Infosys’ Mohandas Pai is a man on a mission. His biggest challenge today: meeting the aspirations of 1,30,000 Infoscions
As I walked into Mohandas Pai’s office in Infosys’ carefully designed Electronic City campus, I was expecting a formal conversation first-up. After all, he is head of human resources (HR) and a member of the board of Infosys – India’s second largest information technology (IT) services company. I was in for a surprise. The ambience was collegial. Pai was chatting with his colleagues as I walked in. Somewhere in-between his conversation he asked me, “I am not a CEO. Why me on the cover of The Smart CEO?” I told him our focus was on making a startup CEO better informed and for that we, generally, spoke to business leaders across many different functions. Over the next hour and a half, we discussed Mohandas Pai – the individual, and the professional, who believes in taking a practical approach to leadership and people management.
Leading the human resource function at Infosys is no simple task. Over 1,30,000 people at different levels work in over 65 offices and 59 development centres across the world. It conceptualised the global delivery model, where several aspects of a business process are delivered by people from many different locations and then integrated in a seamless fashion. Pai says, “Infosys is a complex machine. The IT industry has grown at a rapid pace, but it is maturing now. The business is becoming more complex, competition more intense and there is rapid change that is happening.” Pai admits that the toughest part of his job is meeting people’s aspirations. He says, “Everyone wants faster promotions. They want variety in their jobs. It is meeting these expectations that keeps me on my toes.”
Keeping people happy
Before Pai answered my question about how he plans to keep his workforce happy, I wanted to find out what the best management advice he received in his career was. Like I expected, it came from N.R. Narayanamurthy, founder of Infosys. Says Pai, “Murthy once told me – just keep it simple, so, people can understand what you are talking about.” True to this philosophy, Pai’s answers, strategies and management concepts are clear enough to grasp with ease.
Pai’s big idea for a happy workforce revolves around keeping employees engaged, working with reasonably simple organisational structures, keeping them informed about developments at the enterprise level and helping them participate in the decision making process. Pai adds, “For an employee, it is the immediate manager who counts more than the CEO. It is important to empower them within their smaller unit.”
Pai, the CFO
A chartered accountant by education, Pai, traditionally, was a finance man. He was first spotted by Narayanmurthy and Nandan Nilekani (also a founder of Infosys) at an Infosys private placement conference at Windsor Manor prior to the Infosys initial public offering (IPO). Again, in late 1993, Pai met with Nilekani and Narayanmurthy at an investor conference and asked some tough questions, which intrigued the Infosys founders. They wanted him to come on board Infosys as head of finance. After a short stint as a consultant for the company, he joined full-time in September 1994.
Over the years, Pai has become indispensible at Infosys. Along with Srinath Batni and Phaneesh Murthy, Pai is among the few non-founder professionals who made it to the board of Infosys. In his role as chief-financial officer (CFO), he set high-quality standards in financial modeling, annual reports, corporate disclosure, code of ethics and anti-investor trading policies. Pai jokingly says, “In a company of software czars, Murthy used to call us (the finance team) second-class citizens. I had to change that. I had to set standards for the division.”
Pai admits that his high points at the company are the numerous awards he won and Infosys’ NASDAQ IPO, the first ever listing of an India-registered company in the exchange. The Infosys Annual Report won the best annual report from the Institute of Chartered Accountants in India for ten consecutive years. In 2006, while still on top, Pai wanted to step down to take over as head of human resources. “It took me over a year to convince Murthy and the team to let me quit the finance function and have a go at HR,” says Pai.
“The more I think about Gandhi, I am amazed. If you want any lessons on leadership in business, his life has got all the answers.”
Growing the ecosystem
Till 2006, the IT services industry was India’s flagship industry. Infosys, along with several of its peers in the industry, had played a key role in shaping up the ecosystem and enabling growth of the industry as a whole. Infosys’ leaders were icons and role models for youngsters getting into the world of business. But as in any growth story, this bull run was not permanent. Other sectors including consumer industries and financial services started becoming attractive and hiring in the IT industry became a major challenge. Pai knew he had it in him to make a difference, and wanted to bring in his learnings from corporate finance to help manage people.
“Our ultimate analysis at the time was this – we had to marry the rigour of data with the empathy that HR brought to the table. We had to identify patterns in people behaviour and use that information carefully to make decisions. We also realised that to improve the corporation, we had to improve the ecosystem outside of the company,” explains Pai. He rolled out several efforts to make things happen from a people standpoint. The campus connect initiative was launched to take the curriculum developed for Infosys’ fresher training programme into several engineering colleges across the country. Over Rs. 25 crore was spent in improving the quality of education at these colleges.
Development had to happen across the board – not only at the fresher level. Creating leaders from within was part of the game plan. The Infosys Leadership Institute, which was founded in 2001, became one of Pai’s responsibilities. Under the aegis of Dr. Matt Barney, a leadership expert who held leadership-training roles at global companies including Intel and AT&T, the programme was taking shape. Pai says, “We knew we needed a formal leadership training process. The idea was – we had the campus in Mysore which acted as the university, our own business leaders were the faculty and our business was the curriculum.” It was an inclusive leadership programme in which three tiers of leaders were trained. The board of directors personally mentored the top-tier and today, over 450 leaders at the company go through a formal training programme.
