BENGALURU: Ashok Soota is 78, and he is not thinking of retiring yet. But after the spectacular IPO of his company Happiest Minds, he is now restructuring his shareholding, as also the governing structure of the company, in a way that’s unique, and which he believes will keep the company going for a long, long time. Unlike what’s expected to happen to his previous venture, Mindtree.
Most of his shareholding in Happiest Minds – he holds 53% – will go into a holding trust and a medical research trust. He will mandate that the trusts must vote with the management of Happiest Minds to give the latter the confidence that their decisions would have substantial support.
“I have also indicated that to enable this, I will not allow my shareholding to drop below 35% even after meeting dilution requirements of future acquisitions. That’s enough to protect any company,” Soota told TOI in an exclusive interaction.
Soota’s view on holding 35% stems partly from the experience with Mindtree, the company he had co-founded in 1999 and which he quit in 2011. He noted that Mindtree had to succumb to L&T’s hostile takeover two years ago because Mindtree’s founders’ collective stake had by then fallen to 13%.
“Then they were ready prey. And they couldn’t have expected Siddhartha (Coffee Day founder VG Siddhartha who held a significant stake) to remain in perpetuity as their white knight,” Soota said. Many believe it’s a matter of time before L&T absorbs Mindtree into itself.
The second part of Soota’s strategy to ensure Happiest Minds a long life involves creating a collective leadership structure. Most organisations have a chairman, managing director and a CEO. Soota visualises the following roles for the future – executive chairman, managing director & CFO, and an executive board (EB) comprising three business unit heads and the MD/CFO.
“The executive board members individually and collectively function as the CEO of the company,” Soota said.
Happiest Minds has had the EB model for three years now. Its four members include Joseph Anantharaju, who is executive vice chairman & CEO of product engineering services, Rajiv Shah, who is president & CEO of the digital business services, Ram Mohan C, who is president & CEO of the infrastructure management and security services business, and Venkatraman Narayanan, who is MD & CFO.
Soota said the EB has already demonstrated success, given the company’s outstanding results and the ratings by Glassdoor and Great Places to Work that demonstrate the quality of the organisation built.
“The creation of the EB was a significant turning point for Happiest Minds. A very interesting point here is that a new CEO does not come in as a one time event. The EB is continuously refreshed as new BU heads are inducted. And EB meetings will be led by rotation by a different CEO each quarter,” Soota said, adding that the single CEO model comes with substantial risks.
“There are innumerable examples where the new CEO doesn’t work out, leading to organisational decline. We saw that in IBM, in GE,” Soota said.
Tech companies like Wipro and SAP have experimented with joint CEOs, but had to quickly abandon the model. Soota’s executive chairman-cum-EB model is different, and only time will tell whether it will remain successful after he exits the company.
On his own tenure in the firm, Soota said he draws inspiration from Berkshire Hathaway chairman Warren Buffett, who at 90 continues to have an active work life. “It doesn’t mean I will necessarily work as long as he will. I might even have different roles going forward,” Soota laughs.
The holding trust has three family members as trustees, and each will have to identify his/her own successors.
“They don’t have ownership of the shares. They will get paid as trustees for the responsibilities they fulfil. I have specified those trustees for the next two generations, and since the youngest of them is 22, the person should be there long enough to ensure the system is working well,” Soota said.