CHAPTER-1

PURPOSE OF THE STUDY

OBJECTIVE:-

There are certain sequentially laid down objectives stated as under:-

To understand the managerial practices of Infosys

To understand the leadership style of Infosys

To understand the contribution of managerial practices and leadership styles to

successes of Infosys.

To collect the feedback and perception from the retailer toward various Infosys

policies such as pricing, distribution, advertisement, product/brand preference

amongst the channel.

SCOPE OF THE STUDY:-

Company’s brand as an employer.

Early opportunities for growth.

High degree of autonomy

Value compatibility.

Innovative people program

CHAPTER 2

INTRODUCTION

ABOUT THE COMPANY:

Infosys Limited formerly Infosys Technologies Limited is an Indian provider of

business consulting, technology, engineering and outsourcing services. It is a public ltd

company and It’s headquartered in Bangalore, India. It has offices in 30 countries and

development centers in India, US, China, Australia, UK, Canada, Japan and many other

countries. (Worldwide)

Infosys was co-founded in 1981 by N. R. Narayana Murthy, Nandan Nilekani, N. S.

Raghavan, S. Gopalakrishnan, S. D. Shibulal, K Dinesh and Ashok Arora after they

resigned from Patni Computer Systems. Today, Infosys is a global leader in the "Next

Generation" of IT and consulting with revenues of billion.

Infosys ranked among the most innovative companies in a Forbes survey, leading

technology companies in a report by The Boston Consulting Group and top ten green

companies in Newsweek's Green Rankings

Infosys was voted India's most admired company in The Wall Street Journal Asia 200

every year since 2000. The corporate governance practices were recognized by The Asset

Platinum award and the IR Global Rankings.

Infosys was also ranked as the 15th most trusted brand in India by The Brand Trust

Report

HISTORY

Infosys was founded on July 2,1981 in Pune by N. R. Narayana Murthyand six

others: Nandan Nilekani,N. S. Raghavan, Kris Gopalakrishnan,S. D. Shibulal, K. Dinesh

and Ashok Arora, with N. S. Raghavan officially being the first employeeof the

company. Murthy started the company by borrowingINR 10,000 from his wife Sudha

Murthy. The company was incorporated as "Infosys Consultants PvtLtd.", with

Raghavan's house in Model Colony, north-central Pune as the registered office. In1982,

Infosys opened an office in Bangalore which soon became its Headquarters.

Headquarters & Branches

Its corporate Headquarter is situated in Bangalore.

Branches in India

Bhubaneshwar Chennai Jaipur Mysore Chandigarh Mangalore

Hyderabad Mumbai Thiruvananthapuram New Delhi Gurgaon Pune

Branches in Abroad

America Australia Europe Middle East Africa

Overall Number of Employees

Infosys and its subsidiaries have 151,151 employees as on June 30, 2012.

