NR Narayanamurthy

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NR Narayanamurthy (Journey to the top - Part 1)

N R Narayana Murthy, the legendary brain behind Infosys Technologies, gives us a rare insightinto his entrepreneurial days. He talks of how the idea of Infosys was formed, how he became a

capitalist and what you should do to become a successful entrepreneur. Murthy answers CIOL

readers queries on various subjects. In an occasional series, Dares sister publication, CIOL,presents Journey to the TopWhat is that one moment that made you

think of starting Infosys?Anil Rao, [email protected]

In 1974, when I was holed up in a small8x8 foot room in a railway station at Nis, aborder town between what was thenYugoslavia (currently Serbia) andBulgaria, I realised that the best solution

for countries like India to solve theproblem of poverty was entrepreneurshipand capitalism. I realised how communistrule had punished its citizens withoutreason and just based on biases.

I still remember the words of the guards atthe railway station who released me afterthree and a half days of detention: I wasfrom a friendly country called India andthat was why they were letting me go! Then I got on to the train, a goods train, going from Nis to

Istanbul. It was a 21 hour journey and I had not eaten for five or six days before that. Throughoutthe journey, I was mulling over this injustice, the system of communism, and the problem ofpoverty in India. That is when I decided to become an entrepreneur and a capitalist. I had read alittle about various economic philosophies by then and realised that the only way countries likeIndia could overcome poverty was through the creation of jobs, which required entrepreneurship.

How did you select your cofounders? And what was each ones role in building Infosys?

Alex, [email protected]

My colleagues were very young with hardly a year or two of experience in software engineering.

Therefore, I selected people on the basis of compatibility of values. Nandan Nilekani, N.S.Raghavan, Kris Gopalakrishnan, S.D. Shibulal, K. Dinesh and Ashok Arora all had a verysimilar value system. They were all from the middle class and they believed in deferredgratification. They were ready to run the business honestly and ethically, they were ready towork very hard, and they were satisfied with very low salaries in the beginning. Even today, oursalaries are the lowest in the industry. They believed in team spirit. Team spirit is about makingsure the other people in the team do not fail. They brought complementary values. For example,Raghavan was the peoples person. He looked like he understood human resources. Nandan

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looked like he was a sales oriented person, I thought I knew a bit of strategy and finance, Krisliked technology. Shibulal and Dinesh seemed like good project managers. Ashok Arora was afine designer.

Who selected the name Infosys and on what basis was it chosen?

Tinu George, [email protected]

When we decided to start the company on December 29, 1980, I chose N.S. Raghavan, KrisGopalakrishnan and Nandan Nilekani to work with me. I asked them to think of a name.Generally, I am a very impatient person. So, I told them that they had to come back to me with aname in 48 hours or I would choose a name. For some reason, they did not come back with aname. Therefore, I chose the name, Infosys, because we wanted to be in the business ofdesigning information systems. So, Infosys is an acronym for information systems.

What did you intend to achieve with the founding of Infosys and in how many years after

the founding do you think you achieved what you intended?

Gowda Suman, [email protected]

I dont think we have yet achieved what we wanted to achieve. There were several objectives.First, I wanted to demonstrate that it was possible to run a legal and ethical business in India. Byand large, we have done that. I wanted to conduct an experiment in the democratisation ofwealth. We gave ESOPs to our people. In that sense, we have achieved what we wanted toachieve. We wanted to benchmark ourselves on a global scale in quality and productivity. Wehave achieved that as well. We wanted Infosys to be a truly multicultural organisation. Wewanted the company to be a place where people from different nationalities, races and religions

would come together and work in an environment of intense competition, but utmost courtesyand dignity. We have a lot more work to do in this dimension.

During your initial days, did you ever think of quitting or selling Infosys?

