SIKKA’ S RESIGNATION – WILL INDIA HAVE PROFESSIONAL CEOs?

about 7 years ago
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By Ruma Dubey

The resignation of Vishal Sikka shook out everyone from the morning stupor. Many felt that this was news which was in the coming but to have it knock on the door, early in the morning today, took everyone by surprise.

In many ways one could not help but think about Ratan Tata and Mistry. When Mistry left, everyone knew that Ratan Tata would be back holding the reins and it was at his behest that Mistry was shown the door. There are other examples too – Britannia had got in professional Sunil Alagh to run the company but that did not work out and today the Wadia family itself runs it. Or take the case of Micromax where Vineet Taneja abruptly resigned.

Infosys and Tata; these were two organizations which had earned themselves a name of being truly professional because there was no proprietary succession of sons/daughters of the founders. They both, Narayana Murthy and Tata scouted around for the “right” person and then banked upon Sikka and Mistry respectively. We all felt that maybe Indian companies were slowly coming of age to get a professional and not a family member to head the company; this was unheard of. But today, they both have come to a naught and one cannot help but feel that the other CEOs, who never truly took the “professional” route would be sitting smug, with a “I told you so!” expression on face.

But seriously, the resignation of Sikka brings to mind a multitude of questions but most pressing one – can Indians never run their companies with a professional CEO in place? Bill Gates, the founder and first CEO of Microsoft brought in Satya Nadella and handed over the baton to him as the CEO. In America, almost every other company has  professional CEOs – Indra Nooyi heads Pepsi Co, Sundar Pichai is CEO of Google and we see very few which are family run. In India though, family comes first, be it business or succession.

So does it mean that India can never have professional CEOs? Well, ITC has been having a professional CEO for years now and so does L&T. TCS is a fine example of a professionaly run company from recent times. But these are rare; the fact is that even when the founder of a company brings over an “outsider” CEO, he never really gives up control. His may not come into work every day, but he knows every day-to-day happening and remains very much in the loop despite having reigned as CEO.

We simply cannot let go. Just as we can never let go of our children, continue to meddle in their lives even when they themselves have become parents; it is simply in our DNA to monitor our own baby – be it the child or the company which was founded from scratch. It is all very professional and “so mature” to get in a professional CEO but clearly, it does not work here.

The truth is that promoters and their families in India, never ever hand over charge; it remains largely a feudal society and dynasties are a way of life and perpetuity.  

Thus Sikka’s going today is shocking but the writing on the wall was clear –it was to happen sooner than later.

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