So, is Infosys, in some ways, still a founder-led company? Can it make the transition when professionals take over? Pai says, “We have over a 100 people who can run fairly large business units independently. The key is to give them exposure at the enterprise level.”
Infosys 2.0
At a broad level, Pai is convinced Infosys is going to win in the long-term. He says, “Ten years from now, Infosys will challenge IBM and probably overtake Accenture and will be among the top five companies world over in this space.” Talent is crucial to achieve this target and Pai has his eyes set on recruiting the best available talent for Infosys.
According to Pai, multiple business units – verticals and horizontals – will have both top-line and bottom-line targets, with a certain amount of centralisation. Every three or four years, there will be a study into the organisational structure to analyse if it needs to be restructured. “I think, from an organisational structure standpoint, we have to be outwardly focused. Business units will have to collaborate if it makes sense for our customer. In that sense, I do not see business units competing with each other for capital, rather, collaboration will be the key,” he says.
Pai jokingly says, “In a company of software czars, Murthy used to call us (the finance team) second-class citizens. I had to change that. I had to set standards for the division.”
The other big concern for Infosys is that students from leading institutes are skeptical about joining the IT industry. I try to explain to Pai that top-quality students probably feel they get lost in the crowd at large organisations. I draw parallels with what is happening in the West where companies like Microsoft and GE are struggling to hire the best and brightest from campuses. However, Pai is not totally convinced by that theory. He says, “We still come out on tops in several surveys. Talent is available and we certainly continue to hire some very smart people across the board.” But, he does agree that students have options today. “At one point of time, we were unique stars of a unique industry. Today, there are several industries that are exciting. So, we certainly have to compete with other sectors.”
Advantage Infosys
Of course, Infosys has the advantage of the brand image it carries in India and around the world. Its image is associated with integrity and growth and a passion to deliver on its promise to customers. The other critical area where Infosys has excelled is in systems and procedures. Infosys’ now famous PSPD model (predictability, sustainability, profitability, de-risking) that was formulated by the founders and several key personnel including Pai is helping it manage complexity and change in the global business landscape. Pai has a smile on his face as he explains this model. He knows it is Infosys’ secret mantra to success and managing risk. When Infosys planned to open a development centre in the same time zone as the United States, this very model helped it identify the location and iron out the operational kinks. Before it chose Monterrey, Mexico as the location for the center, several questions (based on the PSPD framework) were answered to ensure it was the right choice. There remains room for mistakes, but, as Pai mentions the key is to “contain the problem and isolate it.” Infosys’ risk council, headed by a chief risk officer, continuously analyses any external problems that could affect the business. Pai says, “When problems cropped up in Egypt, we had a process in place to fly people out. We were ready for it.” The risk council looks at everything from regulatory risk and client concentration risk to even visa-related risks.
Infosys’ strategies reflect on its financials. In the quarter ending December 2010, its revenues touched U.S. $1.585 billion with a profit margin of 25.05 per cent. Its return on average equity, a measure of efficiency at generating profits from every unit of shareholders’ equity, was at 27.56 per cent. As Pai repeatedly mentions, having an eye on both top-line and bottom-line growth is crucial in the IT services industry and every strategy, every move is directed keeping in mind these numbers and targets. Over the last several years, Infosys has hardly delivered below market expectations and the financial forecasting model developed during Pai’s time as CFO has been instrumental in this.
What next for Pai?
On a parting note, Pai, whose favourite book is The Story of My Experiments with Truth by M.K.Gandhi, says, “Being part of Infosys has given me a platform to realise all my dreams and ambitions. The Infosys platform also allows one to do a lot of work outside of the company.” I get the feeling that like several of his Infosys colleagues, Pai is ready for a life in public service.
What next for Pai is a burning question I want an answer for. Pai would not reveal much, except, he says, “I am worried about the quality of higher education in India. I have some ideas that I want to work on.”
Name: T.V Mohandas Pai
Role at Infosys:
Director and Head, Finacle, Admin, Human Resources, Infosys Leadership Institute and Education and Research, and Member of the Board
Best advice ever received:
“Keep it simple” – from N.R. Narayanamurthy, Founder of Infosys
Favourite Book and why?
The Story of My Experiments with Truth by M.K. Gandhi
“The more I think about Gandhi, I am amazed. If you want any lessons on leadership in business, his life has got all the answers.”
Management style: Approachable and participative
What keeps him awake at night?
Meeting the aspirations of the people who work at Infosys
His take on what young professionals should think about in a job
Can I continuously add to my capability and self-worth?
Am I treated with respect and fairness?
Can I advance in my career?
Am I paid adequately well?
Public service roles and ambitions:
* Improve the quality of higher education in the country.
* Works with the Akshaya Patra Foundation, a project that provides mid-day meals to over a million children across India
