Murthy's Law

Saturday, September 1, 2012 - 12:14

When founder N.R. Narayana Murthy started Infosys in 1981, he had one simple aim for the business: to become India's most respected company. Gerard McManus speaks to the man behind the IT giant.

Education and professional development are so embedded in the ethos of Infosys that its founder N.R. Narayana Murthy puts the teacher on a special pedestal.

"In my world the following are all gods: mother, father, teacher and guest," Murthy explained to Mt during a recent visit to the company's headquarters in India.

In many ways, Infosys both symbolises the high-tech juggernaut that is India today, but has also paved the way for it to happen.

The company pioneered the "Global Delivery Model" which so many Australian businesses now take advantage of, whereby IT backroom or support tasks are sent to India overnight and a solution is provided the following day at a marginal cost. Today, Infosys is at the apex of the Global Delivery Model, providing hundreds of companies a range of sophisticated and innovative IT and consultancy services, not just as an IT back office, but moving up the chain to become knowledge partners "co- creating" business initiatives with private and public organisations.

Australia and New Zealand Managing Director and CEO Jackie Korhonen says Infosys's original values continue to drive the business.

"As I look at the corporate values established many years ago in Infosys, we call them C-LIFE, which stands for customer value, leadership by example, integrity and transparency, fairness, and excellence – these are values that speak very strongly to Australians and New Zealanders," she says.

"While they are universally admired values, I also admire the fact they were established early in the life of the Infosys company at a time and a place where many of our competitors were less aspirational.

"I see it as my job, and the jobs of my leadership team in Australia, to live and express these values in a way that is relevant to our Australian and New Zealand employees, customers and business partners.

"For clients, they have to see it in the way we conduct ourselves every day in the way we work, negotiate and deliver.

"Clients might see me once a quarter, but they see our people every day, so it's from our team that clients will experience our values.

"The values may transcend nationalities, but the way you transmit them will vary according to the local culture. For staff, it is really a matter of folklore – sharing experiences and war stories that bring them to life for people. I'm seeing these differences more now as I have been given additional responsibility for other markets such as Africa, the Middle East, China and Japan."

The Infosys story is not just about a single company's road to success, it is also emblematic of the historic shift in the global economy from west to east.

Founder Murthy's early insistence on having a set of uncompromising values underpinning the Infosys business helped overcome western prejudice and concerns about business transactions with anonymous business partners on the sub-continent.

Murthy retired last year, but still plays an active role as "chief mentor", something he revels in, particularly to the thousands of young graduates who join the company each year. "I only give advice when asked these days," Murthy says during a staff birthday party at a floating restaurant at the company's spectacular Mysore campus.

Aged 66, Murthy is a small wiry man with strabismus (lazy eye), thick glasses and a ready smile. He wears the open- necked short-sleeved shirt of a software engineer just as often as he dresses in a suit.

"If a young person came to ask me how they should set about their career I would tell them this: base your work on honesty, respect, honour, trust, diligence, tolerance and a willingness to understand other cultures," he says.

"Most of all, seek excellence and integrity in that whatever you say, you do."

The biggest change in the way business operates in the world in the past three decades, according to Murthy, is collaboration rather than individualism.

"Everyone is a team player now, all projects are a team these days," Murthy says.

Like so many things about Infosys, its business culture operates on a different plane to other companies.

The founders have been known to give away 60 per cent of their salaries and their children are not allowed to work at the company to prevent the formation of family dynasties.

Employees call themselves "Infoscions" and there is even a company song.

And the next time you hear an organisation talking about forward planning, consider the kind of foresight behind a company that has a road map for the next 200 years. Murthy has laid down a 200-year vision for the company and its employees, which involves growth through multiple economic cycles.

The genesis of Infosys is now the stuff of corporate legend. It was conceived in a nine square metre bedroom of Murthy's apartment in Mumbai in 1981, together with six software engineers with a working capital of $US250.

As the foundation team tossed around aspirations about what the company might become ("India's largest employer?" or "The biggest software firm in the country?") Murthy instead came up with: "Why don't we aim to become India's most respected company?"

It stuck. Earning respect from customers meant delivering on promises, but was also aimed at employees, investors, vendor-partners, government and the wider society.

Murthy also mandated a "no bribes" policy that resulted in Infosys having to make more than 20 visits to the Department of Electronics in Delhi just to gain permission to import a mini supercomputer. It took a year to get a phone line without paying officials.

Today Infosys has almost 150,000 employees with an annual turnover of about $US7 billion. It operates in 30 countries providing consulting and IT services for hundreds of major corporations and government agencies.

Infosys also built the largest private university in the world in Mysore. It is an astonishing vision for any visitor, but especially for young Indian engineering graduates whose formative years were in villages without running water or electricity.

Set on 140ha, the campus is a collection of buildings, both majestically classical and ultra-modern. Its 60,000-treed gardens are constantly manicured; its roads swept daily; eventhe kerb and guttering is regularly whitewashed. Student residence blocks were designed in the shape of each of the letters I-N-F-O-S-Y-S so that from the sky you can read the name of the company below.

Recreation facilities include swimming pools, soccer fields, athletics tracks, a bowling alley, a 12-table billiard room, squash and badminton courts. There are daily classes in recreations such as dance, guitar and aerobics.

Behind its annual intake of about 15,000 students, which includes many star graduates from international universities, Infosys also invests heavily in leadership, nurturing existing leaders, training lateral hires who come from outside business cultures, and bringing on the next generation of leaders.

The Infosys Leadership Institute, for example, is charged with developing about 750 people at the top of the company, according to director Dr Jayan Sen. "The people I deal with do not need time-management skills, they are already pretty darned good at what they do," Dr Sen says.

"But we endeavour to adopt a scientific approach to assessing our people using an evidence-based approach.

"What we discover is that individuals who are operationally strong may not be strategic, or they may be great at relationships and networking but lacking in charisma.

One-on-one mentoring is then provided, often with the foremost experts in the world in that particular area, such as Robert Cialdini, who wrote the best seller Influence: The Psychology of Persuasion and Bruce Avolio from the Centre for Leadership and Strategic Thinking at the University of Washington.

A business culture based on respect ahead of profits is still no guarantee of the prevention of mistakes or the elimination of corporate transgressors. Only recently Infosys's US arm was embroiled in a scandal involving immigration work visas.

However, Dr Sen says there is no backing away from the values set by the company three decades ago. He says while Infosys is accepting of all different styles of leadership and innovative approaches to doing business, some things were unacceptable.

"We have values that we won't bend for anybody and whether they be lateral hires or people who started out with Infosys as graduates, if they are not able to adopt these values, they have to be let go," he says.

Murthy's farewell letter to shareholders in August last year after 30 years at the helm will stand in time as one of the great epistles of business leadership.

"Posterity will not excuse you if you did not dream big. You owe it to your customers, your colleagues, your investors, and the society. Every major civilisation, every great advance in science and technology, and every great company is built on a big dream," he wrote.