We saw a surprising development in the Indian IT industry earlier this week when the CEO of Infosys, Mr Vishal Sikka, resigned protesting against personal attacks by founders of the company which have caused serious distraction in the performance of his duties as the CEO of the famous IT company. The Board of Infosys was fully supportive of the CEO during the onslaught mounted by the founders, led by Mr Narayana Murthy, the ex Chairman and CEO, and one of the co-founders.
Mr Sikka’s resignation sent the Infosys stock down by over 10%, wiping out almost USD 5B in its market capitalization. The market had a strong belief in the value that Mr Sikka brought to his job, and his strategy of moving Infosys’ business from traditional IT outsourcing to cloud, big data, social media driven business, transforming Infosys to take on the new digital challenges offered by the market.
While there are many commentaries (mostly supportive of Mr Sikka and the Board), it is important to learn a few things from this episode. Once the founders have handed over the CEO job to a professional, and have received assurances from the Board of Directors that the essential ethos and values of the company will be maintained and strengthened further, they should stay completely away from the running of the business. If there are issues with the corporate governance aspects of the business, there are ways of approaching and handling the same with the Board, instead of washing the dirty linen in public media glare.
Of course, it is to the credit of the founders who have built up a strong foundation for Infosys over three decades of pioneering work, that such public damage did not cause harm to the company or its business or its stock price (in a major way). Things were going on normally, despite all the attacks.
But Mr Sikka now says that the attacks by Mr Murthy turned very personal over the past couple of weeks. And, the distraction to the business was too much, leading him to make a drastic decision.
His resignation is a loss to Infosys as well as to the Indian IT industry. He was setting new benchmarks in strategic business transformation at Infosys, and was a thorough professional who made decisions without undue influence (from what can be gathered). He had the ears of the Board and the stock market.
Mr Murthy is an iconic figure in the industry and is a well-recognized name globally as well. There must be something which has disturbed him and his co-founders in a big way. But then, the way the attacks have been mounted on Infosys is not an acceptable form of protest. Seasoned businessmen and leaders do it in a different manner, without public disaffection and published letters via the media.
I disagree with Mr Murthy’s tactics, and won’t be surprised if the damage to Infosys is long-lasting. It would be very difficult to find a CEO of the calibre of Mr Sikka who would be willing to take up the CEO job now.
When I entered the IT industry in 1987, I knew only of Mr FC Kohli of TCS and Mr Azim Premji of WIPRO. I also knew about Mr Shiv Nadar of HCL. Infosys was not known at that time. But, in the Nineties Infosys built up its business nicely, garnering a serious reputation for integrity and values (similar to WIPRO). For the past nearly two decades, the stock market has always looked at Infosys as a trend-setter with conformance to global principles of accounting and transparency.
That legacy is under threat now. Hopefully, the Board will be able to make the right choice of the CEO. If it is an internal candidate from the old times, the market will assume that the founders are taking back control. And, if it is an external candidate bold enough to accept the challenge of dealing with the founders, then it has got to be a person of huge stature who cannot be trifled with.
Let us see how this plays out.
20th August 2017
Well, we are back at this fabulously greedy topic, aren’t we after a while?
There are many poor countries in the world, India being one with a per capita income of USD 1,581 as per World Bank data. This is GDP per capita and on the basis of purchasing power parity, India’s per capita income is estimated to be USD 6,088. On both measures, India ranks below more than 100 other nations. So, it is reasonable to assume that India is one of the poorer countries, though the GDP is growing at over 7% currently (the fastest for any of the largest 10 economies of the world).
One can argue that these low figures would have been even lower had the socialist policies of the erstwhile Congress governments continued to be in place. That would probably be true, but then the Congress government changed its long standing socialist philosophy in 1991 when India encountered an unprecedented balance of payments crisis. For the past quarter century or so, successive governments have improved their focus on economic development (though not at the pace required, and definitely not at the speed at which Communist China was able to pursue economic growth). Hence, it is also reasonable to say that India shifted surely and steadily towards a Capitalist model of economic growth, in simple terms. It was actually more complex than what I am stating here, but then we wish to understand the essential truth rather than analyze voluminous economics data.
So, we have now arrived at an inflection point in the GDP growth curve. In the process of the rapid growth over the past several years, India managed to create scores of billionaires, and Capitalism was no longer a bad word in the Indian lexicon. Startups mushroomed in Bangalore, Hyderabad, Chennai and Gurgaon. Venture Capital Funds flocked to India. The India IT Story was going great guns. More jobs were getting created. And what not?
