$25-billion IT services behemoth TCS’ Managing Director & Chief Executive Officer (MD &CEO) Rajesh Gopinathan announced his resignation on Thursday, with four years still left in his term. President and Global Head of the Banking, Financial Services, and Insurance (BFSI) Business Group, K Krithivasan, has been named the new CEO designate of the country’s largest private sector employer.
In a press conference on Friday morning, the two addressed media questions on the decision and way ahead for TCS. Here are five key points:
1.Why Rajesh Gopinathan is leaving as MD& CEO of TCS
Gopinathan, whose resignation was announced on Thursday, is leaving after a 22-year-long run at TCS, six of which were spent leading it as MD& CEO. He was re-appointed to the post till February 21, 2027. “I have been having discussions with Chandra (Tata Sons Chairman N Chandrasekaran) off and on. In moments of retrospection, I have been telling him, ‘At some point I want to do it’. That’s been an ongoing dialogue. One day you wake up and realise, you’ve thought about it long enough and spoken about it, and it is better to pull the trigger as it were,” said Gopinathan about his decision.
2. On why he is leaving now
Gopinathan said his decision was timed such that incoming CEO Krithivasan could start off with a new financial year. “So, the whole year can be owned. From a longer-term perspective, we have brought the volatility of the pandemic to a fair state. We have registered strong growth, both off the pandemic low with 15 per cent and then over the last 9 months we have grown at 14.8 per cent. We have crossed big milestones like $7 billion. When you look forward, I don’t think there is going to be another period when there will be significant difference to stability. I asked myself, ‘If not now, will there be a better time?’ and the frank answer was I couldn’t think there could be anything better.”
3.On succession planning at TCS
The IT behemoth has long held a tradition of promoting insiders to the top post. For instance, Gopinathan took over the reins of the IT giant from now Tata Sons Chairman N Chandrasekaran and passes it on to the company’s President and Global Head of the Banking, Financial Services, and Insurance (BFSI) Business Group, K Krithivasan. On the decision to narrow in on Krithivasan for the job, Gopinathan said: “The Board has high visibility to a large part of the leadership and there are close interactions on an ongoing basis. So, the top 10-15 people get in front of the Board many times a year. Plus, Chandra (N Chandrasekaran) as Chairman knows each and every one of them personally and professionally for decades. So, our approach to this is very unique to who TCS is and we have not tried to go away from that. Chandra and the Board will weigh in on that at some point.”
4. On what the transition will look like
Both the exiting and incoming CEOs were confident about a smooth transition. Gopinathan, who has been with TCS for 22 years, and Krithivasan, a 39-year-veteran at TCS, have worked with each other for long. Gopinathan will also stay on with the company till September 2023. “Our teams are stable and I don’t expect the transition to be dramatic. But we owe it to our customers, colleagues, employees and all other stakeholders to do it diligently,” said Gopinathan.
5. On the strategy and focus ahead for TCS
Krithivasan outlined that his priority is to focus on the core values of TCS and tweak the strategies and priorities according to market conditions, adding that customers and employees are the two most important sets of stakeholders for TCS. “Most importantly, for me, there are certain parts of the business, I know quite well. I’ll work with Rajesh to understand what is happening in the rest of TCS. That would be my immediate priority.”
On the macroeconomic uncertainties posing a threat to the IT industry, he said: “Every time there is a change in the market, it gives us new opportunities. Just because of a macroeconomic situation, it doesn’t mean customers are done with all digital transformation. If at all, there will be more need to continue. For a quarter or two, this disturbance will remain but growth has to come back and customers have to transform and leverage all technologies available with them.”