Sunday, June 03, 2007

N R Narayana Murthy of Infosys Lecture at Stern school of Business. N Y Uni

N R Narayana Murthy, chief mentor and chairman of the board, Infosys
Technologies, delivered a pre-commencement lecture at the New York
University ( Stern School of Business) on May 9. It is a scintillating
speech, Murthy speaks about the lessons he learnt from his life and

Dean Cooley, faculty, staff, distinguished guests, and, most
importantly, the graduating class of 2007, it is a great privilege to
speak at your commencement ceremonies.

I thank Dean Cooley and Prof Marti Subrahmanyam for their kind
invitation. I am exhilarated to be part of such a joyous occasion.
Congratulations to you, the class of 2007, on completing an important
milestone in your life journey.

After some thought, I have decided to share with you some of my life
lessons. I learned these lessons in the context of my early career
struggles, a life lived under the influence of sometimes unplanned
events which were the crucibles that tempered my character and
reshaped my future.

I would like first to share some of these key life events with you, in
the hope that these may help you understand my struggles and how
chance events and unplanned encounters with influential persons
shaped my life and career.

Later, I will share the deeper life lessons that I have learned. My
sincere hope is that this sharing will help you see your own trials
and tribulations for the hidden blessings they can be.

The first event occurred when I was a graduate student in Control
Theory at IIT, Kanpur , in India . At breakfast on a bright Sunday
morning in 1968, I had a chance encounter with a famous computer
scientist on sabbatical from a well-known US university.

He was discussing exciting new developments in the field of computer
science with a large group of students and how such developments would
alter our future. He was articulate, passionate and quite convincing.
I was hooked. I went straight from breakfast to the library, read
four or five papers he had suggested, and left the library determined
to study computer

Friends, when I look back today at that pivotal meeting, I marvel at
how one role model can alter for the better the future of a young
student. This experience taught me that valuable advice can sometimes
come from an unexpected source, and chance events can sometimes open
new doors.

The next event that left an indelible mark on me occurred in 1974. The
location: Nis , a border town between former Yugoslavia , now Serbia ,
and Bulgaria . I was hitchhiking from Paris back to Mysore , India ,
my home town.

By the time a kind driver dropped me at Nis railway station at 9 p.m.
on a Saturday night, the restaurant was closed. So was the bank the
next morning, and I could not eat because I had no local money. I
slept on the railway platform until 8.30 pm in the night when the
Sofia Express pulled in.

The only passengers in my compartment were a girl and a boy. I struck
a conversation in French with the young girl. She talked about the
travails of living in an iron curtain country, until we were roughly
interrupted by some policemen who, I later gathered, were summoned by
the youn man who thought we were criticising the communist government
of Bulgaria .

The girl was led away; my backpack and sleeping bag were confiscated.
I was dragged along the platform into a small 8x8 foot room with a
cold stone floor and a hole in one corner by way of toilet facilities.
I was held in that bitterly cold room without food or water for over
72 hours.

I had lost all hope of ever seeing the outside world again, when the
door opened. I was again dragged out unceremoniously, locked up in the
guard's compartment on a departing freight train and told that I
would be released 20 hours later upon reaching Istanbul . The guard's
final words still ring in my ears -- "You are from a friendly country
called India and that is why we are letting you go!"

The journey to Istanbul was lonely, and I was starving. This long,
lonely, cold journey forced me to deeply rethink my convictions about
Communism. Early on a dark Thursday morning, after being hungry for
108 hours, I was purged of any last vestiges of affinity for the Left.

I concluded that entrepreneurship, resulting in large-scale job
creation, was the only viable mechanism for eradicating poverty in

Deep in my heart, I always thank the Bulgarian guards for transforming
me from a confused Leftist into a determined, compassionate capitalist!
Inevitably, this sequence of events led to the eventual founding of
Infosys in 1981.

While these first two events were rather fortuitous, the next two,
both concerning the Infosys journey, were more planned and profoundly
influenced my career trajectory.

On a chilly Saturday morning in winter 1990, five of the seven
founders of Infosys met in our small office in a leafy Bangalore
suburb. The decision at hand was the possible sale of Infosys for the
enticing sum of $1 million. After nine years of toil in the then
business-unfriendly India , we were quite happy at the prospect of
seeing at least some money.

I let my younger colleagues talk about their future plans. Discussions
about the travails of our journey thus far and our future challenges
went on for about four hours. I had not yet spoken a word.

Finally, it was my turn. I spoke about our journey from a small Mumbai
apartment in 1981 that had been beset with many challenges, but also
of how I believed we were at the darkest hour before the dawn. I then
took an audacious step. If they were all bent upon selling the
company, I said, I would buy out all my colleagues, though I did not
have a cent in my pocket.

There was a stunned silence in the room. My colleagues wondered aloud
about my foolhardiness. But I remained silent. However, after an hour
of my arguments, my colleagues changed their minds to my way of
thinking. I urged them that if we wanted to create a great company, we
should be optimistic and confident. They have more than lived up to
their promise of that day.

