"Helicopter Moms" is a prejorative term that "Former Executive Founders-but-still-Shareholders" in listed companies could face from global corporate governance commentators?. In the 1990's, Seemingly every Indian promoter used to have an "I met N R Narayanamurthy on my flight and told him how to run INFY". Once such champ got caught out making the fib by his Board-Of-Director's member, who said " I mentioned your meeting to NRN and he denied meeting with you..grrr!!"....such was the dazzle of brand InfoSys, that lesser trader type wannabe "promoters", would actually lie to boast about meeting the great NRN...but...not anymore??
I received a WhatSapp forward from Santosh Misra which attempts to analyse the situation from the prism of "culture" as follows (facts to be treated with caution):
" Forwarding
If you were operating at or connected to the senior levels in the technology industry, the news of Sikka's exit from Infosys would neither be shocking nor unexpected. It was a question of when - not whether - Sikka would be out of Infosys. So what went wrong ?
The History
When Sikka took charge, Infosys was in doldrums. Once an industry bellwether, Infosys stood still as industry peers like HCL and TCS grew quicker and delivered better returns. Its efforts at moving up the value chain through Infosys 3.0 came a cropper. Murthy’s second stint as CEO under those tumultuous conditions was a largely forgettable one The only positive event were Murthy’s efforts to bring in a new CEO.
The CEO search
The Infosys board envisaged what it needed in a new CEO: a successful technology executive with a global perspective and proven track record. Sikka’s academic success and credentials at SAP looked impressive: additionally, he seemed to have the depth of strategic skills and the right vision for an organization Infosys’ size. He took charge as the first non-founder CEO in 2014. All good? Not quite. Two areas simmered in the background right from beginning:
1. The very first clue comes from Infosys’s tagline: “Powered by Intellect, Driven by Values”. While Sikka’s Stanford PhD and SAP HANA success ensured his intellect stood out, his values' fitment is unlikely to have ticked all boxes. Sikka was a global executive schooled in liberal values - diametrically opposite to te values of a traditional Infosys. Sikka’s masterful strategic skills and intelligence were an unlikely replacement for his mismatch of cultural values, especially for the top job at an organization that prided itself precisely on theoe very values,.
2. Sikka’s due diligence about the role of Infosys’ powerful and domineering founders presented an important potential fault line. There is a likelihood that Sikka mistook his experience in the West - where executive freedom is nearly guaranteed – as a benchmark for what to expect at Infosys. Little did he understand the true meaning of Murthy’s line “Infosys is my middle child”: Sikka, like others, might have laughed it off as parting words from a genius – not as literal words from a very possessive strong personality.
In the battle of nature vs nurture, Infosys founders expected Sikka to get nurtured by existing values whereas Sikka expected his nature to turn Infosys around. That dichotomy - as time would tell - made all the difference.
However, difference in such subtle yet vital areas rarely manifest themselves overnight: they build up overtime and blow over soon.
Enter Sikka
Sikka scored some early successes:
1. Sikka loosened the office dress code, promoted 500 employees, gave away iphones, strengthened grassroot communication and did everything to engage employees.
2. Sikka next wooed the investor fraternity and the stock markets by presenting a grand and aggressive vision of a $20 billion organization by 2020. For an organization known to under-promise and over-deliver, this was a cultural shock. The tall talk raised expectations drastically and while that enthused the stock markets in the short run, the expectations – as we now know - made it difficult for Sikka to live upto them.
3. Last, for a conservative organization known to harp on its brand but never known to pay top-of-the-line salaries, Sikka raised the salaries of his top reports to unheard-of levels.
Seen from the perspective of Infosys' founders, these initial “successes” were not success at all: they were cultural failures, disturbing enough to lead to uneasy relationship with Sikka, but yet not alarming enough to cause a blast.
Meanwhile, Sikka brought an army of top people from SAP to change the culture and help him transition Infosys from a lumbering elephant to nimble cheetah. Unfortunately, Sikka misjudged what it would take to bring about a cultural change: if a culture of a 30 year old, hundred-thousand employee traditional organization could be changed with a handful of imported top-managers, Drucker’s powerful line “Culture eats strategy for breakfast everyday” would not have stood the test of line.
The challenges
All of the above would still have sustained but for a few areas where Sikka and the board crossed Murthy’s red line.
1. Awarding CFO Ravi Bansal a huge severance pay package raised question marks on corporate governance. Infosys prided itself on its disclosure standards. The board’s decision of not disclosing the contents of reports from an external law firm - especially when all was deemed “fine” - gave an already disenchanted founders’ team a stick to beat Sikka and the board with.
