When founders find it difficult to let go

Priyanka Pani Mumbai | Updated on January 27, 2018

Last year Narayana Murthy, co-founder of IT major Infosys, while delivering a speech in Mumbai said, “The biggest challenge for all of us, not just politicians or bureaucrats, is that we, Indians, have the highest ego per unit of achievement. I would humbly request, we be open-minded to those who have performed better than us.”

After Vishal Sikka’s exit as the CEO of Infosys, experts and industry honchos reckon that Murthy may have not stuck to his own advice.

Gurcharan Das, author, management guru and and former CEO of Procter & Gamble India, told BusinessLine, “Narayana Murthy built the company as a professional but today he is acting as typical patriarch. Murthy must know that when you quit a company, you must also let go of it. Sikka was doing a commendable job at the company, bringing about a quiet revolution and transforming it for the next stage of technology.

The Infosys incident comes a few months after the Tata Sons’ former Chairman Ratan Tata got into a massive public spat with the then current Chairman Cyrus Mistry that not only led to the latter’s ouster from his position but also from the board. This incident has raised a very pertinent question on why some founders find it difficult to let go.

Cutting the umbilical cords

“The Infosys episode also shows that some Indian companies have not been able to cut its umbilical cords with the founders. These cords have to be cut if India has to become a truly developed country,” says Das.

Harsh Mariwala, founder of consumer goods company Marico, who also has successfully managed to groom his successors, said: “It is sad that a globally reputed firm like Infosys has to go through this mess”

Not only large diversified conglomerates but many new age companies also have fallen prey to the spat between founders and professionals, who were bought in to run the show. Take for example Flipkart. The e-commerce giant had roped in several professionals from the Silicon Valley to grow the business but they quit as founders Sachin and Binny Bansal retained control of operations.

There are other global examples including the recent incident at fashion powerhouse Ralph Lauren, where the CEO quit in just six months over difference of opinion and views.

“Such incidents happen when there are no clear cut succession plan and the founders have to get someone from outside to run the show. Founders are always very cagey when someone tries to make any transformational change in the company which leads to spats. In a bid to avoid that they should start planning their succession by having a dedicated team that can identify some internal candidates and groom them further,” said Sujaya Banerjee, Chief Executive Officer of Capstone People Consulting.

Banerjee further added that only about 20 per cent companies in India have a proper succession plan in place.

(With inputs from Rahul Wadke)

Published on August 18, 2017

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