Buggins’ turn and succession planning at Infosys

In my last blog on Ashok Vemuri, I had talked about probability of becoming next CEO going up for remaining two contenders- BG Srinivas and V. Balakrishanan. A lot of water has flowed under the bridge since then.

V.Balakrishana left Infosys to fight 2014 general elections (he lost, so did his ex-boss Nandan Nilekani). After V. Balakrishnan quit BG Srinivas and U.B. Pravin Rao were made joint presidents, with one of them tipped as likely successor to CEO Shibulal.

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So far so good, but then Executive Chairman Narayana Murthy took some strange decisions.
He hired Development Dimensions International (DDI) to map competence of internal candidates for the post of CEO, at the same time hired Egon Zehnder to look for external candidates. DDI has profiled some 8-10 internal candidates while Egon Zehnder has shortlisted some 3-4 candidates.

When almost 12-15 candidates in fray it made no sense for BG Srinivas to stay in Infosys esp. when his subordinates were also getting considered for the post. He has decided to quit and will be joining Hong Kong based PCCW.

 

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With top 3 contenders gone, it is likely that Infosys will look for external candidate.

Infosys’s failure to identify internal candidate has lot to do with policy of reserving the CEO’s post for founders for almost 30 years. Narayana Murthy, Nandan Nilekani, Gopalakrishanan and Shibulal have all been founder members. Whenever the position of CEO was vacant, it was filled by Buggins’ turn– seniority was given importance over merit.

Then HR Head of Infosys Mohandas Pai was critical of Buggins’ turn when he lost race for CEO’s position to Shibulal. Narayana Murthy defended selection by saying that it was as per HR policy.

 

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“If there are two people who are as capable as each other, how will you choose one of them? Both are equal in all respects. So, you have to choose the experienced one, and that’s what we have done. … we have clearly said that with other things remaining equal, the person who has had a longer tenure will be promoted ”.
– Narayana Murthy on selecting Shibulal over Mohandas Pai.

All we can say is had evaluation system been stringent like those in GE or Hindustan Unilever, they would have never reached conclusion that both were equally capable.

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