Infosys, Narayana Murthy & mother-in-law syndrome

Last weekend I was at Bengaluru when news broke that the CEO of Infosys, Vishal Sikka, was quitting unable to bear with the ways of N R Narayana Murthy. Infosys equity tanked by 9.6 per cent, leading to a loss of market capitalisation of Rs 34,000 crore. Thereafter, the business and even the general press have been filled with analyses of what went wrong in a company which was earlier reputed to be the standard of corporate governance.

But there were other thoughts in my mind. To me it seemed to be an instance of the founder of the company unable to take a step away even while professing to do so. In other words, Narayana Murthy was behaving like a typical mother-in-law who while professing to hand over the reins of the kitchen to a daughter-in-law insists that she be told what dish is being cooked for lunch and dinner and also insists that she also advise on the quantities of masalas to be added. This is a pity because Narayana Murthy had built up his image on being different and on being simple.

For all those who came in late, Narayana Murthy who used to work in a company called Patni Computers broke away with some of his colleagues to found Infosys in 1981. He soon became a household name in Bangalore (which was what the city used to be called those days) and old timers remember how he and his colleagues went from office to office, seeking customers for their first public issue in the early 1990s that was not even fully subscribed. Narayana Murthy also had a way with the press: you could directly ring him up on his direct landline and he was ever accessible.

He always advertised his simple life style: he was quoted many times in his interviews about how he cleaned his own toilet. For the lay public for whom rich businessmen were nothing short of being corporate zamindars, this manifestation of simplicity was nothing short of a marvel. But now with the benefit of hindsight, I can say that this was not simplicity, this was an attempt at portraying simplicity! Why? Because Infosys was aiming to be global software company like those in the Bay Area. But in the Bay Area – thanks to a shortage of staff, even top honchos had to do their own domestic work.

Narayana Murthy wanted to be seen as one of them. He wanted to show that he was ‘cool’ and to further buttress this, Narayanamurthy decided to step down as CEO of Infosys in 2001 when he was barely 55. He continued as chairman for a decade longer and later as emeritus chairman as Infosys became a huge company – now with revenues exceeding $10 billion and with a market capitalisation in excess of $34 billion.

For all his efforts, Narayana Murthy was continuously showered with honours – whether it was a Padma Vibhushan or being named as the father of the Indian IT industry by Time magazine or one of the 12 greatest entrepreneurs by Fortune magazine. But were all these honours well deserved? Let’s not pass a judgment on this, although it’s a fact that Infosys and most of Indian IT companies are nothing but mere providers of cyber-coolie services.

They are not owners of high-end patented IT products; they just provide IT engineers (cyber-coolies) to execute contracts for clients. A developed Indian IT industry should mean that local companies are in the front line of technology and Infosys fails on this score. This apart, deep down, Narayana Murthy is feudalistic and his spat with Sikka has now demonstrated this amply. No empowered CEO worth his sale will tolerate continuous public comments on what he is doing even if it is from the founder of the company. Interestingly, in 2014 when he was already an emeritus chairman, Narayana Murthy inducted his son Rohan as his executive assistant in Infosys – a move seen as a backdoor method of getting the latter in.

Narayana Murthy is not alone in displaying such feudalistic traits in India. I knew Wipro owner Azim Premji quite well when I used to stay in Bangalore around the turn of the century. He had graduated from the control raj being a player in the Vanaspati industry (his family had roots in the trading business) and made it big through hardware and software after the IT boom. In the process, he also became at one time the richest man in the country. This had happened because he had not divested shares from Wipro, owning 85 per cent of the company.

With IT stocks the favorite of the bourses, Premji’s shares had tremendous valuation and thus he became dirt rich. Premji was fabulously rich but at the same time he wanted to be modern – at least portray to the world that he was. He often times would tell me that it was not necessary for the sons of owners of company to enter the management. This was because the owners’ son may not be the best manager around. They could inherit the equity of the company from their fathers and enjoy the riches but should leave the management to professional managers. It was in fitness of things in modern society that ownership and management should be divorced, he used to say. Premji more than hinted to me that his sons would not inherit the management of Wipro from him.

But this is not how the script played out in reality. A few years later, his son Rishad was in the company and one can take a bet that he will ultimately succeed his father in the top slot of Wipro when the day of reckoning arrives. I ran into Premji again in 2011 (after a gap of nearly a decade) in Rashtrapati Bhavan where he had gone to receive his Padma Vibhushan. I asked him how his sons were and immediately I could figure out that he recollected what he had told me about them earlier. “Rishad is in the company but I did not thrust him. He came up through the regular process. He was found to be suitable and the best,” Premji said a little defensively. Then he added: “There has to be some continuity too.”

So that’s the fact: India is still a feudal country and whether it is corporate chieftains or political bosses, nobody has learnt to give up and allow a professional line of succession. This is the reason why political parties in India have become family enterprises where power is passed from generation to generation. The Congress party is the best example but regional parties like Samajwadi Party of the Yadavs, Telugu Desam Party, the Telangana Rashtra Samiti (TRS) and many others are not wanting in their efforts that deepen feudal tendencies.

No one wants to give up control and that is why often times you will find lawyers, chartered accountants and doctors passing on their practice and clients on to children. The examples are never ending but this is the normal acceptable thing to do.

Narayana Murthy wanted to break away from this practice but his primeval impulses have not allowed him to become democratic. He may only take comfort in the fact that instant polls are showing that more people are for him than in support of Vishal Sikka, the guy who went out.