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N.R. Narayana Murthy: All I Want is a Good Night’s Sleep

The chairman of Infosys talks to Forbes India about the software company’s pace of growth and his life after retirement

Published: Nov 1, 2010 06:47:15 AM IST
Updated: Nov 1, 2010 07:55:40 AM IST
N.R. Narayana Murthy: All I Want is a Good Night’s Sleep
Image: Mallikarjun Katakol for Forbes India
N.R. Narayana Murthy

What are your comments on the timing of Infosys 3.0?
We have to ask everyday — in what way can we make this a better organisation; a more robust organisation? In what way can we improve our margins and enhance our revenue growth rate? As far as I am concerned this is nothing new, most of my time at Infosys is devoted to these issues.

Is this a big shift?
Our primary innovation was the Global Delivery Model. Afterwards, we realised we needed to be a full cycle services company, from consulting to BPO, we not only advise the customers what needs to be done, we will actually walk the talk; the third wave is to deliver greater value to customers in an enhanced model”

In the context of increased competition, the developed nations being under slow economic growth while developing nations have been growing much faster, it is the paradigm of serious job losses in Western countries, there is huge scaling up of federal IT structures by federal and state governments in India. We need an enhanced model.

Why did you keep consulting and BPO separate?
Because they were two different mindsets, so we needed two different platforms to encourage.

Consulting mindset is different, technology people are smart and are willing to work as many hours as needed to satisfy the customer, consulting is about being proactive, looking at problems from customer’s point of view, in the short and medium term there is a difference in their mindsets.

Infosys Technologies is the best oiled machine in the world in my opinion, it delivers results regularly, it is focused on margins, it is focused on delivering on the agreed date and quality. These are the good qualities of Infosys Technologies that Infosys Consulting has been absorbing, Infosys Technologies is absorbing the qualities of proactive problem defining and solving that is the hallmark of IC. Infosys BPO has been learning the focus of IC and IT of delivering higher and higher net after tax dollars added per capita.

Accenture Chairman says that in the last 12-18 months they have been able to build cost and quality in ADM like Indian companies and have 88,000 people in GDM, You started consulting in 2004 around the same time they started setting up low cost centres, have they moved up faster than you?
The fact that IBM, Accenture and many others have built up huge India-based infrastructure, is actually a tribute to the idea that we came out pretty early, so I am very happy and congratulate them on their recognition of importance of robust scalable process driven technology based cost competitive development centres in countries like India. I am a firm believer in the principle that the most important parameter of any corporation — computers, hardware, software, telecommunications, automobiles — is the net after tax dollars added per employee, per year, in my opinion that is the most seminal parameter that matters to a corporation because this is all about how productive each of your employee is. It is all about how much cash a corporation is adding every quarter, it is extremely important because that is how you build a technology infrastructure, give a better salary to your people, in better capital budgets, in acquisitions, on that parameter I think Indian companies and especially Infosys has done extremely well.

The Western corporations have done a good job in scaling up the critical issue is that Indian companies have done a good job of enhancing net after tax dollars added per capita every year.

Don’t you think that is a difficult position to maintain? As business becomes more commoditised?
It is a difficult position to maintain and is a big challenge, but then leadership is all about facing challenges and coming out with innovative solutions. It is an opportunity for innovation.

Is the Cognizant model the future — more margins than Western corporations but higher growth rate than Indian companies?
As corporations grow, it is only natural that growth rates become flatter. To add 20 percent today is adding $1 billion. If you are a $3 billion company, adding $1 billion is growing by 30 percent. In that sense, different companies are in different parts of growth cycle and unless you can normalise all the parameters it is difficult to say whether that is a well proven model.

The new strategic plan that is rolling out will take five to seven years to get fully implemented, to get stabilised and see results? Do you think Kris and Shibulal will be there for the next five to seven years to see this through?
Kris is 54. He clearly has another five years in an executive role. He can continue on the board till he is 65, so he has 10 years. As far as Shibu is concerned, he too is 55 and the same thing applies to him. Therefore they are doing the right thing — they are putting the foundation for a plan that will start yielding results in two to five years. I would say by and large they would be there to see the fruits of what they are doing.

There is speculation that Shibulal will be named the CEO of the company next year and Kris will be moved up.

These are decisions that the nominations committee will make, I respect institutions and don’t want to pre-empt their prerogative. I would only say that in the past we have demonstrated leadership changes in the organisation haven’t dampened the enthusiasm of the organisation and have brought in competent people in leadership positions. It doesn’t matter who becomes the CEO or the Chairman, I am confident in the resolve of the organisation to achieve the various objectives that we have set for ourselves.

