[civic-sense]

Nilekani is running for the post of Chairman of the board, not CEO. To get out of the mess they would first have to reconstitute the board.

[hserus]

Originally Posted by civic-sense

Nilekani is running for the post of Chairman of the board, not CEO. To get out of the mess they would first have to reconstitute the board.

And in such a case an independent CEO would have very little say in the running of the company.

Not to mention the board becoming packed with nominees of the promoters.

Same mess, I’m afraid - I am not sure any independent CEO will want to come in. Probably end up promoting as CEO a senior Infy exec who is acceptable to the founders and willing to continue hewing to their wishes.

[interest]

Originally Posted by GTO

Wow, interesting story. If it's in the public domain, please share links. Would love to read.
.

Unfortunately not in the public domain so cannot disclose the name of the company. But you may search for an Italian power company that bought majority stake of an Indian renewable energy company. The reason why the sale happened was what I mentioned.

[CarJunki]

In this entire saga, one thing is clear, whether the founders like it or not, they will be at loss. More legal trouble will come their way via ADR buyers.
One more aspect that became very apparent about India IT services companies (a dignifies name for cheap labor contractors), they have very limited role left in the future economy.

One company that really works with grooming leadership from within is L&T.
In general manufacturing or core economy companies have greater possibility of successful transition to professional management (in Indian context).

[Alfresco]

No organisation should be solely run by either the promoters or the professionals.
Professional expertise is needed for the day to day running of the enterprise.
At the same time, strong oversight has to be provided by the promoters who have thrown in their all financially, physically and emotionally to build up the institution.

At the end, if any decision turns out to be bad, the professional can just walk away to another job but the promoters don't have that option.
Professionals can be bad for business if they have no emotional connect with their work and don't claim ownership.
Promoters can be bad for business if they don't have professional expertise of their own and always measure everything from the point of view of profits.

[autohead666]

When Vishal Sikka took over as CEO, Infy was in a terrible state, projects were going away, share prices were at all time low, attrition level was high. He changed all that, in a span of 3 years, and for that, its obvious that he had to bring changes to the current environment and policies. The results were for all to see. He was gaining popularity among the employees and its understood that in order to implement those decisions he had to lock horns with the board of directors. I guess he was seen as a threat to the directors rather than someone who was far sighted and a leader who revived the company. I simply shows that no matter how well you perform, management will always try to find faults, irrespective of whichever position you are in.

[sanstorm]

With so many things going/gone wrong including "blue eyed boys" fall like nine pins, it is classic case study for corporate India. The initial and easy reaction is tending see things in black and white, culture driven vs evangelist, humble vs young & hungry, however it would take a long time for truth to emerge and even longer would be the recovery path for Infy.

Knowing Infy has pile of cash reserve, they may not necessarily need cashier/operations driven person as first priority. In today's economy, anyone who does not have compelling connect with customers/business and a visionary that stays top of digital economy is not going to help for an IT company.

I am sure they will find CEO, but getting someone filling in those shoes is tough , however is the only success mantra. Otherwise as the famous adage go - "Haveli ki Umar saath saal"

Guess he was seen as a threat to the directors rather than someone who was far sighted and a leader who revived the company

I tend to agree this view, one seasoned person inside was full of praise of him, mentioning how he has direct visibility to business,100+CIOs across globe, how he successfully broke the kingdoms built by incumbent stalwart (inefficient though)and how Infy was stepped up from slideware to software/CX. All these qualities tend to shake house, eventually tremors to be felt higher-ups. It likely that the vulnerable insiders lobbied successfully to poison the promoters time to time. knowing promoters formal/informal clout, both emotionally and otherwise.

One company that really works with grooming leadership from within is L&T.

HCL and Wipro are having mentoring in in their DNA, I do recollect an ET article quoting between these 2 companies, corporate world has received 25+ CxOs

[hserus]

So this looks like the posters on the thread are divided between supporting the promoters and supporting Sikka.

I am not even sure there's any middle ground possible here.

True - there were several entrenched fiefdoms, classes of employees (long serving ones with high share values from stock ops in the early days vs recent entrants), several middle managers promoted just to handle the huge influx of freshers and now facing the ax after Trump and Brexit, a lot of rot that required drastic surgery, of course at the expense of the various poor fellows who got fired - or rather given arbitrarily low performance evaluations and made to leave.

There are reports of people trying to organize trade unions of IT sector employees so this sort of rot is certainly a major contributory factor that will make the life of any future CEO in this industry the same sort of misery that CEOs in manufacturing and other sectors have faced for a long time.

I guess we can blame the original promoters of this and several other large IT majors for their lack of foresight in failing to anticipate the market moving away from poorly trained junior staff to a few senior staff along with automation, besides the US and British governments moving to protect their own citizens from being laid off and jobs outsourced by cracking down on the flagrant abuse of work visa programs. Both those trends were visible miles away and yet industry (not just the currently headless Infosys) was woefully unprepared.