CHAPTER 3

COMPANY PROFILE

Organization structure

Members of the Board

Srinath BatniDirector and Head,Delivery Excellence

S.D. ShibulalChief Operating

Officer and Memberof the Board

S.GopalakrishnanChief Executive

Officer and ManagingDirector

T.V. Mohandas Pai Director and Head,

Finacle, Admin,Human Resources,Infosys Leadership

Institute andEducation and

Research

K.DineshDirector and Head,

Communication Design Group,

Information Systems and Quality and Productivity

N.R.NarayanaMurthy

Chairman of the Boardand Chief Mentor

Independent Directors

Rama BijapurkarIndependent Director

David L.BoylesIndependent Director

Claude SmadjaIndependent Director

Dr.Omkar GoswamiIndependent Director

Deepak M. SatwalekarLead Independent

Director

K.V. KamathIndependent Director

Sridar IyengarIndependent Director

Dr.Marti G.Subrahmanyam

Independent Director

Jeffrey Sean LehmanIndependent Director

Business and Department Heads

V. BalakrishnanChief Financial Officer, Infosys Technologies

Haragopal MangipudiVice President and Head,

Finacle, Infosys Technologies

Sridhar MarriVice President,

Communication Design Group, Infosys Technologies

Subhash DharSenior Vice President and

Head, Global Sales, Alliances and Marketing

Head, Communications, Media and Entertainment, Infosys

TechnologiesExecutive Council Member

Satyendra KumarSenior Vice President, Quality,

Tools and Software Reuse, Infosys Technologies

Srikantan MoorthyVice President and Head, Education and Research,

Infosys Technologies

B.G. SrinivasSenior Vice President,

Manufacturing; Product Engineering; Product Lifecycle

and Engineering Solutions, Infosys Technologies

Executive Council Member

Jackie KorhonenManaging Director and Chief

Executive Officer, Infosys Technologies, Australia

K. Murali KrishnaVice President, Computers and Communications Department,

Infosys Technologies

Ashok VemuriSenior Vice President and Global Head, Banking and Capital Markets; Strategic Global Sourcing, Infosys

TechnologiesExecutive Council Member

Ramadas Kamath U.Senior Vice President,

Administration,Commercial Facilities,

Infrastructure and Security, Infosys Technologies

Raj JoshiDirector, Infosys Consulting

Amitabh ChaudhryChief Executive Officer and Managing Director, Infosys

BPOHead, Independent Validation

Solutions, Infosys Technologies

Binod Hampapur RangadoreSenior Vice President and

Head, India Business, Infosys Technologies

Ritesh IdnaniVice President and Head,

Global Sales and Marketing, Infosys BPO

M.D. RanganathChief Risk Officer, Infosys

Technologies

Subrahmanyam GoparajuVice President and Head, Software Engineering and

Technology Labs (SETLabs), Infosys Technologies

Nandita GurjarSenior Vice President and

Group Head, Human Resources, Infosys

Technologies

Prabhakar Devdas MallyaVice President and Head,

Security Audit and Architecture, Infosys

Technologies

Girish G VaidyaSenior Vice President and Head, Infosys Leadership

Institute

Dheeshjith V.G.Head, New Markets and

Services, Infosys TechnologiesMember of the Board, Infosys Australia and Infosys China

Stephen R. PrattCEO and Managing Director,

Infosys ConsultingHead, Consulting Solutions,

Infosys Technologies

Suryaprakash KVice President, Information

Systems, Infosys Technologies

Sanjay PurohitVice President and Head, Corporate Planning and

Business Assurance, Infosys Technologies

Pravin RaoSenior Vice President, Retail, Consumer Packaged Goods, Logistics and Infrastructure

Management Services, Infosys Technologies

Director, Infosys Australia

Eric PaternosterSenior Vice President and

Head, Insurance, Healthcare and Life Sciences, Infosys

TechnologiesDirector, Infosys BPO

Director, Infosys Technologies, Sweden

Prasad ThrikutamSenior Vice President and Head, Energy, Utilities and

Services, Infosys TechnologiesDirector, Infosys China

Our Vision, Mission and Values

Vision

"We will be a globally respected corporation."

Mission

"Strategic Partnerships for Building Tomorrow’s Enterprise."

Values

we believe that the softest pillow is a clear conscience. The values that drive us

underscore our commitment to:

CLIFE

Client Value: To surpass client expectations consistently

Leadership by Example: To set standards in our business and transactions and be an

exemplar for the industry and ourselves

Integrity and Transparency: To be ethical, sincere and open in all our transactions

Fairness: To be objective and transaction-oriented, and thereby earn trust and respect

Excellence: To strive relentlessly, constantly improve ourselves, our teams, our services

and products to become the best

Product & Service Offerings

Products designed by Infosys

Infosys has designed and developed products across industries. Such as:

Aerospace Design of A380 Inboard Fixed Trailing Edge

Design of Fuselage Frame Installations Design of Nose Landing Gears Doors and associated mechanism elements Design of Floor panels Complex composite and metallic structures Knowledge-based engineering

Automotive

Seating system design Door and Pillar trims Instrument floor consoles Overhead systems Model for Combustion Pressure inside Engine Test Automation for Dashboard SW Embedded control development of Electro Hydraulic Breaking, Adaptive Cruise Control

and Fuel Injection system Design and development of software in Antilock Breaking Systems Body control module Platform Porting and Optimization

Business Software & Enterprise Products

Enhancement of Business Intelligence Product Development of Retail server product Development of Enterprises Integration platform components Design and development of Internet security product suite Development of leading MNP and LNP solutions

Computing Peripherals & Office Automation

Product development of high-speed label printer, host system drivers and middleware

components Design and development of device drivers, core printer controller firmware, testing, roll-

out and support at sites for pilot installations Solution development for POS product vendor

Consumer Electronics, Mobile & Handheld Segment

Design and development of an interactive TV application for a European cable service

provider Development of an embedded multimedia framework and audio/video components for

various platforms and operating systems Development of next generation handheld scanners that integrate with web applications

in near real-time for a US package delivery giant.

