International -- The Stars of Asia -- Entrepreneurs and Dealmakers
N.R. Narayana Murthy (int'l edition)
Founder -- Infosys Technologies -- India
N.R. Narayana Murthy, 52, tops the polls as India's most admired businessman. He's certainly an inspiration: He and six colleagues used their combined life savings of $1,000 to found Infosys Technologies in 1981. The provider of Internet and e-commerce software services had annual sales of $200 million last year, while profits soared 260%.
Now, Murthy is working to make Infosys as respected around the world as it is at home. Last year, he handed over daily management of Infosys to co-founder Nandan Nilekani. Murthy spends half his time traveling the world, meeting customers, investors, and even students. The U.S. is very competitive, so "we have to increase our brand equity there," says Murthy. Infosys' U.S. customer base doubled last year, to 200 clients.
Murthy, a humble engineer from southern India, is in some ways too shy for his role as model and statesman. He doesn't like to talk about it, but he gives away untold millions of dollars in gains from the Infosys stock he sells when prices rise, mostly to benefit higher education in India. This year, he was awarded one of India's highest civilian awards, the Padma Shri, for his contribution to the IT industry. Murthy sits on a Prime Ministerial task force on developing technology, which he says is the key to eradicating India's poverty. "If technology is to reduce costs, to improve production, who needs these more than the poor?" he says.
Despite the phenomenal rise of his fortunes, Murthy retains his modest ways. He still does a full day's work and then some, but these days he allows himself one indulgence. Instead of arriving at his Bangalore office at 6 every morning as he has for years, Murthy now starts at 7 a.m.Return to top
A Chat with N.R. Narayana Murthy
N.R. Narayana Murthy, the founder and Chairman of India's spectacular technology success story, Infosys Technologies, visited New York recently and met with a team of Business Week editors, including International Managing Editor Bob Dowling, Assistant International Managing Editor Christopher Power, and Asia Editor Sheri Prasso. Here are edited excerpts of their conversation:Q: We hear you've become quite a philanthropist, that you're making large donations with money from sales of your personal Infosys stock. Can you tell us about the money you're giving away?
A: I'm somewhat reticent talking about it. I'd be happier skipping to another topic.Q: Can you give us an idea of how much it is? Millions? Tens of millions?
A: Well, more, but let me not talk about it. These are topics that are best not discussed. They're best done.Q: At least, what is the objective of the donations you're making?
A: The objective is to make sure our institutions of higher learning regain their glory of the '60s and '70s. In India, the cost of inflation has far exceeded the increased support that government gives to the institutions. We [my wife and I] feel there is quite a lot of work that needs to be done in making sure that there are new buildings, and for faculty members, for scholarships.Q: Do you want to discuss where you see Infosys going in the next five years?
A: I would be very happy if the company becomes globally respected. It's very highly respected in India today. In January, when there was a survey among 1,600-plus general managers of all industries asking them to vote their most admired company, they voted for Infosys among 7,500 listed companies, plus an equal or higher number of unlisted companies.
I think in India we have been fairly successful in gaining respect and our reputation. But the real challenge is to get respect and reputation in a market like this [the U.S.] with a lot of smart companies, a lot of role models, a lot of high performers.
Secondly, we obviously want to provide best services to our customers, so we have to enhance our knowledge and make sure we provide core solutions.
Thirdly, in our mission statement is employing best practices, to attract good talent...[and] to make the company more multicultural. Obviously, our objective is to create an environment where people of different nationalities come together and work in an environment of intense competition but mutual respect, to add greater and greater value to our customers.Q: What are you doing to achieve this?
A: I believe in synergizing the organizational objectives and individual aspirations. The organizational objectives are in some senses nonnegotiable. The company has to grow. Having done that, how do we make sure individuals are enthusiastic about that? Some people may want better compensation. Some people may want more recognition. Some people may want more free time to learn new things, etcetera. We try to see how the organizational objectives are maintained while the individual aspirations are being met. Most of it has happened in India. Now our challenge is to bring it outside of India.Q: This is a pretty competitive job culture here, and you have to meet the demands of the market. How do you do that?
A: We have an options plan. In fact, when we went public, one of the major reasons was to create an option plan. The stock doing well has been a double-edged sword. People who have been given options are very happy, but what about new options that you want to give people? At what seems high levels, how do you make sure people have capital appreciation? We were the first ones to [introduce share options in India] in a formal way on a reasonable scale. Many, many companies are following now. We got the Exchange Board of India to come out with a new legal framework, modeled on the U.S., last year.... My view is that God is still not finished with Infosys, and we are in the initial stages.Q: How likely is it that the IT revolution in India can really have an impact economically?
A: I'm a heretic in many, many ways. For example, I'm the only corporate leader in India, who says companies who make export profits must pay taxes. I've become absolutely unpopular. So even here, I say technology has as much relevance to the poor as it has to the rich.
I'll tell you why I say that: A couple of months ago, I was coming out of my office and one of the attendants, one of the people who bring coffee and tea and clean tables, he was coming out, and he was smiling. He was very happy. I said, "What, man, why are you so happy? What has happened?"
He said, "I got this urgent call from my village, I have to go back and go to see my father, somebody is not well."
I said, "This couldn't make you happy."
He said, "No, I could get money. I went to the ATM and got money."
I said, "That's no big deal."
He explained, "When I go to a bank counter, first of all I am not dressed suitably, and the counter clerk does not show as much interest in serving me. Second, if I go to the counter at 3:55 because they close at 4:00, they don't serve me because they want to close up and go.
"On the other hand, this machine is a great leveler. I stand in the queue. It doesn't matter whether it's me or the Chairman. We all stand in the queue. We put in our cards. We get the money."
In some senses, technology is a great leveler. Secondly, if technology is to reduce costs, if technology is to improve productivity, who needs these things more than the poor? So I've been having a big battle with my government, saying
we need technology much more than anybody else.
The poor need technology! In Bombay, 50% of the taxi drivers are from the villages. They come to the city, they are away from their families, they get to go back once in six months. So we said, "Let's conduct an experiment: Take a taxi driver in Bombay, and use Internet technology to keep them in touch." I personally believe technology has tremendous impact on the Indian economy. Q: Is the government becoming more cooperative?
A: I think the history of 200 years can't be wiped out in a hurry. I find that the mindset of bureaucracy in India is changing, but is still one of maximization of revenue for the government and is against any scheme that, in the short term, will reduce revenue for the government. So I think that's a big issue in India.Return to top