The Icon

Reed Hundt, the maverick ex-chairman of US communications regulator
FCCresponsible for sweeping changes in American telecom regulationoften
remarked: it is not enough to initiate change, one must talk about it as much as
possible to drive the message of that change. In India, where talking
unequivocally about what you believe is right is often taken as a sort of
arrogance, few have the conviction to stand out and tell the world what they
think is rightespecially if they are successful in public life.

One rare example is Nagawara Ramarao Narayana Murthybetter known as NR
Narayana Murthy and, sometimes, NRNthe co-founder and non-executive chairman of
Infosys Technologies. Never hesitant of saying what he thinks is right, even if
that is against conventional wisdom. Even if that has got him into major
controversies. Even if that has meant standing almost alone on an issue. It has
not always made him dearer to the people around him, yet arrogance is the last
quality that anyone would associate with him. If anything, he stands out as a
modern-day icon of humility.

Murthy means different things to different people: a visionary; a great
leader; a role model; a symbol of new India; and above all, for a large section
of the Indian middle class, a hero who proved that the values that they learn
from their parents at home are the same values with which the foundation of a
great global corporation can be built.

NR Naryana Murthy, the winner of the Dataquest Award for Lifetime
Contribution to Indian IT for 2007, becomes the only person to win all the three
Dataquest jury awards: IT Person of the year in 1996, and the Pathbreaker award
for Infosys in 1999, when he was the CEO.

Listing down Narayana Murthys contributions to the Indian IT industry is not
easy. Whether it is building a company from scratch that changed the rules of
global IT services, making India the epicenter of all the action. Or building
the new Brand India that transformed the countrys image from being a land of
elephants and snake charmers to a land of IT.

He was able to visualize years back that what this industry would compete on
in the future was people. Here too, Murthys contributions are diversebe it
creating a culture of sharing wealth with employees or bringing about a mindset
changethat wealth creation is not something immoral.

Above all, his role as a mentor in establishing the faith among many Indians
about the superiority of having a strong value system. About the fact that
business success and a strong sense of ethics are not mutually exclusive. If
you ask me what distinguishes Infosys from many other companies: it is our very
strong value system, says Murthy.

But what really sets him apart is that in addition to being a successful
leader, hes always been very involved in public issues, taking up causes close
to his heart and speaking his mind out. Take for instance when he wrote to the
Ministry of External Affairs to create 240-page passports for frequent business
travelers, as India was fast becoming a global hub. Or during the Cauvery water
dispute, when he vociferously opposed the Bangalore Bandh saying that the right
way for Karnataka was to get data to prove their case, and not in disrupting
business.

Though this led many to believe that he had a political agenda, Murthy has
silenced everyone by staying away from active politics. His name even came up as
a contender for the post of the President of India, but he himself didnt show
any inclination.

Apart from what he has done in business and public life, it is how he has
done it that is so special. While actively advising everyone to learn from the
West qualities such as accountability; acknowledging accomplishments of others;
dignity of labor; professionalism; honoring words; and intellectual independence
to name a few, he has, as forcefully, emphasized that the success of his company
comes from following some of the values deep-rooted in the traditional Hindu way
of life. Values such as universal appeal and feeling for all beings; quest for
knowledge; a high degree of importance for the family; apart from, of course,
following a value system.

To list some of Infosys achievements: its huge growth, leadership position
in the market; successful listing in America, paving the way for many IT
companies; representing globalization for the Americans (Tom Friedmans famous
description, Infosys and Al Qaeda remain the two greatest threats to America),
and its leadership in employee practices. Murthys achievements are huge, but
his contributions are far more.

Because, to end in his own words, In the ultimate analysis, we are mere
temporary custodians of the wealth we generate, whether it be financial,
intellectual, or emotional. The best use of all our wealth is to share it with
those less fortunate.

... and the Man

The adage, simplicity is the nature of great souls, goes well with the
personality of Nagawara Ramarao Narayana Murthy, widely known as NR Narayana
Murthy, co-founder and chief mentor of Infosys Technologies. Born into a Kannada
Madhva Brahmin family in Mysore on August 20, 1946, Murthy graduated with a
degree in electrical engineering from the National Institute of Engineering,
University of Mysore in 1967. Two years later, he received his masters degree
from IIT Kanpur.

What really drives Murthy is the vision of the future, to put India on the
global map. From the time he and six others jointly started Infosys in a
two-bedroom Pune apartment in 1981 with an investment of Rs 10,000borrowed
mainly from his spousethe fire has never ceased. At that time Rs 10,000 was
not able to take you anywhere. We started our first project and we asked for 20%
of the project as advance. We didnt have anything except our degrees and
certificates, recalls Murthy.

From that day to the present, Infosys has grown by leaps and bounds. However,
starting an IT company in the 80s was not an easy task. No, I didnt ever
think of entrepreneurship those days. The environment was not conducive and,
also, I came from a background where entrepreneurship was an unknown thing. The
path was very clear for us. We had to do reasonably well in studies, take a big
job in either civil service (which, of course, was the number one option) or
join the private sector.

I did my engineering in 1967 and the idea of entrepreneurship came to me
somewhere in 1974-75. It happened because during my stay in Europe I read a lot,
met a lot of people, looked at various philosophical foundations, and I came to
the conclusion that the best solution for countries like India to solve poverty
is to create jobs through entrepreneurship. So I decided to conduct an
experiment. But I knew I was completely ill-equipped to do so. So I entered the
private sector in India and got some experience, and then with six others, in
1981, I started Infosys.

