Sunday, October 24, 2010

How to develop Leaders - Infosys Experience

Matthew Frank Barney had a personal connection with India that goes back to 1997. The 41-year-old American met his Bengali wife, Shreya, in a "romantic semi-conductor factory" in Orlando. Last year, Barney also sealed a professional connection with India. He, Shreya and their two young kids moved to Mysore, where Barney joined Infosys Technologies for an assignment that will have a great bearing on how this iconic Indian software company is run and perceived for generations to come.

Barney is the head of leadership development at Infosys Leadership Institute. Never in the storied 29-year history of Infosys has so much hinged on this responsibility. The seven founders, each of them pillars in their own right, have built and run a company that is solid in its business construct and has values that are unimpeachable. But they are leaving, one by one.

Ashok Arora left in 1989 and NS Raghavan in 2000. Last year, Nandan Nilekani went to work for the government. In the next five years, the remaining four — NR Narayana Murthy, S 'Kris' Gopalakrishnan, SD Shibulal and K Dinesh — will also walk away from Infosys, in deference to Murthy's decree that all founders retire from operational roles by the age of 60 and from the board by 65. Says Barney: "It's an inflexion point for Infosys, and we need to prepare for it."

In his earlier assignments, Barney helped some of the world's top companies, including Motorola, AT&T and Lucent Technologies, to identify their next set of leaders. But, with Infosys, he's working for the first time with founders seeking to pass on the baton.

In July, Barney kicked off a hunt to identify 750 leaders, across levels, in Infosys — the largest such exercise the company has ever undertaken. It's not a random, one-time exercise to meet a pressing need.

It's a formal, structured response that is intended to become an integral part of the company. It will, continuously, identify the sparks in the company and groom them to become leaders.

Infosys has plenty of leaders, says TVS Mohandas Pai, who heads HR in Infosys and who brought in Barney.

"We believe we have around 100 leaders who can be CEOs of companies of different sizes," says Pai. "That doesn't mean, though, all of them can become the CEO of Infosys." What Infosys lacked all these years was a system that could efficiently identify, organise and hone that leadership, especially in the lower ranks. Which is what Barney and his seven-member team are putting in place.

To explain that system, one needs to start at the top. At the top, there is a 13-member board. Five of its
members are 'executive members', which means they also hold operational roles in Infosys . CEO Kris Gopalakrishnan and COO SD Shibulal are both members of the board.

Below the board is a four-member executive council: Subhash B Dhar, Chandra Shekar Kakal, BG Srinivas, and Ashok Vemuri. The highest decision-making body below the board, the executive council is the grooming place for the next CEO, CFO and COO.

But the beehive of activity is below the executive council. Out here, Barney has created a three-tiered pyramid that is intended to identify leaders at all levels from the 115,000 employees in Infosys.
At the first level, or tier-I, Infosys is looking to identify 50 Infoscians who can join the board in three to five years. "We want each leader to be outrageously successful before they even come to my process," says Barney of this set. At this leadership level, people typically have about 15 years of experience, and are geographical heads or business unit heads.

"We need to make sure that the person is passionate about business," says CEO Kris, of this elite pool. "Also, the person should know Infosys well. That's why we have always been saying that the leaders should come from inside and they should have a successful track-record."

At the second level, the hunt is for leaders capable of graduating to tier-I or running a business unit in three to five years. The target number is 150. The candidates here are vice-presidents and those reporting to unit heads, and have about 10 years of experience.

At the last level, the search is for leaders capable of graduating to tier-II position. This pool, which is intended to be 550-strong, is chosen from business and technology managers who are associate vice-presidents or below. They have about 5-7 years of experience. They are like the Suresh Rainas of the Indian cricket team.

Before Barney and this three-tiered structure, Infosys was identifying and grooming leaders, but it was more unstructured and the leadership pool was smaller. But as the company grew and its operations became more complex, as it went beyond its founders, the imperative for a leadership system increased.

"They are the first among major Indian companies to go through this transition," says John McCarthy, senior vice-president and principal analyst, Forrester Research. "It's always a challenge when you move the original management out. So far, they have done it in a transparent and orderly manner." But a CEO of a leading rival says the founders will be missed. "Infy is surely ahead in terms of planning its transition, but it will miss Murthy's vision and Nandan's ability to win and retain large accounts like BT," he says.

Professor David V Day, who is helping Infosys as an external consultant to identify sustainable leadership models, advises against benchmarking to the past. "First of all, you can never replace such visionary founders like Mr Murthy and others — they are really one of a kind. You first have to let go of the assumption that they are going to be fully replaced," he says. "The challenge then is how are we going to develop leaders we are going to need not just now, but also in the future."

Barney has some answers. "Beginning this year, we will have the 'tier top-off' process every year," he says. The 'tier top-off' is essentially a routine measurement of the numerical deficiency in the company's leadership pools. The last time, Infosys did such an exercise, it was 2007 and its leadership pool was about 50.

Barney and his seven-member team are now looking to do this annually, with a target size of 750. At every level, currently, Infosys is short. Against its earmarked number of 50 leaders in tier-I , Infosys has identified 37. Down the ranks, the vacuum increases. In tier-II, the number sought is 150 and it has identified 120. In tier-III , against 550, it has identified only 200.

At each level, the method of identifying talent is different. Tier-I is self-nominated. Infoscians who think they are up to it can apply. Their candidature is decided after an interview with the board. For tier-II, it's the tier-I leaders who work with the members of the Infosys Leadership Institute and the heads of business units to identify potential leaders.

Tier-III is through a computer-adapted assessment tool. "The tier-I leaders are fewer and relatively easier to find," says Barney, who speaks fluent Bangla. "But when I get to tier-III , there are nearly 10,000 people who can apply. With the tool, I can do it in less than half the time we did the same process."

Next comes the grooming
Infosys draws on several resources to groom leaders. These include mentoring, leadership workshops and simulation exercises. Mentoring is a big part of the initiation, and it runs through Infosys. Murthy mentors the board. The board members, including other founders, mentor 6-8 leaders at any point of time from the tier-I pool, which includes the four members of the executive council.

Brought to you by

HRI Foundation
303 Motherland Building
3rd Main 3rd Cross
HR Help - Call +91.8105737966

Read the Previous Posts