[DuHasstMich]

Originally Posted by androdev

Do you know that a co-founcer of SAP (Hasso Plattner) has more than 8% shareholding in Panaya

While Panaya is all over the news and being discussed in full details, but most people are overlooking a simply fact. What is $200M for a company worth $35B? Even if they 'overpaid', that is still chump change and $200M in itself isn't some breathtaking amount anymore for a decent size organization.

[Sahil]

Originally Posted by GTO

Just read an article on this topic @ The Economic Times.

Great read. I follow this topic very closely, being a third generation family business owner it is imperative to have an outlook geared towards professionalizing. It's a well known saying in the business world - the first generation builds the foundation, the second generation further builds it and enjoys the wealth to some extent, the third generation enjoys the wealth a bit too much until it's all over. Only 3% of family businesses survive beyond the third generation! And the ones that do survive are only because they professionalized the company enough to avoid family feuds over ego, money, and power as the number of mouths to feed increase.

Personally, besides Dabur, I really look upto Marico and Appolo Hospital on their governance and transition from being traditional family businesses to benchmarks in corporate governance structures.

[sgiitk]

Originally Posted by GTO

Nice thread, Avdhesh .

When you build something great from scratch, you'll obviously have your heart & soul in it. We see so many Indian companies where the founder or his descendants continue to control the company.

Not everybody is Bill Gates. also, with Infy they never grew up from a Body Shopping (BPO) company. Sikka was trying to take it up market.

[srishiva]

For promising a 20 billion dollar company, Sikka would have surely thought that he could do most of it through acquisitions with the cash on hand. Now realizing that every buy would be scrutinized, he would have been jittery being the CEO.

NRN never doubted Sikka's ability. Complaints were mostly for the adhoc decisions that resulted in money being given away. The Board was just being yes men to whatever he did.

[hserus]

Originally Posted by DuHasstMich

While Panaya is all over the news and being discussed in full details, but most people are overlooking a simply fact. What is $200M for a company worth $35B? Even if they 'overpaid', that is still chump change and $200M in itself isn't some breathtaking amount anymore for a decent size organization.

So it was bought at 200 million rather than 162.

The thing is, just how many continuous delivery / continuous integration firms are actually on the market with a good product and reasonably low valuations?

How much of a need did Infosys have for the product, and the employees with expertise in that area?

My guess is, after decades of developing for enterprise IT, a substantial part of their workforce would still be doing waterfall, and moving towards scrum / agile, which have themselves been eclipsed by CI/CD, Devops etc. So paying a premium over valuation for the available expertise and product is not unknown especially when taking over a small company that's under a quarter of a million in the first place.

Small potatoes acquisition wise. Panaya was a small company, with a ready customer base for its technology and expertise inside Infy. Integration would have been by far easier. So possibly worth the 200 million.

If you want a mess on a grander scale, look at this -

1. IBM acquired cloud services / datacenter company Softlayer for 2 billion, in July 2013.

2. 19 months later, Softlayer CEO Lance Crosby quit IBM - he was not given leadership over IBM's cloud business, the bulk of new offerings in which were built around his acquisition.
https://www.forbes.com/sites/benkepe.../#14451f6416ff

3. In 2016, Crosby took a cloud based cybersecurity startup - Stackpath - out of stealth, with a large number of carefully chosen acquisitions and $150 million in private equity funding. And an impressive customer list right at the beginning. http://cloudpost.us/2017/03/stackpat...icipation.html

4. Meanwhile - IBM's cloud services isn't in the happiest of positions. http://www.afr.com/technology/ibms-c...0170718-gxdz2b

So let us have some perspective here, I'd say - but Infy is a place where if the CEO drives a Corolla and flies coach, he is idolized for fiscal discipline and frugality.

[DuHasstMich]

Originally Posted by hserus

So let us have some perspective here, I'd say - but Infy is a place where if the CEO drives a Corolla and flies coach, he is idolized for fiscal discipline and frugality.

It's actually not even a CEO to CEO comparison, it's more of a comparison between the Owner and the Employee! The owner with loads of cash in the bank does not hesitate being spotted in a Corolla, because he is getting a gigantic payout, but the employee on the other hand does not have the same financial situation, and will want a better lifestyle even on current terms.

[rrsteer]

Originally Posted by hserus

4. Meanwhile - IBM's cloud services isn't in the happiest of positions. http://www.afr.com/technology/ibms-c...0170718-gxdz2b

So let us have some perspective here, I'd say - but Infy is a place where if the CEO drives a Corolla and flies coach, he is idolized for fiscal discipline and frugality.

You can't compare IBM with Infosys. It is a bad analogy to make here.
IBM is a bloody complex technology company. Since 2011- 2012, especially after the might of AWS dawned on them, they have been running around like headless chickens. IBM basically has been defeated not by bad management, but the inherent weakness of corporate structure in a large company that stifles innovation and decision making.