The French Connection

His stay in France didnt expose Murthy to IT, as he says, there was not
much that I learnt in France in the area of computer science. However, in the
area of economic development, I learnt a few truths.

He learnt four important lessons in Europe. One, the only way you can solve
the problem of poverty is by creating more and more jobs with higher and higher
disposable income. Second, there are only a few people who can succeed in
becoming entrepreneurs, just as there are a few good journalists, a few good
doctors, and a few good lawyers, etc. Third, all human beings need incentives to
perform. Those incentives could be in the form of money, power, recognition; it
doesnt matter which but they do need incentives. Fourth, it is not the
responsibility of the government to create jobs but it is the responsibility of
the government to create an environment where there are more and more incentives
for entrepreneurs to create more and more jobs, and more and more wealth.

On a Mission

Murthy was a strong leftist when he was a student but was quite
disillusioned with leftism by the end of his stay, because, I discussed with
French communist parties leadersincluding Dodge Mossierwho used to be the
leader of the party at that time. I read a lot about Marxism; about Leninism; I
read a lot about practices in China, Russia, Cuba, Vietnam and of course in
India, and reached the conclusion that none of this is really the path to
solving the poverty problem.

What made Murthy look at IT? He lists down the reasons: First, there was
unbundling of software (thanks to a certain decision in the US, IBM had to
accept unbundling of software). Second, online transaction processing engines
based on relational database were becoming available on many computers and super
mini computers. Third, the PC revolution had just started: Bill Gates founded
his company in 1975 and IBM released its first PC in the late 70s, early 80s.
Fourth, Borland released its first sub-hundred dollar software, a compiler for C
language and Basic.

A Tough Road, Indeed

The formative days of Infosys were a struggle. In fact, in every project we
did those days, we used to get an advance; thats why there was no need for
working capital for us. The atmosphere to do business in the country at that
time was not encouraging. It would take us anywhere between two to three years
to get a license to import one computer. We used to go to Delhi 20-30 times,
wait in the corridors of the Lok Nayak Bhavan. It was very painful. First of
all, we had no money. I decided to be in India and my colleagues went to the US
to do projects. I had to take the train to Delhi, which took a good two and a
half days, and then I had to stay in wretched hotels because we had no money.
Then these bureaucrats would not see me for four, five, six days, and at the end
of it, they would not tell me whether they would give me the license or not.

Murthy recalls days when it took two to three years to get a telephone
connection. Those days there was a higher priority for a retired bureaucrat,
for a telephone connection, compared to a corporation into exports. To travel
abroad for even a day, it would take ten to twelve days waiting in the corridors
of the RBI to get foreign exchange. There was no way of opening offices abroad.
The Reserve Bank used to say, first get money and then we would give you 50% of
that as your entitlement of exchange. Nowhere in the world has such a business
model existed. In other words, the conditions were extremely tough absolutely
anti-businessI used to joke with Dr (Bimal) Jalan and Dr (Yaga Venugopal)
Reddy. Both are extraordinary Governors of the RBI, and I have tremendous
respect for both of them.

Infy for $1mn?

Still, Murthy fought for his dream. There was a business proposal to buy-out
Infosys in 1990. There was somebody offering us a million dollars to buy the
company. Several colleagues of mine expressed interest, saying this is a lot of
good money, and that we should give it out. But, finally, we all decided to show
a bit more patience and be more optimistic. I am glad the patience and optimism
paid offwe are about a $24 bn company today.

Behind Every Man

Narayana Murthys wife Sudha Murthys contribution to the success of Infosys is
immense. I have been very lucky in getting extraordinary support from my
family. My wife is a much better engineer, much better computer person than I
am. She got first rank in all the ten semesters, a distinction from the Indian
Institute of Science in her Masters. But she said: You chase your dream, and
Ill support you.

Focus on Employees

Infosys is considered a pioneer of Innovation in the Indian IT market. For
instance, when Infosys thought of the Employee Stock Option Plan (ESOP), it was
unheard of in the corporate world.

We thought we needed to share what we have. We all came from middle class
backgrounds, and believed in sharing whatever little opportunities for wealth
creation we had. Most of us had leftist backgrounds and this is a good aspect of
leftismeven to this day, I am a laborer in social matters and a conservative in
economic matters. So we shared whatever wealth possibilities were there with our
large number of employees. We have given 35% of the equity of the company to our
employees; nowhere else in the world has this happened. Well, now it is somewhat
difficult because for those of us who have listed in the NASDAQ or NYSE, we have
to expense out the capital gains, says Murthy.

He admits though that it is difficult to control attrition. These are all
parameters of business. After all it is our responsibility to make sure that
Infosys is attractive to all employees, and potential employees. If our
employees see better opportunities elsewhere, it is only fair that they would go
there.

The Agony & the Ecstasy

Murthy, who has played the roles of founder, CEO, chairman and chief mentor,
says he probably most enjoyed building up the institute. Well, I am a
manufacturer. I believe in doing things. I am restless if I have something
pending. In the initial days there were a lot of challenges and a lot of
difficultiesthe joy of the first customer, the first cheque, our first license,
the joy when we imported our first computer, when we built our first heritage
building, its extraordinary. So certainly I enjoyed that aspect.

For him the future of Infosys is a place where people of different
nationalities, races, and religion will work together in an environment of
intense competition, but with utmost courtesy and dignity to offer greater value
to the customer.

.Murthy, who says he is a man of the past, holds the view that future
business leaders should try and become more and more relevant to their
customers business.

However, do it in an environmental where the employee morale is high, where
you follow the finest principles of corporate governance, where you do not
violate any law of the land, where you live normally within the society.

Srini R

srinir@cybermedia.co.in