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Mindtree Vs L&T: In A Culture-Driven Business, Employees Decide Their Nayaks And Khalnayaks

It is culture that is standing out as a stark differentiator as Mindtree and L&T spar in what is the first instance of a hostile takeover among companies that make India’s $170 billion IT and business process management industry.

Mindtree Vs L&T: In A Culture-Driven Business, Employees Decide Their <em>Nayaks</em> And <em>Khalnayaks</em>
Mindtree Vs L&T: In A Culture-Driven Business, Employees Decide Their Nayaks And Khalnayaks
outlookindia.com
2019-03-27T20:48:00+0530

The employees of a company, if asked to define culture, may often find it too amorphous. Experiencing it would be do more justice to it than jargons associated with it. There is a lot being heard about the culture at the workplace in context of Mindtree versus L&T case, soon after the latter bought around 20 per cent stake earlier held by VG Siddhartha and his associates.

For founders, it is critical to build a culture which rewards growth and recognises those who perform well. A caring organisation is also built as part of culture. The biggest advantage or growing a particular culture is that employees can relate to a common bonding. It also defines, among other things, what the company stands for. When employees own up and thrive in that environment, the culture will thrive. A culture that thrives, incidentally, always tends to have the support of the top management.

It is culture that is standing out as a stark differentiator as Mindtree and L&T spar in what is the first instance of a hostile takeover among companies that make India’s $170 billion IT and business process management industry.

“Our parents had no money to give us, they have only given us idealism. We have nothing else. How can we be ashamed of it? That Idealism has a simple tenet: do what is right and not what is convenient. Selling off the Tree is the convenient but not the right thing to do. Because the Mindtree is you, we can't sell you off. Today, we can't put your soul on a leash,” co-founder and former CEO Subroto Bagchi wrote to employees in an emotional email.

The emotional appeal does carry a strong connect with the Mindtree Minds. By all accounts, the founders have been involved in various initiatives with a strong emotional connect in a much similar way. It is such emotion for building an organisation that has hemmed together the unique culture at Mindtree.

Engineering giant L&T has, without a doubt, been India’s biggest name in the EPC business. For over half a century it has been a success story among its peers, unmatched over these decades. Its excellence in execution is the envy of its peers and rivals alike.

Step back for a moment and search some of the issues regarding integrity and corporate governance against its companies. While the exact status of the cases may not be public, the number of cases does point to a worrying trend. A giant in its own right that has not been able to arrest the trend of such cases from coming out again and again needs, to use the old proverb, set its own house in order.

Several reports say that in 2013 L&T was barred by the World Bank for six months after it was found falsifying performance certificates for medical equipment for a project in Tamil Nadu. The company said that employee had acted on his own “without management awareness, approval or instructions”. World Bank held that the rogue employee defence lacked merit.

Cognizant Technologies had voluntarily disclosed to the Securities and Exchange Commission (SEC), US that it was probing two of its officials for payment of $2.5 million in bribes. Media reports linked it to L&T which, in 2017, appointed an external agency to review an internal probe around the allegation, which failed to find any evidence of their involvement.

None of this suggests that L&T has been guilty. But it raises questions among the Mindtree minds who have been part of the dream over the last 20 years. Shareholders and employees are well within their rights to demand that the governance standards they have set must at least be maintained, if not raised further. Do they see L&T and its group companies living up to the standards? That could be a tricky question for the L&T management.

The job to convince the Mindtree employees and the promoter group is that of L&T. Without their support to the deal, L&T shareholders may find it to be a lose-lose deal. Given the facts as they are, the Mindtree minds should, ideally, be free to chart their own course.

 

(The author is founder, Carre4re Communication. Views expressed are personal.)

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