Some Insights into the Infosys and TATA Sagas that are Relevant to all Organizations

Many of you would have read about the dramatic events of the last two days pertaining to the Indian IT (Information Technology) bellwether and behemoth, Infosys, which was played out in the public domain and which culminated in the resignation of its first non-founder chairperson, Vishal Sikka, amidst allegations of malfeasance of corporate governance and the continuing stream of attacks on him regarding his management of the company by the founders as well as anonymous whistleblowers.

Indeed, as most of us know, there were undercurrents of tension between the present board and the founders some of which were visible to the public as well as an internal battle of wills being fought within the company between the old guard and those who have come in during the last few years.

The first issue at stake is the allegations of malfeasance in corporate governance that were raised anonymously initially and which soon began to appear in the public domain.

While not commenting on the issues of overvaluation of the acquisitions and other aspects since they remain as a bone of contention even now, it is worth noting that organizations do need to be as transparent as possible especially when the stakes are high which in this case they were.

Indeed, more so when the organization in question is known for its high standards of corporate governance and is often cited as an example of a firm that places values before anything else.

It follows from this that this issue at stake is also about the clash between the old and the new wherein the former represented by the founders, and the legions of employees brought up on a steady diet of high governance and prim and proper conduct and the latter who not having eschewed these values have nonetheless found it expedient to move fast to keep up with the changing market trends wherein agility and speed are of the essence.

In other words, what Infosys is undergoing now holds lessons for all organizations wherein as they adapt to the new wave of automation and Artificial Intelligence, they have to take a call about whether they would move fast and break the old structures or remain wedded to the older but slow moving habits which are more traditional and high minded.

The second issue at stake is the clash between culture and strategy wherein organizations or people within them who are schooled in a particular culture should tweak and play around with it to ensure that their strategy for the future is not thwarted in the process.

Indeed, as one article by an expert in a leading business speculation, the clash between deeply ingrained cultural habits and the need to be strategic and cold when facing existential challenges is inevitable in the modern day business landscape since we are moving away from stability and certainty to an era of unprecedented volatility and where constant disruption is the name of the game.

Thus, it is clear that unless cultural habits are adapted and adopted to the changing mores, organizations will continue to be beset with the kind of problems that the Infosys experience has revealed.

Moreover, there was also a clash between the founder driven mindset that was the bedrock of Infosys since its inception and the new and aggressive mindset of embracing the future that was the hallmark under the present dispensation since 2014.

Indeed, this is the problem that another venerable Indian corporate, the TATA group is also facing as the old guard reasserts them and the newly brought in dispensation is dispensed with.

This is the third issue wherein the age old outsider versus insider debate is revived and which holds relevance to all organizations when they try to reinvent themselves and move forward.

More so, when the new dispensation has been selected by the same set of founders who as some pointed out should have quietly “gone into the sunset” especially when they have chosen the new team and hence, should not create problems for them.

Having said that, the issue is not so simple since any organization that has been built from scratch and made into an institution by its founders would face some sort of uneasiness from these individuals who would naturally be distressed at the way their cherished firm is heading.

Indeed, much like parents who become alarmed whenever their children drift, it is clear that both Infosys and the TATA group are facing an existential crisis wherein those who have taken over are questioned by those who left as having “abandoned” the high values of the latter and more importantly, the institution itself.

Thus, all organizations must learn from the experiences of Infosys and the TATA group about the direction that they should take when the old has to give way to the new without actually sacrificing the core principles.

Indeed, there is nothing to be gained by just sacrificing growth at the altar of values and conversely, there is nothing to be gained by simply refusing to see “the writing on the wall” and allowing values to be sacrificed.

The point to be noted here is that institutions are built for longevity, and the people who run them and work in them are but drivers which propel the institutions in their journey.

This means that a balance has to be struck between racing full steam without damaging the core institution and at the same time, not letting the deadwood of the past interfere too much with the future lest the journey is stalled.

Lastly, the institutions are bigger than individuals and hence, it is worth remembering that any organization must expect whoever is leading it to keep this in mind.

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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to and the content page url.