Probability, Succession Plan and Ashok Vemuri

Ashok Vemuri was a worried man, he was thinking about return of his mentor Narayan Murthy (along with his son Rohan Murthy) to Infosys. He was also thinking about call from Russell Reynolds Associates, an executive search firm.

Should he stay back with Infosys and try his luck (two of his colleagues B.G Srinivas and V Balakrishnan were also in race to succeed current CEO, S.D Shibulal, who retires in 2015) or should he take offer of CEO’s position at iGATE?

ashok vemuri

He knew iGATE quite well. Relaxing in his chair, he started thinking…

Credit of starting IT revolution in India largely goes to 3 MIT graduates- Narendra Patni, F.C. Kohli and Lalit Kanodia. Narendra Patni started Patni Computers, Lalit Kanodia started Datamatics, while F.C. Kohli played important role in foundation and growth of TCS.

nk_patni

Narendra Patni hired a General Manager called Narayan Murthy for his organisation. Narayan Murthy along with his six colleagues from Patni, quit Patni to start his own venture, an organisation called Infosys.

narayan murthy

Later another Murthy- Phaneesh Murthy- joined Infosys. Phaneesh’s growth in Infosys was rapid, but had to quit Infosys after he got involved in sexual harassment case. Phaneesh joined company called iGATE as CEO. Phaneesh was ambitious; he acquired Patni Computers which was almost three times bigger than iGATE. The merged entity now called iGATE, had turnover of $one billion (Infosys is $ 7 billion organisation). But before he could leverage the benefits of merger, Phaneesh got involved in another harassment case and had to leave iGATE.

phaneesh_murthy

Executive search firm Russell Reynolds Associates was given task of filling up the vacant position of CEO. Not an easy task, as iGATE had challenges of its own esp. debt of almost $700 million.
Apart from Ashok Vemuri, they had also rumoured to have approached Salil Parekh of Capgemini and ex COO of IPsoft Jeya Kumar (Jeya Kumar was CEO of Patni before acquisition by Phaneesh).

Ashok got up from his chair, and staring out of window he made decision. He decided to try for iGATE CEO’s position. While Salil Parekh was strong competitor, Jeya Kumar was hardly a competition and already a spent force.

iGATE offered Ashok Rs.19 crores, nearly 4 times more than his current salary of Rs. 4.91 crores. Having decided to take offer, all that remained was to inform Narayan Murthy about his decision to leave Infosys.

While Ashok was thinking about how to inform Narayan Murthy, he remembered about quantitative techniques he has learned during management program at IIM Ahmedabad.

Agner Krarup Erlang was a Danish mathematician, statistician and engineer who came up with queuing models. It deals with optimisation of length of queues, waiting period for customers etc.

While communicating about his decision, theory of queuing and probability proved useful. He told Narayan Murthy that with waiting period of 20 months and post that with probability of success at 33%, it made sense to join iGATE.

With his quitting, he improved chances of other two competitors- now their probability of succeeding is 50%!

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s