However, one sad thing is the ignorance of our Capitalists on how to behave and live in one of the poorest countries on earth, and how to contribute to the less fortunate in society. In essence, it was a required tenet that Capitalists anywhere on the planet who have made billions for themselves need to become real philanthropists to aid society in ways more than just creating some jobs in the economy. Their role does not stop with just creating a few thousand jobs. And, they are not supposed to flaunt their wealth by building skyscraper homes in the midst of slums. Just look at the top few billionaires in the world, mostly in U.S. and Europe – they are all philanthropists and do not flaunt their wealth. They get engaged in issues which afflict societies all around the world – in Africa, in India, in South America, etc., They apply their minds to solving some of the biggest problems facing humanity.
What about Indian billionaires?
Except for one or two, you don’t hear from the rest on what they are doing towards alleviating poverty, improving water supply, providing power to villages, enhancing availability of quality education, etc., And, surely none seem to be heeding the advice of the Indian Prime Minister on moderation in everything. Nobody is even questioning the generation of wealth by these Capitalists (though there is enough talk on how it was done with the help of greedy government officials in most cases, but not all), or creation of jobs. What is sincerely needed is their application of mind to resolving some of the most intransigent challenges faced by India and its poor people who live below the poverty line.
Now it gets interesting. India moved away from Socialism to Capitalism sometime in the early to mid Nineties. Is it time for India to revisit Socialism (as Bernie Sanders tried to do in the recent U.S. Presidential Election Campaign)? Is it important for the Indian Government to become more interventionist than it actually already is? Is its pleading for Corporate Social Responsibility falling on deaf Corporate ears of the Capitalist oligarchy? Is it critical at all for the government to be involved in any kind of business?
Well, history is not a predicator of what is to come. With Social Media, the population (at least the younger ones which India does not lack in very good numbers) is “always” connected, and the injustices in society are being discussed more aggressively than in the past. The discussion is also different this time as it is not the corporate cookies afraid of losing their jobs who are talking in hushed tones. It is really the teenagers and the early twenty somethings who are very confident of their future, who are engaged in these conversations.
All these things presage a good development for India – if there is one country which can pull together its young people power into productive causes, it would be the Indian New Age Capitalists a.k.a. Startup Ventures. Such initiatives would eventually wrest control from the traditional oligarchs by implementing suitable business model innovations.
Interesting, right? Let us see what happens in the near future.
6th November 2016
Yesterday I attended an interesting lecture by a renowned finance professional and a venture capitalist.
Apart from other interesting points, he highlighted the need for intense depth rather than a breadth of knowledge or skills.
He was addressing a group of executive MBA students with average business experience of 10 years.
I have always believed in breadth at the expense of depth, simply because I believed I needed to have a wider mental perspective to deal with complex business issues which keep cropping at regular frequency. Right from the beginning, I probably thought that I was always destined to become a general manager of sorts………that is what every MBA pass-out expects him or her to become eventually, I guess.
Things have changed dramatically over the past couple of decades, the world has inevitably changed, the business environment has transformed incredibly, and the manner in which people communicate has also change hugely.
With all this transformation, is it possible for anyone, even a guy at the very apex of an organization, to have a total comprehensive view of everything around that he needs to know ?
Surely that is going to be a very tough proposition.
If everyone in the organization tries to emulate the boss for breadth as against the depth needed for himself or herself, then most organizations will be in serious trouble, if you think about it. Job execution requires considerable depth. I met a CEO yesterday who mentioned that even in his late fifties, he trains himself everyday so that he could successfully demonstrate the latest features of his product to a potential client – he said that while the traditional wisdom is that you could always get that task delegated to a mid-level person, the customer does not think so – the customer would not only expect you to explain about your product or solution in great depth, explain how your product can solve his problems, and then if he has the time would expect you to demo ! One has to be prepared all the time for that eventuality. By doing so, instead of delegating it, the customer would gain huge confidence in your product, your company and your capabilities.
So, my new conclusion is that “Depth” is far more important and critical to one’s success than breadth. While there is no harm in knowing something about everything, it is not necessary these days as one can get any kind of information from the web; whereas, to attain depth, it requires hard work and training, not generally easily delivered for free from the internet.
This is something which we should all think about………
25th August 2013
If there is one thing that can be learnt from the travails of Mr Rajat Gupta, it is that information is sacrosanct and should not be traded for anyone’s benefit, knowing full well that critical information will be traded. When information is shared due to the necessity of one’s job or position, it is done with complete trust and integrity and the recipients need to reciprocate the trust. When that hard-earned trust is misplaced and then misused by the recipient, then judgement of the giver and the user of the information will be called into question.
