When a house falls or a bridge collapses, the first thing that is suspected is the strength of the foundation.
But when it comes to business, what really is a foundation?
In 2014, Vishal Sikka became the first non-founder to take over as CEO of Infosys. In 2017, he resigned after a long drawn battle with the company’s founders, mainly Narayan Murthy.
What exactly transpired?
The reasons were numerous but what became evident was this — there was a massive ‘cultural corporate governance gap’ between Vishal Sikka and the founders of Infosys.
The Infosys story will find itself in any entrepreneur’s book of inspiration. As the company grew from a small group of founders to a billion-dollar company, none of its founders led, or lead, flashy lives. Just for some more context, NR Narayan Murthy was my mother’s classmate in engineering and she has seen him rise from a very middle-class background. Incidentally, he and his wife Sudha Murthy stay a half a kilometer from our home and if you see their house, you wouldn’t think a billionaire lives there. When I had gone for a play a few years back, I saw another co-founder, Nandan Nilekani, standing in the queue with everyone else.
Not that they are all saints but I can honestly attest to the fact that the founders of the company don’t go around flashing their inordinate wealth.
When Vishal Sikka took over, he came from a slightly different culture. Having spent most of his working life abroad, he sought to overhaul what was thought to be a company that was lagging behind. He also took some decisions that went against the grain.
He relaxed dress codes.
He increased his salary by 50% and raised employee salaries. Increasing his own salary raised a furor among the founders who saw it as a sign of greed.
He chartered private flights for meetings, again something that riled the founders who mostly traveled commercial, even after Infosys became a gargantuan organization.
For a company built on frugality, the founders, especially NR Narayan Murthy, saw Vishal Sikka’s ways as too flashy.
As this quora article says, somewhere NR Narayan Murthy thought Vishal Sikka was trying to change the core values of Infosys and couldn’t bear the thought of that. Of course, there were questions of others deals and acquisitions but a lot of it boiled down to one thing — a new CEO trying to overturn a long-standing culture which in some ways was the foundation of the company.
The foundation. It’s what everything is based on, what the future is built on. That’s why you see foundation stones dating back many years.
When a house falls or a bridge collapses, the first thing that is suspected is the strength of the foundation.
But when it comes to business, what really is a foundation?
We think of it as a mix of marketing, personnel, values, financial resources, principles, rules.
But I disagree.
What I believe the foundation really is when it comes to businesses and individuals is the story that they tell themselves. That then leads to the business plan, something people mistake for the foundation.
For example, this article says the foundation of your business lies in answering the following questions:
- How does a business create value?
- What is its value proposition?
- How does it deliver value to a specific set of customers? and
- How does it capture value?
But this poses a bit of a problem.
How a business creates value can be upended by a technology change. Does this mean it keeps changing its foundation? If that’s the case, in today’s world, it means changing the foundation constantly.
But the story of creating value doesn’t change. That means finding new ways of creating value to customers.
In the case of Infosys, their story was ‘we are frugal billionaires and eschew any outlandish displays of wealth.’ It was woven into the fabric of the culture and Vishal Sikka’s style didn’t fit into that story.
Seismic changes in technology mean all value propositions can be made redundant overnight. New technology can render workforces and skillsets obsolete at the blink of an eye.
If someone calls themselves a social media agency and based their foundation on creating shallow clickbait content for clients, what happen when a new platform suddenly reduced social media as we know it to rubble? If their story is one of creating authentic messages for their clients, they will find their way around a new platform as well. But if they see themselves as just a social media agency, they will find the going tough.
In other words, everything that you consider to be your foundation can be taken apart. If that’s the case, how can it be the foundation?
When we say a foundation is strong, it means that the core values and principles are strong. When seen together, they form the story a person or organization keeps telling themselves.
Apple’s core values were innovation and design and even as the technological landscape changed, they managed to stay one step ahead. That was the story they told themselves — we create what people don’t know they want and something they will crave.
Wieden and Kennedy is the world’s largest independent global network. They have created iconic work for big brands, Nike being the most famous. Their story is one of independence that gives you the courage to follow your own path, tell off annoying clients, and being averse to selling out which they believe benefits only a few people. This independence reflects in bold and outlandish work.
Basecamp is a web-application company that has chosen to be independent and speak out against the facade overvaluation and funding. That’s their story.
Microsoft had all the resources to create breakthrough products, but that isn’t the story they tell themselves, hence they don’t act as trailblazers.
What most of us do is scratch the surface. Changing the logo, the manifesto, using fancy terms that make it look like change is occurring, all of it is like ordering a paint job for a house that has collapsed. All of them complement change but don’t constitute major change in their own right. If you move an office with a toxic culture to a new fancy building, does it change the culture of the place?
On the other hand, if you want to improve communication and reduce friction in a workplace, the story you are seeking is one where better, honest and candid communication can lead to a more open culture. You can then tell people that email is banned for the next month and that all internal communication should be face to face. This changes the story for how communication can take place inside an office. No more hiding behind cowardly emails and CCs.
Once the story changes, everything can stem from that because all behaviors and actions stem from a story. This then leads to the foundation.
This applies to people, organizations and cultures.
Re-examine your story and then alter your foundation accordingly.
