Under extreme circumstances, when India's No.2 IT services firm Infosys Ltd is losing market share to the like of TCS and HCL, with disappointing profit margins and thumps down from stock market, the company found no alternative but to recall its co-founder N.R. Narayana Murthy, 66, as executive chairman for next five years.
Murthy himself finds this latest development “sudden and unexpected” but accepts this responsibility as he considers Infosys as his middle child. Infosys is the company, which he co-founded some 32 years back and it's been 11 years since he handed the management of Infosys Technologies to Nandan Nilekani (CEO from 2002 to 2007), and seven years since he had an executive role.
With this, he replaced KV Kamath who has been re-designated as "lead" independent director. In addition, the company also appoints Murthy's son Rohan Murthy as his executive assistant. Recently, as reported by some of the leading dailies, Infosys had begun the search for the successor of current CEO S.D. Shibulal whose terms ends in March, 2015.
In the last one year, the company has lost its market share to TCS and the second rank to Cognizant. According to many analysts, the latest development is to boost the morale of investors, to infuse new vigour among employees and to pass a right message to the market.
In most case, Infosys, as many believe, wanted its most charismatic leader back to business. In fact, the company had option to appoint anyone from outside or give a chance to someone from inside, but this certainly would have sent a wrong signal to the market about the current leadership.
As one of top most IT companies in the world, Infosys still considered as the preferred brand among clients. It has a massive number of well-trained young software engineers who have contributed company's growth with deep understanding of ever changing market scenario and changing technologies.
Murthy's entrance to rescue Infosys has so far got positive feedback from its employees. On hearing the news, Deepak Bansal who is working as software testing engineer in Infosys Mysore has expressed his happiness to work under the leadership of such a magnetic personality who has put India in the global software map.
This is not the first time that a leading company has brought back its senior or retired executive into business. There are many examples, including Steve Jobs for Apple, Michael Dell for Dell Inc. Howard Schultz for Starbucks and Larry Page for Google. The result may or may not have been favourable for the companies, but this has been a trend to recall a senior but successful executive when any company's performance comes under scrutiny.
As Kamath said on his company's decision: ‘The board has taken this step keeping in mind the present challenges that the technology industry and Infosys faces and also in the interest of stakeholders who asked for strengthening the executive leadership during this challenging time.' Nevertheless, the IT giant has to do a lot before it regain its market share.
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