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This story is from June 2, 2013

Narayana Murthy & Son comes to rescue of faltering Infosys

Closely watched along with Narayana Murthy’s return will be the role played by his son, the Harvard-trained computer scientist Rohan Murty.
Narayana Murthy & Son comes to rescue of faltering Infosys
BANGALORE: In a dramatic development, N R Narayana Murthy, 67, on Saturday returned to the executive leadership of the $7.4-billion Infosys, two years after retiring from the iconic company he had founded. Murthy was forced to rejoin because Infosys, once the bellwether of the I-T industry, is currently struggling, with its revenues falling behind its peers such as TCS, Cognizant and HCL in the past five years.

While Cognizant’s revenue was nearly $2 billion less than Infosys in 2008-09, it has now surpassed it. TCS’s revenues were $1.5 billion more than Infosys five years ago; today, the gap has widened to $4 billion. The slide is also said to have raised questions in a section of Infosys’s senior management about CEO S D Shibulal’s leadership and the Infy 3.0 strategy he unveiled with its focus on consulting and higher-end work.
Murthy is expected to re-work the strategy and look into aspects that need to be strengthened as well as abandoned. "Finally you need results," said Murthy, who owns a 5% stake in the company he had co-founded in 1981 with Rs 10,000 borrowed from his wife. He told reporters that he did not in his "wildest dream" imagine that he would be back in Infosys in an executive capacity when he walked out on August 20, 2011.
Murthy refused to spell out what exactly ails Infosys, merely saying, "I’ve been here only a few hours." But it’s learnt that his priority will be to stabilize Infosys through the transition to a new management team, mentor it during his five-year tenure, and then exit.
Closely watched along with Murthy’s return will be the role played by his son, the Harvard-trained computer scientist Rohan Murty. Rohan and another person from Catamaran — the family investment office — will form the core of Murthy’s office. Murthy sought to quell suggestions that Rohan, married to TVS heiress Lakshmi Venu, was being groomed to take on higher positions in the company.
"The quickest and best way of my being effective is by utilizing the competencies of a strong team of people that I have been interacting with in the last 2-3 years. One of them happens to be my son Rohan. The only role that Rohan has is to make me more effective," he said.

In a regulatory filing with the Bombay Stock Exchange (BSE), the company said outgoing chairman KV Kamath would be an independent director from Saturday.
Welcoming the move, Kamath said Murthy’s entrepreneurial and leadership record and the long experience he has had as a technology pioneer makes him eminently qualified to lead the company and provide strategic direction at this point in time.
Kamath speak:
K V Kamath, who took over as non-executive chairman in 2011 and now steps down from that post, said the board had unanimously invited Murthy to come in to lead the company.
The decision, he said, was driven by the challenges that both the industry and company were facing. “Given Murthy’s pioneering role in building this company and the tech industry in India, and given that his leadership is accepted all over the world, the board decided that at this crucial juncture we should invite him to be the executive chair,” Kamath said. He also said that company CEO S D Shibulal fully endorsed the decision. “I can never forget the comment he made. He told me ‘I am a soldier of Infosys and will continue to be one’.” Shibulal said Murthy was very well qualified to deal with the challenges. “I have interacted with Murthy for the last 32 years and I don’t have to rethink my interaction,” he said.
Nasscom: N R NarayanaMurthy is an iconic leader who has played a key role to shape the Indian technology industry and we welcome him in his role as executive chairman, Infosys. His guidance and strategic insights to Infosys as well as for the industry would be valuable as the industry focuses on its next phase of evolution and growth.
Subroto Bagchi, chairman, Mindtree: It is an act of great courage. Infosys will emerge stronger than before as NRN returns. While the company was hurting, pygmies were making wise comments; with the giant back, hopefully now they will mind their own business. Infosys must succeed because it is a national institution and not just a company.
Ashok Soota, executive chairman, Happiest Minds technologies: It’s an unusual move, but a good move nonetheless. Obviously there has been a drift for a while, and nobody but Murthy can revive the growth momentum, put a vision in place, and see what factors resulted in that drift, especially in the last three years.
KiranMazumdar-Shaw, CMD,Biocon: I think it was a very difficult decision for Murthy to make, after having stepped down from all executive functions two years ago. Having said that his coming back is a very welcome move.
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