 "Mindtree is passing on to hands way more capable than mine: Subroto Bagchi")
From April, Mindtree, the Bengaluru-headquartered IT services company, will undergo a leadership transition that would see its co-founder Subroto Bagchi stepping down as executive chairman. Krishnakumar Natarajan will take up Bagchi's role while handing over the role of CEO & MD to Rostow Ravanan, also a co-founder. In an exclusive interview with Bibhu Ranjan Mishra, Bagchi discusses the succession planning at the company and the efforts that were made to ensure the smooth transition. Edited excerpts
You are stepping down from Mindtree as executive chairman, ending almost 17 years of association with the company you co-founded. How do you feel?
In stepping down from an executive role, it doesn't feel as if I am "ending" my association with Mindtree. How can I ever feel that way? Mindtree is my life's greatest defining experience. I am who I am because of Mindtree. Today, the tree has grown strong and tall and borne fruits for everyone. In some sense, now I can move on. But as a director on the board, I will come once a quarter and pour some water at its base, and sit under it for a while.
In India, we have a retirement age for all Mindtree Minds (employees) at 60. The executive chairman and the office of the MD & CEO are contractual and, at the pleasure of the board. The principle of retirement age doesn't apply to them in that sense. However, both I and KK (Krishnakumar Natarajan, present CEO & MD) have always felt that founders should be treated the same way as others and our own principle of governance told us we should step down from executive roles at the age of 60. The second consideration was that we should bring in a much younger leader as the CEO. These two considerations urged that I vacate my office so that KK steps in now and then the new CEO takes over KK's office. Both I and KK were very clear about one thing: leaders must let go so that leaders can come.
Was there any distrust among the board members regarding the succession planning?
On the contrary, the Mindtree board is enormously proud of the way succession planning and leadership transition has been done at the company. All the independent directors feel that we have set an example for others.
As you leave Mindtree, are you leaving it in safe hands?
In 1928, John Shedd said, "A ship in harbour is safe, but that is not what ships are built for". No, I don't think of safety. I think of capability. Mindtree is passing on to hands way more capable than mine.
Since when has the company been working on the leadership transition? Why didn't you consider an outsider for the role of CEO & MD?
The leadership transition exercise was formally initiated almost 14 months ago under the stewardship of Ms Apurva Purohit, who is independent director and chairman of the Nomination Committee. The committee drew up an internal and external shortlist of candidates and finally chose to settle on the best candidate. It is incidental that the chosen one happens to be an internal candidate.
Personally, what efforts have you put in to ensure that the transition is effected smoothly?
Smooth leadership transition in any organisation requires people to take a long view of time. This mentally prepares an organisation to work in a future-backwards manner, asks the incumbents to introspect as to what kind of leaders we need 5 and 10 years from now, not just at the helm but at the level next, so that the future can be delivered. Once this is done, comes the need for transparency and governance. That is why, in a listed company, independent directors of the board lead the search and the overall process. We thought of succession planning the day we raised external capital in 1999 and we visited the issue every six months. At no stage, we were unprepared. Mindtree always worked on multiple scenarios and there was always a Plan 'B' and 'C'.
How long would you continue as non-executive board member in the company?
I will remain there as long as the shareholders, the board and the management need me. But even as they may ask me to be around, I will step down the day I feel I am not capable of adding value. I am not a squatter. Leaders must continuously question their own competence and relevance and not wait for others to do that.
How do you intend to spend your post-retirement life?
The word retirement isn't for me. Realignment, reprioritising, re-focus, repurpose yes, but retirement, no. My wife Susmita and I have decided to align our resources and energy to work in three under-served areas. These are mental health, blindness and geriatrics. I have recently joined the board of Indian Oil Corporation. This board meets every month. I chair its Nomination Committee and serve the Audit Committee and the CSR Committee. I am also on the Governing Council of IIIT, Bhubaneswar and the Software Technology Parks of India - I take these very, very seriously. Beyond all these, I must find time for writing. I see my writing as a responsibility towards capacity building for the nation.
Finally, what are your thoughts on the present health of Mindtree; don't you think the company should grow much faster?
