Part IThe Story
Eight Feet by Eight Feet
The room was eight feet by eight feet, and it sat inside a railway station in Niš, a border town between what was then Yugoslavia and Bulgaria. The young man held there was twenty-seven, an Indian computer engineer hitchhiking from Paris back to Mysore with a backpack and a sleeping bag. He had not eaten in days. A driver had dropped him at Niš station at nine o'clock on a Saturday night, after the restaurant had closed. The bank was shut the next morning, so he had no local money, and he slept on the platform until the Sofia Express pulled in at eight-thirty that evening. In his compartment were a girl and a boy. He struck up a conversation in French with the girl, who began to describe the travails of life behind the Iron Curtain. The boy, who appears to have concluded that the two were criticizing the communist government of Bulgaria, summoned the police. The girl was led away. The Indian was taken off the train, separated from his belongings, and put in the small room.
He was held for about three and a half days. When the guards finally let him go, they gave him a reason that he would repeat, nearly verbatim, for the next half century: he was from a friendly country called India, and that was why they were releasing him. Not because he had done nothing wrong. Because of where he was from.
They put him on a goods train to Istanbul. The trip took twenty-one hours. By his own count he had gone five or six days without food by then, and he spent the ride, as he later told an interviewer, "mulling over this injustice, the system of communism, and the problem of poverty in India." He had boarded in Yugoslavia, by his own description, a "confused leftist." He climbed down in Turkey something else. He would later supply the label himself, and it would stick to him like a second surname: compassionate capitalist.
That was 1974. Seven years later N. R. Narayana Murthy and six younger colleagues would incorporate a company in Pune with capital so slight that sources still disagree about how to state it, $250 or ₹10,000, most of it borrowed from wives. Forty-five years after that, the company, Infosys, would report annual revenue of roughly $19 billion and a workforce of 328,594 people, and its founder would be described by Time and CNBC as the "father of the Indian IT sector."
Every founder myth has a hinge, and this is Murthy's: a hungry man in a locked room deciding that the cure for poverty was not redistribution but job creation, not the state but the firm. What makes the story worth more than a commencement anecdote is everything it failed to resolve. The man who came out of Niš believed in markets and distrusted greed, believed in meritocracy and then hired his son, believed in giving away control and could never quite stop exercising it. He built an institution on the principle that it belonged to everyone with a stake in it, and then spent much of his old age fighting, publicly and bitterly, over who it belonged to.
The guards had told him who he was by telling him where he was from. He would spend the rest of his life arguing with the answer.
By the Numbers
From a Pune Flat to a Global Payroll
$250Initial capital when Infosys was incorporated in Pune on 2 July 1981
21 yearsMurthy's tenure as CEO, from 1981 to March 2002
₹95IPO offer price in February 1993; the issue was undersubscribed
11 March 1999Date Infosys became the first Indian company listed on Nasdaq
337 acresSize of the Mysore campus housing the world's largest corporate university
328,594Infosys employees as of March 2026
$5.0BMurthy's estimated net worth, per Forbes, January 2025
The Economics of Common Salt
The father was a schoolteacher, and there were eight children, and in the early 1950s the household in Karnataka could not afford a radio. This is not the self-pity of a rich man's memoir. It is a budget line. Murthy's father, rather than apologize for the absence, turned it into a curriculum. Cultivate inexpensive habits, he told his children, "and you will not become a victim of money in later years. And you will not fall into the trap of greed which leads you to do things that you will later regret." Read, because every small town has a public library and a library card costs nothing. Listen to music, because the public garden played it from 5:30 to 7:30 every evening and admission was free. Choose good friends and talk to them about useful things, because conversation is free too.
Murthy told this story to the Harvard Business Review more than half a century later, by which point he was a billionaire, and he insisted he still practiced all three habits. The reading was popular physics and popular mathematics. His favorite book, he told an online audience in 2007, was the trilogy of Feynman lectures; asked which book had shaped his business career, he said, with what seems to have been real puzzlement, that he could not think of one. The father also made the boy keep a timetable, allocating hours by priority. Asked in 2007 how he balanced personal and professional time, Murthy did not cite a management philosophy. He cited his father's timetable. It was, he said, "the best solution."
There was another teacher. When Murthy was thirteen, his high school headmaster, K. V. Narayan, was conducting a chemistry experiment that required sodium chloride. He measured it with exaggerated care, a pinch at a time, into the test tube. A boy sitting beside Murthy burst out laughing. The headmaster stopped, walked over, and asked what was funny. The boy said, Sir, you are so stingy with common salt, which is so cheap. The headmaster's answer, as Murthy remembered it, was that the salt belonged to the school, and therefore to all of them, and that property belonging to the community deserved more care than one's own, not less.
He was not the laughing boy. He was the boy who remembered.