2. Within months of the Bansal episode, the board raised Sikka’s already high salary by 55%. The stick in the disturbed founders’ hands now got a poison tipping and became a lot more potent with Murthy incessantly and publicly lynching the board.
3. After some initial success, Sikka’s turnaround strategy missed its target by an embarrassing $5 billion: finally in June 2017, the board scrapped the $20 billion target.
For an organization that consistently beat investor expectations for years, this was a strategic Freudian slip and the Infosys stock – and Sikka – lost support of some of the vital institutional investors.
And for Sikka - long dismissed as a cultural misfit - who had strategic results as the last armory in his toolkit, a slipup in strategy, positioned his rhetoric as “all bark, no bite”. This was the last straw on the camel’s back.
The Exit
With a frustrated founding team led by combative Murthy, allegations of corporate governance, a failed turnaround strategy questioning the very competence of Sikka and missing investor support, Sikka had nothing to fall back on and nothing to look forward to - except a good nights sleep and the much needed peace of mind. Exiting Infosys provided him precisely those benefits – and Sikka cut his losses.
There are some really valuable lessons:
1. With the infamous Tata episode still fresh in memory, Indian founders and family business heads would do well to rethink if they really want to let go in the true sense when they hang up their boots. If all they want is to remote-control a strategically minded executive - who is tasked with the responsibilities of a CEO without the requisite authority, they should stop searching the market and instead stick to the comforts of loyal insider.
You can have loyalty or results – rarely both.
2. For prospective CEO choosing a top job at any organization – specially with powerful founders or families, it is well worth developing a thorough understanding of the cultural factors and sensitivities involved. Raw Intelligence is a necessary but not a sufficient condition to succeed – emotional intelligence provides the much-needed sufficiency. And that involves recognizing stakeholders interest before picking up the top job.
There is no point in diving in deep oceans and complaining about sharks.
The forces of nature are so strong that in the battle of nature vs nurture, nature often wins hands down. As Sikka learns that lesson and walks into the sunset, he would do well to recall Peter Drucker’s golden lines that Cyrus Mistry at TATA group learnt equally painfully:
“Culture eats strategy for breakfast everyday”.
"Helicopter Moms" is a prejorative term that "Former Executive Founders-but-still-Shareholders" in listed companies could face from global corporate governance commentators?. In the 1990's, Seemingly every Indian promoter used to have an "I met N R Narayanamurthy on my flight and told him how to run INFY". Once such champ got caught out making the fib by his Board-Of-Director's member, who said " I mentioned your meeting to NRN and he denied meeting with you..grrr!!"....such was the dazzle of brand InfoSys, that lesser trader type wannabe "promoters", would actually lie to boast about meeting the great NRN...but...not anymore??
I received a WhatSapp forward from Santosh Misra which attempts to analyse the situation from the prism of "culture" as follows (facts to be treated with caution):
" Forwarding
If you were operating at or connected to the senior levels in the technology industry, the news of Sikka's exit from Infosys would neither be shocking nor unexpected. It was a question of when - not whether - Sikka would be out of Infosys. So what went wrong ?
The History
When Sikka took charge, Infosys was in doldrums. Once an industry bellwether, Infosys stood still as industry peers like HCL and TCS grew quicker and delivered better returns. Its efforts at moving up the value chain through Infosys 3.0 came a cropper. Murthy’s second stint as CEO under those tumultuous conditions was a largely forgettable one The only positive event were Murthy’s efforts to bring in a new CEO.
The CEO search
The Infosys board envisaged what it needed in a new CEO: a successful technology executive with a global perspective and proven track record. Sikka’s academic success and credentials at SAP looked impressive: additionally, he seemed to have the depth of strategic skills and the right vision for an organization Infosys’ size. He took charge as the first non-founder CEO in 2014. All good? Not quite. Two areas simmered in the background right from beginning:
1. The very first clue comes from Infosys’s tagline: “Powered by Intellect, Driven by Values”. While Sikka’s Stanford PhD and SAP HANA success ensured his intellect stood out, his values' fitment is unlikely to have ticked all boxes. Sikka was a global executive schooled in liberal values - diametrically opposite to te values of a traditional Infosys. Sikka’s masterful strategic skills and intelligence were an unlikely replacement for his mismatch of cultural values, especially for the top job at an organization that prided itself precisely on theoe very values,.
