Millennium Post

Old warhorses refuse to quit

M K Das
Why did the return of
N R Narayanamurthy to Infosys as Executive Chairman after having retired respectfully from the post at the ‘young age’ of 65, result in such a furore in corporate and non-corporate world? The reason is simple, never in the history of Indian corporate world has a chairman voluntarily exited at the height of his career like Narayanamurthy. Also, no voluntarily retired chairman has returned to his post so soon. Both were unique and if this is not the stuff furores are made of, nothing else is.
Indian corporate chiefs are very much like their political counterparts; they neither retire nor fade away and simply continue to remain in power till their last breath. The Indian corporate landscape, past and present, will amply vouch for it. Their prolonged possessiveness must have had some justification in the days of the licence raj, given the predominance of family-owned, family-managed businesses along with their nefarious nexus with the ruling political dispensation and the perceived intolerance towards any sort of professionalism. Its continuation in the post-reform period with its emphasis on efficiency, innovation and ruthless competition is truly intriguing; perhaps, as intriguing as the return of the new world prodigals.
Take a look at the corporate landscape. A recent study made public by has it that nearly a 4th of the top 500 Indian companies are headed by those who have crossed 65. There are 10 listed companies that are headed by those who are in their eighties, 58 in their seventies and 43 in the 66-69 age-groups. Yet, they never miss an opportunity to attribute the current economic mess to outdated policies of gerontocracy.
Indeed, most of the companies are family-owned and family-managed which give their top honchos the necessary authority to be irreplaceable entities. Some are magnanimous enough to leave day-to-day administrations to their chosen progenies and concern themselves with macro management. But the fact of their presence is enough deterrent to the youngsters to be assertive. That said, the fact also remains, especially in the Indian context, that the octogenarians do help keep the family flocks together though there have been cases of even this advantage being violently violated, typical cases in point being the fiercely fought family battles in the Mafatlal and Modi groups in the north and, nearer home, in BPL.
To revert, the return of Narayanamurthy has a lot to do with the crisis of leadership in the company. One theory is that this was brought about by the policy laid down by the founder-chairman himself of handing over the baton of leadership to only the founder-members. Those who lost nursed heartburns and were resultantly reluctant to take orders from someone who was their peer just the other day. This policy has led to the ill-effects of inbreeding. It has become a malady of management succession, a fixation which companies seem to suffer from. Critics of this theory argue, then why did the past CEOs who succeeded Narayanamurthy not run into similar crisis situations? The counter to this is that their success was partly due to their leadership qualities, partly because of the immediacy of succeeding an icon who had laid down a streamlined command chain that took good care of possible operational aberrations but was largely due to the continuing boom in the IT industry. None, apparently, came handy to the incumbent CEO who had since been sidelined.
Power fixation of ageing CEOs is not a typical Indian phenomenon. It is global and has been the subject of study by management experts. There is the usual post-retirement syndrome some acutely suffer from but in most cases, as a research study by a well known sociologist and Harvard Professor, Jeffrey Sonnenfeld, showed it was the sheer agony of being out of power and the resultant denial of the perks, patronage and privileges they have been used to. Fear of the dynamic role shift from being ‘Who’s Who’ to ‘Who’s That’ makes CEOs cling shamelessly to their seat well after they run out of their utility. Graceful exits, according to him, are very few.
In his remarkably researched book, Hero’s Farewell, What Happens when CEOs retire, he has categorised the different departure styles and their outcomes. He says that there are four patterns of departures and they characterise four distinct persoanlity types, any one of which can have a profound impact on the company and its performance. Sonnenfeld lists them as ‘monarchs, generals, ambassadors and governors.’ He explains as follows, ‘Monarchs were those who did not leave office willingly but were overthrown and strong-armed out, or else died in office. Generals left office reluctantly, but managed to mount campaign for their return to office. Ambassadors left, but remained actively involved in the firm, supporting their successors. Governors left the firm cleanly, severing virtually all formal contact with the firm.’
The book is replete with anecdotal examples in each of the category of which two need reproduction. The first relates to the now defunct Pan Am Airlines’ celebrated CEO, Juan Trippe. When the board of directors virtually ruled out an extension and asked him to quit, he agreed on condition that his nominee who he alone knew was dying of terminal cancer should be picked thereby ensuring a likely comeback. The second story was about the founder chairman of Eastman Kodak, George Eastman. A brilliant innovator who brought about a revolution in visual entertainment and a philanthropist to boot, he graciously retired but found his post-retirement days vacant and for want of doing anything committed suicide.
What really hurts most of the retired CEOs is the loss of identity. Overnight they find themselves devoid of any attention and more importantly, power. Some seek positions elsewhere, some take up public causes to keep themselves in limelight and some succumb to trauma. Evidently it requires considerable self-discipline to adjust to post-retirement life.
The Indian scenario is of course different. Even so, he would have been a trend-setter had Narayanamurthy taken up the role of a mentor and guided and groomed a team that contained the best of talent from both inside and outside rather than pick up the mantle that he once willingly discarded.
To be sure, the hallmark of any leader, particularly a corporate leader, is that he not only measures up to his task brilliantly and efficiently but builds and leaves a leadership that will ensure continuation of what he has achieved. How many of our CEOs can claim to have lived up to this?

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