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A leader is one who knows the way, goes that way, and shows everyone the way
When there is a standing debate about the pioneering leaders of the Indian IT revolution, there are plenty of names acting as writing on the wall. However, none is comparable to N. R. Narayana Murthy. The way he overtook Infosys weaves motivation and ambition in millions today. His story is a tale of grit, vision, and impeccable determination. But do you know how did he start? What challenges did he face? And how did he manage to steer Infosys through turbulent periods? Let’s explore it all in our case study about Narayana Murthy and Infosys.
How did it start
Following India’s 1991 transition from a planned economy to global capitalism, a large number of new technology companies emerged nationwide, particularly in the Bangalore region. Infosys, an information technology business founded in 1981 by Mr. Narayana Murthy and six of his associates with Mrs. Sudha Murthy’s help, was one of the most prosperous of these start-ups. The first Indian business listed on the NASDAQ, Infosys, was valued at over $27 billion in 2000. But little did we know that Narayana Murthy would show the world how an Indian may be both extremely modern yet rely on their rich cultural heritage, which dates back thousands of years. Like Gandhi before him, Murthy has unique methods of fusing aspects of his Indian heritage with his work.
About Narayana
Narayana Murthy was born in 1946 in the Southern Indian state of Karnataka. After graduating from Mysore University with a degree in Electrical Engineering, he went on to the Indian Institute of Technology (IIT) in Kanpur to study Computer Science. Narayana Murthy and six of his buddies launched Infosys Technologies in 1981. Fortunately, his wife Sudha Murthy, an engineer at Tata Industries, had saved 10,000 rupees (Rs), or roughly $250 USD, which she donated to launch the business because none of them had the funds to do so.
The fate of Infosys- how did it come into Narayana’s hands
Since its founding, Infosys Technologies has grown rapidly and performed well in both the domestic and foreign stock markets. With $203.4 million in sales, it made $61.3 million for the year that ended in March 2000. Although Infosys’s growth slowed during the early 2001 stock market slump, the company was still seeing significant growth.
Mr. Murthy was chosen as one of the 50 most powerful individuals in Asia for 2000 based on an Asiaweek poll. In an online survey by The Economic Times, he was chosen as India’s top CEO by 50% of participants. His 7.7 percent stake in Infosys Technologies is worth Rs 4,306 crore, or over $1 billion, as of January 8, 2000, when the company’s share price surpassed Rs 16,910-mark on the Bombay Stock Exchange. Even though Mr. Murthy once said that being called a “national icon” can be very damaging to one’s ego, he still maintains his roots by living with his engineer wife Sudha and their two kids, Akshata and Rohan, in a home in Bangalore’s middle-class Jayanagar neighborhood. He also draws on lessons learned from his early life and Indian customs.
Naryana’s Leadership Values that led Infosys to success
In the case of Infosys, a strong leadership team and a well-thought-out business plan were crucial success factors. The leadership group must strike a balance between experience and vision. A tech start-up will have a technical genius and/or a visionary and the company did have one.
Narayana Murthy’s vision was crystal clear. He graduated from the University of Mysore with a bachelor’s degree in electrical engineering and the Indian Institute of Technology with a master’s degree in technology. He was experienced enough to launch a company. Before he and six other professionals founded Infosys in 1981, he worked at the Systems Research Institute, then headed Patni Computer Systems Pvt. Ltd. in Mumbai, Maharashtra, and was a member of the team that designed a 400-terminal, real-time operating system for handling air cargo for Charles De Gaulle airport.
Since there was no software market in India at the time, he thought Indian software businesses should export their goods where they had a competitive advantage. In Mysore, India, Narayana Murthy established a Leadership Institute to oversee Infosys’s future expansion. By fostering leadership traits, the institute sought to transform the work culture and equip Infosys employees to handle the challenges of a quickly evolving business. “At Infosys, our goal is to develop top-tier leaders who will lead the way in business and technology in the cutthroat market of today,” he stated.
How did Narayana lead Infosys to Success
Narayana Murthy concentrated on the US market, which is the most difficult in the world, right from the start. He did this for two reasons. First, at the time, India had no software market. He thought that Indian software firms ought to export goods where they are more competitive. Infosys and Kurt Salmon Associates (KSA), a well-known international management consulting firm, formed a joint venture in 1987.
The Global Plan
The first Indo-American joint venture in the United States was KSA-Infosys. The global plan of Narayana Murthy had three components. The first one was the “global delivery model.” The approach focused on “producing where it is most cost-effective to produce and selling where it is most profitable to sell.” Profitable selling required concentrating nearly entirely on international markets, especially the US, and cost-effective producing meant completing as much of the software development work in India as possible.
Moving up the value chain
“Moving up the value chain” was Murthy’s strategy’s essential component, meaning investing in software development projects from the very beginning of their life cycles. However, it might be difficult for Infosys to compete with large firms like Cambridge Technology Partners or even Andersen Consulting. Narayana Murthy stated that this would not be simple. Unmitigated success, however, need not be a major worry. We might be successful in some things but not in others. This does not imply that we will not be successful in our role as consultants.
The PSPD Strategy
Any well-run organization must adhere to four key principles, according to Narayana Murthy. One: predictability of revenues; two: sustainability of the projections; three: profitability of revenues; and four: a good de-risking model. This strategy is called PSPD.
By limiting its exposure to different types of enterprises, Infosys was “de-risking.” The company became the first Indian company to be listed on the Nasdaq Stock Market in 1999 thanks to this strategy and vision. Infosys was on the verge of becoming a truly global business in 2000. By 2000, Infosys had a market valuation of Rs. 11 billion, and by 2001, it was one of the largest Indian software exporters. An organization with strong systems, high ethical standards, and a supportive work environment was established by Narayana Murthy and was well-respected throughout the nation. According to Euromoney’s Fifth Annual Survey of Best Managed Companies in Asia, which was published in February 2001, Infosys Technologies Ltd. (Infosys) was chosen as the Best Managed Company in Asia in the Information Technology sector.
Bottomline
With so many achievements, Narayana is not yet finished. And he aims for more, to climb up the ladders and become the most successful organization in the world. Well, his vision is not short-lived and is pretty possible. What drives him, one may wonder. We believe it’s not the pleasure that he gets from achievements, but one he gets from the journey towards success. He is not just a leader, but a beacon of hope for many, an inspiration that many look up to.
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