Is there a proposal for you to stay back as Chairman Emeritus?
They have already decided that I will be called Chairman Emeritus, that will not give me a seat on the Board and that will not allow me to participate in the strategic deliberations of the senior management of the company; however I will the Chairman Emeritus because I founded the company, I will have a room and I can come here when I want. However I respect traditions and processes so I don’t think there will be any need for me to participate in any of these because things will go on well. I am not expected to participate so I will not violate the norms.

In the past you have not stopped even for 1 day to continue building the Infosys brand? Will you continue to do all this brand building as Chairman Emeritus? How will we meet you after November 20, 2011?

No, you will meet only as Narayana Murthy. 100 percent.

How are you preparing for that vacuum?
I travel outside India 20-25 days a months, I have a VC company with which I will spend more time. I will continue to participate in the extra Infosys activities in which I participate today.

Most people believe that K.V. Kamath will take over as the Chairman of Infosys after you?
That decision will be taken by Jeffrey Lehman and the committee, all that I have requested them is that they decide by July 11, 2011 when we have the Q1 board meeting. I am sure they will select and recommend to the board by then. It could happen before that as well. I am not involved in that process, they may consult all of us, but the bottom line responsibility for it lies with them.

A lot of Board members are moving out, what kind of new members will be on the new Board being constituted now?
Claude retired, before that Rama retired, then next year Marti and I are leaving. Then in 2012 Sridhar will retire. We will have to bring in people to fill in respective roles that each member were performing, like some understood US environment, Clause understood Europe,  the ideal thing will be to find replacement to get wisdom that they brought to the table.

India is going pretty well and our focus on India has increased but we have three Board members who understand India well (Deepak, Omkar and KVK). We haven’t had anyone from China for a long time; we will have to see what to do about that.

We’d heard that you might ask Vindi Banga to join the Board?
I have enormous respect for Vindi, he is a world class leader, gold medallist from IIT Delhi, IIM (A), and he was the number two at Unilever and was a candidate for becoming number 1. There was a plethora of choice for him, and he is involved in many other activities at the moment.

Would you like to see him on the Board?
Yes, of course. I admire him a lot on the personal level.

As more and more founders retire, do you see this will be a more board managed company with a professional CEO?
I already think that we are a board managed company, from the time we went public we have realised that we mist bring in highly credible people to be the Ombudsman of the company. By and large we have done an excellent job of that, as good as any company in the world — I have no hesitation in saying that. Therefore, we will not see much change in the role of the Board going forward.

Do you have any personal interests that you want to fulfil after retirement?
I have been so busy with Infosys, I’ve had very few activities outside the company, I don’t go to parties, I don’t do networking, I don’t play a sport or attend concerts. I don’t know if I would want to spend time with any of this, I will continue to be busy with the activities I have been involved with today. All I want is a good night’s sleep; I must be physically and mentally tired. I hope that happens, if that doesn’t happen then there is a problem. I get it today and I hope I will have it next year too.

What does Mrs Murthy have to say about your retirement?
She is a very busy person, I am home on Sundays, but she is not, she is very busy. (Laughs.)... I don’t think she will have any issues with my being at home more. (Laughs...)

What do you think when you reflect upon your journey over the last 30 years? Would have you done anything differently?

I feel very nice that this company has come this far, while retaining a highest level of respectability. We have managed to enhance respect for this company in every transaction we do. I feel most proud of that.

No, I would not do anything differently. I have been a man in a hurry and my kids make fun of that. All my deadlines are in hours, I am very impatient and I make very tough decisions. I praise in public but criticise in private. I take bottom line responsibilities for all my actions. I have never ever run away from taking tough decisions. I am quite happy with this innings.

(This story appears in the 05 November, 2010 issue of Forbes India. To visit our Archives, click here.)

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  • Praise W. King

    Mr. Murthy, please wake up. Cognizant's growth is faster than Infosys not just in percentage terms but in incremental revenues as well. Size, I am afraid, does not come into the picture. Just FYI, Monday Cognizant guided to revenues of $4.55 billion for calendar 2010 and is not a $3 billion company. In calendar 2009, when Cognizant added $463 million, Infosys lost $55 million in revenue. Likewise, in calendar 2010, Cognizant has guided to add approximately $1.27 billion to its revenue. On the other hand, Infosys has guided to add approximately $1.08 billion to its revenue during the same period even if we consider the higher end of their December 2010 guidance. One needs to bring data (yes, data) to the table, and not make some generic statements.

    on Nov 3, 2010