There is lower tolerance for poor performance in a downturn, says Kris Gopalakrishnan, chief executive officer & managing director, Infosys Technologies. Here's his account on how to fight recession.
How is dealing with recessionary conditions different when you’re in a senior leadership position than when you’re actually leading as CEO?
The CEO has to take bottom line responsibility and has to be accountable to all stakeholders. A senior leader is responsible to only one department or business unit. In that sense, CEOs are different.
How was the IT sector affected last time -- the depression of 2001-03? And now?
The dot-com bubble was restricted to a few sectors. It did not impact financial services -- the backbone of any economy. The crisis is global and is impacting all industries and countries. The responses from governments around world have also been unprecedented taking into account the scale of the problem.
What is the m
ost challenging part about being a recessionary CEO? In a recession, growth is absent; sometimes, the business may even be shrinking. In this scenario, managing costs in order to protect margins become the immediate priority. Medium term, you have to continue to invest in the business selectively such that the business can emerge from the downturn stronger than competition. This is challenging. Even in good times, a CEO must be able to get to the details if needed. During a recession, this may increase due to the requirement for faster action.
What are some of the most difficult decisions you’ve had to take recently?
Clients are expecting greater flexibility in pricing and margins may get affected because of that. Utilisation levels are lower because of lower volumes of work. There is lower tolerance for poor performance since everyone has to perform better in a downturn.
How do you inspire and motivate the entire organisation at a time like this?
First and foremost, we have to communicate the vision, mission, goals and purpose of our business. We have to make every employee feel that he or she is needed and plays a valuable role in the business. Everyone must feel that they are benefitting intellectually, career-wise and in terms of personal wealth. Employees must feel inspired by the leadership and the values of the company.
Is there a silver lining to the recession cloud?
Downturns allow a company to get ahead of competition if they are able to manage better. In good times, everyone does well; it is during bad times that the good do even better. It also teaches everyone to become more flexible and performance is appreciated better. A recession may fundamentally alter the structure of industries since only the best will survive and emerge stronger. It could change the rules of the game.
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