There is a third childhood story that circulates about Murthy, and it should be handled with tongs. It appears on the internet as a forwarded email, written with the polish of parable: a sixteen-year-old in Mysore, the brightest in his class, earns a top rank on the IIT entrance exam in 1962; his father, reading the newspaper, tells him the family cannot afford it; the boy goes to the station to see his classmates off and stands there "even after he could no longer see the train or the waving hands," resolving that "it is not the institution, ultimately it is you and you alone who can change your life." I cannot verify the rank or the scene. The record does show that he took his bachelor's degree in electrical engineering at the National Institute of Engineering in Mysore in 1967, and that he did eventually get to an IIT, Kanpur, for a master's in 1969. That the parable exists at all, and that it has been passed around for years by people who wanted it to be true, says something about what Murthy came to mean to a certain kind of Indian: the kid who was good enough and couldn't afford it, and went anyway, later, by another road.
At Kanpur the road bent. On a Sunday morning in 1968, at breakfast, a graduate student in control theory overheard a well-known computer scientist on sabbatical from an American university talking to a cluster of students about what computers were about to do to the world. "He was articulate, passionate and quite convincing," Murthy recalled in a 2007 lecture at NYU's Stern School of Business. "I was hooked. I went straight from breakfast to the library, read four or five papers he had suggested, and left the library determined to study computer science."
What followed was a decade of building machines for other people. At IIM Ahmedabad he was a research associate and then chief systems programmer, working on India's first time-sharing computer system and designing a BASIC interpreter for Electronics Corporation of India Limited. From 1972 to 1974 he was in Paris with a firm called SESA, where he worked on a real-time operating system, reportedly handling 400 terminals, for air cargo at Charles de Gaulle Airport. Then Niš. Then back to India, to the Systems Research Institute in Pune, then a company of his own called Softronics, which failed after about a year and a half, then Patni Computer Systems, where by 1977 he headed the software group.
Somewhere in there, by his own account in a 2009 interview with The Economic Times, around 1975 or 1976, he thought seriously about going into politics. His then-friend, later his wife, Sudha, was "quite sympathetic." Other friends told him to run an experiment on a smaller scale first, to learn his strengths and weaknesses, and then look at a larger canvas. He took the advice. The experiment would run for the rest of his life.
Seven Men and a Borrowed Ten Thousand
Sudha Kulkarni was born in Shiggaon in 1950, the daughter of a surgeon and a schoolteacher, raised partly by grandparents, whose household would later become the material for her first well-known book, How I Taught My Grandmother to Read. She took an engineering degree from B.V.B. College in Hubli and a master's in computer science from the Indian Institute of Science. When she saw a job posting from TELCO, the Tata engineering company, that specified men only, she wrote a postcard to the chairman complaining about it. She was granted a special interview and hired, becoming the first female engineer at the company. Before Infosys was an idea, then, one of the two people in the Murthy marriage had already won an argument with the most powerful industrialist in India by writing to him directly. The other would spend his career doing the same thing to prime ministers, boards, and the general public.
They married in 1978, while she was working at TELCO in Pune. When he decided to start a company, she lent him the money for his share of the equity, ₹10,000 in the most common telling (one version has her jewelry being mortgaged for it). In a 2007 online chat, asked about the debt, Murthy answered with unadorned accuracy: "My part of the equity in Infosys was borrowed from Sudha and she paid for most of our expenses in the initial years." She has since been known to correct journalists who spell her surname with an h. "Murty, not Murthy," she said in 2015. "My husband spells his name wrong."
The decision itself, Murthy has said, was taken on December 29, 1980. He told a magazine in 2010 that he picked N. S. Raghavan, Kris Gopalakrishnan, and Nandan Nilekani first, and gave them a deadline for a name. "Generally, I am a very impatient person," he said. "So, I told them that they had to come back to me with a name in 48 hours else I would choose a name." They didn't. He did. Infosys, for Information Systems, a name about as poetic as a filing cabinet, which was rather the point.
The other founders were S. D. Shibulal, K. Dinesh, and Ashok Arora. They were young, with a year or two of experience each. Murthy said he chose them not for brilliance, though several were brilliant, but for what he called compatibility of values: "They were all from the middle class and they believed in deferred gratification." He assigned them roles almost the way a casting director assigns parts, on the basis of how they seemed. Raghavan "looked like he understood human resources." Nandan "looked like he was a sales-oriented person." Kris liked technology; Shibulal and Dinesh "seemed like good project managers"; Arora was a fine designer. Murthy himself, he said, "thought I knew a bit of strategy and finance."
Nilekani's compressed biography rhymes with Murthy's in ways that are almost too neat. Born in Bangalore in 1955 to a Konkani-speaking family from Sirsi; father a general manager at the Mysore and Minerva Mills and a subscriber to Fabian socialism; schooled in Bangalore and Dharwad; IIT Bombay. He arrived at Patni in 1978 and was interviewed for the job by Murthy. Another son of a socialist who would end up building capitalism's Indian showroom. Another man who would later be tempted by politics and, unlike Murthy, actually run, losing the Bangalore South parliamentary seat in 2014 by 228,575 votes while declaring assets of ₹7,710 crore, the richest candidate in the country. Murthy's verdict on him, given in 2010, was characteristically clipped: "He is a consensus-builder and is not easily demotivated." Coming from a man who was not much of a consensus-builder, it was a compliment and a confession at once.
