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Old 26th August 2017, 14:53   #91
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Default Re: Promoter-driven companies unable to cede control to professional managers (e.g. Infosys)?

This thread reminds me of the time Microsoft was hunting for Ballmer's replacement. Fortune called it "how not to do CEO succession".

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Microsoft’s CEO search marks the emotionally painful transition that every company must get through, moving from the founders’ guidance to a new generation of professional managers who weren’t present at the creation, and it isn’t easy. In recent years, for example, Nike, Dell, and Starbucks have all tried it and blown it; in each case the new CEO got fired, and the founder returned to right the ship. Microsoft can’t afford that scenario.
Full Article

Of course, they sure hit it out of the park with Satya Nadella!
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Old 26th August 2017, 15:25   #92
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Default Re: Promoter-driven companies unable to cede control to professional managers (e.g. Infosys)?

Sikka has clarified he isn't joining HP as CTO, so let's put that discussion to rest. There is that odd chance he has already accepted this or another role since he has mentioned in his letter he was being persecuted sinCe Jan. Ample time for him to prepare for a backup option once he knew NRN wouldn't relent.

Coming to the actual crisis, leaking off the record conversations with board members that Sikka is not CEO material, or insisting that the report be made public seem childish on NRN's part, especially when you read the board's letter that the employees who testified before the committees would feel uncomfortable if the reports were laid bare in the public domain, and NRN himself had no evidence whatsoever to offer to backup his allegations.

So it seems to me at least that somebody went to NRN as a whistleblower, NRN was already sour at Sikka and the board over the compensation issues and he decided to use the Panaya case to beat the board black and blue with a moral stick.

Sikka has also proclaimed that the per employee revenue has increased for six quarters straight, and other than the compensation and Panaya matters there has been no news on him not being able to perform. NRN has admitted to it as such when he says his comments are not aimed at Sikka's performance. So at the moment I would conclude Sikka was on track with improving Infy's bottomline.

While a single share holder can definitely take the board to task, he cannot do it in this manner where he casts aspersions over the entire board of directors and the two independent investigating firms.

This entire saga, at least to me, with my limited knowledge, seems to be a child's attempt to reclaim its favourite playground spot, in a manner of speaking.

However childish I think this has been, NRN has clarified he doesn't want power for himself and his family members, and at the momebt I do trust him on that.
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Old 26th August 2017, 16:26   #93
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Default Re: Promoter-driven companies unable to cede control to professional managers (e.g. Infosys)?

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However childish I think this has been, NRN has clarified he doesn't want power for himself and his family members, and at the momebt I do trust him on that.
I think that claim would have been believable before the mini-Murthy episode. After the havoc caused by that episode, one can't be too sure.

As a co-founder CEO myself, I am on the fence here. I can understand NRN's sentiments, but then he gave up the CEO role 15 years ago. When you move out, it should have been clean cut. Him coming back with a mini-me and causing all havoc should have been avoided. And now I see it repeating with another variation. He should have found another vocation and should have just left Infosys alone. With the last two episodes, he has lost all his credibility.

And I am not all gung-ho about Sikka either. Most professional CEOs are fair weather CEOs, unlike founders. Founders fight back until the last chip, which professional CEOs don't. They have their golden parachutes and have the option to walk away any time they feel like it. They are usually good at playing top salesman role and can bring strategic vision lacking within the company. But they don't have real skin in the game. That can lead to principle agent problem.

As I said, I am on the fence with this one.
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Old 26th August 2017, 17:00   #94
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Default Re: Promoter-driven companies unable to cede control to professional managers (e.g. Infosys)?

You are right in that we don't know how this will play out in future, however last time NRN had to come back to clean up the mess created by Shibulal, so he had little choice back then. Sikka has not left Infosys in troubled waters.

Also in the mini Murthy saga as you call it, NRN had made it clear his son was merely helping him out and there was no plan to create a permanent role for him in Infosys. True to his word, Rohan Murthy has not been heard to be meddling with Infosys ever since.
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Old 26th August 2017, 21:10   #95
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Default Re: Promoter-driven companies unable to cede control to professional managers (e.g. Infosys)?

