In 1995, I was a staff writer at The Hindu Business Line in Chennai and had wrangled, for the paper’s management supplement, an interview with Hatim Tyabji, then CEO of VeriFone Inc., a company with progressive people policies. The interview was in Bangalore, a city I am always happy to travel to, and where my sister, a technical writer, was then based. The family subsequently gave her up to Uncle Sam, as is the norm for all TamBrahm families of a certain vintage with more than one child (as writer R.K. Narayan once remarked, Chennai is a city of parents).
The interview went well; later that evening, a senior reporter at the Bangalore bureau of the paper asked me and my section editor whether we would like to accompany her to Electronics City for a press briefing by what she termed a-relatively-unknown-but-very-promising-company.
My memory is a little hazy about why Infosys Technologies Ltd (now Infosys Ltd) had called a press conference, but I do remember almost everything else. We toured the campus, which back then comprised just one building, now called the Heritage Block. The company’s managing director, N.R. Narayana Murthy, proudly showed off the ramps at the building (for wheelchairs) and said Infosys would be an equal opportunity employer. He then delivered a stirring speech about how the company was already sharing its wealth through employee stock option, or Esop, programmes and how it would create at least 200 millionaires by the end of the decade. I recall that a buzz went through the assembled journalists. Many of them, I later learnt, were new to business reporting. One, I discovered, had been a crime reporter—one of Bangalore’s best.
I now realize that it was a combination of several things, all new and novel, and all related, that resulted in Infosys becoming the poster boy and pin-up girl of Indian industry and enterprise in the 1990s. One, although Infosys had been founded almost a decade ago, in 1981 (as Infosys Consulting), it was the economic crisis of 1991 and the country’s subsequent decision to accelerate the process of integrating the domestic economy with the global one that helped it become the force it is. One of these changes, the abolition of the so-called Controller of Capital Issues, allowed Infosys to raise money by selling shares to the public, although it didn’t have a “track record” of profits. Two, the opening up of the Indian economy resulted in the growth of business publications—some of them had been around, but many came around the same time economic reforms did; Business Today, for which I wrote several cover stories on Infosys, was founded in 1991; The Hindu Business Line in 1993. Until then, the prevailing sentiment among business journalists was that all companies were crooked and that all businessmen were crooks (I may be overstating the case a bit here). After 1991, Indian reporters and readers started preferring a style of journalism perfected by Fortune magazine— the CEO as a rock star. That would change in the mid-2000s again, but that’s another story. Three, for eager business journalists (including this writer) looking to do such stories, Infosys provided ideal fodder. Some of its promoters had graduated from one of the handful of Indian Institutes of Technology (IITs), itself a middle-class dream; they seemed a decent bunch and talked of doing business the right way; the managing director spoke of sharing wealth; the company set new standards for corporate disclosure and financial transparency; and, maybe because of all this, its shares rose and rose.
Some of these may seem trivial in 2011. The media is more clear-headed in its coverage now—Mint was there at the beginning of this trend in 2007—and Infosys itself is in the middle of a controversy over alleged visa violations in the US and is just recovering from some unseemly events surrounding succession to the top spot (which, to date, has gone firmly according to script, from promoter to promoter to promoter to promoter). And lest we forget, there was the popular backlash a few years ago against the company’s internal restructuring.
In 1991, all this was in a future no one could see. Back then, knowledge of COBOL didn’t make you a dinosaur—a grass-eating one—and was, instead, a desired attribute in employees and prospective sons-in-law. Back then, body shopping wasn’t infra-dig (and didn’t run afoul of visa regimes). Back then, it was a rare company that shared its wealth with employees and a rarer company that stuck to the straight and narrow. And the sheer chutzpah of six professionals (the seventh left in the late 1980s or early 1990s, depending on who you listen to) who set out to build a company the right way caught everyone’s imagination.
Until then, India’s middle class hadn’t dared to entertain entrepreneurial dreams. Infosys changed that.
It wasn’t the only change it rung in.
As the company’s scrip soared, several of its employees who had been given stock options found themselves wealthy.
Once, in the CEO’s secretariat at Infosys, the only place where you would find office boys, I was served coffee by a man who was worth several times what I was. He had just bought a house (for Rs 39 lakh, and this was in 2000 or 2001). Others did far more evolved things with the money. Umesh Malhotra, one of Infosys’ early hires from IIT Madras, started a reading-and-learning centre for children in Bangalore called Hippocampus with money he got from selling Infosys shares. Another, who worked in the administration department and once accompanied then CFO Mohandas Pai and me on a 4-hour tour of Infosys’ new campus in 2000, has used some of the money he got by selling Infosys shares to start a hospital. Indeed, many of the employees who got Infosys stock—the company’s stock option programme was short-lived—did well by themselves and by the world around them.
The promoters did so too.
Murthy, the co-founder who started it all, has decided to use some of his money to fund entrepreneurs. Rohini Nilekani, the wife of another co-founder Nandan Nilekani, started asking the kind of questions about how to use the money well that others were asking in other parts of the world and has emerged not only as an expert on the subject but also one of the biggest individual givers in the country (full disclosure: she edited and anchored Mint’s series on philanthropy). Nandan himself has parlayed his innate intelligence and years spent in the corner room at Infosys into a position that effectively makes him the government’s chief technology officer, or, as the man himself likes to describe it, a “plumber”.
In Bangalore and in the rest of India, these trends—of the new rich giving back, materially and otherwise—are well-established now, and not restricted to one company or even one industry. But it was Infosys that, at least in some ways, started it all. And it all came together in the 1990s.
R. Sukumar is editor, Mint.