Digital Media Technologies

Digital media products in broadcasting, distribution and play out Set-top box development and integrated DTV solutions Network and Element Management solutions for telecom and data communication

products Product services in 2G, 2.5G and 3G services IPTV Solutions including solutions with Microsoft's IPTV Platform

Discrete manufacturing

Electric Injection Molding machines Re-engineering for improved efficiency of Air conditioning compressor KBE for Optimization and Automation of Design of Oil Well Screens Hydraulic systems for Industrial machinery Mechanism Synthesis, Analysis & Optimization CFD analysis for Gas turbines Sizing and Selection Machine Elements Next generation HMI for power plant SCADA

Energy & Utilities

Equipment sizing and selection Effluent treatment system layout Piping analysis and drawings Oil Well Monitoring system Implementation of advanced process control in crude line refinery

Hardware

Professional Video Deck for real-time video and audio editing Reference Platform for High End Cell phone

Processor Board redesign for RoHS compatibility keeping the old form factor, and

minimizing software impact Optical Channel Monitor using DSP for control of tunable optical filter, piezo-electric

sensors and signal processing Oil Well Monitoring system to compute oil flow rates, bulk velocity, and measurement of

pressure and temperature; based on industrial PC running Windows NT

Medical Devices

New software products in the Patient Tracking and Health Information Management

areas Web-enablement of payor product suite including sustenance and maintenance End-to-end product development for respiratory devices End-to-end development of comprehensive healthcare monitoring applications Innovation in all aspects of medical image-analysis platform and biochemical- markers in

drug development for a CRO New product development, regulatory testing and support of several medical devices

Networking & Communications

Development of a WLAN switch for a leading networking company Development of VOIP calls manager, Media gateway and Softswitch Complete product ownership of a leading enterprise L2-L7 switch Development of a leading DSLAM switch Development of EMS & NMS systems for wireless and optical networks

Product Development (Hardware & Software)

Product development of digital video processing card Development of key mobile phone components including MMI modules, entertainment

modules, Codecs, etc.

Semiconductors, Scientific & Industrial Equipment

Design of reservoir monitoring system Development of silicon wafer inspection solution Development of monitoring solutions for chemical processing industry Development and sustenance of defect tracking and diagnostic systems for railway tracks

Storage & Services Segment Solutions

Development of ISCSI host and target modules & SCSI drivers Development of performance tools for disk mirroring Development of a NMS configurator for FC-SAN switch Development of Recovery & Storage manager Re-engineering of multi platform space manager

SWOT ANALYSIS

Its stand for:S : STREGTHW : WEAKNESSO : OPPORTUNITYT : THREATS

Strengths

Since the company is based in India its competitive advantage is enhanced. The Indian economy, despite weak economic indicators such as relatively high rates of inflation, has low labor costs. The workforce has relatively high skills levels in Information Technology. Couple these two elementstogether and you have an operational basis that offers low-cost based, highly skilled competitive advantage. Trained Indian personnel often speak very good English and are sensitive to Western culture, underpinned by India's colonial past.

Infosys is in a strong financial position. The business turned over more than $4 billion in 2008. This means that it has the capital to expand, and also the basis to leverage potential investors.

The company has bases in 44 global development centres, most of which are located in India, although the company has offices in many developed and developing nations. This means not only that Infosys is becoming a global brand but also that it has the capability to support the global operations of multinational clients.