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Originally Posted by V.Narayan View Post
.... Should I continue on the Board after that date and constantly be a mother in law hanging around? should I abandon all ties and say farewell I don't care - and how does one do that with the company's logo etched on each cell inside....
Not an entrepreneur myself (yet), but I was talking to a mentor (good friend and ex-entrepreneur) about this recently and here's what he had to say:

"As a founder, you need to demonstrate trust in your successor by severing professional ties at some point, it being the point-in-time they're ready to go solo.

If you hang around, even with noble intentions, you won't be able to help yourself from meddling because you're naturally attached to what you built and will always think you know best, true or not, and that will cause resentment eventually on both sides. Set a suitable but definite handover date, do your best to transfer all your knowledge and wisdom, offer to be there for them if they ever need guidance/advice, then step away gracefully knowing you did all you reasonably could, including your choice of successor".

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My conclusion is to develop a second career outside the corporate world in areas that interest me and invest serious time and money into it....
If you do decide to step away, this is the best decision you could make. Find yourself something else to do, preferably something you really believe in. I'm no fan of Bill Gates the professional but I absolutely admire what he's been doing since he retired, and he's a great example of how professional retirement is just a fork in the road of life, not the end.

Last edited by Chetan_Rao : 26th August 2017 at 21:21. Reason: Rephrased a few things
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Old 26th August 2017, 21:40   #96
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Default Re: Promoter-driven companies unable to cede control to professional managers (e.g. Infosys)?

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Even a shareholder with a single stock is entitled to take the entire team to task if things look goofy. There are plenty of activist shareholder stories to learn from.
Agree. CEO is sole authority of decisions in the company. I don't think Sikka had to roll back any business decisions due to external pressure. The concerns raised were more related to principle, values, and transparency. Shareholders are well within their rights to questions these and CEO is entitled to address them.
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To his credit, Sikka timed his exit exceptionally well. In a year or two his report card would be so bad that he would have been asked to go.
Yes, with current growth, Infy wouldn't be anywhere near the goal it had set itself. BTW, The buck doesn't stop at CTO, but at CEO
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Old 27th August 2017, 00:29   #97
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....The concerns raised were more related to principle, values, and transparency......
Thanks for raising a pertinent point there. It indicates a potential failure in the CEO selection process, and a question mark whether the same people should be allowed to have a say in choosing another CEO.

How did they end up with a CEO who didn't align with their 'Principles, Values & Transparency' requirements? In all the mess about Sikka's exit, nobody seems to be asking how he got the job in the first place if he was so antithetical to traditional Infosys values? If Sikka was a poor choice, what does that say about the person(s) who made that choice?

Last edited by Chetan_Rao : 27th August 2017 at 00:32.
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Old 27th August 2017, 08:28   #98
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Default Re: Promoter-driven companies unable to cede control to professional managers (e.g. Infosys)?

@chetan_rao; all this sounds like a pack of lame excuses. As soon as Sikka started rowing his own boat, NRN came down like a boll in a china shop. Sorry mate, no way to treat a CEO.
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Old 27th August 2017, 13:06   #99
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Default Re: Promoter-driven companies unable to cede control to professional managers (e.g. Infosys)?

I beg to differ in some areas.

There is an anomaly in current corporate structures. A lot of times, CXOs don't have skin in the game as they can simply move out with a golden parachute as Samurai mentioned. They take disproportionate share of profit/income home without having a downside.

That is essentially the problem NRN has with Sikkas and Bansals. When Sikka flies some clients in Private Jets around the middle eastern destinations (all expenses paid by the company) while the average code mules are paid insufficient salaries with little increments since over a decade, it looks downright ugly to a lot of people.

However, this is perfectly understandably from Sikka's perspective - he comes from a product business, he wants to generate business and he does what he knows. And he knows what he does.

That is where NRN-Sikka conflict is - their value systems. NRN or Tatas are old school where employees and societies mattered as much. Mistry/Sikka have almost singleminded focus on bottomlines.

Disclaimer: Ex Infosys employee but I have no reverence towards old guards because they implemented a performance model with retroactive bell curves in 2009. It was a blow from which Infosys never recovered.
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Old 27th August 2017, 13:09   #100
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Default Re: Promoter-driven companies unable to cede control to professional managers (e.g. Infosys)?

