...everybody else bring data to the table.” This is one of Narayan Murthy’s favorite one liners. What exactly does
he mean? Is he saying that clients and
staff can’t be trusted? Murthy has said
many times that trust is critical in business because it reduces the cost of transactions.
- As Murthy sees it, Infy (as Infosys is referred to) is an ‘enlightened democracy’ i.e. a meritocracy ‘powered by intellect and driven by values’ committed to Murthy’s brand of ‘compassionate capitalism.’ He feels that what people really need are opportunities, incentives and healthy competition. According to Murthy, there is a hierarchy at Infy, but it is a hierarchy of ideas, not people. Decisions are based on data, not emotions. The best and most innovative ideas are selected in every case. Murthy says he runs Infy on the conviction that "Performance leads to recognition. Recognition brings respect. Respect enhances power. Humility and grace in one's moments of power enhances the dignity of the organization." Infy has given away stocks worth Rs. 50,000 crores to staff creating two thousand salaried millionaires in the US and twenty thousand in India. It has done this because it wants to ‘attract, enable, empower and retain’ ‘happy, enthusiastic, energetic, satisfied, aspirational minds.’ According to Murthy, the rest is elementary and follows as a matter of course. How far Murthy's vision is a ground reality at Infy is a matter of debate.
Murthy’s life and
work are the stuff of legend. He is a
frugal man who lives an austere life rooted in conservative middle class values.
For example, he doesn't drive and takes the company bus instead. In fact buses
have played a critical role in his life. Years ago, the beautiful and brilliant Sudha
Kulkarni got hired as the first woman engineer at Telco in Pune. Narayan Murthy
was working for Patni Computers. Omkar Goswami of NDTV interviewed Narayan and
Sudha Murthy in 2011. She spoke of how they met on the bus both took to work. She noticed that he got on the bus with a
different book every day. Intrigued, she took a peek. One day the front page
said ‘Narayan Murthy: Istanbul,’ the next day it was, ‘Narayan Murthy: Paris’,
the third, ‘Narayan Murthy: Peshawar. ’Always direct, she asked him: “Who is
this Narayan Murthy? He’s an international conductor.” He replied “He’s a young
person from Karnataka who was in Paris for three years. Every time I visit a
place, I buy a book to remember it by.” The next day he got on the bus and told
her: “Narayan Murthy wants to meet you.” Sudha Murty is from Karnataka too and they had
a common friend, Prasanna. This marked the start of their courtship.
Sudha Murty (She spells her last name without the ‘h’)
speaks very candidly and endearingly about the early years. Murthy invited a
few friends and insisted that she join them. She was quite surprised and
refused because she was the only girl in the group. He was insistent. She says
she had to pick up some clothes from a tailor nearby so she got there at 7 p.m.
instead of 7:30. Murthy was already standing outside. He insists that she got
there early to meet him. She says it was the tailor. They’re still arguing
about it. During their courtship, Murthy was always broke. He’d say; “I don’t
have money with me, you pay my share, I will return it to you later.” For three
years, she kept an account. When they married in 1978, Murthy owed her a little
over four thousand rupees. He never returned the money. The man who couldn't
pay for his dinner was worth US $ 1.4 billion in 2012!
By 1980, Murthy was working on a blue print for Infosys. His
habit of borrowing from his wife continued. In 1981, Murthy set up Infy with
six other professional in a 10 ft x 10 ft room with no telephone or computer. He
borrowed Rs. 10,000/ (Us $ 250 at the then rate of exchange) from her. This was
their seed capital. She also gifted him a three year sabbatical to follow his dream.
She promised to take care of the
financial and other needs of the household and also look after their son.It took over nine years for Infosys to break even. It’s
incredible that in 2012-13, Infy had a market cap of approximately US $31
billion and 155,000 employees!
Initially, Infy found it very hard to get a foothold in the
international market as no one trusted Indian business practices and products.
It worked hard. It worked smart. It was transparent. It worked to deadlines and guaranteed quality
control. It developed cutting edge
technology with a very fast delivery cycle.It introduced the PSPD model (i.e. predictability, sustainability, profitability, de-risking). In a business unfriendly India, it
battled with massive corruption and red tape. It refused to compromise on open,
honest business practices. Its Global Delivery Model for IT services outsourcing from India led to an international footprint for Infy.
Murthy shared life
lessons with the students of the Stern School of Business in New York in 2007. He said: “we often run into chance events and
unplanned encounters. We have to turn these events into opportunities by
combining them with intentional choices;" “In a time of change, it is the learners
who inherit the future.” He spoke of how the founders got an offer of US $1
million for Infy after struggling for nine years. This was the first time
they’d seen money. Five of the founders met in Bangalore to consider the sale.
For four hours Murthy listened to his colleagues without a word. Then he got up
and spoke of why they should hold on. If they still insisted, he’d buy out
their shares. He didn't have a penny in his pocket! Somehow, he managed to
persuade them. Today Infy is a US $ 7.5 billion company.
Murthy has never
deviated from a path of corporate responsibility towards society in his long
career:
“I
believe that we have all at some time eaten the fruit from trees that we did
not plant. In the fullness of time, when it is our turn to give, it behooves us
in turn to plant gardens that we may never eat the fruit of, which will largely
benefit generations to come. I believe this is our sacred responsibility, one
that I hope you will shoulder in time.”
Infy has run into
problems over the last few years. It’s been overtaken by Cognizant. Its revenues have fallen well below TCS. Employees satisfaction and morale are low. It is no longer a company people are willing to kill to work for. On June 1, 2013, Murthy returned to Infy for
five years to restore the company to its eminent position in the market. At the AGM on June 15, he told shareholders
that it would take him three years to turn the company around; ‘…improvements
require change and the quest for perfection requires us to change as often as
necessary.’ Infy 3.0 starategy of focussing on the lucrative consulting business has been put on the back burner for now. In the short run, Infy will concentrate on its bread and butter business. In the current recessionary environment, clients are not willing to pay high prices. Buying is limited to essentials so Infy is trimming its profit margins.
Is Murthy right in
crossing the retirement age and bringing his son Rohan in as PA? Can one man
turn the fortunes of a huge company? Open questions. They say character is destiny…