What Murthy did with the money is the part of the founding story he has told most often and most pointedly, and he told it at full volume in a 2017 letter written in anger. His starting salary at Infosys, he wrote, was "just 10% of my salary in my previous job." He made sure his younger colleagues got 20 percent more than they had been earning at Patni, "even though I was 7 levels above them in my previous job and was 11 years older than them." And he gave them, he wrote, "huge equity compensation the like of which has never been replicated in this world." T. V. Mohandas Pai, who joined as head of finance in 1994, put it more plainly in a 2011 tribute: Murthy "had a large holding when he started Infosys but ensured that all his co-founders had good stakes by diluting his own hugely."
Asked in 2007 what the best business decision of his life had been, Murthy did not name a client or a product. "Clearly, requesting 6 younger colleagues of mine to join me as co-founders."
There is a lesson about ownership embedded here that Murthy articulated in a 1999 interview with Pritish Nandy, and it is the closest thing he has to a theory of the firm: "We realised rather early that it is better to have a small part of a large, growing pie than a large part of a small, shrinking one. Most people are obsessed with control. But that is no way to grow."
Most people are obsessed with control. Hold that sentence. It will come back.
Eleven Years in Darkness
The licence raj did not merely slow Infosys down. It nearly killed it, repeatedly, in ways so mundane they read like satire.
The company moved its headquarters from Pune to Bangalore in 1983, one of the first software firms to plant itself in the city that would later be called India's Silicon Valley. In 1982, Murthy recalled, it took more than a year to get a telephone connection, "and we lost a huge project because of that." It took twelve to fourteen days to get government permission to travel abroad. The company was refused a loan to import a computer. In the 1980s, trying to stay alive, Infosys briefly made hardware: electronic telex machines and keyboard concentrators. "I used to make 50 visits to Delhi for small things," Murthy told Business Standard in 2010. "We did not have current account convertibility; we could not open offices." Then the line that should be engraved somewhere in the Ministry of Finance: "Of the 21 years of my CEOship, about 11 years were lost in darkness."
He did not, in this period, enjoy the mythic status he would later acquire. A detail from a 2016 Forbes India profile, offered almost in passing: Azim Premji, the Wipro chairman and future rival, once interviewed Murthy for a job. He was rejected. One imagines this was a satisfying thing to disclose at seventy.
The worst moment came in 1990. After nearly a decade of struggle, Infosys received an offer to be bought out. Murthy put the number at ₹2 crore in a 2021 interview; The Economic Times, in a 2007 tribute, rendered it as "a princely sum of $1 million." His co-founders, exhausted by the government, wanted to take it. The story as the newspaper told it: Murthy, who did not have the money, offered to buy them all out himself and keep going. Stunned, they backed off.
A year later, India ran out of foreign exchange and, under Finance Minister Manmohan Singh, began dismantling the controls that had strangled the company. Murthy would later describe the software industry as "the shining example of all the good that came out of liberalisation." In July 2021, when Infosys's market capitalization had reached ₹6.5 lakh crore, Moneycontrol ran his remarks under a headline that did the arithmetic for the reader: In 1990, there was an offer to buy us out for Rs 2 crore.
It is worth being precise about the moral Murthy took from the dark decade, because it was not the libertarian one. He did not conclude that the state was the enemy. He concluded that the state was badly designed. Asked in 2007 how to fight bureaucratic red tape, he said: "We have to create a system of meritocracy and incentives in our bureaucracy. Then I am sure they'd perform as well as anybody in the private sector." Asked, hypothetically, what he would do as prime minister, he said he would concentrate government entirely on education, healthcare, nutrition, and shelter for the poor "while providing an absolutely free space for entrepreneurs." He credited Jawaharlal Nehru, architect of the very system that had cost him eleven years, with the "extraordinary vision" that built the engineering colleges whose graduates Infosys hired.
He was offered a government position by Prime Minister Atal Bihari Vajpayee in 1999 and declined. He gave two reasons. The first was that he was taking the company to Nasdaq. The second was revealing: "I don't know whether I can succeed in an environment where people are not disciplined; where people don't believe in meritocracy; and where people put their own interests above the societal interest." He had run that smaller-canvas experiment. He seems to have concluded it was the only canvas he could control.
When in Doubt, Disclose
In February 1993, Infosys went public at ₹95 a share. Almost nobody wanted it. The issue was undersubscribed, and Morgan Stanley stepped in to stabilize the price, taking a 13 percent stake. By June, when trading began, the stock opened at ₹145. That same year the company introduced an employee stock option plan, among the first in India.
The ESOP would turn out to be Murthy's most consequential act of compassionate capitalism, and also his most capitalist one. Infosys would create, by one count, more than 2,000 dollar millionaires and more than 20,000 rupee millionaires among its employees. Pai called it "India's largest and most generous ESOP, democratising wealth and forcing corporate India to do more." It was also, of course, a retention tool in a labor market where engineers were the scarce asset. With Murthy, the generous move and the shrewd move were usually the same move, which is one reason his critics and admirers so rarely understood each other.
