N.R.Narayanamurthy's (our Chairman Emeritus) golden words, for those who need reasons to be proud of being an INFOSCION and for other inspiration seekers!
Source: Speech delivered at the convocation of IIM Shillong (it was during my brother's convocation, March 2012. A booklet of his speech back then had been published by the institute and I happened to read it recently).
"The chairman, Members of the Governing council, the director, faculty, staff, guests, students, parents of the graduating students, and, most importantly, the graduating students, it is a pleasure to be here with the future managers and business leaders of our country. Thanks for giving me this opportunity to be with you on this joyous occasion. Congratulations to the passing out students. Every one of you has the potential to lead world-class companies and contribute to India’s competitiveness. Today, I will talk to you about the Infosys journey. There may be some generic lessons for you, the future business leaders.
Infosys was founded in 1981 by a team of seven. The founding team had a mutually exclusive and collectively exhaustive set of skills, expertise and experience. There were people, who, in addition to their expertise in software, had some experience in human resources, finance, strategy, technology, sales and marketing. This is one of our success factors. At that time, there were no venture capitalists to connect with prospective key employees. Hence, we had to start with such a complementary founding team. The common attributes of the team were aspiration, hard work, meritocracy, integrity, honesty, confidence, commitment, passion, hope and enthusiasm.
We realized that our dream had to be based on a lofty vision, something larger than ourselves. Our aspiration derived strength from Leo Burnett’s words: When you reach for the stars, you may not quite get one, but you won’t come up with a handful of mud either. We wanted to create India’s first company of the professional, by the professional and for the professional. We also wanted to create high disposable income jobs for young men and women in India. Above all, we wanted to demonstrate that wealth could be created legally and ethically. We longed to disprove the stereotyped view that all businessmen were crooks. Therefore, we chose respect from every stakeholder as our corporate objective.
Building a business is all about great aspirations and about deferred gratification. My colleagues had to trust the leader’s words and sacrifice upfront with the hope for a better tomorrow. I found out pretty early that the best way to obtain the trust of younger colleagues was to lead by example. This is particularly true in an environment where educated people observe, collect data, analyze it, and come to conclusions. My inspiration for leading by example came from Mahatma Gandhi’s words that one must be the change that one wishes to see in one’s followers.
The odds were against us. We had a very little money, just US$ 250. In fact, we borrowed the initial capital from our generous and trusting wives. It was difficult to attract good people. We had neither a decent infrastructure nor a brand name. The market for customized software did not exist in India. The Indian rules and regulations in the 1980s were far too bureaucratic. India had an inward looking economic policy. The bureaucrats just did not trust the private sector. Business faced difficulties in obtaining even basic infrastructure like phones and data communication lines. We believed that our aspirations were our possibilities.
We worked hard and built the organization, step by step. Infosys grew from US$ 0.13 million in revenues and 12 employees in 1982 to just US$ 3.89 million and 300 employees by 1992. The economic reforms of 1991 reduced the friction for conducting business in India, and improved the velocity of decision-making in organizations. We used this opportunity to grow. We recognized the need to adapt to change and acted according to the words of Charles Darwin that it was not the strongest of the species that survived, nor the most intelligent, but the ones most responsive to change. We took the opportunity afforded by these reforms to globalize our operations. We focused on exports, conceptualized and implemented the Global Delivery Model (GDM), built world-class infrastructure and became the first Indian company to be listed on NASDAQ.
Infosys has grown its revenues consistently for the last 75 quarters in a row since we went public in India in 1993. By March 2012, we estimate that our annual revenues will cross US$ 7 Billion. Today, we have our 130,000 employees, around 90 overseas offices, and more than 700 active and satisfied clients.
Let me now discuss some of our core beliefs and principles of Infosys. I believe that these are useful for every young business leader.
The goal of a corporation is to maximize shareholder value ethically, legally and on a sustainable basis while being fair to its stakeholders- customers, employees, investors, vendor-partners, government of the land, and the society-at-large. The clause sustainable basis is important. Sustained growth requires the company to have a strong value system- a protocol for behavior that enhances the trust, confidence, commitment and enthusiasm of the team members in each other. The value system of a company builds its character and ensures longevity. At Infosys, our value system can be summed up by our belief that the softest pillow is a clear conscience.
