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Corporate Legacy: Idle Worship

How enduring is the legacy left behind by N.R. Narayana Murthy, K.V. Kamath and Ratan Tata? For two successive decades, the trio towered over India Inc. like Titans.

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For two successive decades, the trio towered over India Inc. like Titans. If you look at Indian corporate history, barring Dhirubhai Ambani, no other tycoon had such a deep and lasting impact on the economy. Two other visionaries who could have belonged to this list — Aditya Birla and Parvinder Singh — unfortunately died too young.

As the recent controversies surrounding the leadership at Tata Group indicate, we are forced to think whether these icons are indeed worthy of the pedestals that we have placed them on. We are talking about N.R. Narayana Murthy of Infosys, K. V. Kamath of ICICI Bank and, of course, Ratan Tata. It may not be very chic in India to reassess and re-examine the legacies left behind by corporate leaders, although Indians love to squabble over legacies left behind by political leaders and sports persons. But the world over, analysts do reassess legacies of corporate icons, if only to glean lessons that future business leaders could imbibe from the flaws and feats of these tycoons.

To give one example, Jack Welch, the former CEO of GE, towered over corporate America for two decades before he retired in 2002. His fans considered him a superstar. There is no doubt he was. And yet, it is 2017 now and his successor Jeff Immelt is still struggling with the aftermath of some of the decisions taken by Welch, that appear hasty and dangerous in hindsight.

Undoing the Legacy

Look at Infosys right now and you can see a similar churn. Though he retired as executive chairman way back in 2006, Murthy has been active at Infosys, including reclaiming the post of chairman in 2013. All this while, a visionary like him could have seen the full implications of the digital age. And yet, for all his outstanding leadership qualities, he failed to. At the moment, the Infosys CEO Vishal Sikka, the first “outsider” to head the company, is in a race to completely revamp the company as the traditional IT services model is just about broken.

Or, look at K.V. Kamath, who is currently the head of the BRICS Bank. From out of nowhere in the 1990s, Kamath transformed an ailing and dying state-owned financial institution to a powerhouse called ICICI Bank. Though younger than rival HDFC Bank, it was ICICI that raced ahead in the late 1990s and the first decade of this century. Like most successful leaders, Kamath spotted an opportunity in retail banking that others hadn’t. He launched such an aggressive strategy of hunting for customers to give loans to, that for a while, ICICI became an almost generic name when it came to home, auto and personal loans. But was there something amiss behind the glittering facade? Without doubt, yes. Fault lines at ICICI Bank were cruelly exposed in the aftermath of the 2008 global financial meltdown. Kamath made an honorable exit in 2009 but it took his successor Chanda Kochhar years to bring ICICI Bank back from the brink.

Meanwhile, under a low-profile Aditya Puri, rival HDFC Bank has consistently outperformed ICICI and is arguably the most valuable bank in the world at the moment. Puri has been slow and steady while Kamath was fast and furious.

That brings us to the third of the trinity: Ratan Tata. He had perhaps the toughest corporate job in India when he took over as group chairman from the legendary JRD Tata in 1992. To his credit, Ratan Tata did a remarkable and admirable job of consolidating the sprawling group by taking bold decisions. Soon after he took over, Ratan Tata sold Lakme to HUL, signalling his determination to refashion the group. He embarked on a series of bold acquisitions signalling that the Tata Group was going global with a vengeance and getting ready for the 21st century.

The acquisitions of Tetley Tea, state-owned VSNL and the truck business of Daewoo Motors were landmarks. But perhaps hubris struck after a while when Tata Steel acquired British steel maker Corus in 2006. The company is still struggling with the aftermath of this takeover. His grand dream — the Nano car — has been a failure, though the acquisition of JLR by Tata Motors was a successful coup. Tata simply couldn’t succeed in the telecom sector and is mired in legal wrangles. And of course, the bitter fight with Cyrus Mistry after the latter was unceremoniously sacked as group chairman has considerably dented his reputation as a corporate leader.

As subsequent stories and graphics in this package will demonstrate, there can be no doubt that Tata, Murthy and Kamath were towering corporate leaders. But who can deny that they were also fallible?