Speaking at an Indian startup conference in 2022, Murthy recalled the conversation he and a co-founder had before the IPO, and it explains a great deal of what followed: "IPO brings onerous responsibility... as so many people with very little money would put faith in us and put in their meagre disposable income, it is important to give them a suitable return." He was scolding a generation of founders who, he said, treated an IPO as "a surrogate for the next round of financing." The scolding has the cadence of a man remembering his own fear.
What he built in response was a cult of disclosure. In 1995, Infosys lost its business with General Electric, then a major client. "We held a analysts meet and told them upfront that we were in trouble," Murthy said in 1999. The same year the company suffered losses in the secondary market that Indian accounting rules did not require it to publish; it published them anyway. Infosys later became the first company on Nasdaq to report its balance sheet and income statement under the generally accepted accounting principles of eight countries. The house motto was five words long: When in doubt, disclose. Pai summarized his boss's view in a sentence that sounds obvious now and was eccentric then: "He said transparency was a competitive advantage."
There was a philosophy of management underneath this, and Murthy gave it a curious, almost cold name. He described his approach to people as "transaction-based." "If you applaud me for three or four transactions where you think I have done well, you can always criticise me for one where you think I have failed," he explained to Nandy. "I will not take it amiss. It means starting every transaction at zero base." It is a method that refuses to let reputation accumulate, in either direction. It is also, as later events would show, a method that can make a man very hard to placate once he believes a transaction has gone wrong.
Pai, who reported to him, remembered the texture. Within a fortnight of Pai's arrival, Murthy had built a financial model that explained the business. "He was a stickler for performance, gave no quarter and accepted none. He was harsh on us if we faltered, sometimes we were terrified of what he would say, but when he felt we had done our best, there was no one kinder." The best argument won, not the person or the position. "Everybody knew he had the last word on everything."
The disclosure ethic extended to the government. In 1999 Murthy told Nandy that the occasional job applicant arrived with a recommendation from the chief minister, and that Infosys always replied that the candidate would be hired if he passed the usual tests. "No one minds you being blunt," he said, "as long as they know you are even handed."
On March 11, 1999, Infosys listed its American depositary receipts on Nasdaq, the first Indian company to do so. By November its ₹10 shares were trading at ₹8,000 at home and its market capitalization had touched $11 billion. Murthy would call the listing the best moment of his career. In 2017, asked by CNBC-TV18 for his greatest success, he reached for the image and the borrowed words: "I think sitting on those high stools at Nasdaq when we got listed... and borrowing the words of Neil Armstrong to say that it is a small step for Nasdaq, but a giant leap for Infosys and the Indian software industry."
A small Indian company on a tall American stool, quoting an American astronaut. The friendly country called India, finally admitted.
— N. R. Narayana Murthy, interview with Pritish Nandy, Rediff, November 1999The first was that if you put public good ahead of private good, it always leads to better private good. There were many occasions when we were tempted to use our corporate resources for personal gain. But we did not.
The Day in the Sun
In March 2002, Murthy handed the chief executive's job to Nilekani. He was fifty-five, Infosys was growing at 37 percent a year, and revenue had reached $500 million. The reason he gave, as quoted by The Economic Times, was that "the others should also have their day in the sun." He became chairman and, after reaching the company's retirement age of sixty in 2006, chief mentor. Under Nilekani, the top line grew sixfold to $3 billion. Kris Gopalakrishnan succeeded Nilekani in 2007; Shibulal succeeded Gopalakrishnan in 2011. Until 2014, every chief executive of Infosys was a founder. The company was, as one observer put it, run by the same seven-minus-one men for thirty-three years, taking turns.
This is the period in which Murthy became a national icon, and also the period in which the institution acquired its physical body. In 2002 Infosys established its Global Education Centre on a 337-acre campus in Mysore, the city of the stone mantap and the public library and, in the forwarded email, the railway platform. It would grow to 400 instructors and more than 200 classrooms, able to train 14,000 employees at once; by June 2015 it had trained roughly 125,000 engineering graduates. It is described as the largest corporate university in the world. Pai credited Murthy personally with the decision to invest "hugely" in campuses, "forever changing the workplace in India." Whether one finds this inspiring or slightly dystopian likely depends on whether one has spent four months there.
The icon accumulated honors in the way icons do: the Padma Shri in 2000, Ernst & Young's World Entrepreneur of the Year in 2003 (the first Indian to win it), the co-chairmanship of the World Economic Forum at Davos in 2005, a CBE in 2007, the Légion d'honneur and India's second-highest civilian honor, the Padma Vibhushan, in 2008. Fortune, in 2012, would place him among the twelve greatest entrepreneurs of the era, alongside Steve Jobs and Bill Gates, and quote him summarizing the whole enterprise in seven words: "It is all about sacrifice today, fulfilment tomorrow."