Weaknesses

Infosys on occasion struggles in the US markets, and has particular problems in securing United States Federal Government contracts in North America. Since these contracts are highly profitable and tend to run for long periods of time, Infosys is missing out on lucrative business. Added to this is the fact that its competitors do well in terms of securing the same Federal business (and one should also take into account that many of its competitors are domiciled in the US and there could be political pressure on the US Government to award contracts to domestic organizations).

Despite being a huge IT company in relation to its Indian competitors, Infosys is much smaller than its global competitors. As discussed above, Infosys generated $4 billion in 2008, which is relatively low in comparison with large global competitors such as Hewlett-Packard ($91 billion), IBM ($91 billion), EDS ($21 billion) and Accenture ($18 billion).

It is sometimes argued that Infosys is weaker when it comes to high-end management consultancy, since it tends to work at the level of operational value creation. Competitors such as IBM and Accenture tend to dominate this space.

Opportunities

At a time of recession in the global economy, it may appear that some companies will reduce take up of services that Infosys offers. However, in tough times clients tend to focus upon cost reduction and outsourcing - with are strategies that Infosys offers. So hard times could be profitable for Infosys.

There is a new and emerging market in China as the country undergoes a huge industrial revolution.

The strategic alliance between Infosys and Schlumberger gives the IT company access to lucrative business in the gas and oil industries.

There has been a trend over recent years for European and North American companies to base some or all of their operation in India. This is called an offshore service. Essentially there is a seamless link between domestic operations and services hosted in India. Examples include telecommunications companies such as British Telecom and banks such as HSBC that have customer service and support centres based in India. Think about the times that you have made calls to a support line to find that the adviser is in Mumbai or Bangalore and not in your home market.

Threats

India is not the only country that is undergoing rapid industrial expansion. Competitors may come from countries such as China or Korea where there are large pools of low-cost labor, and developing educational infrastructures such as universities and technology colleges.

Customers may switch to other offshore service companies in other countries such as China or Korea.

Other global players have realised that India has the benefit of low-cost, highly-skilled labor that often speaks English and is culturally sensitive to Western practices. As with all global IT players, Infosys has to compete for skilled labor and this may have the effect of driving up wage levels, and making it more difficult to recruit and retain staff.

COMPETITOR INFORMATION

Competitor Company Name

Last Price

Market Cap.(Rs. cr.)

SalesTurnover

Net Profit

Total Assets

TCS 1,209.15 236,657.38 38,858.54 10,975.98 24,952.86Infosys 2,168.65 124,530.49 31,254.00 8,470.00 29,757.00Wipro 345.90 85,127.31 32,053.60 4,685.10 29,595.70HCL Tech 480.80 33,333.07 6,794.48 1,198.28 6,889.31Oracle Finance 2,552.10 21,433.61 2,605.85 1,089.23 5,150.34Mahindra Satyam 82.50 9,708.81 5,964.21 1,202.80 3,423.10Tech Mahindra 717.90 9,162.09 5,243.02 460.55 4,569.80MphasiS 399.00 8,384.45 3,404.13 782.01 3,651.60Patni Computer 515.80 7,657.37 2,202.43 499.78 3,382.03Hex aware Tech 112.95 3,344.01 678.58 231.98 858.55Financial Tech 703.05 3,239.55 425.55 478.03 2,464.55Mind Tree 655.55 2,683.80 1,915.20 218.70 1,002.00InfoTech Enter 175.45 1,955.64 863.80 158.60 907.94NIIT Tech 286.10 1,714.50 827.46 113.12 641.85

Persistent 379.40 1,517.60 810.36 137.39 838.39Polaris Tech 113.80 1,359.56 1,749.91 183.41 917.11Rolta 73.25 1,181.74 1,448.75 495.37 3,686.97Zensar Tech 267.90 1,164.28 712.75 94.55 420.16Hinduja Venture 382.15 785.53 90.09 65.03 674.68Hinduja Global 360.15 741.52 631.35 62.62 702.40Tata Elxsi 222.45 692.67 514.85 33.95 223.23Geometric 86.45 542.23 269.73 41.20 207.46Infinite Comp 117.70 500.93 344.71 75.22 282.443i InfoTech 10.40 476.52 514.16 -326.15 2,918.71Mastek 124.25 361.40 363.97 -1.33 378.27Geodesic 39.55 356.51 717.48 162.39 1,583.39Sasken Comm. 129.15 337.11 388.09 37.91 407.66Ramco System 142.40 222.70 157.49 -2.96 325.66ICSA 15.30 73.65 968.22 -126.59 1,684.32Think soft 72.60 72.97 111.90 9.07 69.64Saksoft 68.40 69.53 41.54 3.48 84.17Blue Star Info 60.70 63.04 102.79 5.54 83.55Acropetal Tech 14.70 57.17 187.49 29.04 337.89Bodhtree Cons 19.05 0.00 - - -

