Bengaluru: The trouble at Infosys Ltd is the result of a personality clash between founder N.R. Narayana Murthy and chief executive officer Vishal Sikka that is damaging to both its shareholders and employees.
Investors may believe Murthy’s tirade against alleged corporate governance issues at the company is directed against the board; some have described the trouble as reflective of challenges faced by a company shifting from a founder-run firm to one managed by professional managers; a few have dubbed it a cultural clash between the old and new.
Employees who have worked with both Murthy, 70, and Sikka, 49, and experts say that although the current spat may be between some of the founders and the board, the eventual aim of this faceoff is to make Sikka abide by Murthy’s decisions.
“Vishal is making the company embrace newer technologies, changing the mindset from a staffing-run company to one that can offer newer solutions,” said a senior executive at Infosys on condition of anonymity. “If he succeeds, he will be forever remembered and celebrated. But some founders just cannot see to it that this transformation is a success because their own legacy is at risk of being eroded”.
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Sikka, who took over as CEO in August 2014, managed to steer Infosys to industry-leading 9.1% dollar revenue growth in 2015-16.
In the current year, Infosys, although it will grow a tad slower (at-best 7.6%), will still expand faster than rivals including Tata Consultancy Services Ltd (TCS) and Wipro Ltd.
Both Sikka and Murthy have common personality traits. According to people who know them, both are ego-maniacs; knowledgeable, not selfless, extremely media-savvy, and hunger for respect from people around them.
“Of course both are extremely egoistic. What else explains why Murthy and Vishal could not sit down and resolve differences or sat down say with the board to resolve any differences some of the founders may have with the board,” said the first executive cited above. “You can say Vishal is a new-age Murthy for these qualities.”
But beyond these similarities are opposing traits which have made many to believe that relations between the two are “beyond repair”
Sikka is a Punjabi, described by his colleagues as a loud, boisterous and hard-charging technocrat. He earns big and like a true American manager is so cocksure about his decisions that he will not leave any room for disagreement.
This makes him come across, according to the second executive, as not the best people manager.
At the heart of this personality clash is Sikka’s method of working without being micro-managed.
“Vishal is a tech-wizard, who loves working on innovative ideas,” said the executive cited above. “People like him (Vishal) who work on innovative ideas want to work with freedom, and not somebody overseeing them or controlling them”
This perhaps also explains why when Sikka took over the job, the company did not appoint any executive vice-chairman or chairman. This is reflected in Sikka’s employment contract. Sikka, if need be, can use the clause of ‘Good Reason’ to terminate the existing employment agreement with Infosys, and still get his severance payment if Infosys appoints an executive chairman or vice chairman.
Good Reason is defined as “executive’s resignation within 30 days....following the occurrence of one or more of the following, without Executive’s express written consent: “the appointment of an Executive Chairman or Executive Vice Chairman to lead the Board of the Company,” reads a part of Sikka’s employment contract with Infosys.
Murthy has an edge over Sikka in that he is called a “very operationally strong” leader who helped build a company like Infosys and a very good people manager.
Emails sent to both Murthy and Sikka seeking comment went unanswered.
However, in an email response dated 23 January, in response to a detailed questionnaire from Mint dated 17 January, Murthy clarified that none of the founders have discussed with Sikka his strategy or its execution.
“Right from the day the founders voluntarily left the company in October 2014 to give a totally free hand to Vishal to craft and execute his own strategy, none of the founders has discussed with him either his strategy or its execution,” said Murthy. “When Vishal is in India and is free he requests for my time. We only meet for a meal in my house or on rare occasions on campus”
“Vishal is a rare technocrat with whom I can discuss topics as diverse as quantum mechanics and B-star trees. Therefore, the only topics of our conversation during our meetings are physics, mathematics and computer science. Neither has he has asked my opinion on any aspect of his strategy or its execution nor have I offered any advice on these issues. This has ensured that Vishal has had maximum freedom to pursue any strategy and any execution method of his choice”
“At Infosys, the culture has always been for all predecessors to only wish the best for the succeeding CEO and his management whether it is Vishal now or Shibu (S.D.Shibulal), Kris (Kris Gopalakrishnan), or Nandan (Nilekani) in the past. Therefore, it is in the same spirit that I continue to wish Vishal, the management, and every employee the best of everything in the coming year like I have done in the past