more time in the private equity space.
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Q: When you communicated this decision to Mr Murthy was it a one shot communication or have you been talking to him about this exit for a period of time? What was his reaction? We all have great respect for Mr Murthy but ever since he has come back there have been a series of departures and I am sure that weighs heavily on Mr Murthy himself?
A: I have been talking to him since he came back into the board. He understands that. Everybody has got something to do in life and whatever exercise they have to do, he understands that. Ofcourse he did not want me to go but finally understood what I wanted to do.
Q: Would your departure have anything to do with the degree of discomfort with the inclusion of Rohan Murthy?
A: No. Murthy has clearly articulated what is Rohan's role. I don’t think anybody should be having any discomfort because of that.
Q: When so many senior people decide to quit in a short period of time there only a couple of ways to try and understand this, one, the changes that are taking place in the organization don’t meet their personal ambitions. They are uncomfortable about the changes or they don’t see any further scope in terms of personal ambitions in that organization because other people have been brought into positions they would like to occupy. Secondly, they are not happy with the top leadership. Why would 8 people leave within a span of 6-8 months just on the basis of we got better offers or we wanted to do something else?
A: That is more an external view. Each departure happened for different reasons. You can't link all those and come to a conclusion. I don’t think that is an internal view.
Q: If you were chairman of Infosys and you lost 8 of your top senior management people in the span of 6-8 months, is this a position you would continue to hold?
A: We also hired lot of people. People never come to know about it or write about that. People write about only exits.
Q: Did you feel sidelined at any point because of the return of Mr Murthy?
A: No. Nobody gets sidelined. I have a good relationship with Murthy.
Q: You don’t think this sends out a negative message to clients when so many senior management – I am not saying people are going to start pulling their business back from Infosys but Infosys is going through a difficult transformation at this point in time. This doesn’t help your case or Infosys' case when it goes out to pitch for bigger deals?
A: As I told you clients are not concerned. Even if they are concerned it has been properly addressed. So, I don’t think clients are worried about this. Any large company few exits will happen when there is a change we have to live with that reality and clients understand that.
Q: I want to understand there has been a concern and we have understood this from clients as well, we have understood this from people in the industry that old hands at Infosys are walking out. What then is left currently? Who are the people write now that are capable of running the show? Any CEO contenders that you can name for us?
A: Two days back I was at Infosys BPO. We gave mementos to some 30 people who have been with the company for more than 10 years. As you know BPO is only 11 years old. So, a lot of people, extraordinary people who have spent lot of time in the company are still there, it is not that everybody has gone out. So, it is more an outside view, it is not an internal view.
Q: You said that senior people have been hired. Could you tell us some of the senior management executives that have been hired, how many have been hired because the exits that have happened have not been at the mid level area, this has been senior exits – 7 if I am correct. Can you name some of the senior management positions that have been introduced in Infosys?
A: That you have to ask the company. They will give you a big list. We hire a lot of people, we can't remember each and every name.
Q: Can you help us understand whether Infosys is able to fill these vacancies from people within and who those people within could be or from people outside and who those people outside could be because these are vacancies that need to be filled?
A: The CEO change is going to happen somewhere in the beginning of 2015. The board is cognizant of it. They are looking at lot of candidates internally and they will come to a conclusion at the right time. You will know that. All I can say is Infosys has got good leadership talent, there is lot of leadership bandwidth which will take the flag and run. I don’t think external world should be concerned about it.
Q: How can you expect us not to be concerned or rather investors not to be concerned because you are the second CFO now, atleast former CFO who is leaving Infosys because personal ambitions are not being met within the company?
A: Everybody has the right to get concerned. I can only address their concerns, they have to get satisfied, I can't do beyond that.
Q: You mentioned we when you were talking about your private equity venture. Do you have partners in this? Could you take us through or talk to us a little bit more about what you intend to do in the future so that we are fully convinced that you left only because you want to be in PE and not because you don’t want to be in Infosys?
A: Four of us are joining and starting that fund. Mohandas Pai, me, Girish Paranjpe and Deepak Ghaisas. We are starting that fund. It is a Rs 100-125 crore fund. It will invest in small startup companies either as an angel funding or a first round kind of funding. We are waiting for Sebi's approval which should come in January or February.
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Q: What did Mohandas Pai have to say about your leaving Infosys to join him in this private equity fund?
A: I have not met him and told him about that. I will meet him and tell.
Q: He is a partner in the fund right? So, he would know that you would have to leave Infosys to be able to do this right?
A: He is a partner in my fund, not a partner in my life.
Q: What is the current sense within employees right now? Have you referred to your team, have you spoken to your team? A sense that we had got when Ashok Vemuri put in his papers and left for iGate several people we understand have left Infosys and joined iGate. Can we assume that you would possibly want to take your team along with you? Any specific people along with you?
A: No, we will never do all that. If people on their own join any company you can't stop them but that is unethical to do. I don’t think I will be doing that.
Q: How have employees reacted to your exit because you have played a senior mentor role for several people and I am talking about the mid management level as well, how have people reacted to this because the last time Ashok Vemuri put in his papers there was a lot of concerns amongst employees as well. Have you spoken to employees so far?
A: I have only spoken to some of my direct reports. They all understand what I am trying to do. They were disappointed but that is a way of life.
Q: I will reiterate a question I asked you on top; where and how do you see Infosys's transformation process progress from here onwards without some stalwarts like you and Vemuri and a bunch of others who left? How do you assess this transformation process and where it is in the cycle right now?
A: Organisation is always big. People come and go. Few leaders are very important but at the same time there is enough leadership talent within Infosys to take it to the next level.
Q: I am not only taking about exits I am also talking about the fact that there is an overhauling of Infosys going on as we speak and you would be privy to that overhauling so I am just asking you to assess for me now that you have some degree of objectivity on where you see Infosys in that process of transforming itself and maybe attempting to return to leadership position?
A: The whole process is done because we want to return to the leadership position. So, if we are to attain that they will always be some collateral damage which we have to live with otherwise you can never go there. So, Infosys is doing all the right moves, making the right changes. So, it will all see fruits in the years to come. There is no point in getting worried about that because then you can't make changes.
Q: What is this collateral damage that you are referring to?
A: Some people will always leave when you make a change; you have to live with that.
Q: And those people don't include you because you are leaving for other reasons?
A: Everybody has left for different reasons. When the world outside sees it they link it together. That is why I am saying as external view. However, all I am saying is you have to assume when you make a large change same people will leave. You have to live with that and move on.
Q: How is that change working out for Infosys? Where in that cycle is Infosys is the question I am trying to put to you?
A: Murthy already said that is a three years journey and he has started that process. He came into the board six months back so you have to give him some time.
Q: You don't think that Infosys's credibility as a top IT company or its brand or its business will suffer because of these big top management exits that we have seen?
A: I don't think so.
Q: Not even in the short-term?
A: I don't think so.
Q: Have you spoken to clients so far and what they read of this?
A: Clients understand this. The communication would have gone by now. Clients understand that.
Q: At a time when clients are restructuring spends, are cutting down on spends they want familiar faces and that has been proven over the last six years within the IT sector. At all would this be a concern for the clients that you are talking to? Have they said anything specifically or rather what really have you said to them currently?
A: Clients always have multiple layers of relationship, it is not with one person. They always have multiple layers of relationship. So, that will continue. If somebody goes there are other people who can continue the relationship. So, I don't think that will get impacted because of all this.
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