And the austerity became part of the brand. Murthy liked to repeat an industry saying from the 1990s: if you see a Mercedes in front of a house, it belongs to the CEO of a failed traditional company; if you see a ramshackle Ambassador, it belongs to the CEO of a hugely successful software company. He told The Bombay Chartered Accountant Journal that India's capitalists "have to lead an austere life shunning vulgar display of wealth and power if they want capitalism to become strong in India." In 2007, asked about his investment portfolio, he said his main investments were in Infosys, made when the company was founded, and that he was "not an expert in stock market." It was, as far as anyone could tell, true.
The icon also fought. In January 2001 he had been made chairman of Bangalore International Airport Limited, the body charged with giving India's software capital an airport worthy of its clients. By October 2005 the former prime minister H. D. Deve Gowda, whose party held the balance of power in Karnataka, was publicly attacking him for having contributed nothing in five years and accusing Infosys of meddling in government affairs. On October 20, Murthy dashed off a letter resigning the post. Infosys followed with a point-by-point rebuttal of how much land it had been allotted and how many jobs it had created. The episode is mostly forgotten. It is worth remembering as a first draft of a pattern: the founder treats an insult to his integrity as a matter of public record, answers it in writing, and walks out.
Murthy retired from the company in August 2011, handing the chairmanship to the banker K. V. Kamath. His farewell letter, published in May, is the most unguarded document he ever released. Colleagues told him, he wrote, that "Infosys is an inseparable part of me and I am an inseparable part of Infosys." Then: "I have been the Number One actor in every major decision taken in the company. I have rejoiced in every significant milestone of the company. I have commiserated in every false step that this company has taken." The company had recently been accused in the United States of misusing business visas, accusations it denied, and which in 2013 it would settle for $34 million without admitting guilt. "Being accused of violating our own high standard of business ethics recently made me lose several nights of sleep," he wrote.
A man who describes himself as inseparable from an institution has told you something about how he will behave once separated from it.
Those who want the long version of these years have two biographies to choose from, N. R. Narayana Murthy: A Biography and NR Narayana Murthy - A Biography, along with a briefer primer in Famous People: N. R. Narayana Murthy Biography. Murthy's own lectures from the period were collected in A Better India, A Better World (2009), whose thesis he summarized in a 72-minute interview in a company guest house in South Delhi: the elite and the powerful must "eschew creation of asymmetry of benefits in their favour vis-à-vis the common man." He had painted, he said, "a very simple drawing at Infosys and that painting has been reasonably successful."
The Return of the Middle Child
He came back on June 1, 2013. He was sixty-six. He said it was a move he had not anticipated "in my wildest dreams."
The company he returned to had slipped to third place in the industry rankings, overtaken by Cognizant, a relative upstart. Shibulal's strategy, branded "Infosys 3.0," had tried to push the company toward products, platforms, and higher-margin consulting, away from the labor-intensive services on which it had built its name; growth had decayed from 30 to 40 percent a year to a forecast of 6.6 percent. The stock had fallen 20 percent to a decade low in April. The board asked the founder to save it. When the news broke, Infosys shares jumped as much as 9 percent before settling 4 percent higher. The market, at least, believed in resurrection.
He did what he knew how to do. He raised salaries by about 8 percent across the board, at some levels the first raise in two years. He reopened lines to employees and investors. Then he cracked down on costs, and non-performers were shown the door. In fiscal 2013–14, Infosys roughly doubled its revenue growth to 11.5 percent, added 238 clients, and pushed operating margins to 25.5 percent. There were also ten executive-level departures in a year, and The Hindu, in a skeptical anniversary assessment, noted that his promise to build "a desirable Infosys within 36 months" remained far from fulfilled.
And he brought his son.
Rohan Murty had been finishing a PhD in computer science at Harvard when his father was asked, in 2010, whether he might join Infosys. Murthy's answer was a model of principled hedging. "There is a possibility because he is highly qualified, but the probability is somewhat low." Then the creed: "Right from the beginning, we wanted to create a company that was of the professionals, for the professionals and by the professionals." Pai, in his 2011 farewell tribute, listed among Murthy's virtues that he "never involved family in business nor gave favours or jobs to anybody without merit."
Three years after the low-probability answer, Rohan arrived as his father's executive assistant. Shareholders and commentators, as The Hindu drily put it, greeted the return "with bouquets and brickbats — the latter for bringing along his son." The paper asked whether "the compromise on self-professed principles of corporate governance" had hurt the company. Rohan stayed from June 2013 to June 2014, then left to found his own company, Soroco.
There is no evidence in the record that the son was unqualified. That was never the point. The point was that the founder who had made his reputation on the bloodless fairness of the zero-base transaction had, for once, let the transaction carry a surname. It is the sort of small, human inconsistency that matters enormously in a man whose entire public authority rests on the claim that he has none.
