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So I write, Even if it is trite.

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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 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.


Written by vasuudev

May 28, 2009 at 4:28 pm

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