Market share and growth rate

BSE

 Exchange: BSE  Start Date: 27-1-2012  End Date : 27-7-2012

NSE

 Exchange: NSE  Start Date: 27-1-2012  End Date : 27-7-2012

   infosys     Sensex

   infosys     NSE INDEX

16

Peer Group Comparison

Index BSE

Start Date: 27-1-2012 End Date : 27-7-2012

INDIA

Infosys Satyam Wipro TCS

        Index

BSE NSE Plot Index

17

Financial Highlights

Five Year Overview Indian GAAP (Consolidated Basis)

P & L Data (in Rs. Crore)

Particulars 2011-12 2010-11 2009-10 2008-09 2007-08

Revenue 33,734 27,501 22,742 21,693 16,692

Operating Profit (PBIDT) 10,723 8,968 7,861 7,195 5,238

Interest - - - - -

Depreciation & Amortization 928 854 905 761 598

Provision for taxation 3367 2,490 1,681 919 685

PAT from ordinary activities 8,332 6,835 6,218 5,988 4,659

Dividend (inc dividend tax) 3,137 4,013 1,674 1,573 2,225

 

P & L Ratios - Standalone

Particulars2011-

12 2010-

112009-

102008-

092007-

08

Export revenue/ Total revenue(%) 97.63 97.66 98.73 98.72 98.60

Software dev expenses/ Total revenue (%) 57.06 56.20 54.68 55.00 56.72

Gross Profit/ Total revenue (%) 42.94 43.80 45.32 45.00 43.28

Selling and marketing expenses/ Total revenue (%) 4.65 4.80 4.61 4.60 4.67

General and administration expenses/ Total revenue (%) 6.10 5.85 5.90 6.32 6.90

Aggregate employee costs/ Total revenue (%) 49.51 49.08 48.96 49.20 49.89

Operating profit (PBIDTA)/ Total revenue (%) 32.19 33.15 34.82 34.08 31.72

18

Operating profit after depreciation and interest/ Total revenue (%)

29.6530.23 31.00 30.66 28.23

Depreciation and amortization/Total revenue (%) 2.54 2.92 3.82 3.42 3.49

Tax/ Total revenue (%) 9.95 9.37 8.12 4.42 4.03

Profit after tax/ Total revenue (%) 25.55 25.38 27.22 28.72 28.57

ROCE (%) 40.87 37.58 37.25 42.90 41.38

Return on invested capital (%) 71.29 67.73 68.75 78.84 71.12

 

Growth Ratios - Standalone

Particulars 2011-12 2010-11 2009-10 2008-09 2007-08

Export revenue (%) 23.08 18.78 4.33 29.65 19.28

Total revenue (%) 23.12 20.08 4.32 29.50 19.01

Operating profit before depreciation (%) 19.57 14.32 6.57 39.15 17.47

Net profit before exceptional item (%) 23.95 11.95 (1.10) 30.18 18.35

EPS before exceptional item (%) 23.88 11.85 (1.26) 29.92 15.36

 

Balance Sheet Data - Standalone (in Rs. Crore)

Particulars 2011-12 2010-11 2009-10 2008-09 2007-08

Share Capital 287 287 287 286 286

Reserves & Surplus 29,470 24,214 21,749 17,523 13,204

Gross Block 7,173 6,934 6,357 5,986 4,508

Investments in liquid MFs and certificates of deposit 341 119 3,507 - -

19

Net Current Assets 22,428 17,541 13,131 12,288 8,496

Total assets 35,815 28,854 22,268 17,846 13,490

 

