Will Salil Parekh meet with the same fate as Vishal Sikka?

When he stepped down in 2007 as Infosys CEO, it is very unlikely that Nandan Nilekani - despite his famous leadership skills and exemplary vision– could have envisioned where Infosys and he would land in 2017. THE gold standard of corporate governance, darling of the bourses, apostle of compassionate capitalism and the organization feared and respected in equal measure for its iconic founders and leadership foresight in 2007 is known just ten years later for exactly the opposite reasons – allegations of corporate misgovernance, disengaged staff, loss of IT bellwether tag, battered stock, leadership better known for washing dirty linen in public and worst of all, the unthinkable fall from grace of its once iconic founder. In fact, a few months ago, the Infosys drama had become so riveting that Nilekani – forced to return to Infosys in 2017 as its Chairman to fix the mess - aptly described it as reaching “reality TV” like proportions. 

Salil Parekh’s selection as CEO at this crucial juncture presents Infosys with the much-needed opportunity to shed its “reality TV” tag and get to some serious business. But will that happen?

The CEO selection

Most CEO searches focus heavily on prospective candidate’s track record and results – almost to the point of exclusion of softer aspects. The Sikka episode reveals the pitfalls of this approach. Although no two CEO searches are precisely the same, the model below provides a framework for understanding the CEO fitment.

Candidates with the right foundation of culture fitment and competence are more likely to execute with desired levels of emotional intelligence leading to the desired results.

 Lets analyze each area with a focus on Parekh and Sikka.

 Culture fitment: Getting the culture fitment right is the fundamental requirement for any role to succeed – more so that of a CEO.

It is at this basic step that Infosys failed in its last CEO search. With all predecessors to Sikka being promoters who shaped - and were shaped by - its culture, Infosys never had to face the issue of cultural misfits. With a single-minded focus on getting a technology stalwart as its CEO, Infosys board miscalculated the serious consequences of having a culture misfit on board. Sikka – a maverick, outspoken, technology stalwart with a gargantuan ego - was hopelessly out of sync with the more sober, hierarchical, down-to-earth, “compassionate-capitalism” values-driven expectation of its founders. Sikka was powered by intellect and driven by values – his own, not Infosys’s values. It is unlikely that Sikka would have ticked too many boxes if the board had conducted a culture fitment analysis on him at the hiring stage.

With Parekh, the board – and promoters – seem to have gotten the equation a lot better. Known for his Indian pedigree, humility, integrative approach to people management and results-driven approach sans the Sikka era flashiness and tall talk, Parekh’s willingness to shift to the epicenter of action – Bangalore – has sent all the right signals about his culture fitment so far.

Emotional Intelligence:

Every organization needs emotionally intelligent leaders, but Infosys is a different animal. The recent Sikka episode proves that the promoters – particularly Murthy – remain emotionally invested in their baby and - for all practical reasons – are likely to call the shots in the future. Infosys CEO needs to display a high level of Emotional Intelligence while maintaining a fine balance between tactfully disagreeing with Murthy’s perspective and capitulating altogether. Sikka – expecting a 100% free hand in the running of the organization – clearly struggled here. 

From the current analysis, Parekh appears to be a low-key individual. His LinkedIn profile states that he is a “business manager” (that’s a tad humble for a deputy CEO of a Euro 12 billion organization unless Parekh is inactive on social media) and there is very little press coverage on Parekh despite his past accomplishments – radically opposite to Sikka, who basked in limelight. From the limited industry information on Parekh, he appears amenable enough to appeal to a strong personality like Murthy.

At a NASSCOM presentation, Parekh had outlined "Look outside, not inside -- spend more time in the market with clients" as one of his strategic mantras. That line is easier said than done at Infosys. Whether Parekh uses his EQ wisely to strike the right balance between external clients and internal stakeholders – promoters and Murthy – will determine if he succeeds in following his own mantra or is forced to do the opposite.

Optimism:

Robotics and automation have changed technology landscape to the point of significant job losses. In November, there were reports that at Infosys, several employees in job level 6 and above (group project managers, project managers, senior architects and higher levels) are expected to be asked to leave. This isn’t great news – some laid off employees in technology industry went to the extent of setting up unions to raise their voices. 

To sustain such vicissitudes of business life and the loneliness that is a given in top roles, every CEO needs a dose of optimism that comes from trusted relations and cultivating the support of an inside mentor. With a base in Silicon Valley miles away from promoters and head office, the headstrong Sikka missed these relations and the vital mentorship of promoters. The resulting emotional turmoil took its toll on him.

The board seems to taken just the right step by asking Parekh to shift to Bangalore. How Parekh uses the opportunity of proximity to promoters – whether Parekh converts this into an opportunity for mentorship while still standing firm on his views or becomes a spineless remote-controlled CEO - will be the true test of his soft skills

Competence, Execution and Obstacles:

The track record of Parekh and Sikka places them at the opposite ends of the expertise and execution spectrum. Sikka was a technology visionary and product evangelist but had limited experience in sales strategy or in negotiating outsourcing deals, whereas Parekh is an expert at sitting across table with Fortune 50 CEO’s negotiating multi-million deals but isn’t known for his technology vision.

While there is no doubt that Parekh - with his vast services business experience - will stabilize the Infosys ship in tested waters of outsourcing services, there is limited information in public domain - aside of his Sogeti work experience - that proves he will successfully steer the ship in unchartered waters – like setting a bold technology vision or adapting the organization to fast-changing technology landscape comprising robotics, IoT and AI. With Infosys lacking industry peers in shift to these newer more-profitable growth drivers, this skill will be vital for Parekh’s success. 

With the technology landscape changing fast, the job of a CEO at any technology organization and at Infosys is as much about the traditional executive leadership as about technology vision: the right combination of CEO and CTO skills is the key. While Sikka was the latter, Parekh appears to be excel in the former.

The verdict?

From the information available in the public domain, Parekh wins the soft skills battle hands-down with the right mix of humility and cultural fitment. He will also bring the much-needed stability and sustainability in the near term especially when growth at Infosys hasn’t yet stabilized. 

This is a good beginning, unfortunately well-begun is only half-done. If sustainability and focus on traditional headcount-driven revenue generation models was the only need, an internal candidate without the culture fitment Damocles-sword of Parekh would have worked just fine for Infosys.

Parekh will be a near-term sustainer but whether he will the much-needed long-term industry disruptor is the million (perhaps billion) dollar question. The answer to that question will determine whether Infosys' bet of playing it safe with Parekh will turn out safe and successful or safe and sorry.

Sikka lost out for being CTO - not CEO - material, Parekh should not lose out for being the opposite. 

Raja Jamalamadaka is a LinkedIn featured top blogger, technology veteran, an entrepreneur, mentor to startup founders, coach to senior industry executives and a board director. He also serves on several CEO search panels. His primary area of research is neurosciences - functioning of the brain and its links to leadership attributes like productivity, confidence, positivity, decision making and organization culture. If you liked this article, you might like some of his earlier articles here:

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