N R Narayana Murthy – Chance Favours a Prepared Mind
The journey of Indian economy and mantras for change management
The journey of Indian economy and mantras for change management
You are an epitome of engineering industry today. But, back in early 70’s you were in Paris. What prompted you to come back to India?
During my stay in Paris, I observed a lot and interacted with people from every corner and I became convinced that the only way I can contribute to the society is through creation of jobs and such jobs can be created by entrepreneurs and not by the government. I realised I would be much more useful to my home country than in the US or UK which were already advanced countries. Therefore, I decided to come back to India.
Your first venture did not last for more than a year and half. It was not a common decision for anyone to go ahead a start a new venture. What motivated you to conceptualise Infosys?
Those days, very few people became entrepreneurs. In my case, I was pretty convinced that I had to work towards succeeding in entrepreneur because that my conviction. Even though, Softronics failed but I carefully analysed the reason for its failure and there a structural reason for its failure and no other reason. I realised that focusing on the domestic market would not provide me an opportunity that I was looking for, at the same time, advances were taking place in supermini computers in the west, in modern operating systems in the west, in relation database in the west and in transaction processing monitors in the west and I realised that the cost of developing application software to run commercial application and running them on our computers would be cheaper and small and medium scale companies would start using these computers and that would lead to an explosion in demand and that’s where I saw an opportunity to start again.
Infosys is a case study today, but, the journey wouldn’t have been easy. What were the leadership challenges that you faced and how did you overcome them?
Environment back then was very business unfriendly. To get a telephone, you had to wait for 5-7 years. There was no current account convertibility that means anytime you travel abroad even for a day, you had to get the permission from the RBI which would take 10-15 days, you couldn’t open offices abroad, and getting license for importing a computer was restricted to software exporting companies and that too would take quite a lot of time. The banks did not believe in providing term loans to software companies because they always wanted collateral. Therefore, the environment was very tough but in the end, it is the power of human idea that overcomes most of these obstacles.
What were the challenges that you had to face internally and from the western countries during the early years?
Once the economy was liberalized in 1991, and we got listed in India in 1993 and got listed on NASDAQ in 1999, we became better known in the United States, more and more CFOs realized that there is a company which is going to grow, a company that is committed to the United States, it listed on our stock exchange and therefore we should work with them. So, our growth started picking up in 1998 and there was an opportunity of Y2K, that’s when the entire industry started growing rapidly and we also started growing rapidly. And also there was internet boom. So when you combine the internet boom with the Y2K boom, this was a remarkable stand where there was excellent growth opportunity. Therefore, we realized that if the company has to grow rapidly, given that we’re also listed on the NASDAQ, we understood the importance of developing the next generation leaders.
Is there anything that you would like to change in Infosys and why?
I think, we need to be more multicultural. We need to employ people from other nationalities, races, religion and gender. For example, the percentage of women working in our industry and at Infosys is growing. It is today about 35-38 per cent. But, it has to become 50. Similarly, we have employ talent in order to sell our products. For example, we need to recruit Englishmen to sell in England, American to sell in the US, Mexican to Mexico etc. We also have to improve the brand equity to be better known. And, we have to work towards even better training of the staff who’s working at Infosys because the quality of students that are coming out of our engineering colleges as reported by McKinsey is quite low. It says that about only 25 per cent of the students are employable. Therefore, a lot of effort needs to be put in in-house training.
During all these years, you must have felt the need of change and there must have been resistance to such changes. How did you overcome these resistances?
Leadership is all about transformational change. It is about making impossible, possible. Late Robert Kennedy used the words of George Bernard Shaw to define leadership. He said, “Most people see things as they are and wonder why? I dream of things that never were and they were not.” In absence, leadership is about this: while most people think that it is impossible to bring this change, while most people are bewildered by what’s happening around them, a leader thinks of something that is unimagined by the rest of the people, and then say, we should get there, we should do that. Therefore, in order to help our younger people become such leaders; we realized that our institute has to depend on three important tenets:
- Our company is our campus. If you want good ideas to come from the people, then there should be a sense of pluralism, there should be an environment of openness, there should be an environment of curiosity, an environment of questioning, an environment of enlightened democracy and that will happen only in a campus environment. All doors must be open, anybody must be able to walk into your room, anybody must be able to send an email questioning any of your decision. That is how we say that the 1st tenet for training of leader is that we will operate our company like a campus.