Balance Sheet Ratios - Standalone

Particulars 2011-12 2010-11 2009-10 2008-09 2007-08

Debt-equity ratio - - - - -

DSO (days) 63 61 56 61 72

Current ratio 4.72 5.05 4.46 4.72 3.28

Cash and equivalents/ Total assets (%) 55.56 52.97 66.48 57.65 57.00

Cash and equivalents/ Total revenue (%) 63.67 60.21 70.03 50.78 49.14

 

Per Share Data - Standalone

Particulars 2011-12 2010-11 2009-10 2008-09 2007-08

No. of shares for EPS 57,41,99,094 57,40,13,650 57,33,09,523 57,24,90,211 57,13,98,340

EPS from ordinary activities-Basic

139.07112.26 100.37 101.65 78.24

Dividend per share 37 30 25.00 23.50 13.25

Book Value 518.21 426.73 384.01 310.90 235.84

 

Per Share Ratios

Particulars 2011-12 2010-11 2009-10 2008-09 2007-08

20

Basic EPS from ordinary activities 139.07 112.26 100.37 101.65 78.24

Cash EPS from ordinary activities 152.90 125.14 114.46 113.77 87.80

Price/ earning, end of year 20.61 28.87 26.06 13.02 18.40

Price/ cash earnings, end of year 18.75 25.90 22.85 11.64 16.40

Price/ book value, end of year 5.53 7.60 6.81 4.26 6.11

PE/EPS growth 0.86 2.44 (20.68) 0.44 1.20

Dividend per share 37.00 30.00 25.00 23.50 13.25

Dividend (%) 740 600 500.00 470.00 265.00

CHAPTER 4

LEADERSHIP STYLE OF INFOSYS

21

Leadership style of Mr. N.R Narayan Murthy (Chairman & Founder)

Mr. Narayan Murthy was born in a middle class family in Siddalghat in Karnataka, His father inculcated importance of determination, discipline and good values. Since childhood he had a very good academic record.

At present he is the Chairman of Infosys. Present market capitalization of US$ 7.075 billion

Infosys started with Rs.10, 000.Mr. Narayan Murthy is influenced by Mahatma Gandhi who ‘walked his talk’ and demonstrated by, Example He says he wants to be a doer and respects people who do things, rather than just talk.

Some of the traits that differentiate him from others are:

•His Underlying principle: Is that, you undertake to do something you are confident of and have the capability to do it. This helps to lay the foundation to build a healthy relationship. He also believes that it is better to have a small part of a large, growing pie; than a large part of small shrinking one.

•Simple living-high thinking:A man who believes in ‘Simple living high thinking’. Even though he has a personal wealth of Rs. 2,500 crores, his lifestyle remains modest. He lives in a simple 2-bed room flat in Santacruz-Mumbai, India.

•Under-promising & Over-delivering:He has tremendous respect for people and sound philosophy of “under-promising & over delivering”. This helps him build a healthy long-term relationship with his colleagues, employees, family, friends, business associates and network of shareholders.

•Pioneer in HRM: Mr. Murthy says that his is an HR-based industry. Software is a knowledge business hence the focus is shifted to Brainware. It was he who started ESOP’s that is real distribution of wealth. Now it is very common in the industry to have ESOP’s but it has done wonders in Infosys. Thus Narayan Murthy is honestly awe-inspiring role model for professionals.

•Performance Oriented:He is a man who always measures performance against value. According to Murthy peoples performance in the knowledge industry is as valuable as gold. Thus by introducing ESOP’s he motivated his employees to work smart and hard.

•Strategy: (Customer is the King):Even though there is a lot of competition in the market he believes in one thing that is, being unique in the market place and making sure that you are the 1st mover.

22

Tap the need of the customer and give them more than they expect. Believes in giving value to the customer, being fair to people and transparency in working.Mr. Murthy says that “Growth comes from repeat business, repeat business comes from relationships, and relationships with customers are built on trust and trust is built by delivering quality products.

•Social being:He believes in putting the public good ahead of private good in every decision he makes. This differentiates the developed world from the developing world. Infosys practices its Social responsibility very well. Rehabilitation drive, literacy programme, donations etc are few ways in which he works for the society.

