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Would Nehru do to Congress what Murthy’s done to Infosys?

John Elliott

N Murthy Infosys 33rd agm2 300x217 Would Nehru do to Congress what Murthy’s done to Infosys?The end of ‘Buggins turn’ at Infosys is an end-of- dynasty lesson for Congress

If Jawaharlal Nehru could suddenly reappear and be injected into the top of the Congress leadership with a mandate to rebuild the demoralised party, would he echo, in a political sense, the words of Narayana Murthy, one of the founders of Infosys that the iconic IT company had “diluted its focus on meritocracy and accountability during the last decade”.

Surely he would, given the disastrous leadership of the country provided by his family! So would Nehru then end Congress’s dynastic line of succession that began with him, in the same way that Murthy has terminated the Infosys founders’ ‘Buggins turn’ system of succession as chief executive officers of what was once the best known of India’s IT businesses?

Murthy (left), who was the company’s first chairman and ceo, was brought back  a year ago from retirement as executive chairman to halt a slide in the company’s fortunes. He said, at the company’s agm last Saturday, that moves he was initiating would bring in “a new culture of innovation…and the best talent” and would identify “hidden jewels in the company” and “niche areas…where we believe opportunities for the future exist”.

He had already announced that he was stepping down from his temporary role and that an outsider was being brought in to run the company. Vishal Sikka, previously with the US-based SAP software company, would become ceo and managing director in August.

That is exactly what the Congress Party needs, having collapsed from being India’s leading iconic political party to the level of a regional party like Tamil Nadu’s AIADMK

Nehru’s possible adaptation of Murthy’s aims would be to end his great-grandchildren’s family succession to the Congress leadership. He would bring in someone fresh from outside the dynasty and its circle of hangers-on to revive the party, and would introduce a new culture of policy development and execution, while identifying further bright potential leaders and looking for new areas of society where Congress could be effective.

Family companies rarely succeed after the first two or maybe three generations and Infosys, with its pattern of passing the chairman and ceo jobs successively to the original founders, has failed as four have held the job.

One can argue about when the Congress dynastic prime ministers failed. Many commentators blame Nehru’s daughter Indira Gandhi for beginning India’s current decline, while there is no doubt that the current heir, Sonia Gandhi, Indira’s daughter in law, and her son Rahul have been more focussed on sustaining the dynasty than governing India well.

Infosys was founded in 1981 by seven engineers with starting capital of just $250 –the market cap is now around $31bn with sales of $8.25bn in more than 30 countries. That is a massive success story by any measure, but the succession system at the top did not produce the right entrepreneurial drive and focus.

I wrote on this blog seven years ago about whether Infosys was “really a family company, controlled not by blood relations but by the bonding of five of its seven founders who still worked there, owned 16.5% of its stock, and taking turns running the show”.

Growing old together

I chatted for the blog to Nandan Nilekani, who was then graduating family-style. He was handing the chief executive officer’s job over to S. Gopalakrishnan, the chief operating officer, whose job was going to S.D.Shibulal, now (and until August) the ceo. Nilekani was becoming executive chairman alongside Murthy, who had moved aside to be the non-executive chairman and chief mentor. Murthy later moved out, as did Nilekani (first to head the last government’s UID electronic identity scheme, and then to stand – unsuccessfully – as a Congress Party candidate in the recent general election).

I asked Nilekani how they all managed to get on so well – or were there fights that their personal and public relations skills managed to bury? “No,” he said laughing, “we all have the same values…. we are all from the same simple middle class backgrounds…. and we have enormous bonding”, adding: “The important thing as an entrepreneur is to choose partners you can grow old with.”

Well, the growing older together has finally ended with them all around the age of 60 or older. Infosys should benefit and now have a more motivated staff without the buggins’ turn glass ceiling over their heads. Staff turnover has been high – nearly 20% of the 160,000-plus employees left in the past year

Commenting on Sikka’s appointment last week, the Financial Times’ Lex column, known for its pithy judgements, wrote, “As soon as he takes his seat, Mr Sikka needs to present an explicit plan for how the company’s resources will be used. In the short run, investors need clarity. Once Mr Sikka provides this, he can turn to transformation.”

And that is what Congress needs – clarity about its basic beliefs and policies for modern aspirational India.

Rahul Gandhi has been trying the transformation by introducing disastrous primaries for parliamentary candidates and other changes, without spelling out with clarity how the party would tackle India’s problems.

He does not of course have clarity about himself, let alone about how he might run things – so he should read the speech Murthy made last Friday – it’s here http://www.infosys.com/investors/news-events/annual-general-meeting/2014/Documents/NRN-AGM-2014-speech.pdf

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