Outliers 64: How Infosys founder Narayana Murthy makes decisions

Pankaj Mishra July 20, 2018 3 min

Depending who, just the mention of Infosys founder N. R. Narayana Murthy’s name will evoke strong views. Ever since he co-founded Infosys in July 1981, he’s shaped the company with some strong decisions. From walking away from customers such as General Electric, which accounted for over a quarter of Infosys’ revenues in 1995, to making a comeback in June 2013 as the executive chairman –Murthy’s decisions have been bold and at times considered everything from being foolish and old-worldly to self-fulfilling

If there’s one thing that even his biggest critics agree with his loyalists, it’s the issue of corporate governance and personal integrity. As I sat down with him to record this episode of Outliers, I decided to stay away from analysing all the decisions he’s taken in his career and, instead, try and understand Murthy’s decision-making framework.

If there’s one thing that defines all his decisions, it’s governance and integrity.

“Most organisations that have seen a downward slide have seen that it starts at the top. As they say, a fish always rots at the top. Therefore, it’s very, very important for senior people to conduct themselves with fairness, transparency, and accountability,” says Murthy.

“Never look at a ticker tape and make a decision. If you enthused your employees to work hard, if you satisfied your customers with good software, if you followed the best rules and did not violate any laws of the land, and if you used a part of your profits to make a difference to the society, then your revenues will grow and you will provide better and better value to investors.”

“Never focus on the ticker tape, but focus on how can you win better in the marketplace.”

“Anybody who looks at stock price and takes decisions…that person is definitely going to destroy the corporation,” he adds.

On his part, Murthy has always stood firm by his decisions, notwithstanding all the criticism and questions raised by others.

As a journalist tracking Infosys all through my career since 2000, I’ve myself had confrontations and arguments with him on several topics. And, he has had questions about my stories too.

“We should not worry about criticism from people who have no knowledge of the issue. Those are opinions… anybody can give opinion… as long as I have a mouth, as long as my voice box is working,” he says.

“Before we went public in 1993, I sat down with my colleagues and I told them… from today onwards, we are going to be in a different paradigm, which consisted of the founders, their families and the employees. You’re now answerable to the entire mass of shareholders.”

“And there may be a shareholder with just one share, but that person has as much right as somebody with 99% shareholding. So I impressed upon them that only if they’re ready to accept this, then we should go public.”

Listen in to the man credited with creating one of India’s most respected companies.