The other key learning is the deciphering of human greed. Why is it that folks who are rather well off want to make more on morsels of information that can be secured using illicit transfer of such information from the famous and powerful people, knowing that such use of information for personal gain is not only prohibited by law, but is totally immoral ?
I am not passing any opinion on the verdict of conviction by the jury in the Rajat Gupta case – the jury may or may not be right. All evidence presented in the case is circumstantial and is unlikely to hold up if the case ever makes it to the Supreme Court of the U.S.
But the point is, should this case ever have occurred in the first place ? Why do people in high and mighty positions, sometimes misuse their positions for personal benefit ? How come a long distinguished career could just be thrown away (Mr Rajat Gupta was the global Managing Director of McKinsey) for an urge which could have been controlled by the most sober and calm individuals if only had they reflected on the repercussions of their intended actions ?
Repeated and successful prosecutions of insider trading cases on Wall Street over the past couple of years should have given a pause to any criminal conspiracy, but unfortunately the case precedes this time period and in hindsight, I am sure that the people involved in trading of information in this case would not have dared to do things that they did in fact. Exchange of securities related information happens all the time all over the world, but such information exchange is mostly casual and based on hearsay. Sometimes it could have led to profits from trading on that information. But, in the current case which has caught the limelight given the powerful personalities involved, these folks are the originators of the actions leading to the information. So, it becomes a case of fiduciary trust and integrity.
I do not know whether the conviction will ultimately lead to a jail term for Mr Rajat Gupta. Today, there was extensive coverage of the case in The Times of India newspaper – one full page. I disagree that acts of philanthropy and good deeds should be taken into consideration while determining the outcome of the case. I also disagree to associate national or ethnic origin in any way to this case – we are seeing a case of human failure, and the ultimate determination of whether it was indeed a premeditated failure is yet to be taken by the ultimate Court of Law. So, let us not prejudge, but take in the learning from the case for our future life design, and advising the youngsters who contemplate a high-achieving life of riches in securities and banking (and for that matter, in any endeavour of life).
16th June 2012
There was an interesting coffee-shop discussion recently with some friends on what we do to handle the challenges and stresses that impinge on us during daily lives.
These folks handle challenging jobs with built-in stresses which they have to handle regularly, and they also face sudden issues involving their employees, customers and markets.
One guy said that he keeps the blackberry switched off during weekends, and “concentrates” on spending time with his family. Good idea but not practical in this “over-connected” world, where the world expects you to be connected and available.
Another guy said that he spends time on golfing Saturday/Sunday mornings which takes his time from something like 6 AM to 3 PM. No harm in that, but one has to be regular and focused on the game, which depends on a close circle of golfers who usually do not tolerate inconsistencies. Plus, you would hardly get time to attend to family or personal needs over the weekend, and weekdays are like 24 x 7 operation !
Some other guys prefer cricket, tennis or badminton.
The thing which has worked for me during weekends is a combination of 60 minutes gym (per day) plus concentrated putting on a golf patty at home plus of course, blogging, and you won’t believe this – cutting fruits ! Rest of the time is spent with the family or going for forced shopping !! The best stress-buster is at the gym followed by blogging and cutting fruits.
The fruits that I like and therefore, cut, are – apples, kiwi fruit, pomegranate, pears and guavas. Takes some good effort when you are not using any gadgets. I have an apple cutter, but I don’t use it as it is quick and takes the pleasure out of the manual cutting. When you take time to cut in a nice organized manner every late evening, arrange the same and hand out to family members after dinner, that is real good focused exercise.
Of course, sometimes variety is required, and then I would go for some light badminton or golf-putting. It is good to get the concentration, and I can tell you – it helps in your business and people interactions as well. Most of us lack listening skills, and it is critical to enhance the same and that would come with increased ability to concentrate your mind on the job at hand.
I tend to compare the ability to focus on one task vis-a-vis handling a multitude of tasks simultaneously. I used to place more importance on the latter for a long time, as I thought my ability to juggle many tasks would help me move quicker and ahead of others.
But as we absorb the complexity of the corporate world and encounter bigger challenges in business and life, I found that the singular ability to concentrate on one big task to the total exclusion of everything else, even if that is required only for 2 hours, is a very critical and strategic benefit one can have. I had to develop that ability and it took time.