In the seventeen years since that day, Infosys has grown to revenues
in excess of $3.0 billion, a net income of more than $800 million and
a market capitalisation of more than $28 billion, 28,000 times richer
than the offer of $1 million on that day.

In the process, Infosys has created more than 70,000 well-paying jobs,
2,000-plus dollar-millionaires and 20,000-plus rupee millionaires.

A final story: On a hot summer morning in 1995, a Fortune-10
corporation had sequestered all their Indian software vendors,
including Infosys, in different rooms at the Taj Residency hotel in
Bangalore so that the vendors could not communicate with one another.
This customer's propensity for tough negotiations was well-known. Our
team was very nervous.

First of all, with revenues of only around $5 million, we were minnows
compared to the customer.

Second, this customer contributed fully 25% of our revenues. The loss
of this business would potentially devastate our recently-listed company.

Third, the customer's negotiation style was very aggressive. The
customer team would go from room to room, get the best terms out of
each vendor and then pit one vendor against the other. This went on
for several rounds. Our various arguments why a fair price -- one that
allowed us to invest in good people, R&D, infrastructure, technology
and training -- was actually in their interest failed to cut any ice
with the customer.

By 5 p.m. on the last day, we had to make a decision right on the spot
whether to accept the customer's terms or to walk out.

All eyes were on me as I mulled over the decision. I closed my eyes,
and reflected upon our journey until then. Through many a tough call,
we had always thought about the long-term interests of Infosys. I
communicated clearly to the customer team that we could not accept
their terms, since it could well lead us to letting them down later.
But I promised a smooth, professional transition to a vendor of
customer's choice.

This was a turning point for Infosys.

Subsequently, we created a Risk Mitigation Council which ensured that
we would never again depend too much on any one client, technology,
country, application area or key employee. The crisis was a blessing
in disguise. Today, Infosys has a sound de-risking strategy that has
stabilised its revenues and profits.

I want to share with you, next, the life lessons these events have
taught me.

1. I will begin with the importance of learning from experience. It is
less important, I believe, where you start. It is more important how
and what you learn. If the quality of the learning is high, the
development gradient is steep, and, given time, you can find yourself
in a previously unattainable place. I believe the Infosys story is
living proof of this.

Learning from experience, however, can be complicated. It can be much
more difficult to learn from success than from failure. If we fail,
we think carefully about the precise cause. Success can
indiscriminately reinforce all our prior actions.

2. A second theme concerns the power of chance events. As I think
across a wide variety of settings in my life, I am struck by the
incredible role played by the interplay of chance events with
intentional choices. While the turning points themselves are indeed
often fortuitous, how we respond to them is anything but so. It is
this very quality of how we respond systematically to chance events
that is crucial.

3. Of course, the mindset one works with is also quite critical. As
recent work by the psychologist, Carol Dweck, has shown, it matters
greatly whether one believes in ability as inherent or that it can be
developed. Put simply, the former view, a fixed mindset, creates a
tendency to avoid challenges, to ignore useful negative feedback and
leads such people to plateau early and not achieve their full potential.

The latter view, a growth mindset, leads to a tendency to embrace
challenges, to learn from criticism and such people reach ever higher
levels of achievement (Krakovsky, 2007: page 48).

4. The fourth theme is a cornerstone of the Indian spiritual
tradition: self-knowledge. Indeed, the highest form of knowledge, it
is said, is self-knowledge. I believe this greater awareness and
knowledge of oneself is what ultimately helps develop a more grounded
belief in oneself, courage, determination, and, above all, humility,
all qualities which enable one to wear one's success with dignity and

Based on my life experiences, I can assert that it is this belief in
learning from experience, a growth mindset, the power of chance
events, and self-reflection that have helped me grow to the present.

Back in the 1960s, the odds of my being in front of you today would
have been zero. Yet here I stand before you! With every successive
step, the odds kept changing in my favour, and it is these life
lessons that made all the difference.

My young friends, I would like to end with some words of advice. Do
you believe that your future is pre-ordained, and is already set? Or,
do you believe that your future is yet to be written and that it will
depend upon the sometimes fortuitous events?

Do you believe that these events can provide turning points to which
you will respond with your energy and enthusiasm? Do you believe that
you will learn from these events and that you will reflect on your
setbacks? Do you believe that you will examine your successes with
even greater care?

I hope you believe that the future will be shaped by several turning
points with great learning opportunities. In fact, this is the path I
have walked to much advantage.

A final word: When, one day, you have made your mark on the world,
remember that, in the ultimate analysis, we are all mere temporary
custodians of the wealth we generate, whether it be financial,
intellectual, or emotional. The best use of all your wealth is to
share it with those less fortunate.

I believe that we have all at some time eaten the fruit from trees
that we did not plant. In the fullness of time, when it is our turn to
give, it behooves us in turn to plant gardens that we may never eat
the fruit of, which will largely benefit generations to come. I
believe this is our sacred responsibility, one that I hope you will
shoulder in time.

Thank you for your patience. Go forth and embrace your future with
open arms, and pursue enthusiastically your own life journey of discovery