Infosys: Its Real Contribution

Recently, Fortune magazine listed Infosys founder N R Narayana Murthy among the The 12 Greatest Entrepreneurs of Our Times. The list, dominated by Americans, has only two people outside the US. Interestingly, both of them happen to be from the subcontinent, Muhammed Yunus of Grameen Bank, Bangladesh being the other.

The piece on Narayana Murthy—like most of the other profiles—does not substantiate  too well why he is in the list. This is what the magazine says

He proved that India could compete with the world by taking on the software development work that had long been the province of the West. As one of six co-founders of Infosys and the CEO for 21 years, Murthy helped spark the outsourcing revolution that has brought billions of dollars in wealth into the Indian economy and transformed his country into the world’s back office.

Well, with all respect to Fortune and Murthy, I do not think this can actually be the reason bestowing the honor  on him. For Murthy was neither a pioneer nor an innovator as far as offshoring per se goes. Nor is Infosys, the company he co-founded, the largest among the lot. So, while he/Infosys could still be acknowledged  as one of the major forces that shaped this phenomenon, it is unfair on others to single him out for this.

The West, though, has always seen Infosys as the most important symbol of offshoring phenomenon. In his 2005 book, The World is Flat, Thomas Friedman wrote that the two biggest challenges to America were Infosys, which was “taking away” the American jobs and Al Qaeda, which wanted to destroy America. He portrayed Infosys as the symbol of the pro-globalization forces.

In fact, if anything, that is a lasting contribution of Infosys to Corporate India. It taught Indians how to market globally. Just when the world was waking up to the “The Rise of  PR” wave, Infosys taught the world in general and B2B companies in India in particular how to use PR effectively.

But again, the idea of the piece is not to suggest that it is PR that has made it what it is. For that matter, that is not the greatest contribution of Infosys to India, Indian business and the society in general, which is what I want to discuss here.

But before that, I would like to bust some of the myths that exist about Infosys.  I would like to reiterate that

  • Infosys is not the pioneer in offshoring per se
  • Infosys has not even pioneered any particular trend within offshoring industry (such as moving up the value chain by doing different things, globalizing delivery, movement to smaller locations, targeting newer markets, service lines etc)
  • Infosys is not particularly more innovative or disruptive than its peers
  • Infosys is driven by a good set of values but it is not among India’s top few companies when it comes to social responsibility
  • Infosys is no more one of the preferred employers among IT employees, as many best employer surveys show
  • Infosys, as the company is not hesitant to admit, is not particularly risk taking
On the other hand, Infosys’ contribution to Indian IT, Indian business, Indian economy, and Indian collective psyche are much more than these business parameters. Here is what I feel Infosys brought to us/changed in us.
  • The belief that middle class Indian values can be successful business mantras globally.  I think this is the single biggest contribution of Infosys and Murthy. In my college days (88-92), we had one of our batchmates who came from a business family. He always silenced us by saying that you cannot succeed in business by following the so-called ethics. Though he did grudgingly admit that Tatas and a few others are exceptions, he always pointed out that the formative years of all those companies were much older. In independent India, it was not possible. Most of us fumed but had no answer for him. Infosys single-handedly changed that perception. By doing so, it gave hope to millions of middle class youth that you could still stick to a set of values and be successful in business. What is more, you do not need to come from a “business background”.
  •  Transparency in business. Ethics and transparency are related but they are not the same. Transparency requires a proactive approach of sharing information with stakeholders, be in clients, investors, employees or partners. One of the classic statements of Murthy is, “When in doubt, declare.” That has been the guiding principles of its investor strategy. And many newer second generation companies have tried to follow that approach.
  • Setting new benchmarks in employee care.  As is rightly believed, Infosys created new standards with its approach to employee care. Its employee care strategy looked beyond the traditional HR parameters of pay, job satisfaction, growth etc to actually proactively make  the lives of its employees smoother so that their minds are not pre-occupied with too many issues. What Infosys did became the standards for the entire IT industry. Be it IBM or Acccenture or Indian companies, whoever wanted to be a player in the Indian offshore industry, had to play by the HR rules created by Infosys. Though it has been criticized—I myself have done that—for not changing with the time when the IT labor market became more like any other labor market anywhere else, with employees turning to more professional parameters than feel-good parameters, it had already raised the bar for ever. The feel-good HR may not be a differentiator for anyone anymore, but it is a filter, a bare minimum that you cannot ignore.
  • Sharing of wealth with employees. While Dhirubhai is credited with popularizing the stock market phenomenon in India, it is Infosys which can be credited for pioneering the concept of sharing wealth with a large set of employees through its ESOP. Though this is not really a pure innovation—it is the norm in many places—in India, Infosys can surely take the credit for this practice.
  • Making traditional Indian parents proud about their chilldren’s work and organization. One of the things that Infosys understood that parents and elders in India are actively involved in decisions about their children’s job choices. And it knew that the “secure” government job and a few in the private sector such as “Tatas” are always the first choice, it actively wooed the parents with proactively communicating what it stood for. Its great concern for employees, its sprawling campus (to which many parents come to see as if it is a pilgrimage spot), active communication of values that it stands for (which would appeal to any traditional parent in India) were all targeted at the parents. It did it for itself but that became a benchmark for most of the new companies that entered IT business.
  • Beating Americans at their own game. When Friedman wrote Infosys stands for the pro-globalization forces, he meant Infosys as a symbol of the offshoring wave. But Infosys is much more than that. While Tatas and Wipro are often hyphenated with Infosys, none of them comes anywhere close to Infosys when it comes to marketing and PR. HCL too is seen as too aggressive and sales-driven. While Wipro and TCS traditionally would not mind their sales people doing cold calling, Infosys ensures that the name itself does the trick in most cases. Whether it is Friedman or Fortune, the first name that they turn to is Infosys/Murthy. That is not a mean achievement for a company with headquarters in India, that too South India, where talking about oneself positively is often frowned upon. Unless of course, you know how to do it without sounding arrogant or verbose. Infosys has mastered that art. That too is a lesson for corporate India.
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Filed under Globalization, Outsourcing & Offshoring, Technology Business

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