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January 11, 2000
The Rediff Business Interview/ N R Narayan Murthy
'We must benchmark ourselves against the best in the world'
The stock markets anointed him the first billionaire of 2000. On the basis of his holdings in what is today the most acclaimed company in corporate India. Investors see him as an unrelenting creator of wealth. Infosys chairman N R Narayan Murthy, who has emerged as corporate India's man of destiny in the new millennium, explains to Pritish Nandy what the creation of wealth means for him.
How do you see wealth created in corporate India in the coming decade?
The creation of wealth is very badly needed in India because at the end of the day we need to create more and more jobs. I don't see that happening in the agricultural sector because as you know the per capita revenue productivity in the agricultural sector is very low here. Perhaps the lowest in the world. So we have to move more and more people from agriculture to industry.
But that means more migration to the cities, more uprooting of people, more culture shock?
But that has to happen. It will happen. The need is to encourage the creation of jobs in industry, particularly in the service sector. Now the creation of wealth there requires quite a few things. One: A marketable idea. An idea that is going to make a difference to the people, to the corporation in some way. In the case of a corporation it may reduce costs, it may reduce cycle time, it may improve productivity, it may improve customer base, it may improve the service level. Any one of these things it has to do.
But even a well-run bordello is likely to fulfil these conditions!
Ah, that is where I bring in the most important factor: The creation of wealth has to be in a legal and ethical manner. Since what you talked of is not considered a legal or ethical activity in India, I would leave it out here. Though I am sure in many parts of the world even that would be considered a legitimate industrial activity!
What I am talking about here has to make a fundamental difference in terms of enhancing the quantity and quality of leisure, enhancing lifestyle, productivity. These are the issues. You need an idea that does these. Secondly, you need a market that is ready. You must be sure that the idea you are coming out with has a killer application. Something that will sell by itself. Something that will create new markets. Something that does not require a huge advertising campaign.
After that you need passion, commitment, hard work, sincerity and some smartness. It is always best if you have a group of people with you who have mutually exclusive but collectively exhaustive set of skills, expertise and experience.
You have found it easy to put together such a group of people?
No, not easy but that is what is likely to succeed. In fact, I have made an analysis of 12 companies that were founded between 1979 and 1982 in my sector. Only one or two of them have done very well and the rest did not satisfy the criteria that I am talking about. What happens, unfortunately, to most entrepreneurs is that they think that the functional expertise they have is all that is needed for success. For example, the software guys say being a technocrat is all that is needed. But you also need people who understand human resources development, finance, sales and marketing, quality, In other words, you need a group of people with complementary skills.
The third thing you need is vision. These people must have a vision. You may never reach that vision, but it is a good direction to move towards. For example, Bill Gates said: I want to put a PC on every desk, in every home and in every office. Ford said: I want to put a car in every garage in every home in the US. It is these visions that led to great achievement. A vision for the company should be shareable. It should enthuse people to move ahead.
That is all that is required to create wealth? An idea. A market that is ready. And people with a vision.
No. A group should also have a value system. This value system is nothing but a set of norms that a given group adopts for the best performance of the group as a whole. It will lead to the subordination of some individual interests, but the group as a whole advances. This is something absolutely essential because in the hour of your tribulation, in the face of adversity, it is the value system that gives you courage and conviction to continue with the game. The value system also translates into a certain cost.
What is this cost?
It is like this. When Pritish Nandy is walking down the road and he sees a Rs 500 note, he does not pick it up because he knows it is someone else's. But Narayan Murthy goes and picks it up. This means simply: Pritish Nandy has a much higher value system than Narayan Murthy. The value system simply translates into the ability to incur a certain cost in any given situation because you want to stick to certain beliefs, certain principles that you hold dear.
Then the enterprise must also create an environment where there must be a desire for innovation. Constant innovation. Whether it is in sales and marketing or in finance or in delivery, that does not matter. Everybody must be enthused and encouraged to bring about constant innovation. This means the hierarchy should be based on value addition rather than the office size, longevity in the organisation, how grey your hair is.
The instrument for doing this must be benchmarking yourself against the best in the world. Not just in India. Once we say that we are going to look at the best in the world in our domain, then your people are obviously going to get better and better and better.
In a shielded economy this would have never happened...
You are absolutely right. But you must create incentives to do that. Unless there is an incentive, people are not going to change. That incentive can come in terms of salary and stock option plans or it could be in terms of perquisites. It does not matter. Someone may want flexible hours. Someone may want the opportunity to learn more. Someone may want power. Someone may want recognition. But we must understand the hot buttons of various people and create a menu of options. Without compromising the overall organisational goals.
In other words, you mean empowering those who work for the organisation?
I see empowerment as synergising individual aspirations with the organisational objectives. The organisation is most important. It must go forward. But ways and means must be found to satisfy the aspirations of various individuals within the organisation without compromising its principles, its goals.
But are these not the privileges of an already successful company? A start-up or a struggling company does not usually have the time nor the bent of mind to focus on such niceties.
No, when a company is small that is when it has the greatest opportunities for innovation, for breaking down hierarchies, for better bonding, for creating higher aspirations, for running the marathon. That is when your people are hungry too. They are ready to try out anything new if it could afford them success. That is when one must set the goals right. You will never have to look back after that.
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