Infosys’ annual strategy meet goes ‘different’ this year

Infosys’ annual brainstorming session, Strategy Action and Planning (Strap), was different this year. The usual fanfare was missing, said several people who were part of it. The spotlight was on ensuring accountability, performance and execution. And the company chose not to set an internal growth target for the next fiscal, presumably because of the failure of its forecasting attempts last year.
Normally, some 1,000 employees are part of the event at the Mysuru campus. This time there were only some 200 senior executives. Normally , invitations are extended to former Board members too, but this time CEO Vishal Sikka+ sent a polite mail to them saying the format was being changed and they would not find it useful to come to Mysuru.
“This year, we wanted Strap to be a very focussed event, amongst a much smaller group of internal leaders, to flesh out the details of our strategy execution. The format has also been changed to be in the form of hands-on break-out sessions over one and a half days in early March. As such, we felt it would not be fair on our part, nor a very productive use of your time, to request you to come all the way to Mysuru to attend this year’s event,” said Sikka in his email to former Board members.
Sources said Sikka assessed the performance of each vertical and service line, and drew up an action plan and fixed responsibilities for the sales team to mine existing accounts deeper and crosssell newer service offerings.”The focus of Strap has shifted from ‘what’ to ‘how’. The board members were a part of it, but it had fewer outsiders. It was all about execution, timelines and outcomes,” said a source who attended the event.
When TOI asked Infosys about the change in the format, the company said Strap 2017 was designed to be more action oriented this year, with the participation of a smaller group of internal leaders. “Due to the change in format, including a briefer agenda, we invited only a handful of participants,” it said. At Strap last year, Infosys had set an internal target of 16% revenue growth, with an operating margin of 27%, for the 2016-17 FY. But the macro environment turned against the industry , and Infosys had to lower its forecast thri ce during the year.
Peter Bendor-Samuel, CEO of IT outsourcing research firm Everest Research, said there are two related factors causing Infosys to change its practice of announcing internal goals this year. The first, he said, is the uncertainty surrounding the service market. The market for the top 5 Indian providers has decelerated for seven quarters in a row. And there is rising uncertainty in the US market, where many companies have postponed or canceled plans to further offshore work.
The second factor, he said, is the public debate the board is having with the Infosys founders on the direction of the firm. “The Infosys founders are acting much like an activist shareholder hedge fund vocally advocating for change at Infosys, and given their public agitation, the management may well be seeking a lower profile, by avoiding making aspirational statements which they know will be reported in the press and provide ammunition to the battle,” Bendor-Samuel said.
Tom Reuner, MD of IT consulting & research firm HfS Research, said for Infosys, it has to be about sales execution. But he felt the continuing rumour mill around the Board is distracting the company from this overarching priority .