Vishal Sikka caught in the clash of cultures

For Vishal Sikka, this is not the first time he has fought a bitter but losing battle. At SAP, from where he resigned and came to Infosys, he was a victim of a power struggle between its German employees and US executives, of whom Sikka was a key member. According to Business Insider, Sikka was expecting to be pushed up as the co-CEO of the German company. He had the backing of SAP founder Hasso Plattner, who wanted the company to become more innovative and aggressive. But the SAP board, which had many European members, had other ideas. It decided on having one CEO in Bill McDermott. And SAP’s loss was Infosys’s gain. 

Son of a railway officer, Sikka graduated as a computer engineer from Baroda’s MS University and received a doctorate in artificial intelligence from Stanford University. With stints at Xerox, followed by various entrepreneurial ventures, Sikka’s rise was meteoric in SAP, which he joined in 2002, becoming an executive board member and one of the top executives of the information technology world.

Sikka took over the reins of Infosys in 2014 when it was going through challenging times; there was a management exodus as well as high attrition, slow revenue growth and missed profit targets, and too many experiments at the top. Founder NR Narayan Murthy had to come back as executive vice-chairman and his strategy was to cut costs and bring in a new CEO. That choice was Sikka. 

But the honeymoon did not last long. It soon became clear that Sikka’s style of functioning was different — whether it was in large severance packages and big increments to senior executives or aggressively pursuing acquisitions to buy market share. This led him to a confrontation with Infosys’ founders, primarily Murthy. Watchers say it was a cultural divide — an aggressive Punjabi with an American style of functioning versus old-school prudence about pay, acquisitions, and corporate governance. Sikka’s main failure was in not being able to integrate the older employees with his new team. He announced Infosys would achieve an ambitious $20 billion revenue by 2020. But the company’s founders, accustomed to under-promising and over-delivering, asked how this would be achieved in a churning business scenario. Cultural differences again came to the fore when Murthy questioned the decision of Infosys to offer a Rs 17.38-crore severance package to the then CFO Rajiv Bansal. Two investigations by Infosys showed no impropriety was committed by the board.

The acquisition of Panaya, a leading provider of automation technology, by Infosys for $200 million in February 2015 came under a cloud when a whistle-blower complained that due process was not followed and Bansal was against the deal, an allegation that Infosys denied. The focus was again on Sikka. Infosys conducted three investigations into the allegations that were unable to find any impropriety. But Murthy was not convinced. He hit back, saying the reports should be made public and he wanted to know what Bansal’s objections to the deal were.