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CNBC-TV18's exclusive interview with NR Narayana Murthy:

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CNBC-TV18's exclusive interview with NR Narayana Murthy:
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CNBC-TV18's exclusive interview with NR Narayana Murthy: - April 21st, 2006

Silver jubilee & aiming for more moneycontrol.com: April 17, 2006 It's a very big day at Infosys Technologies today as the company celebrates its silver jubilee. It's been 25 years and a big journey at that. Chairman and Chief Mentor of Infosys Technologies N R Narayana Murthy on what's happened in the past and what could happen in the foreseeable future of the next 10 to 20 years.
Excerpts from CNBC-TV18's exclusive interview with NR Narayana Murthy: Q: How do you feel when you walk into the campus, after 25 years today? Do you sometimes get amazed yourself at what has happened in this space in the last 25 years?
A: Absolutely, from the day when I had an encounter with the police in Bulgaria when I renounced my addiction for Leftism and embraced entrepreneurship, this is one of the finest days. There is no doubt at all. When you see thousands of youngsters around you, when you see lot of enthusiasm, when people smarter than you surround you, when their aspirations are high, when they dream so big. I think it’s a wonderful feeling.
Q: Does it inspire some amount of awe in you that you have created such a big entity and where could it go from here on and where your team could take it from here on? A: Reaching 25 means you are in the prime of youth. When you are in your prime, you are confident, your aspirations are high, you think you can conquer the world, you have hope, energy, enthusiasm all that. This means that Infosys now has to decide to do bigger things because that’s what youth is all about. I do believe that my younger colleagues have bigger dreams for Infosys. Of course we do not talk about it in public but, we certainly have much bigger dreams.
Q: Is that how you feel because you use the word young. Do you feel like a 25 year old would feel at this point, because some people say it’s a company, which has matured, it will now plateau off the growth because it’s use to being a fast growing company? A: Actually each year we are adding more youngsters. So for example, last year we added 22000 people on a gross basis. Next year that is 2006, we will be adding 25000 youngsters. All of them are in the age range of 20 to 22 years, which means in some sense one is surrounded by more youngsters. So your mindset has to reveal youth, since the organization is one of young people.
Q: That is right, so it is a company of young people but in the lifecycle of things do you think Infosys is a young company or is it a matured company? A: As I said 25 is when a young man in person becomes confident with high aspirations, as well as an enthusiastic young person who hopes to conquer the world, who has confidence of doing big things. So we all feel like that. We feel that this is the time when you have to dust your knees and say, we are going to run the next bigger marathon. So we do not look tired, does anybody here look tired? No, not at all.
Q: When you look at your team, do you get that confidence that the team is such that can carry on what you have done, and probably grow that even faster over the next 10 years? A: Absolutely. I was 52 when Nandan became the Managing Director. Probably in the history of corporate India, I was the first person at 52 to step down from the Managing Directorship. Mohan is just 47 after having had a wonderful journey of 12 years as a CFO; he voluntarily gave up the position of CFO, so that Balakrishnan who is 39, can have another 10 years. I am sure Balakrishnan, Nandan, Gopalakrishnan, Shibulal and everybody will make sure that the younger people get the opportunity at the right time when they are full of energy, have confidence, and want to conquer the world and stand by their side to make sure that they look much better than these people looked.
Q: Do you think technocrat employees that you own in the organisation can take on the mantel off the original architects of the company? A: Absolutely. That is how it has been decided. For example, my son is not going to come here in Infosys and join it. My daughter has done her MBA but is not going to come here. This is because we want to create an environment of meritocracy, we want to create an environment of professionalism. In fact, my wife is much better qualified as a computer science person than I am, but she didn’t join Infosys. So we have put all these things into an unwritten book right since 1981. So there is absolutely no confusion in my mind that we have shone the seats of India’s finest professional company.
Q: When you look back at those 25 years, it is a long journey. Surely there must be some moments, which stand out as the real special points at Infosys. Can you recount two or three, which are the real turning points or special movements in this journey? A: There are many but definitely the NASDAQ listing was one such. When one sat on those heights, and used Neil Armstrong’s sentence that it is a small step for NASDAQ but giant leap for Infosys and the Indian software industry, that was a big moment. Similarly when we got our first major customer, even that was a big deal. When we got our first non-founder employee in Pune, that was a big deal, and I was really excited. My wife used to make fun of me. Then similarly when we got our first computer; that was a big deal. When we moved to our campus here in 1994, even that was another big event.
