In a foreword to the recently published book ‘Startup Compass’, the 75-year-old billionaire has shared the success mantra, and lessons learned as an entrepreneur from his early Infosys days. He also explains why he chooses to travel economy class even today on domestic flights and made a rule of not discussing issues with his wife on topics related to the difference of opinion between Infosys co-founders.
Here are nine lessons for entrepreneurs from Narayana Murthy:
1) The first and the most important lesson that Murthy and the Infosys team learned was the importance of articulating values and practicing them. “Values form the backbone of an entrepreneur’s determination. The first and the most important tenet of our value system was putting the interest of the company ahead of our personal interest in every decision the founding team took,” Murthy said, adding that a few of his founder-colleagues did not agree with some of those decisions, but they accepted those decisions sportingly and executed them with full commitment.
2) Stating that failures are part of an entrepreneurial journey, the Chairman Emeritus of Infosys, said a failure would be beneficial if you quickly analyzed the reasons why you failed, learned the lesson and did not commit the same mistake again. He gave the example of his failure in Softronics. “I had learned that the absence of the market was what led to that: failure. I decided to focus on the export market in my next venture,” he wrote in the book.
3) An entrepreneur has to constantly scan for signs that his/her venture is likely to encounter a structural problem and that the company was likely to fall into an irretrievable situation. “This is the time for the entrepreneur to tone down his passion for the idea, keep emotions aside and quickly bring the venture to a decent closure. Softronics had no domestic market, and there was no way I could recover from it quickly. So, I closed it in nine months,” he recalled.
4) The fourth lesson is about the role that luck plays in an entrepreneurial journey. “There were so many friends and classmates who were much smarter than I was. Their teams had better credentials than we had. They had better ideas than we had. But God chose us to smile on. There were many critical situations and deals when it could have gone either way. Somehow, God helped us take the right decision in those situations,” Murthy said.
5) As the late industrialist Rahul Bajaj used to say, market competition is the best management school. “Market competition taught us how to attract and retain good customers and employees and how to enhance the trust of our investors. In every area of our operation, we benchmarked ourselves with the best practices in the world, and created some ‘next’ practices,” he said.
6) The sixth lesson is about leadership by example, walking the talk, and practicing the precept is what makes a leader trustworthy in the eyes of his team members. Giving an example, he recalled that during the initial years of Infosys, when the company needed to be austere with overheads, he traveled economy class even on international flights, until reaching a revenue of $1 billion. “I travel by economy even today on domestic flights. I would be in the office at 6.20 am every morning until I retired in 2011. That sent an indelible message to youngsters about reaching office on time,” he said.
7) The seventh lesson Murthy learned was that sustaining the enthusiasm and confidence of a team of seven founding professionals over a period of thirty years was extremely difficult, if not impossible. “I also decided that none of us would discuss with our spouses whatever differences of opinion we had among ourselves on an issue in the office. I followed it strictly. The reason was very simple. Our spouses may look at the issue in isolation, and it had the potential to destroy the camaraderie among them,” he said.
8) Observing cohorts in the field, the Infosys co-founder learned that there should be one and only one leader in any company at any time. “No company can be run by committees. We learned that a leader has to lead by example in values; must work the hardest; must make the biggest sacrifices; must welcome ideas and opinions from competent and expert colleagues before making any decision; must consider those ideas in his decision, and the buck must stop at his table for every major decision,” he said.
9) The ninth and final lesson Murthy learned was that competence and a sound value system are the essential ingredients of a successful knowledge company and that is how the phrase ‘Powered by the intellect; driven by values’ became the tagline of Infosys.
“We fully accepted deferred gratification, made all the necessary sacrifices and showed abundant patience. These sacrifices and this mindset of deferred gratification have made every one of the six remaining members of the founding team billionaires. I am very proud of the team. The seventh one, Mr. Ashok Arora, left us in 1989 to settle down in the US. I wish him the best,” Murthy wrote in the book.
(The book ‘Startup Compass’, authored by two graduates of IIMA – Ujwal Kalra and Shobhit Shubhankar – is published by HarperCollins)