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Narayana Murthy's dream for the future
August 12, 2005
India's software giant Infosys Technologies Limited has entered its 25th year of existence. In these 25 years, the company has scaled many a peak, making the nation proud of it.
N R Narayana Murthy, Chairman, Infosys, however, has plans to turn the company into a bigger, stronger, and global player.
At an analysts' meet, held to mark the silver jubilee celebrations of Infosys in Hyderabad, Murthy spoke about his future for the company.
Here's the speech that he delivered.
We start our 25th year celebrations today. It is indeed laudable that we have run this marathon so far. Several happy thoughts come to my mind as I stand here. But, the most important one is our meeting in January 1981.
How Infosys began
It was a wintry morning in January 1981 when seven of us sat in my apartment, and created Infosys. We had lots of hope, confidence, commitment, energy, enthusiasm, hard work, passion and a sense of sacrifice.
We were short of one thing, money. We managed to put together just $250 in seed capital.
We never dreamt about size, revenues and profits. Our dream, right from day one, was to build a corporation that was, above all things, respected.
From the beginning, our team was unique in our commitment to a strong value system. We believed in putting the interest of the company ahead of our own interest. We believed in legal and ethical business.
We believed in respect and long-term gratification. And each of us brought complementary strengths to the company.
'Entrepreneurship is a marathon'
To me, entrepreneurship is a marathon. I believe that the key to a successful corporation is longevity – my heroes are companies like IBM, Levers, and GE. These firms have shown growth in earnings quarter after quarter, for a long time.
Infosys itself has seen consistent growth in revenue and profitability for over 49 quarters, since it got listed in India. We have institutionalized performance and accountability in our systems and processes, and through the empowerment of our employees. Let me talk about some of the generic lessons we have learnt.
The name of the game is: predictability of revenues; sustainability of the prediction; profitability; and a good de-risking model. Measurement is key to improvement.
A sound value system is what differentiates long-term players from others. Putting the corporation's interest ahead of personal interest will advance personal goals in the long term.
No single person is indispensable. It is important that you give challenging engagements to deserving people, whether they are young or new in the organization. Youth and empowerment are the keys to scalability and longevity.
Every situation is what you make it to be. Confidence is half the battle, and leadership is making the impossible look possible. Speed, imagination and excellence in execution are the only three context-invariant and time-invariant attributes for success.
Trust of employees, investors
The trust of employees is the most important ingredient for successful leadership. To gain the trust of people, there is no more powerful leadership style than leadership by example. The world respects performance and action, not rhetoric.
It is better to obsolete our own innovations, rather than allowing our competitors to do it. A healthy sense of paranoia and respect for competition is an absolute must for success. It prevents complacency, and ensures that the organization is learning continuously. The ultimate test for customer satisfaction is making our customer look good in front of his / her customer.
I have realized that if you want to look smarter, you must surround yourself with people smarter than you. Everybody needs incentives to perform. Money is not the only motivator; respect, dignity, fairness and inclusiveness are essential to get the best out of employees. Every employee must feel an inch taller when talking about the company.
Being transaction-oriented in every decision avoids groupism. An emphasis on meritocracy and data-orientation enhances the confidence of employees in the fairness of the corporation. We believe in the adage, In God we trust, everybody else brings data to the table.
To retain the trust of your investors, it is better to under promise and over-deliver. Investors understand that every business will have ups and downs, and want us to level with them at all times. They want us give them bad news pro-actively and as early as possible. Therefore, When in doubt, disclose.
We have realized that we should never take any decision with the stock price in mind. The day we do this, we will ruin the company. Finally, we have realized that we can shortchange investors if we want to make Rs 1 crore (Rs 10 million), but if we want to make Rs 1,000 crore (Rs 10 billion), we have to play the game straight and honest.
We have realized that longevity requires that we follow every law of the land, even if we do not agree with it. We should work hard to change laws that hurt the progress of the corporation.
Unless we make a difference to the society and earn their trust, we cannot be long-term players. Therefore, in everything we do, we must ask ourselves whether we are adding value to the society around us, regardless of where we are -- US or India.
'What I want Infosys to achieve in 25 years'
What do I want to see this company achieve in the next 25 years? I want this to be a place where people of different races, nationalities and religious beliefs work together, in an environment of intense competition but utmost courtesy and dignity, to add greater and greater value to our customers, day after day. Just like we have received respect in India, I want Infosys to be the most respected company in every country that it operates.
But, to achieve these dreams, we have to be in existence over the next 250 years. I know we can do this for the following reasons:
- We have an extraordinary leader in Nandan (Nandan Nilekani, Infosys CEO), a man of great vision, values and dynamism. He is ably supported by the best management team and professionals in the industry.
- We have a depth of leaders within the organisation, with over 500 leaders being part of our leadership training and mentoring programme.
- The de-risking strategy at Infosys ensures that there is a backup for every position, and that decision-making is participatory across the company. In other words, it is not one person, but a team that looks at every decision. Thus, at Infosys, it is the leadership of ideas and meritocracy that drives every decision.
- Every decision is supported by a strong portfolio of systems, processes and technology.
- The value system of the company is time and context invariant.
We will continue to have the mindset of a small company even as we grow and scale.
Finally, and most importantly, I see youth, the feel-good factor and confidence around me.
This is why I am confident Infosys will continue to serve the society as a long-term player.
N R Narayana Murthy