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BY JM
 NR
Narayana Murthy, Chairman and Chief Mentor of
Infosys Technologies is a highly accomplished man.
Even before the dawn of outsourcing, Narayana
Murthy set up his own company with $250, with a
bunch of friends from office. The start-up went on
become one of the largest (not the largest - that
slot goes to TCS) IT service companies in India.
Its name has spread far and wide. Narayana Murthy
and Infosys have won bagfuls of awards for
performance. Infosys has fared well on the stock
markets too, with rags to-riches-stories of
Infosys drivers earning lakhs courtesy stock
options. All in all, it's a glory story. Infosys,
the shining pinnacle of Indian corporate
excellence. No one disputes any of this.
With success comes
hubris. This seems to have hit Narayana Murthy
too. One tends to believe that I am successful, so
I must be right. Whatever I think, say and do must
be right. Because if I was wrong, I couldn't be
successful, my company couldn't be successful. So
I am right. Since I am right, I have a right to
lecture the world on what is right. So I write,
even if it is trite.
Sorry for the forced
rhyming, but this writer, for whom stock option
millions is still the stuff of dotcom legend, was
taken aback by Narayana Murthy's ramblings the
latest issue of Smart Manager, reproduced by
Rediff.com on its website. Narayana Murthy's
article exposes his ignorance and arrogance rather
than throwing any fresh light on leadership or
corporate management.
The article is pompously
named the Essence of Leadership. I don’t blame
Narayana Murthy for the pomp. It could have been
given by any well-meaning sub-editor who holds
Murthy in awe. Or by the man (or woman) who
arranged Murthy's article who wanted to keep him
pleased, with an eye on Narayana Murthy's next
gospel.
The article starts off
with describing and defining leadership, mostly
quoted from Robert F Kennedy and Mahatma Gandhi.
Sadly, Murthy has started off on a wrong note.
Many of the quotes in his article apply equally
well to leaders of the wrong sort, which Narayana
Murthy has in mind.
"Leadership is about
raising the aspirations of followers and enthusing
people with a desire to reach for the stars. For
instance, Mahatma Gandhi created a vision for
Independence in India and raised the aspirations
of our people."
So did Hitler. Or Chairman
Mao. It is good to use
Mahatma's name to justify your statement. Only,
when you take Mahatma's name, be careful that what
is attributed to Mahatma or Martin Luther King
does not apply equally well to Adolf Hitler and
Vladimir Lenin. But it does. Good leaders need not
always be impeccable men. While trying to describe
leadership, Narayana Murthy unknowingly puts
leaders of all kinds into the same box. He fails
to distinguish the ideal leadership strain that he
has in mind, thereby putting great names to
disrepute.
Leadership is about
making people say, 'I will walk on water for you.'
It is about creating a worthy dream and helping
people achieve it.
The statement sounds more
out of the Bible than from a corporate leader.
Murthy to walk to water? These days, no one walks
on water, except small water-borne insects. But
surely that is not what Narayana Murthy has in
mind. What he has in mind is that the leader
should set worthy goals and get his team to reach
them. Narayana Murthy uses the wrong metaphor of
walking on water. Let me rephrase it for Murthy:
The leader should set worthy, practical goals and
take the initiative in that journey. That is not
walking on water. Suppose Narayana Murthy tells
his staffers tomorrow like this: "Guys, we
planning to be a $100 billion company next year.
Follow me." Almost as tough as walking on
water, I think. Staffers will follow him only till the
gate and then flee. They would be convinced that
Narayana Murthy has finally lost it.
As this writer sees it:
Do not think your employees are dumb and can be
taken for any ride (even water ride). They are
also thinking individuals. Set practical goals,
not dreams that others of relatively less genius
can relate to.
 "A
leader has to raise the confidence of followers.
He should make them understand that tough times
are a part of life and that they will come out
better at the end of it. He has to sustain their
hope, and their energy levels to handle the
difficult days."
This statement is fine,
since so long, the going has been good for Infosys.
Infosys never had two face two successive fiscals
of poor revenues to put Murthy's above statement
to test. If Infosys had been significantly hit by
the dotcom bust and the meltdown, would Murthy
have been able to keep paying his employees the
same salaries of the previous days and keep their
morale high? I doubt it. Narayana Murthy's gospel
is all fine, since he or Infosys never had to go
through the pangs of restructuring and reviving an
old economy industry like steel or automobiles.
Things have been good, so I can preach! Normal
people and normal companies do not always come out
better at the end of tough times - often, they
come out pauper.
Murthy moves to Winston
Churchill to establish his case of leaders
surviving adversities:
There is no better
example of this than Winston Churchill. His
courageous leadership as prime minister for Great
Britain successfully led the British people from
the brink of defeat during World War II. He raised
his people's hopes with the words, 'These are not
dark days; these are great days -- the greatest
days our country has ever lived.'
Winston Churchill
successfully led Great Britain through World War
II. Unlike Murthy's, Churchill's leadership,
oratory and depth of knowledge was indisputable.
His greatness assumes a bigger glory when we
realise that he was under constant attack by
critics from within and without, with doubters and
warmongers all around. And yet he pulled off the
war.
The mistake is in
attributing Churchill's leadership and greatness
to his success. In 1942, the Wehrmacht (German air
force) pounded British cities with bombs. Japan
was running amuck in East Asia. France had
capitulated in the first year of the War and De
Gaulle had fled. Try as they might, the German
navy could not cross the English Channel.
Meanwhile, Nazis built the "Atlantic Wall", a huge
fence on the European coast controlled by Nazis to
prevent Allied landings. How did they fail then?
