A few days back, when Infosys announced the appointment of Vishal Sikka as the next CEO, after an elongated search, the country was taken by a surprise. Interestingly because for the first time Infosys chose a non-founding CEO, breaking its legacy as the current CEO SD Shibulal is to step down on 1st August, 2014.
Vishal Sikka, a member of the executive board of SAP, headed all SAP products and innovations. Although he brings a rich pool of experience and knowledge, there are a few challenges he might have to face in the beginning of his new role. Some of the key challenges can be:
The increasing attrition rate has been a major problem for Infosys, since quite some time now as we still hear of senior executives quitting the organization. In 2009 the attrition rate was 13% and within five years now it has reached to 18.7%. This needs to be immediately taken care of or the organization may fear losing its best talent to competition. Mr. Sikka might have to ensure improving connect with the employees in order to reinvigorate the magic of Infosys.
Ever since Narayana Murthy retired as the CEO in 2002, Infosys has been facing a problem with the revenue growth. The CAGR for the last 5 years has been the worst for the company, reason being the failure of a few major projects. This creates an urgent need for Mr. Sikka to enable revenue growth through accelerating existing crucial projects and bringing in new innovative ones, as time takes its own course.
New Domain and culture
Although Mr. Sikka is a strongly rooted Indian, for the longest of his work-life he has been in the US and was leading a products focused company at SAP. Infosys, being a service company might pose a new and challenging situation for him. Also, the Indian work-culture is different from how it is in the US. Coping up with cultural changes along with switching from the products domain to the service domain, will require a lot of adaptability and creativity.
Only time will tell, as to what might be the fate of Infosys in Mr. Sikka’s rule. Nevertheless, industry experts feel the organization is now in safe hands and that it will only grow up from here.