Infosys Saga: Leadership Lessons For Founder-CEOs


The latest saga in corporate wrangling is the resignation of Vishal Sikka, MD and CEO of Infosys. There is a definite feeling of déjà vu. Last year, Cyrus Mistry of Tata Sons resigned from his position amid a very public spat with the patriarch Ratan Tata. There was open mud-slinging between him and Tata, the previous CEO. Allegations flew thick and fast, resulting in litigations that went to the courts. After the ugly face-off, N Chandrasekharan of Tata Consultancy Services (TCS) was appointed to the position.

Sikka talks about “false, baseless, malicious and increasingly personal attacks”, and adds, “I have decided to leave because the distractions, the very public noise around us, have created an untenable atmosphere.” In all likelihood, he was referring to the previous CEO and also the founder of N R Narayana Murthy. The Infosys board has taken sides with the outgoing CEO and says, “Mr Murthy’s continuous assault is the primary reason that the CEO, Dr Vishal Sikka, has resigned despite strong board support.” It doesn’t leave much to imagination the kind of acrimony that had developed between the two corporate leaders.

Striking similarities between Infosys and Tata Sons episodes

Initially, both Sikka and Mistry were praised for their potential: Tata described Mistry as “far sighted”, while Murthy considered the “illustrious track record” of Sikka as one that made him “ideal choice”. Course correction could be there but its happening so soon after transition could mean the incumbent didn’t get a fair chance to prove himself and his ideas. No wonder, there is a public opinion that corporate leaders have not been doing justice to their choices and trying to behave autocratically.

However, the most striking aspect in all this seems to be that both Sikka and Mistry failed to install changes that they wanted in the new setup. Let’s see how through some simple steps Founder-CEOs can avoid such a distasteful situation. It would also ensure that the change of guard is amicable and does not generate feelings of ill will. In case you find yourself in a similar situation, this is how to deal with it.

How Narayana Murthy should have handed over the mantle to Vishal Sikka

There can be a range of emotions experienced by outgoing and founder CEOs. There could be a number of positive as well as negative emotions. The first and foremost positive emotion could be of elation and generosity. It must be acknowledged that the owner-CEO built as well as captained something valuable and that effort and journey should get its due recognition. There would naturally be a feeling of elation for the veteran who put in place a successful business and has all the reasons to feel on top of the world.

The second stage can prove to be tricky and could result in negative emotions. Founder-CEOs must understand that they are no more the captain of the ship and that the show is going to be run by someone else now. There will be significant shift in control as the incumbent comes in with his own set of beliefs and thoughts. Not being prepared could make the second stage really difficult and result in bad blood all around. Consequently, they must be mentally prepared for the change in guard. They must also accept that the emotional stages are common and expected. And everybody goes through it. It is neigh difficult to leave your child in someone else’s custody and that too for all time. Like all separations, it is a painful process.

Challenges for Founder-CEOs after leadership transition

There could be anger, which is understandable, particularly when the new entrant is spectacularly different from his predecessor. As the new CEO begins to bring in his thoughts and vision into the organization, this could pose a entire gamut of challenges for the previous CEO. The former could use his influence to marginalize the new CEO or throttle his views. There can be a very strong impulse to remote control the institution. They can interfere in the day-to-day running of the business, especially if the outgoing continues to stay on the board.

Proper handover crucial for the organization

This anger or frustration could be managed if the proposed changes to the system and the organization are spelt out in advance, especially during the transition. The Founder-CEO should accept the fact that their authority will, in all likelihood, diminish. Additionally, it is in the interest of everyone that the outgoing knows how much control he would continue to enjoy over the organization’s systems and personnel.

Murthy should prevent the formation of adverse public opinion as it could be detrimental to the wellbeing of the company, which is a listed public company. He must take proactive steps to dispel such opinion. Both the Founder-CEO and the board must try to resolve differences and take the lead in this direction. Mere words won’t suffice. Actions have always spoken louder than words.

[Disclaimer: The views expressed in this article are solely those of the authors and do not necessarily represent or reflect the views of Trivone Media Network's or that of CXOToday's.]