Sadhana Hegde[M1]

In 1990, there was an offer to buy out Infosys for $1 million. Everybody got excited and we helda meeting on a Saturday morning in our Jayanagar office. In that meeting, I let my colleaguesspeak first. When my turn came, I said, No, I will buy you people out. They were a little bitsurprised because they knew I did not have the money. I said we were going through difficult

days, but I was confident that we would overcome the problems. We had already spent nineyears in this marathon. Therefore, I said, it would not be a good idea to sell it off for just amillion dollars, although I did not think that a million dollars was a small sum at that time.Within ten minutes, Nandan came to me and said he would be with me. Within half an hour, theothers followed suit. That is how we averted that sell-off attempt.

How difficult or easy would it be to start another Infosys in todays conditions as compared

to 30 years ago?


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Sampath Kumar, [email protected]

Well, starting yet another vanilla type software services company would not be easy because thebigger companies have built lots of entry barriers. Today, we own 26 million square feet ofoffice space just in India. We have offices in 70 countries. We have 110,000 people. We have

around Rs 17,000 crore of cash. We are connected with many influential people in well-knowncorporations because we are on the boards of various international companies. We have investedheavily in quality, productivity, branding and technology. We have SETLabs (SoftwareEngineering and Technology Laboratories). It works with ten well known universities in Indiaand abroad. We have the worlds largest corporate training centre. We have 600 faculty membersdedicated for training. We have a 29 week training program for every engineer. We have 10,300hostel rooms in our training centre in Mysore. No global or Indian competitor has these facilities.We have a huge human resources department, which can process 10,000 applications a day.

The point I am trying to make is that if somebody else wants to do something on the lines ofwhat we do or what TCS or Wipro or Cognizant does, it is going to be difficult. Todays

youngsters have tremendous opportunities if they think of a different paradigm or a differentbusiness model. While there is tremendous opportunity in other areas, doing, today, what Infosysdid 30 years ago will not be that easy.

Could you share your first breakthrough moment?

Name unavailable

When we started Infosys, we spoke to a US software company called Data Basics Corporation.During my stint at Patni Software, we had worked with this company. Data Basics Corporationhad started its operations in SEEPZ, Mumbai, when I met its CEO. I convinced him that it was

much better for him to close down his own operation and work with us. Since he had workedwith us earlier, he knew our competence and value system and the difficulties of operating out ofIndia at that time. So, he closed down his operation and started working with us. That was thefirst breakthrough.

Had your wife been the CEO of Infosys instead of you, how would your company have

shaped up?

Somasegar, [email protected]

She is a much better manager and a better leader than I am. She is much more disciplined than I

am. So, it is likely that we would have been more successful. But such hypothetical questions arevery difficult to answer. It would depend on the team she would have put together and on themarket conditions outside. It would also depend on the ideas she would have chosen. She isbetter at getting along with people too.

Why did Infosys not utilise its brand reputation and cash reserves to enter other

businesses?


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Soleswaran

We are software professionals. We enjoy doing what we do. And there are lots of opportunitiesin this area. We are all busy doing what we enjoy. Even though I am retired, I come to this officeregularly. I dont get a salary. But I come because I enjoy coming here. We are quite happy with

what we are doing.

How will Infosys shape up by 2025?

Kadur Srinivas, [email protected]

It is very difficult to say what Infosys will be in the next 15-16 years. If you had asked me in1995 whether we would be a $6 billion corporation by 2010 or 2011, I wouldnt have been ableto answer. All I can say is that we want Infosys to be a corporation where people of differentnationalities, races and religions will come together and work in an environment of intensecompetition, but utmost courtesy and dignity to add greater and greater value to the customer day

after day. Whether we will be a $50 billion corporation or a $100 billion corporation in thefuture... I dont know.

Is an MBA or an engineering degree necessary to become a successful entrepreneur?

Kavitha Murthy, [email protected]

No, I dont think any specific educational background is required. What is required is a goodidea that has value to the market, a team with complementary skills and a good value system, anda market which is ready to pay for that idea. And, of course, you need some money in thebeginning. That is not very critical, though. However, if you want to be in a specialised area,

then it is better to have expertise in that particular area, like medical electronics, where bringingtogether doctors and engineers is a good idea. It is not necessary to have an MBA to become asuccessful entrepreneur. An MBA will help, but it is not mandatory.