•Visionary: Though Infosys had so many professionals it did not venture into dotcom because of the vision of Mr. Narayan Murthy. This saved them from going down. The downfall of dotcoms has not affected his business much. Before starting Infosys this visionary got together with 6 professionals and wanted to start have India’s first software company of the professionals, for the professionals, by the professionals, and because of his farsightedness Infosys has come this far and proved to be a winner Thus Narayan Murthy is honestly awe-inspiring role model for the professionals.

Great companies can neither be built nor their greatness sustained without great leaders. The Reliance would not have been possible without a Dhirubhai, nor an Infosys without a Murthy.

But on August 20, 2006, at the age of 60, when N R Narayana Murthy retires as the

company's chief mentor and chairman, Infosys Technologies Ltd is not really chewing its

nails anxiously.

A succession plan has long been put in place and the smooth transition of authority and

leadership ensured. Murthy will also continue as the non-executive chairman of Infosys.

Of the seven original founders of Infosys, one of India's greatest corporate success stories,

only four will remain at the helm of affairs at the company from August 21: Nandan

Nilekani, S Gopalakrishnan, S D Shibulal, and K Dinesh. N S Raghavan retired in 1999,

while Ashok Arora had quit the firm much earlier, in 1989, to settle down in the United

States.

While Infosys continues to be in very good hands to take on any challenge, the IT major has

already identified a pool of 400 leaders who will steer it in the future. Especially, since the

founders of the company are in their early- or mid-fifties and due for retirement at 60.

23

So how does Infosys groom its future leaders? The process is long-drawn, meticulous, and in

consonance with the company's stated vision: 'To be a globally respected corporation that

provides best-of-breed business solutions, leveraging technology, delivered by best-in-class

people.'

This is where the Infosys Leadership Institute at the company's Mysore campus comes into

the picture. The 162,000 square feet structure, built at the cost of Rs 41.1 crore (Rs 411

million), is where the next generation of Infosys leaders is being primed.

Says S 'Kris' Gopalakrishnan, chief operating officer and deputy managing director, Infosys:

"The company has identified 400 'leaders' on the basis of several parameters: their

performance throughout their tenure with the company being a prime criterion for selection."

Gopalakrishnan, who will take over as the company's President, COO and Joint MD, on

August 21, spoke to rediff.com at Infosys' Mysore campus during its 25th anniversary

celebrations.

"Great performance puts employees on the fast track to growth within the organisation. As

does their commitment to surpassing customer expectations, setting standards in business and

transactions, and being an paradigm for the industry and the company," adds Gopalakrishnan.

"Creativity, devotion to being ethical and sincere in dealings, and the commitment to strive

relentlessly in pursuit of excellence are also major considerations while identifying future

leaders at Infosys," he points out.

The charismatic Narayana Murthy, speaking about his retirement, said: "I do feel sad, but am

happy too. It is a mixed feeling. It's like getting your daughter married: you are sad that she is

going away, but happy that there is someone younger -- and stronger -- to take care of her."

"The company is now in the hands of the youngsters. It is necessary to recognise the power of

youth and to nurture it. We must respect youth and create opportunities for them to

participate in everything. Which is why at every function, we have the youth participating. I

am about the past. I am gone. They are the future," says Murthy.

"The pool of 400 leaders," says Gopalakrishnan, "that Infosys has identified is from across

the globe and does not comprise Indians alone. It is in keeping with the company's multi-

national, multi-cultural image where excellence is the most important condition."

"There is a three-tier mentoring process at Infosys.

Tier-1 of the Infosys Management Council, which consists of the company's board of

directors, mentors Tier-2 leaders who in turn guide the Tier-3 group.

About 45 executives are a part of the company's Tier-1 of the management council. And each

of the leaders undergoes exhaustive and sustained training through the company's personal

development programme -- PDP.

24

Infosys training programmes are designed to enable company professionals enhance their

skill sets in tune with their respective roles," says Gopalakrishnan.

The management council is an advisory body that takes strategic decisions on the company's

businesses and was set up by N R Narayana Murthy, with the idea of building an outfit that is

built to last and is ably "geared to handle the uncertainties of a global market, the high and

lows of business cycles, and to power the company towards strong growth in the future," says

the Infosys COO.