No, I don't think so. I am not a fan of mindless growth. We need to notice that in just under 17 years, we are among India's top- 250 most valuable companies. This is across industries. Coming from nowhere, that is not a small feat. Today, we have created more than 16,000 jobs. The work we do in our four chosen verticals gets us a seat at the table alongside the CEOs of Fortune 500 companies. We have consistently set the standards for corporate governance. That is reflected in the way Mindtree stock has performed.
You are stepping down from Mindtree as executive chairman, ending almost 17 years of association with the company you co-founded. How do you feel?
In stepping down from an executive role, it doesn't feel as if I am "ending" my association with Mindtree. How can I ever feel that way? Mindtree is my life's greatest defining experience. I am who I am because of Mindtree. Today, the tree has grown strong and tall and borne fruits for everyone. In some sense, now I can move on. But as a director on the board, I will come once a quarter and pour some water at its base, and sit under it for a while.
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Was the decision to give up the executive role your own? Or, was there any self-imposed set of rules that the founders had devised regarding retirement age?
In India, we have a retirement age for all Mindtree Minds (employees) at 60. The executive chairman and the office of the MD & CEO are contractual and, at the pleasure of the board. The principle of retirement age doesn't apply to them in that sense. However, both I and KK (Krishnakumar Natarajan, present CEO & MD) have always felt that founders should be treated the same way as others and our own principle of governance told us we should step down from executive roles at the age of 60. The second consideration was that we should bring in a much younger leader as the CEO. These two considerations urged that I vacate my office so that KK steps in now and then the new CEO takes over KK's office. Both I and KK were very clear about one thing: leaders must let go so that leaders can come.
Was there any distrust among the board members regarding the succession planning?
On the contrary, the Mindtree board is enormously proud of the way succession planning and leadership transition has been done at the company. All the independent directors feel that we have set an example for others.
As you leave Mindtree, are you leaving it in safe hands?
In 1928, John Shedd said, "A ship in harbour is safe, but that is not what ships are built for". No, I don't think of safety. I think of capability. Mindtree is passing on to hands way more capable than mine.
Since when has the company been working on the leadership transition? Why didn't you consider an outsider for the role of CEO & MD?
The leadership transition exercise was formally initiated almost 14 months ago under the stewardship of Ms Apurva Purohit, who is independent director and chairman of the Nomination Committee. The committee drew up an internal and external shortlist of candidates and finally chose to settle on the best candidate. It is incidental that the chosen one happens to be an internal candidate.
Personally, what efforts have you put in to ensure that the transition is effected smoothly?
Smooth leadership transition in any organisation requires people to take a long view of time. This mentally prepares an organisation to work in a future-backwards manner, asks the incumbents to introspect as to what kind of leaders we need 5 and 10 years from now, not just at the helm but at the level next, so that the future can be delivered. Once this is done, comes the need for transparency and governance. That is why, in a listed company, independent directors of the board lead the search and the overall process. We thought of succession planning the day we raised external capital in 1999 and we visited the issue every six months. At no stage, we were unprepared. Mindtree always worked on multiple scenarios and there was always a Plan 'B' and 'C'.
How long would you continue as non-executive board member in the company?
I will remain there as long as the shareholders, the board and the management need me. But even as they may ask me to be around, I will step down the day I feel I am not capable of adding value. I am not a squatter. Leaders must continuously question their own competence and relevance and not wait for others to do that.
How do you intend to spend your post-retirement life?
The word retirement isn't for me. Realignment, reprioritising, re-focus, repurpose yes, but retirement, no. My wife Susmita and I have decided to align our resources and energy to work in three under-served areas. These are mental health, blindness and geriatrics. I have recently joined the board of Indian Oil Corporation. This board meets every month. I chair its Nomination Committee and serve the Audit Committee and the CSR Committee. I am also on the Governing Council of IIIT, Bhubaneswar and the Software Technology Parks of India - I take these very, very seriously. Beyond all these, I must find time for writing. I see my writing as a responsibility towards capacity building for the nation.
Finally, what are your thoughts on the present health of Mindtree; don't you think the company should grow much faster?
No, I don't think so. I am not a fan of mindless growth. We need to notice that in just under 17 years, we are among India's top- 250 most valuable companies. This is across industries. Coming from nowhere, that is not a small feat. Today, we have created more than 16,000 jobs. The work we do in our four chosen verticals gets us a seat at the table alongside the CEOs of Fortune 500 companies. We have consistently set the standards for corporate governance. That is reflected in the way Mindtree stock has performed.