Narayana Murthy: Corporate leaders should be self-restrained in perks and lifestyle to make capitalism attractive

“Corporate leaders should exercise “self-restraint” in their perks, profligacy, and lifestyle, particularly in India where a majority of people are poor, to make capitalism attractive,” Infosys co-founder NR Narayana Murthy said in Ahmedabad on Sunday (April 2).

Speaking as the chief guest at the 58th annual convocation of the Indian Institute of Management Ahmedabad (IIMA), Murthy said “good governance” is enhanced by adhering to “honesty, fairness, transparency, and accountability in every transaction”.

‘Fairness most important attribute for a decision’

Listing his “ideals,” he emphasised the virtue of “fairness” as being the most important attribute for a decision.

“Across the world and particularly in a country like India where a majority of people are poor, the best way to make capitalism attractive is that corporate leaders exercise self-restraint in their perks, profligacy, compensation, and their lifestyle,” Murthy said.

Also read: Leadership makes one feel lonely on top, I have gone through it: Narayana Murthy

He said the “mindset” of a company should be determined by the culture of meritocracy and values, as “culture is a strong foundation on which the super-structure of aspirations, dreams, and hopes rests”.

Murthy said a part of success is determined by performance and half part by luck.

“I want every one of you to be humble. You must do everything possible for success before you invoke God,” he said.

‘Infosys built on competence and values’

Talking about building Infosys, Murthy said he wanted it to be a place where persons irrespective of their race, religion, caste, region, nationality, and economic strata could succeed based on competence and values.

“Transparency in everything you do is counter-intuitively a competitive advantage. I want you to remember this very importantly,” he said.

Murthy said “competence, commitment, and character” are essential for a company to earn the respect of stakeholders and achieve enduring success.

‘A leader should lead by example’

Talking about the attributes of a leader, he said, “the most powerful instrument of a leader is leading by example in demonstrating courage, sacrifice, hope, confidence, innovation, hard work, truth, fairness, transparency, accountability, austerity, discipline, a good value system, and most importantly, open-mindedness.”

A confident leader hires people smarter than himself or herself, and such a leader gets the best out of his or her people by creating an environment of openness to “new ideas, values, meritocracy, fairness, transparency, speed, justice, imagination, discussion, excellence in execution, and questioning, he added.

Also read: I was wrong: Narayana Murthy on keeping family away from Infosys’ leadership role

“The best management guru is the market competition,” Murthy said.

“The way one behaves when he or she is on top and has power and wealth is his/her true character. In such moments, your grace, your courtesy, and humility showed to others will reveal the real you,” he added.

According to Murthy, there is no progress without questioning.

“Putting the interest of the company ahead of one’s interest in the short and medium-term results in the betterment of one’s personal interest in the long term,” he said.

Murthy said every customer looks for the best value for money in every purchase, and therefore, a company that enhances differentiated values to customers using continuous innovation, will obtain premium pricing.

Learnt three important ideas while working in Paris

Murthy said it was drilled into his mind when he was young that his fate would be limited by the circumstances that he was born in, and the India he experienced was a lower middle class with small hopes and even smaller dreams.

He said he had simply accepted that there would be a glass ceiling to most of the corporate ladders in corporate India when corruption and connections in government used to be common for success in most businesses.

Also read: Proud of him: Narayana Murthy on Rishi Sunak

“This regressive mindset changed when I went to work in a French real-time software company in Paris where I learnt three important ideas – the power of entrepreneurship in a free market in creating jobs and prosperity for the nation, the beauty of an enlightened corporate democracy, and the role of compassionate capitalism in building a happy and prosperous country”, Murthy added.

He said this journey irrevocably transformed him from a “confused Leftist” to a determined compassionate capitalist.

“After my return to India, I decided to conduct an experiment based on these three important ideas that I spoke about,” he said.

A total of 597 students graduated from IIMA.

Just covered my first convocation! Narayana Murthy, Infosys, was invited as the guest at the 58th convocation held at #IIMA. He spoke about the importance of grace, courtesy, and humility when in power. Murthy also shared his thoughts on meritocracy and value systems in Infosys. pic.twitter.com/Iht9tydE9i

— Janvi Sonaiya (@JanviSonaiya) April 3, 2023

(With agency inputs)