When Murthy first set up the council, he found that the young go-getters in the company

were diffident to air their suggestions. It was then that the idea of an in-house leadership

institute was born. Encouragement from the top management has put an end to the fears of

transgressing the chain of command, and young Infoscions are now urged to give vent to their

creative talent and come up with their ideas and plans.

The faculty at the ILI has in a note spelt out the rationale behind the institute and charted out

the manner in which it operates.

The ILI was set up in 2001 to prepare Infosys to manage its exceptional growth; to prepare its

executives to handle the external and internal business environment; and through 'thought

leadership' create better customer value.

The leadership development programme at Infosys takes after similar processes followed by

many global mega corps. It has been refined to suit the particular needs of Infosys and is

termed as the 'nine pillars for leadership development in Infosys.'

These nine pillars form the backbone of the PDP and each leader can choose from these

pillars for personal development. "Depending upon the individual's need to grow and the

company's sensitivity to these needs, every (short-listed) individual is groomed to lead the

company in the future," Gopalakrishnan says.

The chosen few -- 400 of the 58,409 employees -- identified as 'high potential Infoscions'

undergo a three-year 'leadership journey' that includes training, actionising personal

development programme, interacting with other participants, understanding the company

better and resolving real business issues.

Leadership competencies

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The starting point for creating a robust leadership development process is defining leadership competencies. Leadership competencies exist in the context of the organisation’s vision and its core values. The soul of our leadership competencies rest in the vision statement of Infosys which reads: ‘We will be a globally respected corporation that provides best of breed business solutions, leveraging technology, delivered by best in class people.’ To achieve this vision, leadership competencies have been defined along four broad dimensions stated below:

Work People Technology Business

Each of these is further amplified into smaller operational elements, These competencies were identified through a process of debate and discussion with an initial competency set developed through benchmarking studies of formal leadership development systems

Across the world

'The Nine Pillars for Leadership development'

1. 360 degree feedback

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This is the mechanism through which the company gathers data about an individual's

performance and abilities. This information is collected from co-workers, including peers,

subordinates, managers and customers. Personal development plans are prepared on the basis

of this feedback. Then, each of these individuals is assigned an ILI faculty member to help

prepare the PDP and to follow it.

2. Development assignments

Identified high potential Infoscions are trained at various functions of the company through

job rotations and cross-functional assignments. This helps employees to acquire new

leadership skills outside their own areas of expertise and experience.

3. Infosys Culture workshops

These workshops are designed to fortify the Infosys culture amongst the participants, help

instill better communication skills through sustained interaction amongst themselves, and

identify with the values and processes involved in leadership development.

4. Development relationships

This includes one-on-one interaction in actual on-the-job work climate and leads to better

sharing of knowledge and camaraderie amongst individuals. Mentoring forms an integral part

of this exercise.

5. Leadership skills training

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The 'Leaders Teach Series' are workshops that the company's Tier-1 members, including

Narayana Murthy and Nandan Nilekani (CEO and MD), hold to acclimatise the next rung

with leadership roles and to groom them through their own rich experience.

6. Feedback intensive programmes

These are akin to 360 degree feedback, but based on formal and informal feedback from

employees that an individual interacts with.

7. Systemic process learning

This helps individuals to gain an overall view of the company and its diverse and complex

systems, business, operations and processes. It is a continuous process and helps improve the

individual and also the systems.

8. Action learning

This exercise constitutes solving real problems in real-time conditions, but as a team.

9. Community empathy

The company stresses the need to give back to society through involvement in various

developmental, educational and social causes. This programme helps nurture a social

conscience amongst its leaders.

"The last 25 years for Infosys have been successful. And we are ready for the future. Yes, our

growth rates will change, the business cycles will change, our ability to influence the business

environment will change, even our leaders will change. But what will not change in Infosys's

future is our ability to achieve profitable growth legally and ethically, our guiding set of

principles and our values," says Gopalakrishnan.

Meanwhile, there is a buzz about the imposing edifice of the ILI set amidst the verdant

expanse that is the Mysore campus of Infosys: the next CEO, COO, CFO are being readied

there.