In June 2014, Infosys named Vishal Sikka, a former SAP board member, as its first chief executive from outside the founding circle. Murthy stood down as executive chairman, served as non-executive chairman until October, and then was designated chairman emeritus, a title one report says he declined. He left. And within three years he would be at war with the man he had helped choose.
Dear Folks
The letter began the way his letters always began, with an informality that was itself a kind of warning. Dear Folks. It was April 2017, and the subject was a pay raise.
The board had approved an increase in compensation for U. B. Pravin Rao, the chief operating officer, of roughly 60 to 70 percent including variable pay, at a time when most employees had received 6 to 8 percent. The founders had abstained from the shareholder vote. Murthy explained why, and he added an instruction to the press that tells you everything about the state of his trust: "If you use the contents of this mail, please quote me verbatim and in full. Please do not paraphrase."
"I have lots of affection for Pravin," he wrote. "I recruited Pravin in 1985 and had nurtured him throughout my stay at Infosys since then. He had been sidelined. He was not even a member of the Executive Council at Infosys in 2013 when I came back. Kris, Shibu snd I encouraged him, elevated him to the board, and made him the COO." (The typo, snd, survived publication. He was, as he once admitted when asked whether he hated spelling mistakes, "not used to typing so fast.")
Then he laid out the founding arithmetic, the 10 percent salary, the 20 percent raises for the juniors, the seven levels and eleven years, as a credential. "So, this abstention comes from somebody who has walked the talk." The raise was "grossly unfair" to "project managers, delivery managers, analysts, programmers, sales people in the field, entry level engineers, clerks and office boys who are toiling hard." And then the question, aimed at a man he had hired thirty-two years earlier: "With what conscience can a decent person like Pravin (a man schooled in Infosys values for over 30 years) tell his juniors that they should work hard and make sacrifice to reduce cost and protect margin?"
— N. R. Narayana Murthy, letter to the media, April 2017This is necessary if we have to make compassionate capitalism acceptable to a majority of Indians who are poor. Without compassionate capitalism, this country cannot create jobs and solve the problem of poverty.
The pay raise was only the most quotable charge. Murthy and the founders, who together held about 12.75 percent of the company, had been raising questions for more than a year: about Sikka's own large salary increase in 2015; about a severance agreement for the former chief financial officer, Rajiv Bansal, which Murthy would later describe as "unusual and unprecedented," amounting to "1000 per cent" of the standard Infosys contract; and about the $200 million acquisition of Panaya, an Israeli automation company, in 2015, which a whistleblower had alleged was tainted. External investigations commissioned by the board found no wrongdoing. Murthy was unpersuaded. "Some shareholders have said it's hard to believe a report by a set of lawyers hired by a set of accused, giving clean chit to the accused," he said.
In July 2017, in the middle of all this, he gave an interview in which he said something that no founder in the middle of a proxy war is supposed to say. Asked about his biggest regret, he said his co-founders had told him not to leave in 2014. "Generally, I find that I am a very emotional person. A lot of my decisions are based on idealism and probably, I should have listened to them."
On August 18, 2017, Sikka resigned, citing "a drumbeat of distractions" and "false, baseless, malicious and increasingly personal attacks." Infosys shares fell 13 percent. The board's statement that day is among the most extraordinary documents ever issued by an Indian public company about its own founder. "Mr. Murthy's continuous assault is the primary reason that the CEO, Dr. Vishal Sikka, has resigned despite strong Board support," it said. It accused him of "inappropriate" demands that, when declined, "resulted in the threats of media attacks being carried out," and called his campaign "misguided." For Murthy to imply, it said, "that three well-respected international law firms, members of the Infosys Board and certain employees are engaged in some grand global conspiracy to conceal information is not tenable on its face."
His reply was brief. He was "anguished by allegations, tone and tenor." It was "below my dignity to respond to baseless insinuations." He would answer "in right manner, right forum and at an appropriate time."
Within a week the institution had rearranged itself around him. Nilekani, the consensus-builder, returned as non-executive chairman on August 24. The chairman, R. Seshasayee, resigned; so did the co-chairman Ravi Venkatesan, and the directors Jeffrey Lehman and John Etchemendy; Sikka left the board. Nilekani moved the company's center of gravity from California back to Bangalore. In January 2018, Salil Parekh, from Capgemini, became chief executive. Pravin Rao, the man whose raise had started it, served in between as interim chief executive.
And still it did not resolve. On October 24, 2017, the reconstituted board, under Nilekani, reaffirmed the external findings on Panaya and declined to publish the full investigation report, arguing that doing so would "inhibit the company's ability to conduct effective investigations into any matter in the future." Murthy, in a late-evening statement, said he stood by every question he had raised. "Sadly," he said, "it appears we will no longer know the truth."
You can read the whole affair two ways and both are supported by the record. In one, an aging founder who could not let go used his moral authority to bully a board and drive out a chief executive whose numbers, by the board's account, had been improving; attrition had fallen from 23.4 to 16.9 percent, and the company had moved into the top quartile of the industry. In the other, the only shareholder with the standing to ask hard questions about pay and acquisitions asked them, loudly, and the institution's answer was to hire lawyers and stop talking. When in doubt, disclose, the company had once said. Now the company was in doubt, and declined.
