Infy row seen as Murthy vs Sikka personality clash
LOGGED IN Both have common traits, but vastly different ways of functioning
The trouble at Infosys Ltd is the result of a personality clash between co- founder NR Narayana Murthy and chief executive Vishal Sikka that is damaging to both its shareholders and employees, insiders say.
Investors may believe Murthy’s tirade against alleged corporate governance issues at the firm 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 as a cultural clash between the old and the new.
Employees, who have worked with both Murthy (70) and Sikka (49), and experts said that although the current spat may be between some of the founders and the board, the eventual aim of this face-off is to make Sikka accept Murthy’s diktat.
“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.”
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 egoists, knowledgeable, not selfless, extremely media savvy, and hungry 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 sit down say with the board to resolve any differences some of the founders may have with the board,”said the executive cited above. “You can say Vishal is a new-age Murthy.”
But beyond these similarities are opposing traits, which have made many 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 Sikka come across, according to a second executive, as not the best people manager.
“Vishal is a tech wizard, who loves working on innovative ideas,” said the second executive. “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 the job, the company did not appoint any executive vice-chairman or chairman. This is reflected in his 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 the company 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 an executive vice-chairman to lead the board of the company’,’’ reads a part of Sikka’s contract.
Murthy has an edge over Sikka in that he is seen as an “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 January 23 to a detailed questionnaire from Mint dated January 17, Murthy clarified none of the founders had 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.”