How to let go: Lessons in corporate leadership transition from Infosys

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There is a feeling of déjà vu. Last year, Cyrus Mistry resigned and there was a public mud-slinging between him and Ratan Tata, the previous CEO. Allegations and counter allegations have resulted in litigation in various courts. Finally, N Chandrasekharan of Tata Consultancy Services (TCS) has been roped in. The latest corporate saga is the resignation of Vishal Sikka, MD and CEO, Infosys. Both Sikka and Mistry failed to install changes that they wanted in the new setup.

Sikka refers to “false, baseless, malicious and increasingly personal attacks”, and says, “I have decided to leave because the distractions, the very public noise around us, have created an untenable atmosphere.” He was possibly referring to the previous founder N R Narayana Murthy. Moreover, the Infosys board says, “Mr Murthy’s continuous assault is the primary reason that the CEO, Dr Vishal Sikka, has resigned despite strong board support.” It doesn’t leave much to imagination the kind of acrimony that had developed between the two corporate leaders.

Leaving your baby in someone else’s hands

There is a range of emotions that is experienced by outgoing and founding CEOs. In case you find yourself in a similar situation, this is how to deal with it. There could be a number of positive emotions.

first and foremost, the owner-CEO has built as well as captained something valuable and that effort and journey must get its due recognition. He put in place a successful business and has all the reasons to feel elated. The second stage can prove to be a little tricky. Founder-CEOs must understand that they are no more the captain of the ship and that the show is going to be run by someone else now. There will be significant shift in control as the incumbent comes in with his own set of beliefs and thoughts. Not being prepared could make the second stage really difficult. therefore, they must be prepared for it. They must also recognize that the emotional stages are common and expected.

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Challenges for Founder-CEOs during and after leadership transition

There could be anger, which is understandable particularly in case the new entrant is spectacularly different from his predecessor. As the new CEO begins to bring in his thoughts into the organization, there could be a gamut of challenges for the previous CEO. He could use his influence to marginalize the new CEO or throttle his views. There can be a very strong impulse to remote control. They can meddle in the day-to-day running of the business, especially if the outgoing continues to stay on the board.

This anger can be managed if the proposed changes are somewhat spelt out in advance, particularly during the transition. Moreover, the Founder-CEOs must accept the fact that their say and authority is going to diminish substantially. Also, it is in the interest of everyone that the outgoing one knows exactly how much control he will continue to enjoy over the systems and the personnel.

Infosys and Tata Sons: Striking similarities

Initially, both Sikka and Mistry were praised for their potential: Tata  described Mistry as “far sighted”, while Murthy considered the “illustrious track record” of Sikka as one that made him “ideal choice”. Course correction can be there but their happening so quickly after transition could mean that the incumbent didn’t get a chance to prove his ideas and thoughts. No wonder, there is a public opinion that corporate leaders have not been doing justice to their choices.

Murthy must prevent the formation of such opinion as it could be detrimental to the overall wellbeing of the company. He will have to take proactive steps to dispel such opinions. Mere words won’t suffice. Actions have always spoken louder than words.

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