Some of the stress-busters (may be this is an incorrect nomenclature !) that I have mentioned above are helpful. However, to each his own – you got to develop your own “busters” for your own benefit, as only you can determine the specific lack of certain abilities in yourself. May be at a higher level, a mentor or coach that you have assigned for yourself can help point out such deficiencies.
The technique has to be developed by yourself and if that is successful, you would find that religious repetition of the identified stress-buster would help you out in a major manner.
One does not need medicines or medical counselling for beating stress. You can do it yourself and at the same time enhance one of your critical abilities for the future.
12th November 2011
Mumbai is an amazing city.
It has been raining cats and dogs for the past few days. The rains have been successful in filling the water catchment areas just outside the city and also very successful in creating multiple continuous craters on the poor quality Mumbai roads.
But no issue with rains as such. Business life goes on in Mumbai without stop. I was amazed to see the mass of working folks who were walking on the roads in pouring rains after close of work. There was the usual traffic jams in the expressway, no surprise there – in fact, when it rains even in small quantities, the Mumbai traffic starts to crawl. You can imagine what happens during the big rains. Like today’s rains – it has rained non-stop from last night, all of today……and it is still raining heavily at 11 PM tonight here in Mumbai.
But action goes on. Everyone goes about his/her task as though things are perfectly normal. Cars are accelerating when there is little less traffic on the roads, irrespective of the wetness of the roads. People cross roads nonchalantly, carrying umbrellas, and completely oblivious of the oncoming traffic, absolutely sure that nothing will happen to them. Big lorries carrying all kinds of stuff are moving in and out of the city, during the only hours that they are allowed in. Buses are running as usual, again completely ignorant of all traffic rules.
And, that is the spirit of Mumbai. Rain or no rain, business goes on, and has to go on, as this is the financial and commercial HQ of India. When I walked out of a five star hotel recently, I was surprised when someone approached me and asked whether I would be interested to see the inside of the Aston Martin car parked in the driveway. Though I was a bit taken aback, I also noticed the proactive approach made by the driver, in the hope that I might be interested in a test drive. Well, I was not, but that is a different matter altogether. The fact is that, even in pouring rain, someone approaches and asks if we can do business ! I am sure that this kind of thing does not happen in other cities of India that easily.
Mumbai has a way of working and that is a non-personal, non-emotional, practical way of conducting business and affairs. Entirely professional and non-partisan as well. So, it is no wonder that Mumbai stands tall amongst the cities of India in terms of the professionalism and ease of doing business.
Well, I started with rains and ending with conducting business ! And that is the way Mumbai moves on and ahead. Welcome to Mumbai…….in the rains !
27th August 2011
Courtesy : Chaitanya, my classmate from IIM-B
BABY giraffes never go to a business school. But they learn a very important management lesson much early in life.
A lesson that all of us would do well to remember.
The birth of a baby giraffe is quite an earth-shaking event. The baby falls from its mother’s womb, some eight feet above the ground. It shrivels up and lies still, too weak to move.
The mother giraffe lovingly lowers her neck to kiss the baby giraffe. And then something incredible happens. She lifts her long leg and kicks the baby giraffe, sending it flying up in the air and tumbling down on the ground.
As the baby lies curled up, the mother kicks the baby again and again Until the baby giraffe, still trembling and tired, pushes its limbs and for the first time learns to stand on its feet. Happy to see the baby standing on its own feet, the mother giraffe comes over and gives it yet another kick. The baby giraffe falls one more time, but now quickly recovers and stands up.
Mama Giraffe is delighted. She knows that her baby has learnt an important lesson:
Never mind how hard you fall, always remember to pick yourself up and get back on your feet.
Why does the mother giraffe do this? She knows that lions and leopards love giraffe meat. So unless the baby giraffe quickly learns to stand and run with the pack – it will have no chance of survival.
Most of us though are not quite as lucky as baby giraffes. No one teaches us to stand up every time we fall. When we fail, when we are down, we just give up. No one kicks us out of our comfort zone to remind us that to survive and succeed, we need to learn to get back on our feet.
If you study the lives of successful people though, you will see a recurring pattern. Were they always successful in all they did? No.
Did success come to them quick and easy? No, You will find that the common streak running through their lives is their ability to stand up every time they fall. The ability of the baby giraffe!
The road to success is never an easy one. There are several obstacles, and you are bound to fall sooner or later. You will hit a road block, you will taste failure. But success lies in being able to get up every time you fall. That is a critical life skill. And it is the habit of all successful people.
Courtesy : Chaitanya, my classmate from IIM-B
15th May 2011