Q: What has been the most difficult moment in this 25-year journey? A: The good thing about Infosys is its enlightened democracy. Decisions are made after a lot of discussions, analysis and a lot of data. So by and large, we will stay away from major disasters. At Infosys, somehow we may not have done spectacular stuff but certainly we have stayed away from any disaster.
Q: But you are saying that at no point in these 25 years journey has your conviction on this company been challenged and you had doubts? A: Not so much conviction. I did have one moment when one of my colleagues, whom I use to like a lot and was wonderful, unfortunately got into a situation, which diminished his prestige and also in some sense made all of us very sad.
Q: You are not speaking about Phaneesh Murthy? A: Well, let’s move on.
Q: Was it a difficult decision for you? A: It was a difficult decision because I really liked him. He was a wonderful guy but our value system comes first.
Q: For you personally, or for the organisation? A: For me definitely, because he was one of my and certainly Infosys’ blue eyed boys.
Q: When you look forward to the next 10-15 years, do you find confidence that Infosys can actually lock horns with the MNCs which are slowly bearing there teeth and continued to be as successful as it is been in the last 10 years? A: We all have often said that scalability is the biggest challenge that all of us have. Now we have been putting in place instruments to handle scalability. Good quality people, good processes, good systems and good leadership. So I do believe that we would be in a position to handle new and bigger challenges.
Q: In essences, do you think that is perhaps one of the biggest achievements of Infosys, managing this scale that you have reached today? A: Actually, at one level Infosys has had achievements, which transcended the company. That is, first we have raised the aspirations of entrepreneurs in the country. We were the first company to demonstrate democratisation of wealth on a large scale. We have raised the level of corporate governance in the country. We demonstrate that one can be an Indian company, which can match the best global companies.
We articulated the concept of global delivery model, 24-hour work day; that is why we have brought in a lot of innovations. In some sense, the biggest contribution of Infosys is, that it is a great tribute to the financial reforms that our current Prime Minister and then Finance Minister Dr Manmohan Singh had brought about. If there is one shining example of all the positive reforms, it is Infosys.
Q: Do you believe that Infosys can continue to be as shareholder and investor friendly as you have set a benchmark for in the last 24-25 years? Do you think you can continue that sort of work for investors? A: Yes I do think so. As long as we have focus on the stakeholders and as long as we believe in the dictum; ‘when in doubt disclose’. As long as we use speed imagination and excellence in execution in providing better response, better information, better level of transparency to investors and as long as the mindset is that of being more and more investor friendly then we will certainly do that but the day we forget that we will disappear like dew on a sunny morning.
Q: Some people say that if you want to know what the Q4 numbers are like, you can tell it in the first quarter, how much thought has been gone behind being able to predict your revenues for quarter after quarter for many years and never missing that guidance. Have you been able to manage that proactively yourself? A: The good thing about this company is that we have very high quality team. Second, we have a lot of systems, we go into a lot of analysis, and we continuously get data from the trenches. We use this data to do analysis and come out with what we believe is an achievable target because we have always had this principle of under promise and over delivery in everything that we do even in our personal lives. So a lot of consultation and activity goes into producing the forecast.
Q: Do you believe this conservativeness that is inherent in you and most of your colleagues has some times not stood you in good stance, do you sometimes regret this conservatism which might have prevented you from making a large inorganic move or an acquisition etc? A: No. We have had a pretty good run so far and certainly we could do better, but by and large we have done pretty well and we have not had any disaster.
Q: You never think of looking back, and making a few more aggressive moves while you have treaded the path of caution? A: When one is in a democracy one has to accept the trade off. Here it is a question of a lot of people participating, having different opinions and then one comes out with a consensus. That consensus may be somewhat lower in the opinion of some people, but so be it because everybody has bought into it. So everybody will work hard, everybody will make sacrifices to ensure that we redeem on the promise and that is more important than going and saying that we will do this and that and many people not subscribe to your view and then that not happening.