- Leaders thrive in a certain context. You can’t take a person who is successful as the CEO of a company and make him become the Prime Minister or you can’t take Prime Minister and make him run a company. While they are all leaders, but these require different competencies. If we want our leaders to succeed in Infosys, they should be well-rounded in the business of leadership. They should understand our business. We believed that, for leadership training, our curriculum is our business. In the training of the leader we will help them understand the intricacies of sales, finance, software development, and infrastructure building.
- Our leaders are our teachers: We felt that if we want our leaders for being trained to be successful, then they must listen to people who’ve actually handled the problems, issues, the dilemmas, and the success of the company. It was like a real time as well as context based training. They must understand the context of the company very well and in order to teach this, who has the best credibility than the leaders who are actually taking the company forward today. We said we will not have teachers from outside but each of the lectures will be given by the current leaders.
Education plays a major role in developing the future of India. What according to you is lacking in Indian education system today?
First of all, the quality of teachers at the engineering college should improve, secondly, the focus should be in understanding concepts than just passing the examination, and thirdly, they should instil a mindset of problem solving in the students.
Do you think, quotas are responsible for this?
By and large, providing help to children to weaker economic section is a right thing but India is different. We are the only country in the world where caste system still exists. I think, there should a mechanism for providing better education to these children who were denied opportunities in the past, so that they can become as good as anybody else. There are various methods. Reservation is one of them. You can also provide them specialised schools with better faculties and these children get free food. The children should be allowed to spend more time at such schools so that they can access better education and become better leaders of tomorrow. So that, they can say, “we are as good as any and better than many.”
Infosys foundation has been doing a really good work towards the education for poor. Tell us more about it.
Given that, India has about 440 million people who are below the poverty line as per the government of India which is about 28-30rs a day, we have a large number of poor people in this country. Poverty translates to lack of access to decent education, healthcare, nutrition, and shelter. It is a very large task and I don’t think anybody in India can claim to say that they have succeeded in this task. We are also trying to solve and add value to some of these problems, at least in some local areas.
What kind change you see in leaders of early 90s and today? What is your guidance to the new age leaders?
In the late 70s and 80s, most of the people wanted to join civil services or wanted to become professional engineers or doctors or managers. Only children of businessman entered business. Therefore, there was very little confidence amongst the educated youngsters in becoming entrepreneurs as India was a closed economy. There was very small opportunity for entrepreneurs to succeed in India. But, after the economic reform in 1991, India has been growing pretty well. Today, every youngster wants to first become an entrepreneur before thinking of becoming a manager or engineer or doctor or civil servant. There is a lot of recognition that has been attached today with entrepreneurship.
What according to you is the success mantra for entrepreneurs?
Every entrepreneur must focus on 4Cs. Competence – the ability of compound with an idea which has a differentiated business value viz-a-viz competitor in a market. The entrepreneur must have a Commitment which means a lot of hard work and a lot of sacrifice. Thirdly, they should have Character. They should embrace integrity, transparency, fairness and being team oriented. Finally, there is another C that is Chance. In spite of all the other Cs, sometimes people don’t succeed because you also need some luck. Therefore, we all have to believe that we are not the ultimate authorities and there is a vital role of chance and luck. However, we have to remember, chance favours a prepared mind.
What are your hobbies?
I read a lot. Being an engineer i read physics, engineering and other related books. I also like listening to music. Western, classical, Indian, hindi movie songs, etc.
What is a Sunday to you?
Sunday is when you can get up late, have a leisurely breakfast and meet some friends.