NR Narayanamurthy (Journey to the top - Part 2)

Here is the part II of the Journey To The Top, an occasional series by our sister publication

CIOL. We began this series with Infosys Chief Mentor, N.R. Narayanamurthy. Excerpts from thesecond part


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Do you believe in role models? If so, who are yours? [email protected]

Yes, I do believe in role models. They are extremelyimportant. They serve as a guide in handling tough situations

and resolving dilemmas. I look up to two people as rolemodels - the first person is Mahatma Gandhi because hewalked the talk and led people by example and the secondperson is Lee Kuan Yew, the former prime minister ofSingapore.In my own life time I have seen him taking his country fromthe third world league to a first world country stature. He ledthe nation from the very first frontiers.

Well, there are a lot of people out there who look up to you in the same awe and respect.

What would you advise

to all those who consider you as their role model?

[email protected]

I have to say Im flattered. I am grateful to them. I will continue to work hard and smart and liveup to their expectations. I will never let them down.

What in your opinion and experience are the main qualities required to manage people;

manage company; manage partners and manage customers?

Sham

In all these areas you need a sense of integrity. Integrity is about doing the right thing. It is aboutbeing fair to others, having the courage to tell others not to do wrong things. Integrity is aboutdelivering on promise. It is also about being truthful. I believe integrity is one quality that is thefoundation of all relationships whether it is your customer or partner. That said, it does notsuffice if you are only an honest person. It is very important for honest people to condemndishonest people publicly.

There are different leadership styles that a person develops, for example Directive,

Expert or Consensus. What is your leadership style? Can you give instances on how

you could effectively use that style?

Narendra Shikaripur, [email protected]

I listen to everyone. I take inputs from everybody. However after taking inputs from everyone, Iuse those inputs to fine-tune and modify my decision. I welcome participation, but I take thefinal decision. I also take responsibility for the outcome of that decision. I dont like a situation,which says I did not take that decision.

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How is Infosys grooming its next set of leaders? What kind of leaders are required in the

contemporary competitive world?

No name

We need leaders who have high aspirations, who lead by example, and who are courageous totake big and tough decisions. We need leaders who are fair and have integrity, who are firm, andare willing to take bottom-line responsibility. We need leaders who share the credit with othersin the company and who are willing to accept that they are wrong. We need leaders who arehuman beings. We dont want Gods or saints.

Do you have any political ambitions? Will Mr Murthy be donning the hat of a Chief Values

Officer / Chief Belief Officer for Govt of India ?

Aamir [email protected]

I dont have any political ambition. In 1999 I had an offer to become a cabinet minister at thecenter but I refused. However, I do want a good political system. For instance, I am on the boardof the Jaago Re campaign. This forum is about registering voters and improving the quality ofcandidates. But I do not have any political ambitions.

Can you share your toughest experience about handling a client? How did you convince

them?

Dilip [email protected]

In 1983, one of the multinational companies was looking for a data center installation. There

were a couple of IT companies with state-of-the-art machines who were also in talks to clinch thesame deal. I came to know about this just a couple of days before the last date. I went to them totalk about this deal. We had very low financial strength. I also realized that our strength wasmainly our technical expertise. The other two companies had money as well as experience. Theyhad worked on such projects earlier.

This multinational company was very skeptical about dealing with us. I sat down and created amathematical model to demonstrate and explain to them how our computing system was so muchbetter than the competing ones. I asked them to give me an hours time for the presentation. Themeeting went on for four hours. I told them that your strength is financial strength. Your strengthis organizational strength. Our strength is our technical expertise and our strength is making sure

that you can utilize the time sharing system very effectively. Therefore you should find out fromour competitors if they have this kind of strength and you can ask them the questions that I haveraised with you. This multinational company was impressed and we won the deal.

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NR Narayanamurthy