AM Naik denies interference led to L&T Infotech executives' exits
There has long been some speculation that Naik tracks L&T Infotech, his brainchild, very closely and doesn’t leave much room for independent decisions.
L&T Infotech hits the capital market with an IPO on July 11, Instead, 74 year old Naik, who has been with $16 billion-engineering and construction major for over half a century, has blamed it on the chief executives’ inability to “cope” with the “high pressure” of “young man’s business”.
There has long been some speculation that Naik tracks L&T Infotech, his brainchild, very closely and doesn’t leave much room for independent decisions. However, Naik, in his trademark brusque style, said, “There is no dearth of leadership in the group. It is a wrong notion that many people have quit L&T Infotech.
Those who have left the company did so because they could not cope with changing times.” As a run up to the IPO, L&T Infotech hired former Infosys senior executive Sanjay Jalona as managing director and chief executive, and former head of Bank of America’s India captive Aftab Ullah as chief operating officer.
One of the key jobs of Jalona was to build a senior team and he has hired senior executives from Infosys, Mindtree and Accenture. Naik cited former chief executive Sudip Banerjee’s stint from 2008 to 2011to make the point that the company has had stable leadership.While industry sources say Banerjee quit due to lack of freedom to take independent decisions, Naik explained his exit had more to do with his base being Bangalore and his inability to keep travelling to Mumbai for work. “He could not handle the travel,” said Naik.
L&T lost chief executives in quick succession after Banerjee –-and Naik had canny explanations for each one of them.
“The second man (joint chief executive Mukesh Aghi) was better at public relations. He was great at relationships but he could not close deals because it requires a greater amount of detail,” Naik said.
He said the executive has now moved to head US-India Business Council where his relationship skills at better used and he does not have to “deal with the pressure of profit and loss.”
Referring to exit of the other joint CEO, Vivek Chopra who quit in 2014, Naik said, “He could not cope with the changing times. He was over 55 and this is a young man’s game.” Vivek Chopra’s LinkedIn profile says he is now VP and General Manager at HP Enterprise Services.
L&T Infotech has an attrition rate of over 18%, one of the highest in the industry. Naik broke down this figure and said that less than 12% are “normal exits” while the rest 6% make themselves obsolete and have to go.
Naik said that 6% of the people that the IT company loses a year people who are not required as either they have not kept up with technology or they have been rendered obsolete due to new technology, shattering the rosy picture being painted by industry bodies like Nasscom which have claimed that the industry was retaining employees by retraining them.
At a group level, Naik’s succession plan has always been a source of much speculation.
The septuagenarian has surprised each time a succession deadline has neared. In 2012, when he was to retire and new leadership announcement was expected, the company split the post of chairman and managing director, retained Naik as chairman and extended his tenure and appointed K Venkataramanan as chief executive officer and managing director.
In 2015, when Venkataramanan was retiring and again an announcement on succession was expected, the company again split the position and elevated Subrahmanyan as the deputy managing director and president. Earlier this year Naik hinted that while Subrahmanyan may take over the top job as chief executive, the company may have nonexecutive chairman.