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Can Infosys and Tatas Get Over The Old vs New Row? Hope So

Rajen Garabadu GarabaduRajen

Updated: August 18, 2017, 6:06 PM IST
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Can Infosys and Tatas Get Over The Old vs New Row? Hope So
Representative image.
Over the seventy years since India got Independence, two companies have come to be regarded as poster boys for corporate governance practices, ethics and values - Tatas and Infosys. One has grown up hearing stories on how these companies are highly respected for their ethos, deep-rooted values and unquestionable integrity. When there were reports of wrongdoing in other companies, examples were given on how it could never happen in a Tata company or in Infosys. Not only were both companies held in high esteem, the tallest leaders in both companies – Ratan Tata & N R Narayana Murthy - commanded huge respect and admiration both within and outside the company.

I used to be enamoured by both, for being what they are and for being role models for anyone aspiring to pursue a career in corporate India. Both Ratan Tata and Narayana Murthy exhibited not just professional excellence, but were regarded among the most humble and graceful gentlemen corporate chieftains one could hope to meet.

The first serious dent to Brand Tata was caused by the release of Radia tapes which cast aspersions on its hitherto unblemished reputation. Till then, the Tatas were always considered above board in all their deeds and actions. While they enjoyed an iconic status in the manufacturing era which lasted for almost the entire 20th century, it was Infosys which became the toast of new-age companies in the information and digital era.

Infosys has seen a bitter slug fest this year between its CEO (now resigned) Vishal Sikka and its founders, led by NR Narayana Murthy. NRN has been scathing in his criticism of Vishal, especially on the way he handled finances, arguing it is against the core values on which the company was built. Till Sikka took charge of Infosys, the company was known for keeping costs under check, and the founders who ran the company in rotation for more than three decades led by example by fixing their own remuneration below industry standards. Sikka, a professional manager hired from outside India felt it was time to infuse talent from other companies and was willing to make changes in the compensation practices wherever required. He saw the world differently from his predecessors and took steps in that direction.

While the founders were critical of Sikka splurging much more than necessary, the Infosys Board seemed to be on the same page as its CEO and felt nothing wrong had taken place. Sikka said in his resignation note that he was distracted by Murthy's constant allegations levelled in public, which he found difficult to ignore and which hindered his focus on strategising and finding the way forward for the company.

There are many similarities between what happened in the Tata group in 2016 and that in Infosys the following year. In both cases, Cyrus Mistry and Vishal Sikka were handpicked after an extensive search and evaluation process undertaken to find the best man for the job. Both had the blessings of the stakeholders in their respective companies. Ratan Tata and NRN had praised Cyrus Mistry and Vishal Sikka and expressed full faith in their respective abilities.

Both companies saw for the first time outsiders taking charge. Sikka was the first non-founder to be CEO at Infosys. Mistry was the second non-Tata to head Tata Sons. The management in both companies, which was till then closely held and run by a select few, was opened up for the first time to someone from outside (though Cyrus and his family were associated with the Tatas for a long time).

What went wrong in both cases is a matter of speculation and debate and has been written about extensively. But from the outside, it appears that both Vishal and Cyrus are strong personalities who have a mind of their own and do not feel compelled to toe the line taken by their predecessors. They took steps and actions as they deemed fit, even though it did not go down favourably with the key stakeholders. The old guard did not let it go and did everything possible to displace the existing incumbent.

The skirmish between the old and the new has damaged the hallowed reputation of both companies, and more so of their best known faces. The battles were fought in public and this dented the most cherished values both the companies are known for. Let’s hope both these companies can put behind the recent unpleasant chapter and move ahead to restore their past glory and pride.
First Published: August 18, 2017, 6:06 PM IST
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