What is undeniable is that the man who had said, in 1999, that "most people are obsessed with control" spent 2017 fighting for a measure of it in a company in which his family held a small fraction of the shares. He had given the company away, share by share, to employees and public investors and LIC and foreign funds. He had never given away the right to be its conscience. That was the part he could not dilute.
Seventy Hours
In late 2023, Murthy sat for a conversation with his old finance chief, Mohandas Pai, for a video series called The Record, and said the sentence that would follow him into his ninth decade. "India's work productivity is one of the lowest in the world," he said. "Unless we improve our work productivity... we will not be able to compete with those countries that have made tremendous progress. So, therefore, my request is that our youngsters must say, 'This is my country. I'd like to work 70 hours a week.'"
The reaction was immediate and largely hostile. Critics pointed to the starting salaries of engineers at Indian software firms, Infosys included. A Bengaluru cardiologist wrote that young people had no time left to exercise, socialize, or see their families, and then everyone wondered why they were having heart attacks. Others observed that most Indian women already worked well over seventy hours a week, counting the work at home. The film producer Ronnie Screwvala wrote that productivity was "about getting better at what you do," not "clocking in more hours."
Murthy did not retract. In November 2024 he told an audience, "I don't believe in work-life balance." A few days later he seemed to soften: nobody, he said, could ask people to work long hours; it was a matter for introspection, not debate; he himself had put in more than seventy hours a week for some forty years, and that had been his choice. A year after that, in November 2025, he hardened again, holding up China's "996" schedule, nine in the morning to nine at night, six days a week, as a model for India. The Chinese Supreme Court had ruled against the practice in 2021.
It would be easy to dismiss this as an old man's crankiness, and many did. It is more interesting to notice how precisely it fits the shape of everything before it. The father's timetable. Sacrifice today, fulfilment tomorrow. The co-founders chosen because they "believed in deferred gratification." The 2007 advice to a would-be entrepreneur: "Work harder, smarter." The same chat in which, asked by an engineer feeling down about his career, Murthy replied: "Lets all remember that compared to the poor people of India, we are the blessed ones." His ethic was never really about productivity. It was about obligation, the conviction that a privileged Indian, which is to say any Indian with an engineering degree, owed his labor to the hundreds of millions who had none. "This is my country" was the operative clause. The seventy hours were the payment.
The trouble is that the ethic was formed in a world where the employer was a seven-man startup in which everyone had equity and everyone had chosen deferred gratification together. By 2023 the employer was a company with over 300,000 people, most of them salaried, many of whom would never see the kind of stock that made the first generation rich. A sacrifice freely chosen by a co-owner reads, when prescribed to an employee, like a demand. Murthy seemed to sense the difference, hence the November 2024 retreat into "introspection." He could not stop himself from saying it anyway.
The company, for its part, had its own complications with the clock. In 2013 its plan to install software tracking how much time staff spent at their computers had caused resentment. In July 2026, French labor authorities fined Infosys €175,000 after finding that its working-time recording system violated French regulations. The Deccan Herald headline noted that the fine had caused "Narayan Murthy's 70-hour work-week row" to resurface. The founder had not run the company for twenty-four years. His name was still the first thing anyone reached for.
— N. R. Narayana Murthy, speaking to Mohandas Pai on The Record, October 2023So, therefore, my request is that our youngsters must say, 'This is my country. I'd like to work 70 hours a week.'
He is eighty now. His wife sits in the Rajya Sabha, nominated in March 2024 for her work in philanthropy and education; the Infosys Foundation she started in 1996 accepts no outside donations. His daughter married a man who became prime minister of the United Kingdom, a country that had once given his father-in-law a CBE. His son runs a company of his own. Infosys crossed $100 billion in market capitalization on August 24, 2021, the fourth Indian company to do so; the promoter group, the founders and their families, now holds about 14.6 percent, and the largest single shareholder is the Life Insurance Corporation of India, which is to say, in a sense, the Indian public.
In 2017, accepting a medal at the University of Virginia, Murthy offered a definition of success that no balance sheet records. It was, he said, "the ability to put a smile on the face of people when I enter a room." Every decision a leader makes, he said, should pass a single filter: will it enhance respect for the company from society, and respect for the leader from his employees? It is a beautiful standard, and an impossible one, and he has been both its most rigorous exemplar and, in 2013 and 2017 and 2023, its most conspicuous casualty.
Which brings us back, as these things do, to a chemistry classroom in Karnataka around 1959. A headmaster named K. V. Narayan holds a test tube in one hand. With the other he lets a few grains of common salt, the cheapest thing in the room, fall into the glass, slowly, one careful pinch at a time, because the salt is not his. Beside a thirteen-year-old boy, another boy is laughing.
