The softest pillow is a clear conscience, says Narayana Murthy

A PRODUCT OF MANY INFLUENCES

I was brought up in a lower middle-class family. We had gotten quite used to living in austerity. Our parents impressed upon us the importance of education, hard work, discipline and honesty. My father often used the example of Mahatma Gandhi to teach his children the importance of leading by example. I think that is the most important lesson I have learnt from my family—leading by example and walking the talk.

My father also taught me another very important lesson for a student—to have a timetable for home study. He knew that I was not very comfortable with subjects like geography and history. So, he said: If you do not have a slot for these subjects in your home timetable, then you will never study them. Therefore, he made sure that I had a timetable that included both the subjects that I liked and also the subjects that I did not like. I think that was a very important principle that helped me.

I learnt about generosity, compassion and sharing with the less fortunate from my mother. My high school headmaster taught me the importance of treating community property even better than one’s personal property. One of my bosses at IIM-A—Professor J.G. Krishnayya—taught me the importance of using data and facts to decide on an issue, starting every transaction from a zero base, and not carrying the biases from a prior transaction to the current one. My boss in Paris taught me the importance of accountability and bottom-line responsibility. Therefore, I am a product of many things that I learnt from my parents, from my high school teachers in Mysore, and from my bosses in India and abroad.

On the importance of sticking to your principles

During my time, the tagline for Infosys used to be, ‘Powered by intellect, driven by values.’ We have always believed that a competent professional with enduring values will earn the trust of customers, fellow employees, investors, vendor partners, the government and society. There were several instances when some low-level bureaucrats wanted us to pay bribes for approval. They would say, “Be nice to us and we will be nice to you.” We decided not to succumb. The result was the delay and denial of approvals a few times in the beginning. In one case, we were asked to pay unjustifiably high duties. We paid and then appealed. It took 10 years for us to get back our money. It was very painful. We finally won that case. After a small number of such harassment cases, we built a reputation of being honest business people. The same government officials who would try and harass us started respecting us. Now, of course, everyone knows Infosys will not do dishonest business. So, my advice to budding entrepreneurs is to undergo this suffering a few times and not yield. Then, no one will ask them for any bribe.

ON LESSONS LEARNT IN LIFE

The biggest lesson that changed my life was learnt not in India, but in France. That is where I got converted from a confused leftist to a determined, compassionate capitalist. My passion to become an entrepreneur developed only after I went to work in a company in Paris. This passion came from three lessons that became part of my DNA during my stay there in the early 1970s.

● The only way a country like India can solve the problem of poverty is by creating jobs with good income.

● This job creation can be done only by entrepreneurs in the private sector by converting their ideas into marketable products and services. That is how these entrepreneurs create wealth for themselves and jobs for people. This job creation cannot be done by the government.

● The task of the government in any country is to create an incentivising environment that encourages these entrepreneurs to create more well-paying jobs. The government does this by removing every hurdle for the success of these entrepreneurs.

I learnt these three lessons while I was working in Paris during discussions on Saturdays and Sundays with experts on the ideologies of the left, the right and the centre at Left Bank cafes and in Sorbonne conferences. Left Bank was very famous for being a place where youngsters went and discussed social issues of the day. I was also very impressed with how the western nations had embraced the free market philosophy, solved the problem of jobs and poverty, and created a lot of wealth and prosperity for the common man. I was amazed by the infrastructure, cleanliness, honesty, lack of corruption, education, health care, housing and nutrition. My beliefs, built on the foundations of Nehruvian socialism, started to appear shaky. I was becoming confused. I started wondering when my country would become like the Western European nations. These ideas were strengthened by my visits to other Western European cities, and by my experiences during the hitchhiking trip I took from Paris to Mysore. During this trip, I covered western and eastern Europe, the Soviet Union, the Middle East, Israel, Iraq, Iran and Afghanistan during the 1970s. Thanks to an unpleasant brush with the police for no fault of mine in a place called Nis in Serbia, I was transformed irretrievably from a confused leftist to a determined and compassionate capitalist.

OTHER LESSONS I HAVE LEARNT IN LIFE ARE:

Leadership by example is the most powerful instrument for a leader to get his followers to do what is good for the corporation.

Luck plays a big part in anybody’s success. So, we should not let success go to our heads. We have to remain humble.

Performance is the only instrument by which all leaders earn the respect of their juniors and peers. Performance leads to recognition. Recognition leads to respect. Respect brings power. Therefore, the only way India can become powerful economically is through performance. To succeed in performance, the hierarchy of ideas has to become more important than the hierarchy of job titles, corner offices, and compensation.

We have to show grace, courtesy and humility when we are on top.

The softest pillow is a clear conscience. It is therefore best to try and practise good values in every situation.

ON STARTING TROUBLE

In the first few years after Infosys was founded in 1981, all my colleagues were in the US. I was the only person left in India and I was the one who faced the initial obstacles Infosys faced. Our main obstacle in India of the 1980s was the friction to business created by our own bureaucracy. I was alone in India to fight the bureaucracy to obtain a telephone connection, an import licence, a bank loan, and a data centre customer for the computer we wanted to import for software export.

It took seven years to get a telephone connection. It took two years and 30 visits to Delhi to get a licence to import a $3,00,000 computer. It took another nine months and 10 visits to Delhi to get the licence modified, when a new and more powerful, but cheaper model was announced in the US. It took two weeks to obtain foreign exchange to travel abroad even for a day for business. The banks did not understand what software was and, of course, there were no venture capitalists at that time. The IPO was not worth it, because there was a bureaucrat sitting in Delhi called the Controller of Capital Issues who had no idea what the capital markets were. You rarely got any premium on the book value when you had your IPO. An IPO, as you know, is all about future prospect. It is not about past. The bureaucrat sitting in Delhi did not understand that price-to-earnings ratio should be looked at for the next three years rather than just the past three years alone.

On the positive side, the export market for services was expanding rapidly in the US due to a set of technology factor conditions. Of course, we had very few competitors in the US and in India. Talent was also plenty, since unemployment was very high for engineers in India.

FAST-FORWARD TO TODAY

Today, you have to be much smarter to succeed since market competition is the sole determinant for success. The market is highly competitive. Venture money is available in plenty. New ideas and innovations are coming up every day due to many of these wonderful entrepreneurs. However, talent is in short supply. Leaving aside the top 10 per cent, the quality of the talent in India today is not satisfactory. In my opinion, access to the market and access to good talent are the two most critical success factors for entrepreneurship. It is much more difficult to obtain access today than in our time. So, I would say that it is much more difficult to succeed today than during our time. Therefore, today’s entrepreneurs are much smarter than I was and I am an admirer of them.

—As told to Anjuly Mathai