Nazis failed due to a
multitude of reasons, and the last reason was
Winston Churchill. (1) With Pearl Harbor, the US
entered the World War and the tide changed in
favour of Allies. (2) Hitler, drunk with power,
embarked on Operation Barbarossa, the biggest ever
military campaign in history to conquer Soviet
Union. About 25 million Russians died, but Stalin
took the war all the way from Stalingrad
(obviously!) to Nazi Berlin. Hitler's forces bled
and perished in Eastern Europe. There were no
German resources left to fight Britain. (3) And
with Normandy, the Europe's liberation began, and
this was led by the American Eisenhower.
Winston Churchill was a
great war-time leader of Britain. But it was not
his leadership that won the war. Narayana Murthy
falters in attributing Britain's victory to
Churchill's leadership in adversity. Besides, many
of Churchill's war-time (and post-war) activities
have been called into question. When the war
began, the Allies were against bombing civilian
settlements in war countries. But once the heat
built up, the Royal Air Force started destroying
German towns with the same brutality as the
Wehrmacht. Also, post-war, the role of Churchill
and MI-5 in staging the coup of Iran (which
dispatched millions of Iranians to the dictatorial
clutches of the Shah) is no shining examples which
mentor Narayana Murthy should be teaching his
wards, right?
Never is strong
leadership more needed than in a crisis. In the
words of Seneca, the Greek philosopher, 'Fire is
the test of gold; adversity, of strong men.'
This is correct. Jai
Murthy. I am waiting for a crisis for Infosys to
prove that Narayana Murthy meant what he said.
Compliance to a value
system creates the environment for people to have
high aspirations, self esteem, belief in
fundamental values, confidence in the future and
the enthusiasm necessary to take up apparently
difficult tasks. Leaders have to walk the talk and
demonstrate their commitment to a value system.
Excellent. One wonders
why then there was no Phaneesh-Murthy like
scandals in Tata Consultancy, Wipro or Satyam. I
fail to understand the "values", "esteem" and
"aspirations" that Narayana Murthy talks about.
Compliance to a value system may have its
positives, but if you end up with a a jerk in your
company, its your mess to handle, boss.
As Mahatma Gandhi
said, 'We must become the change we want to see in
the world.' Leaders have to prove their belief in
sacrifice and hard work. Such behavior will
enthuse the employees to make bigger sacrifices.
It will help win the team's confidence, help
leaders become credible, and help create trust in
their ideas.
Back to poor Mahatma. He
would be turning in his grave hearing all this,
had he not been cremated. Please note Murthy's
"sacrifice" part. We will come to it soon.
Investors respect such
organisations. Investors understand that the
business will have good times and bad times. What
they want you to do is to level with them at all
times. They want you to disclose bad news on a
proactive basis. At Infosys, our philosophy has
always been, 'When in doubt, disclose.'
Narayana Murthy here is
talking only about long-term investors, like
himself. The rule is not applicable to small
investors who want to buy, sell, move on. Perfect
investors know that for a good company, good times
will follow bad times. Most ignorant investors -
the type who sell in a panic when prices are
falling - don't have a clue, and there are many of
them around. Good
times and bad times are not the sole criteria
defining the Infosys stock price. Global market
indices like that of the Nasdaq have a significant
bearing on Infosys's day-to-day stock price.
Narayana Murthy is more aware of this than you or
me, but he refuses to disclose that!
At Infosys, we have
consistently adopted transparency and disclosure
standards even before law mandated it. In 1995,
Infosys suffered losses in the secondary market.
Under Indian GAAP (generally accepted accounting
principles), we were not required to make this
information public. Nevertheless, we published
this information in our annual report.
Meaning: We are holier
than thou. And since we are the best and me its
chief mentor and chairman, I am right. Better
listen to me.
Now comes an interesting
note. Please recall the sacrifice part in an
earlier para while reading this. Read carefully,
read every word:
We have gone towards
excessive salaries and options for senior
management staff.....Senior management
compensation should be reviewed by the
compensation committee of the board, which should
consist only of independent directors. Further,
this should be approved by the shareholders. I've
been asked, 'How can I ask for limits on senior
management compensation when I have made millions
myself?' A fair question with a straightforward
answer: two systems are at play here. One is that
of the promoter, the risk taker and the capital
markets; and the other is that of professional
management and compensation structures.
And the reason?
One cannot mix these
two distinct systems, otherwise entrepreneurship
will be stifled, and no new companies will come
up, no progress can take place. At the same time,
there has to be fairness in compensation: there
cannot be huge differences between the top most
and the bottom rung of the ladder within an
organisation.
Translation: Senior
management's salaries will be always under the
microscope. Not mine. I am part of a different
system and a higher caste of entrepreneurs. Let
the shudras be shudras and the brahmins
be brahmins. If you challenge my millions,
entrepreneurship will crash-land, companies won't
start up, progress will be stunted. I'm keeping my
millions not for myself, but in the larger
interest of entrepreneurship and economy. The
above-mentioned sacrifice does not apply when I am
the promoter. I am the Essence of Leadership.
In conclusion, keep in
mind two Sanskrit sentences: Sathyannasti Paro
Dharma (there is no dharma greater than adherence
to truth); and Satyameva jayate (truth alone
triumphs). Let these be your motto for good
corporate leadership.
May be few Infoscions
(what a lovely name!) know that Narayana Murthy
worked with a little-known company called Patni
Computer Systems before he started Infosys.
Narayana Murthy did not just leave Patni, he
practically broke its back by walking away with
its best talent. Rajendra Patni took long to
recover from the shock.
Swearing by truth an is
excellent parting shot, Mr Murthy. A few years
back, I had to go to a wicked real estate agent,
whose office had a poster which loudly proclaimed
HONESTY IS THE BEST POLICY. He advised me on ways
by which I could hoodwink the house-owner.
Narayana Murthy's article on the essence of
leadership reads just like that.
BY JM
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