Bangalore, ‘cultural fit’ swung it for Salil Parekh – Search Committee Head

Two crucial factors that swung the decision in favor of hiring Capgemini veteran Salil Parekh as the new CEO of Infosys were his familiarity with working in the IT sector in Bangalore and his overall ‘cultural fit’ with the Indian IT industry, said Kiran Mazumdar-Shaw, who heads the committee that spearheaded the search for a new CEO.

“One of the non-negotiable points was that he had to be Bangalore-based, which was something he welcomed,” Shaw said in an interview with ET Now. “The center of gravity is in Bangalore.”

The decision to appoint Salil Parekh — a veteran of the IT services industry — stands in contrast to the rather bold decision three years ago to bring in a ‘products guy from overseas’ when the board brought in Vishal Sikka from SAP, Germany.

At the time, the emphasis was on shaking things up and opening the company’s eyes to the rapidly changing IT landscape of the world.

From her comments, Shah seemed to suggest that the company was looking for a sense of familiarity and stability this time around.

Sikka had come in as the outsider who had worked in a largely software-oriented company, and was, due to his pedigree, expected to bring a ‘product orientation’ to one of the world’s largest ‘services’ companies.

In contrast, Shaw, who heads Infosys’ nominations and remunerations committee, emphasized factors such as ‘cultural fit’ and ‘stability’ when describing the decision to hire Parekh.

“Salil came across as someone who is mature, as someone who has handled a large workforce in India, somebody who understands the business, who has a global understanding of the business and who basically understands new trends and new businesses,” she said.

Infosys also did not seem to be keen on repeating the ‘offsite’ CEO model that it tried with Sikka.

The former CEO preferred to work out of his familiar surroundings in the Silicon Valley rather than relocate to the ‘center of the action’ in Bangalore.

“I think we wanted, definitely, someone to be based in Bangalore, someone who’s a good cultural fit,” Shaw said. “Although we experimented with a second base in Palo Alto, I don’t think it worked that well.”

“The center of gravity is in Bangalore… and therefore we believe that having Bangalore as a base is a better option, a safer option for us.”

Infosys also seemed no longer willing to place its bets on the ‘outsider’ model, and seemed more comfortable in finding someone with a proven trackrecord in managing, and moulding, a large IT services organization like itself.

“(Salil) has done a pretty good job for his company,” Shaw said. “We believe he was quite a turnaround person at Capgemini and we hope he will do a similar thing at Infosys. More than anything else, we needed stability and a cultural fit, which I think Salil provided,” he said.

Shaw also said, as far she was aware, the selection process did not involve consultations with the company’s larger shareholders.

N Narayana Murthy, one of the key founders and one of the largest shareholders, still plays the role of a ‘third umpire’ as far as the company is concerned. He does not shy away from airing his views publicly if he feels that things are not headed in the right direction — something that seemed to have upset previous CEO Vishal Sikka.

“The selection process was very independent. I don’t think there was any consultation made outside the company,” Shaw said, adding that the company had “a series of metrics” and “Salil ticked more of the boxes than others did.”

She also said that the company went ahead with the process “extremely rapidly” as it was considered very important for Infosys to get a CEO “ASAP”.

“We just want him to focus on the business and get it back on a good, growth trajectory,” he added.