2. Sikka’s due diligence about the role of Infosys’ powerful and domineering founders presented an important potential fault line. There is a likelihood that Sikka mistook his experience in the West - where executive freedom is nearly guaranteed – as a benchmark for what to expect at Infosys. Little did he understand the true meaning of Murthy’s line “Infosys is my middle child”: Sikka, like others, might have laughed it off as parting words from a genius – not as literal words from a very possessive strong personality.
In the battle of nature vs nurture, Infosys founders expected Sikka to get nurtured by existing values whereas Sikka expected his nature to turn Infosys around. That dichotomy - as time would tell - made all the difference.
However, difference in such subtle yet vital areas rarely manifest themselves overnight: they build up overtime and blow over soon.
Enter Sikka
Sikka scored some early successes:
1. Sikka loosened the office dress code, promoted 500 employees, gave away iphones, strengthened grassroot communication and did everything to engage employees.
2. Sikka next wooed the investor fraternity and the stock markets by presenting a grand and aggressive vision of a $20 billion organization by 2020. For an organization known to under-promise and over-deliver, this was a cultural shock. The tall talk raised expectations drastically and while that enthused the stock markets in the short run, the expectations – as we now know - made it difficult for Sikka to live upto them.
3. Last, for a conservative organization known to harp on its brand but never known to pay top-of-the-line salaries, Sikka raised the salaries of his top reports to unheard-of levels.
Seen from the perspective of Infosys' founders, these initial “successes” were not success at all: they were cultural failures, disturbing enough to lead to uneasy relationship with Sikka, but yet not alarming enough to cause a blast.
Meanwhile, Sikka brought an army of top people from SAP to change the culture and help him transition Infosys from a lumbering elephant to nimble cheetah. Unfortunately, Sikka misjudged what it would take to bring about a cultural change: if a culture of a 30 year old, hundred-thousand employee traditional organization could be changed with a handful of imported top-managers, Drucker’s powerful line “Culture eats strategy for breakfast everyday” would not have stood the test of line.
The challenges
All of the above would still have sustained but for a few areas where Sikka and the board crossed Murthy’s red line.
1. Awarding CFO Ravi Bansal a huge severance pay package raised question marks on corporate governance. Infosys prided itself on its disclosure standards. The board’s decision of not disclosing the contents of reports from an external law firm - especially when all was deemed “fine” - gave an already disenchanted founders’ team a stick to beat Sikka and the board with.
2. Within months of the Bansal episode, the board raised Sikka’s already high salary by 55%. The stick in the disturbed founders’ hands now got a poison tipping and became a lot more potent with Murthy incessantly and publicly lynching the board.
3. After some initial success, Sikka’s turnaround strategy missed its target by an embarrassing $5 billion: finally in June 2017, the board scrapped the $20 billion target.
For an organization that consistently beat investor expectations for years, this was a strategic Freudian slip and the Infosys stock – and Sikka – lost support of some of the vital institutional investors.
And for Sikka - long dismissed as a cultural misfit - who had strategic results as the last armory in his toolkit, a slipup in strategy, positioned his rhetoric as “all bark, no bite”. This was the last straw on the camel’s back.
The Exit
With a frustrated founding team led by combative Murthy, allegations of corporate governance, a failed turnaround strategy questioning the very competence of Sikka and missing investor support, Sikka had nothing to fall back on and nothing to look forward to - except a good nights sleep and the much needed peace of mind. Exiting Infosys provided him precisely those benefits – and Sikka cut his losses.
There are some really valuable lessons:
1. With the infamous Tata episode still fresh in memory, Indian founders and family business heads would do well to rethink if they really want to let go in the true sense when they hang up their boots. If all they want is to remote-control a strategically minded executive - who is tasked with the responsibilities of a CEO without the requisite authority, they should stop searching the market and instead stick to the comforts of loyal insider.
You can have loyalty or results – rarely both.
2. For prospective CEO choosing a top job at any organization – specially with powerful founders or families, it is well worth developing a thorough understanding of the cultural factors and sensitivities involved. Raw Intelligence is a necessary but not a sufficient condition to succeed – emotional intelligence provides the much-needed sufficiency. And that involves recognizing stakeholders interest before picking up the top job.
There is no point in diving in deep oceans and complaining about sharks.
The forces of nature are so strong that in the battle of nature vs nurture, nature often wins hands down. As Sikka learns that lesson and walks into the sunset, he would do well to recall Peter Drucker’s golden lines that Cyrus Mistry at TATA group learnt equally painfully:
“Culture eats strategy for breakfast everyday”.