Simple rules are easy to understand, easy to follow, and easy to communicate. Above all, you cannot cheat with simple rules. Hence, companies should concentrate on simple business rules. If you want to implement complex rules, you should first understand them and translate them into a set of simple rules that your stakeholders can understand.
A company has to be fair to every stakeholder. I do not know of a single corporation that has a stakeholder-short-changing policy and survived in the long term. Such focus on global stakeholders requires that we follow the highest degree of transparency and the best principles of corporate governance. It is best to bring bad news to the investors early and on a proactive basis. That is why we, at Infosys, believe that it is best that bad news takes the elevator while the good news can take the steps. Investors respect organizations that disclose their mistakes, and make sincere efforts to improve. At Infosys, we have consistently adopted world-class transparency and disclosure standards, even before it was mandated by law. For instance, in 1995, Infosys suffered losses in the secondary market. Under the then prevailing rules, we were not required to make this information public. Nevertheless, we published it in our annual report. Our philosophy towards transparency is based on the adage: When in doubt, disclose.
In order to attract and retain the best, you have to uphold the respect and dignity of your employees. There must be merit, fairness and transparency in all decisions. Every decision must be based on data and facts to eliminate biases. That is why we believe in the adage: In God we trust, everybody else brings data to the table.
Respect your employees. Provide them with challenging work. Create good career prospects for them. Share wealth with them. Empower them with world-class infrastructure and technology. This will enhance their performance and also help you attract and retain the best talent. We have shared about 35% of equity of the company with our employees.
Peter Drucker says, “The most important thing to remember about any enterprise is that there are no results inside its walls. The result of a business is a satisfied customer”. I add that there is only one entity that pays a corporation month after month. That is the customer. Therefore, a corporation’s survival depends on satisfying and exceeding the expectations of its customers. Unless we live up to the best examples of customer focus and customer fairness, we cannot enhance / maintain our market share. My role model in customer orientation is Sam Walton who says, “The customer is the only boss. He can fire everybody including the chairman simply by spending his money somewhere else”. Historically, revenues from existing clients account for 90% of our revenues at Infosys. We take care to deliver on time and within budget while meeting the highest quality standards.
In these days of complex problems, every company has to collaborate with the best in the world to solve these problems. If you want trustworthy partners, you have to live up to your partner’s expectations in honesty, fairness, transparency and accountability.
The government of India has shown faith in us by implementing favorable policies for our growth. It is our duty to justify this faith. Pay your taxes and win the trust and confidence of the government of the land. Do not violate any laws.
Society contributes customer, employees, investors and bureaucrats. Society elects politicians. Therefore, society is an important stakeholder for the success of a corporation. A core value of Infosys is a strong sense of societal responsibility. Infosys Foundation addresses the basic needs of the poorest of the poor.
I am reminded of Harry Fosdick’s words that the world is moving fast that the man who says something cannot be done is interrupted by someone doing it. Peter Drucker’s words that innovation and selling that innovation must be remembered as time-invariant and context-invariant by every one of you. Another set of such attributes for the enduring success of a corporation are openness to new ideas, meritocracy, speed, imagination and excellence in execution. In fact, speed in imagination is the most critical success factor.
The challenge of Indian companies is to create powerful international brands that are recognized globally. To do this, we have enhanced our investments in sales and marketing even in an uncertain economic environment.
Benchmarking on a global scale is the only way to compete internationally. To do so, companies need an export orientation. At Infosys, we benchmark with the global best in every dimension.
Risk recognition and mitigation are important function of a corporation. Our PSPD model- predictability, sustainability, profitability and de-risking – helps us achieve this. We de-risk our business by taking action to reduce risks identified through weekly, monthly and quarterly analysis.
To operate in a globalized world, Indian companies have to learn to leverage the power of multicultural teams operating seamlessly across nations and bringing diverse expertise. This is especially important since the stakeholders of the company – clients, partners, suppliers, employees and investors are global for today’s corporations. At Infosys, we have leveraged the strengths of professionals of various races, genders, religious beliefs, and nationalities.
You have a rare opportunity to be passing out at a time when India’s confidence is at an all-time high. When we have a reasonable change of realizing the dreams of our founding fathers and the world expects India to lead. Therefore, aim high, embrace good values and make India a better country and this world a better place to live. Thank you”.
Hats off to NRN sir!
Proud to have been an Infoscion! :)
