The ‘Exit’ing Culture at Infosys

The top management exodus at Infosys is the most visible specter of its kind in corporate India. Yet, NRN is unperturbed.

"There is absolutely no turmoil... barring some rare exceptions, let me assure you that nobody who was adding value to the company had to leave," Murthy said at an investor conference in February. The question is whether this holds true of people who left on their own. If yes, does it not mean that the twelve senior executives who include the likes of Ashok Vemuri, Basab Pradhan, V Balakrishnan, and BG Rao amongst others were not adding enough value to Infosys?

If people leave in droves, there is a reason to it. In fact, there could be many reasons and strong ones at that. For senior executives, ambition and hope are the big drivers of emotions, which lead them to succeed and excel. Ambition and hope seem to be at two ends of a spectrum, but when any one of them is challenged, it creates an ‘i-don't-belong-here-anymore' kind of sentiment. The stimulus is almost always internal. Infosys' smart army of sales honchos jumped ship when policies and practices that seemed to work as disincentive to sales performance were brought to play.

People also leave when they feel that their dear company is on a slippery path or at a precipitous edge. People leave when it becomes very clear that they are not going to the top job or that even if they get the top job, it wouldn't be as exciting or rewarding as it seems now. A new leader sends out many penetrating signals, but the message within is more important than the ones in loudly-spoken manifestos. If these signals and the message don't resonate positively, exiting is the most proactive course of action.

Other such examples are too rare to find and no one situation matches exactly the other. Yet, I may point out two within the IT industry in recent memory. Around 2007, SAP had people like Shai Agassi, John Schwarz, Erwin Gunst, Leo Apotheker to name a few exit the company fairly rapidly. Similarly, Cisco had senior talent like Jayshree Ullal, Tony Bates, Mike Volpi, Charles Giancarlo, Dan Scheinman, Nawaf Bitar, Debra Chrapaty leave the company to take up meatier roles in competing companies or new age ventures. Whether these exits made any difference to the respective companies' leadership is open to discussion. But both SAP and Cisco were jolted from their position as the dominant player in the respective markets.

Twelve senior executives and around 500 mid-level managers who were part of the Infosys' story of success will no longer contribute to that story. For a company that prides on having pioneered human capital accounting practices, I wonder how much were the exits worth. Surely, someday it will show up on the company's balance sheets.