FEATURES OF indian Promoter Syndrome IPS at your workplace - KNOWLEDGE IS YOUR BEST DEFENSIVE TACTIC, SO THE INEVITABLE CHECKLIST FOLLOWS BELOW
( Tick more than 2 and you need a speed dial for your placement consultants number):
1. The promoter has a track record/reputation for "trying" to COMPETE with their more experienced/better educated or qualified professional manager
2. The promoter enjoys humiliating staff (own or not) .eg. clicking fingers at restaurants at serving staff/ manager
3. Humiliate publicly in front of their sycophantic team, but praise the professional ONLY in private. They actually believe that praise must be sparingly given
4. Western educated or experienced professionals and executives are TASK focused (Notice Vishal Sikka's MAJOR exasperation about being distracted from his Turnaround task) BUT the IP is "RELATIONSHIP" focused to the point that they actually disrespect the task they hired the professional for. Another group promoter had surrounded himself with what Steve Jobs aptly describs as a "Bozo fest" of echo-chamber like staff, who would lose Crores or indulge in "30%" pelf, but will always be forgiven easily. However with his top team of better educated/experienced professionals, his ire at all times was always 100%, because his grouse was "they're too task focused, they do not come and drink coffee in my cabin". The hardcore professionals said WTF! we are hired to achieve a task, whereas coffee drinking and gassing are NOT achievements during annual appraisal. The competition with his own team, ultimately cost him dearly, but the petty ego is satisfied. This is a natural outcome of DISHONESTY of upbringing and purpose plus dishonesty with education (some proudly boast having sent their driver to mark their college attendance or how they gamed the system to get ahead). Culture Trumps Skills everytime in an Indian Promoter led outfit...so join only if you have Golden Handcuffs and a Golden parachute so severely in your favor that the erratic behaviour of IP's is potentially minimised. A country head of an HR firm advised..always take a company loan on joining more than 2 months salary, so that on your leaving day you owe the company rather than the other way round. But be advised, as soon as you start performing better than he did, you run the risk of Vishal Sikka as their petty ego is fragile.
5. Before joining, Insist on attending a major team meeting of the IP. Pay careful attention, if its filled with Big titles BUT the only person speaking is the IP and the rest merely nod their heads..you are looking at a place that believes "I pay their salary, so I am smarter than the monkeys I have hired" value system.
6. Before joining, also watch out for any hint by the promoter of disrespect for Integrity or their celebration of gaming/fixing the system plus other rule/law breaking including driving habits like road rage.
7. "Missed-out-from Meetings-syndrome" - This is the un-brave tool used to give the message, that your skills are NOT valued anymore. You are a CXO and the Promoter+cronies prevent you from attending strategic meetings which require your inputs. They will also take away or re-assign much of what your role does, so you have nothing to do anymore but QUIT (which is exactly what they want so the Labour department does not get involved) If you are junior, you will "enjoy" please quit or else interviews, as that ITES company youtube video showed:https://www.youtube.com/watch?v=HJ0vM9ykuHU
8. "HR Evasiveness" - HR staff start to look away sheepishly, when asked direct questions. The IP will also not be able to look you in the eye and avoid meeting you due to "sudden travel or health issues"
Conclusions drawn = Generally IP's have NOT matured as yet in their thinking to be able to EASILY absorb the rich diet of an Indian educated / professional who's worked overseas; unless he changes into that crony culture, which became the cause for their failures in the first place. Narayana Murthy's famously ironic quote reads " Growth is Painful; change is Painful but nothing is as painful as being stuck where you do not belong"...yeah rigghhhtt! So did the Indian Stockmarket believe N Narayana Murthy and his cohorts....NOPE!.. the share price tanked -9.57% on the day..so much for "value creation" by the "old guard". Apart from cronies, who will take the CEO Job at INFY??.
VISHAL SIKKA could have avoided this, if he had requested the IP's with previously wonderful track records for governance (N Murthy and M D Pai in particular), to HEAD the Risk Management Committee, even if it reduced transformation velocity. This would have possibly reduced cultural conflict??.
PM Modiji's efforts to improve India's ease-of-doing-business score are working; but how will the IP's ever improve. InfoSys used to be thought of as a paragon of corporate governance; its just had its "Nira radiaa" moment as did the Tata's with Cyrus Mistry's dismissal. Sad that in the 21st century..we remain CAVEAT EMPTOR in Lalajee land.