Q: Which is the most important constituency to you; your shareholders, your employees or your clients? A: There is no doubt that clients will have to be number one. Clients put food on the table. I say aim in to the client before I eat my lunch. So, it is clearly clients. Second, you can’t serve clients unless you have good employees and hence employees come second. Third, investors because these are people who have given us capital to make sure that these high performing individuals can actually add value to the clients and make the corporation successful. Then come vendor partners that are people from whom we buy lot of stuff etc. Then the government of the land wherever we operate and finally the society.
Q: What is your vision for the next twenty-five years? Can you see that far ahead because when you started you couldn’t have perhaps predicted where you would be today? Can you see what is going to happen? A: Yes, not really. When we founded this company, I remember it was in Bombay. We sat down in my apartment and we had a long discussion. Finally we asked the question, what do we aspire for? What is that we want? The unanimous decision was we would aspire for the respect. Whatever we do we want be able to say these are good people. We may not be smart but we want everybody to say these are honest, decent, respectable people. So that is how we defined our vision to say we want to be a globally respected corporation that delivers end to end best of breed solutions, leveraging technology and employing the best professionals.
Our vision for next twenty-five years is that we want to be a corporation where people of different nationalities, races and religious beliefs work together in an environment of intense competition. At the same time give utmost courtesy and dignity to add greater value to our customers day after day. So we want people from different cultures, religions and races but at the end of the day we want all these people to realise that they exist because customers are there and they should work in harmony, courtesy and dignity.
Q: Do you think that the rules of the game or the environment have changed very much since you started this company, and then you might have been on the right place at the right time but now the game has changed and you need to rediscover Infosys completely to be a leader in the next ten years? A: I am glad the environment is changing because that is where there are opportunities. As the environment changes, smart people see new opportunities and that is how growth comes in. So I am very happy that the environment is changing. I see it more as an opportunity rather than as a constraint, disability and negative stuff.
Q: So you think that you can continue to grow at this kind of pace over the next five-ten years? A: I don’t want to make any forward-looking statement. All I would say is that we will not move away from our fundamental principles, which is following the finest principles of corporate governance. Treating every employee with respect and dignity, making sure that we are investor-friendly and are fair to all these stakeholders, along with having the highest level of transparency, and making sure that we make a difference to the society around us is what we want to do.
These are the fundamental principles. My belief, which I am sure, has now become the DNA of this organization is that if you have the right values, if you do things the right way, there will always be results. On the other hand, if you say I will be worth billions of dollars and this much of profits, I think that is the wrong way of doing it.
Q: Do you see yourself being around 20 years in this kind of a successful shape? Is everybody driven by that same passion of longevity? A: From what I see, from the data I have on the table, from the discussions that I have had with my colleagues, the interactions I had with them, from the energy, enthusiasm that I see in them, I have a reason to believe that we will be there.
But the day our people forget that they exist for customers, the day they do not embrace openness, speed, imagination, excellence and execution, I think they will disappear like dew on a sunny morning.
There is no guarantee that we will exist 25 years from now. The only guarantee is that we have to ease our attitude, mindset and our passion. Today I see that in abundance. But I cannot say that we guarantee that we will be, but as long as our people embrace these values I do think that there is a pretty good chance that we will be.
Q: How do you think Infosys is different, because there are large Indian IT companies as well? Do you think you are essentially fundamentally different from any of your larger peers? A: This is a company, which has attracted the best quality people. We have a tremendous focus on processes and systems. We are the only company that gives guidance for topline and bottomline, both. Nobody else gives both in India. That is a sign of confidence, of how analytical we are, how well we are in touch with our customers.
Q: Do you live in mortal fear that you may some day slip on your guidance because you never have, not for a single quarter? A: No, I don’t. I am in mortal fear that someday we may not do all the data collection, the analytics, discussions, debate and all of that. If we do not do that, we will slip.
Q: Twenty-five years, can you put your hand on your heart and say that you have always stuck to the value principles that you set out along with the other founders for Infosys, that they have not been compromised? A: Not at all, principles haven’t been compromised. To take a tough decision in 2002, so many people, investors told us this is wrong, but we did that. We are not saints, not super human beings, but certainly we are well grounded in our values. There is no doubt about that at all.
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Re: CNBC-TV18's exclusive interview with NR Narayana Murthy: - February 12th, 2009

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