Infosys' Murthy (left) and Nilekani: Building a good company

II was there when the media's love affair with Infosys Technologies began. It was April or May 1995; I was six months into a job as staff reporter at India's youngest business newspaper and affectedly world-weary as only someone who has been to one of India's finest engineering colleges and chosen not to head for the us and to a half-way decent B-school and opted not to enter the corporate mainstream (no, I will not let my CGPA at either institute be printed) can be. I say this merely to set the context, an important task for any writer, not to indulge in I-isms of the kind editors usually fall prey to. So, there I was, in Bangalore, visiting to meet with a man called Hatim Tyabji-then CEO of Verifone, since acquired by HP-when a colleague at the Bangalore office said she was going for a press-conference-and-campus-visit to a company called Infosys, and would I like to go along? I went along.

The media was yet to discover Infosys but the head of the advertising agency I had worked briefly for before deciding that ferrying layouts to a maker of mini-computers was not my idea of a living had made a small fortune from the 2,000 shares of the company he had bought when Infosys went public in 1993. The shares were trading at Rs 400 then and he would, every now and then, exhort me and other management trainees to invest in it. I do not know if the man still has the shares; if he does, his original investment of Rs 1,90,000 would now be worth Rs 28 crore.

The campus visit passed off well. We were shown the gymnasium, the canteen and the ramps in the building-now called Heritage Building; the Infosys campus has since grown and grown in a way that is best captured in the company's Experience Theatre, a room where buildings sprout almost magically on a scale model of the campus even as a multimedia presentation on the company plays-to enable the physically challenged to negotiate levels. Then, Chairman N.R. Narayana Murthy delivered a speech promising to create 200 millionaires by the turn of the century. Not too many people had heard of stock options then, but everyone got the picture. All around me, journalists who had been taught to believe that all business was bad and all businessmen crooks cheered and clapped. What kind of man, some wondered aloud, would be willing to share wealth and share it thus? And the legend of Infosys and Murthy was born.

There are some stories, a few undoubtedly apocryphal, that tell how the world came to realise the value of this paper money and others that narrate how it changed lives. My picks of both categories concern houses. Circa 2000, an assistant attached to the Chairman's Secretariat bought a house for around Rs 30 lakh and was still left with several hundred shares as a sort of a nest egg. And sometime in the mid-1990s, the son of one of Infosys' co-founders went shopping for a flat. The developer, certain that this young man in his early twenties could not be a serious buyer, all but ignored him; the said young man left the office the owner of a flat, having written out a cheque for the entire amount. That's not the end of the story: the developer made a few enquiries about his customer, realised that his source of wealth was Infosys stock and started aggressively focussing his marketing efforts on the company's executives. That's a trend that continues to this day.

Other companies, in it services itself, telecommunications, pharmaceuticals and biotechnology, even banking, followed Infosys' example, creating a critical mass of the salaried rich.

Salarymen, even salarymen-turned-entrepreneurs, share a unique relationship with wealth. Those born into wealth are comfortable with there being an 'us', and there being a 'them'; they thrive in an oligarchic environment where some doors are open only to them, and shut to others. Traditionally, the nouveau riche have tried to break these doors down, burning considerable money and effort on making the transition from them to us. The new rich, as opposed to those of the nouveau variety, do things differently: some of them do try the doors thing, but most, after a brief spell of profligacy (houses, cars, holidays, gadgets) realise that they have the money to go out and do something they have always wanted to. There's the well-known story of Umesh Malhotra, a self-confessed under-achiever at IIT Chennai who worked for Infosys till he struck it rich and then retired to found Hippocampus, a learning centre designed to encourage children to read. The man is still in his mid-thirties. I do not know of any of the new rich that have dropped out of the mainstream (after having cashed out, of course) to dabble in writing, pottery, painting, even teaching, but am convinced this is because I have not looked hard enough. The enlightened middle class worships Mammon but once he blesses them, they turn to other pursuits.

Malhotra at Hippocampus: Leveraging money for a cause

Nowhere is this more evident than in the case of Nandan Nilekani, currently CEO, President and Managing Director of Infosys Technologies. Not too long ago, Nilekani, a graduate of the Indian Institute of Technology, Bombay was a code-jock who, largely because he had a mind for strategy, found himself heading Infosys. He had already started looking at how he could make a difference beyond building a good company when he was asked to head a task force seeking to make Bangalore a better place to live and work. The Bangalore story-success, followed by the local government's poor performance in the subsequent elections and the belief that a focus on urban-renewal was what caused this-is pretty well known, but what isn't is that Nilekani has now made the cause of urban reform his own and aggressively lobbied the government into creating the National Urban Renewal Mission. Nilekani may have always wanted to do something like this and have just arrived at the threshold of self-actualisation, or he may have been (and probably was, to some extent) influenced by Murthy's own we-must-do-something-for-society credo, but this writer would like to think that his story is a litmus of how the enlightened middle class reacts to wealth. And Infosys was the beginning of the phenomenon.

I do not see a halo hovering over the campus when I visit Infosys' Bangalore hq. I see a real company, plagued by the foibles that affect most others. Murthy, one former employee insists, was a benign dictator obsessed with details (nothing wrong with that and this writer believes it is more than offset by the fact that the man almost pulled the plug on the company's nasdaq listing, merely because he thought friction between stressed-and-rushing-to-meet-an-internal-deadline-for-the-listing employees was not in keeping with Infosys' values). That four of the six co-founders still hold down executive positions (Nilekani is CEO, Kris Gopalakrishnan, coo, S.D. Shibulal, Director and Head, Delivery, and K. Dinesh, Director and Head, E&R, is, Quality and CDG) is a genuine cause for concern-many former and current employees have hinted at this and the competition holds this up as one big negative that prevents people from growing-although its effect has been discounted by rapid growth, in revenues as well as staff-strength. ICICI Bank is arguably a better place to work for women than Infosys, and tales of the Murthys' austerity sometimes grate. Then, you realise the difference the company has made to an entire generation-stock options are now an integral part of compensation packages across several sectors-and the magnitude of that difference, and everything more than evens out. That, not growth, not systems, not strategy, not the charisma of its Chairman, sets Infosys apart.