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Originally Posted by androdev View Post
If you sell all your equity, you will have little reason to hang around. But if you retain decent amount of equity and then the people you have mentored and respect look up to you to fix the problems, you would find it very hard to look the other way.
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Originally Posted by Chetan_Rao View Post
"As a founder, you need to demonstrate trust in your successor by severing professional ties at some point, it being the point-in-time they're ready to go solo. If you hang around, even with noble intentions, you won't be able to help yourself from meddling because you're naturally attached to what you built and will always think you know best, true or not, and that will cause resentment eventually on both sides.
Very true. Well said.

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Set a suitable but definite handover date, do your best to transfer all your knowledge and wisdom, offer to be there for them if they ever need guidance/advice, then step away gracefully knowing you did all you reasonably could, including your choice of successor". If you do decide to step away, this is the best decision you could make. Find yourself something else to do, preferably something you really believe in. I'm no fan of Bill Gates the professional but I absolutely admire what he's been doing since he retired, and he's a great example of how professional retirement is just a fork in the road of life, not the end.
Yes. Agree whole heartedly. Wife is fully supportive. It will keep me out of the house. Building and running an organization without business and cash flow targets (but other softer goals) will have a kick of its own.

Last edited by V.Narayan : 27th August 2017 at 13:10.
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Old 28th August 2017, 05:29   #101
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Default Re: Promoter-driven companies unable to cede control to professional managers (e.g. Infosys)?

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Originally Posted by catchjyoti View Post
"Ravi has run with the hare and hunted with the hound. He has played both sides very badly. He has met me personally and said he wanted to get rid of Vishal. He wanted time to say Vishal is not working. And then he made a public statement that Murthy should come back in open. Two days back he changed it because a letter was leaked from the company. And I know who has leaked the letter, I donít want to say the name. He has played both sides and his conduct has been disgraceful. I want to put it on the public record. And I think he must go, and that we have no trust or confidence in him."
Mohandas Pai, Former CFO, Infosys
Former employees apparently eagerly angling for a plum job under their old masters and hence hurrying to curry favour by making such statements.

The first - Pai - is poisonously abusive, but that appears par for the course for him from what I see of him on twitter, where he engages in mostly political commentary these days.

The second fellow is maybe a bit more diplomatic but again, eager to vent his spleen.
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Old 28th August 2017, 07:23   #102
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Former employees apparently eagerly angling for a plum job under their old masters and hence hurrying to curry favour by making such statements.
Do you have insider info? These are some strong words.
IMO Pai has been consistent throughout the saga. Its the board doing flip-flop.
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Old 28th August 2017, 08:02   #103
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Do you have insider info? These are some strong words.
IMO Pai has been consistent throughout the saga. Its the board doing flip-flop.
He has been consistently in support of NRN yes. However all I am seeing in his post are a series of unfounded allegations delivered in a self righteously angry tone that would do some of our TV anchors (dis)credit, and I just pointed that out.
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Old 28th August 2017, 09:54   #104
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He has been consistently in support of NRN yes. However all I am seeing in his post are a series of unfounded allegations delivered in a self righteously angry tone that would do some of our TV anchors (dis)credit, and I just pointed that out.
Which posts are you referring to now? Lets not bring in his political inclinations in this discussion. Your allegations that he is seeking plum role under NN looks completely baseless to me.
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Old 28th August 2017, 10:22   #105
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Which posts are you referring to now? Lets not bring in his political inclinations in this discussion. Your allegations that he is seeking plum role under NN looks completely baseless to me.
So I wonder why he is making this set of comments then. As you say his political preferences don't have anything to do with the issue at hand.

This article / interview to Bloomberg. https://www.bloombergquint.com/busin...lekani-returns

"I know who leaked the letter but I won't say"

"Ravi met me personally and said he wanted to get rid of Vishal"

etc etc. What say does Pai even have in the company? Or significant stockholding? Or any status beyond "former CFO"? Why would his assistance even be sought by the board for any of this?

1. Right now - all his statements are unfounded as of now.

2. The motivation as to why he is making these allegations in such a sensational manner AND "I know who leaked it but I won't say" - well, that is open to debate if you state that my guess is not correct.

Last edited by hserus : 28th August 2017 at 10:25.
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