Wipro, one of India’s IT leaders, has just appointed a chief operating officer (COO). Tata Consultancy Services (TCS) veteran Abid Ali Neemuchwala has been roped in, pipping at the post insider Anand Padmanabhan. Veterans G.K. Prasanna and Bhanumurthy B.M. have been promoted as presidents.
Last year, in a move that sent shockwaves across the IT industry, Infosys had appointed Vishal Sikka as CEO. He was brought in from outside after a global search. The vice-presidents in the company — who may have fancied themselves in the running — got pay hikes up to Rs 6 crore. There is a question one needs to ask of the IT industry: Why has it been unable to develop any loyalties at the top? The biggest company in the fray is Tata Consultancy Services (TCS) and it has been far more stable. But Neemuchwala’s jumping ship shows that things are not perfect there too.
IT is a new industry. At one time, TCS was known as a school for CEOs because many had left the company to set up outfits of their own. TCS has had only three CEOs — the builder F.C. Kohli, the strategist S. Ramadorai, and the current incumbent N. Chandrasekaran. History will decide the right adjective for Chandra but he has already had a very successful run. TCS is India’s most valuable company by market capitalisation. It is also worth more than the market cap of the next four IT companies puty together. The lesson from TCS is clear: let the company get on with job of running its business. At TCS, J.R.D. Tata — and Ratan Tata after him — left the company well alone.
It was only when the group needed some money that holding company Tata Sons sold some TCS shares. Since Ratan Tata stepped down as Tata Grou’p chairman, successor Cyrus Mistry has also kept his hands off.
Things have been different at both; Infosys and Wipro. Infosys has seen the founders take over as CEO one after the other. N.R. Narayana Murthy, the first, was a great success. Nandan Nilekani, the next, carried the baton well. The procession finally ended with the well-meaning S.D. Shibulal.
His contribution — Infosys 3.0 — was a disaster from Day 1. At Wipro, there has always been an owner — Azim Premji — who owns some 80 per cent of the company. There have been several experiments with leadership, including a zany one in which there were two CEOs.
The lesson from Indian IT companies is clear: Don’t meddle with management. An internal CEO knows where the bodies are buried; an outsider will have to spend half his time hunting for skeletons. Second, at this level, salary still matters. Sikka has an annual package of $5 million plus $2 million in stock options. That is what global IT CEOs make. At Wipro, the Rs 5 crore salary hikes will put the vice-presidents outside the poaching zone.
Like the IT industry, HR as a discipline is young. A lot of experiments have been tried. Most worked very well in good times; they flopped badly in adversity. With good times returning, new experiments have started both at the rank-and-file level and at the top.
The virtual CEO, who is based in the cloud, is coming. IBM has more employees in India than in the US. But only an Indian CEO will be acceptable to Indian IT companies. What else will change?
Tomorrow, don’t look to IT for path-breaking changes in HR. The two-headed dog Orthrus may surface in the BPO sector or Big Data. Like Sikka, Abid Ali and IT itself, every dog has its day.