Tuesday, June 14, 2011

Narayana Murthy's most famous speech

We feature one of NR Narayana Murthy's most famous speeches, the 2007 pre-
commencement lecture he made at New York University's Leonard N Stern School
of business. In it, the Infosys founder talks of the seminal moments in his life and
of how a belief in learning from experience, a growth mind-set, the power of chance
events, and self-reflection have helped him grow into the person he is.

A chance encounter

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 science.

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.

Break with communism

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

I was hitchhiking from Paris back to Mysore, my hometown.

By the time a kind driver dropped me at Nis railway station at 9pm 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 young 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 eight-by-eight-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 more than 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

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 societies.

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.

An audacious step

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

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

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.

A blessing in disguise

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

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 percent 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 and D, infrastructure, technology and training - was actually in their
interest failed to cut any ice with the customer. By 5 pm on the last day, we had to
make a decision right on the spot whether to accept the customer's terms or to walk

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 the 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

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