Passing the Baton at Infosys

The Infosys Chairman and chief mentor Mr NR Narayana Murthy will step down as chairman of Infosys Technologies Ltd on his 60th birthday.

Mr Murthy who turns 60 on August 20 this year, said in an interview to the IT portal CIOL.Com,

According to Infosys regulations, the retirement age for a chairman is 60. Hence Mr Murthy will become non-executive chairman of the company from 21st August, quoted the report.

I have come across this exclusive interview of Mr. Murthy by Business week, It goes this way........

As he prepares to step down, CEO N.R. Narayana Murthy reflects on the company he built, tech's future, and the effects of globalization

The stock prices of leading Indian tech companies have been battered in recent weeks. Investors are skittish over rising inflation and higher interest rates that could tap the brakes on growth globally. But there's no sign India's companies themselves are losing strength. Indeed, Infosys Technologies (INFY), Tata Consultancy Services, Wipro (WIT), and others continue to disrupt the $600 billion global tech-services industry. Infosys said on Apr. 14 that per-share earnings in the current quarter would rise as much as 27% on a sales increase of as much as 33%.

With that as a backdrop, N.R. Narayana Murthy, the founder and longtime chairman of Infosys, stopped in New York on June 15 on something of a farewell tour. After 25 years at the helm, he's stepping out of his executive role and handing the baton to the next generation of leaders. BusinessWeek Senior Writer Steve Hamm interviewed Murthy at the company's offices in Rockefeller Center. Here's an edited version of their conversation:

You started Infosys and built it to what it is today. Why have you decided to retire from your role as executive chairman?

I set the rule that we should all retire at 60 so we can give opportunities to younger people to play a role in shaping the future of the company. I believe in the power and importance of youth. I gave up my CEO position four years ago so Nandan Nilekani could become the CEO. He will continue in the CEO role. Until now, both of us were running the company. Now I'll become the non-executive chairman primarily responsible for managing the board, for governance functions. I won't be involved in running the company in an executive capacity.

When you look back on the early formative days of the company, did you ever imagine that Infosys would become such an important company in the worldwide tech industry?

No, not really. We started out as seven people in 1981, with $250. We had just one customer. Last year we closed at $2.5 billion. We have 52,000 employees and a market cap of about $20 billion. We never imagined we would come this far. However, we were certain of one thing, and that is our value system. In fact, when we sat down in the bedroom of my apartment in 1981, we discussed for four hours what our objective should be. Should it be revenues, profits, market capitalization?

No, we said it should be none of those. We will seek respect from every one of the stakeholders. My view was if we sought respect we'd automatically do the right thing by each of them. We'd satisfy our customers, be fair to our employees, and follow the finest principles with respect to investors, we would not violate laws, and, finally, we'd make a difference to society. And then I said automatically you'll get revenues and profits and all that.

Why have Infosys and the other leaders of the Indian tech industry had such a dramatic and powerful effect on the worldwide tech industry?

It is simply because we are becoming more and more relevant to our customers and we are having greater and greater impact. Why? For two fundamental reasons. We have helped our customers reduce the cycle time in designing and implementing new systems that reflect the changing marketplace and the new business rules. By reducing cycle time, we have ensured that the people in the corporation that use these IT systems are that much more enthusiastic about the flexibility of the corporation to keep pace with the changes in the marketplace.

Earlier, what was happening was it took three or four years to implement a system and there was a low level of probability of success. Because of the high level of programming talent in India, because of our focus on process excellence, and because of the power of leveraging the 24-hour work day, we have been able to take up large projects and complete them with reduced cycle time with the requisite quality. People said, “Now we can go think of new business initiatives to go after.” The second thing we have done is we're able to give more value for money. Both of these things matter a lot.

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