Infy Board members called NRN back as they thought Infy had got its strategy wrong - and NRN can fix it!
Some Microsoft Board members want Bill Gates to step down as they think Microsoft has got its strategy wrong - and Bill Gates can't fix it!
What is it about such Founders that makes Boards think they are capable of and responsible for - all success and for all failures?
In one word: Leverage.
The ability to get a lot done with very little.
Founders who have built the business over years have a very high leverage in the business.
Leverage because they know how the various moving parts in the business work with each other, how a small change here can make a big impact there.
Leverage because they know the context of the business over many years, why certain decisions were taken and how the changed context today makes it necessary to review the decisions.
Leverage because they know people in the industry. And people in the industry know them. When something needs to be done, the founders know whom to call. They also get a lot of market intelligence. Not data, not information, not research. Intelligence about who is doing what, why etc - because of their network.
Leverage because they know the market landscape, have credibility with market players and have an instinctive feel for the space.
At some point in a company's growth - typically when the product-market fit has happened and some predictability has been achieved , the collective wisdom of a Board is seen to be better at deciding the strategy than the Founders' leverage.
The problem is that the correctness of a strategy is only known post-facto. And so, the prevailing view in the Board can become the decisive factor on how to use the Founders' leverage.
If a Board believes that a Bill Gates will use his leverage and constrain the new CEO candidate, they want him out.
If a Board believes that a NRN will use his leverage and get Infy back on track, they want him in.
Most investors will have you believe that the Board is wiser. That the Founder is good for the creation part. Not the management & growth part. (and that's a good topic for another post!)
Mr. Zuckerberg, Mr. Brin & Mr. Page have ensured that they have control on the destiny of their business. Businesses in high-tech that require rapid decision-making, pivoting etc probably work better this way.
In most start-ups, it is a negotiation - and depends hugely on the working relationship between the Founders and the Board members. There is a risk of the lowest common denominator becoming the consensus strategy. And that can lead to mediocrity.
The ideal model seems to be one of combining the Founder's leverage with the Board's wisdom. The Board's focus on stability, predictability, profitability with the Founders' instinct for new growth opportunities and knowledge of the space.
The Board's Yin with the Founders' Yang.
Go with the Board's wisdom on matters pertaining to existing stable businesses and how to scale them. Go with the Founders' instinct on ambiguous new opportunities - and when faced with an inflection point in the market.
But that's easier said than done. As Microsoft and Infy show, a perceived inflection point can produce two diametrically opposite reactions.
And the battle continues....
Some Microsoft Board members want Bill Gates to step down as they think Microsoft has got its strategy wrong - and Bill Gates can't fix it!
What is it about such Founders that makes Boards think they are capable of and responsible for - all success and for all failures?
In one word: Leverage.
The ability to get a lot done with very little.
Founders who have built the business over years have a very high leverage in the business.
Leverage because they know how the various moving parts in the business work with each other, how a small change here can make a big impact there.
Leverage because they know the context of the business over many years, why certain decisions were taken and how the changed context today makes it necessary to review the decisions.
Leverage because they know people in the industry. And people in the industry know them. When something needs to be done, the founders know whom to call. They also get a lot of market intelligence. Not data, not information, not research. Intelligence about who is doing what, why etc - because of their network.
Leverage because they know the market landscape, have credibility with market players and have an instinctive feel for the space.
At some point in a company's growth - typically when the product-market fit has happened and some predictability has been achieved , the collective wisdom of a Board is seen to be better at deciding the strategy than the Founders' leverage.
The problem is that the correctness of a strategy is only known post-facto. And so, the prevailing view in the Board can become the decisive factor on how to use the Founders' leverage.
If a Board believes that a Bill Gates will use his leverage and constrain the new CEO candidate, they want him out.
If a Board believes that a NRN will use his leverage and get Infy back on track, they want him in.
Most investors will have you believe that the Board is wiser. That the Founder is good for the creation part. Not the management & growth part. (and that's a good topic for another post!)
Mr. Zuckerberg, Mr. Brin & Mr. Page have ensured that they have control on the destiny of their business. Businesses in high-tech that require rapid decision-making, pivoting etc probably work better this way.
In most start-ups, it is a negotiation - and depends hugely on the working relationship between the Founders and the Board members. There is a risk of the lowest common denominator becoming the consensus strategy. And that can lead to mediocrity.
The ideal model seems to be one of combining the Founder's leverage with the Board's wisdom. The Board's focus on stability, predictability, profitability with the Founders' instinct for new growth opportunities and knowledge of the space.
The Board's Yin with the Founders' Yang.
Go with the Board's wisdom on matters pertaining to existing stable businesses and how to scale them. Go with the Founders' instinct on ambiguous new opportunities - and when faced with an inflection point in the market.
But that's easier said than done. As Microsoft and Infy show, a perceived inflection point can produce two diametrically opposite reactions.
And the battle continues....