Part IIThe Playbook
What follows is an attempt to extract from Murthy's career the operating principles that are genuinely transferable, and to be honest about the ones that cut both ways. Several of his most effective habits produced his most damaging episodes; a playbook that pretended otherwise would be a hagiography. The principles are drawn from the evidence above: the founding economics, the licence-raj survival, the disclosure culture, the succession, the 2013 return, the 2017 war, and the work-hours controversy.
The principles
- 1.Choose co-founders for values, then cast them by temperament.
- 2.Dilute yourself early and visibly.
- 3.Treat transparency as a product feature.
- 4.Refuse the exit you can't yet see past.
- 5.Separate controllables from weather.
- 6.Run every relationship at zero base.
- 7.Make compensation ratios a governance issue.
- 8.Build the school before you need the graduates.
- 9.Hand over power while you are still at your peak.
- 10.Decide in advance what your authority will be after you leave.
- 11.Never exempt yourself from your own rule.
- 12.Distinguish an ethic you chose from one you prescribe.
Principle 1
Choose co-founders for values, then cast them by temperament
Murthy's account of how he picked his six colleagues is unusually specific about what he was not optimizing for. They were young, with a year or two of experience; he did not pick them for proven competence. He picked them because they "were all from the middle class and they believed in deferred gratification," were willing to accept low salaries, and would run the business honestly. Only after values were settled did he assign roles, and he did so by temperament as much as skill: Raghavan was the people person, Nilekani the seller, Gopalakrishnan the technologist, Shibulal and Dinesh the project managers.
The bet paid off in a way that is easy to miss. In 1990, when an outsider offered to buy Infosys and the co-founders wanted out, they did not leave; they backed down when Murthy offered to buy them out himself. A team selected for shared willingness to defer gratification is precisely the team that can be talked out of a liquidity event. And the same group ran the company in rotation for thirty-three years. Shared values are not a soft asset. They are what lets a company survive its worst year without splitting.
Tactic: Before discussing roles with a prospective co-founder, have an explicit conversation about how long each of you is willing to accept below-market pay and what you would each do with a buyout offer in year nine.
Principle 2
Dilute yourself early and visibly
Murthy took 10 percent of his previous salary while giving his juniors a 20 percent raise, and gave away equity on a scale he later described as unprecedented. Pai's verdict was that he "ensured that all his co-founders had good stakes by diluting his own hugely." Then, in 1993, Infosys introduced one of India's first employee stock option plans, which eventually created thousands of dollar millionaires. His stated logic, from 1999: "It is better to have a small part of a large, growing pie than a large part of a small, shrinking one."
The visible part matters as much as the dilution. Because the founding economics were known, Murthy could deploy them decades later as moral credentials. In the 2017 letter on Rao's pay, he invoked them explicitly: "this abstention comes from somebody who has walked the talk." Generosity at the founding became authority at the crisis. The lesson is not that founders should be self-sacrificing for its own sake; it is that early, documented restraint is the only currency that lets you later make demands on others' restraint.
Tactic: Write down your founding compensation and equity decisions, and the reasons for them, in a document your early team sees; you will need that record when you later ask others for sacrifice.
Principle 3
Treat transparency as a product feature
Infosys disclosed the loss of GE as a client in 1995 by calling an analyst meeting. It published secondary-market losses that Indian accounting rules did not require it to publish. It reported under the GAAP of eight countries. The motto was "When in doubt, disclose," and Pai said Murthy believed "transparency was a competitive advantage."
For an Indian company in the 1990s selling to Western clients and seeking a Nasdaq listing, this was not simply ethics. It was a solution to a trust deficit. Foreign customers and investors had no reason to believe a Bangalore company's numbers; over-disclosure was the cheapest way to manufacture credibility. Murthy told Nandy that investors valued "the readiness to give bad news well in time." The underdog's disclosure is a signal that the incumbent does not need to send.
The episode of October 2017, when the reconstituted board declined to publish the Panaya report and Murthy said "it appears we will no longer know the truth," shows how durable the expectation becomes. Once transparency is a brand promise, any retreat from it reads as a breach.
Tactic: Identify the one piece of bad news your stakeholders would least expect you to volunteer, and establish now the forum and timeline in which you will volunteer it when it comes.
Principle 4
Refuse the exit you can't yet see past
The 1990 buyout offer, ₹2 crore by Murthy's later account, came at the bottom of the licence-raj decade: a year-long wait for a phone line, fifty trips to Delhi, a refused loan for a computer. Every rational signal said sell. Murthy refused, and offered to buy out his co-founders with money he did not have. A year later came liberalisation.
The non-obvious point is that his refusal was not a forecast of liberalisation. He did not know 1991 was coming. He was refusing to let the worst conditions of a particular regulatory moment set the price of the company. Thirty years later Moneycontrol could compare ₹2 crore to a market capitalization of ₹6.5 lakh crore.
Tactic: When an acquisition offer arrives during an external crisis, ask whether the buyer is pricing your company or pricing the crisis, and decline if it is the latter and you can survive another twelve months.
Principle 5
Separate controllables from weather
In the 2007 chat, asked about the threat of rupee appreciation, Murthy declined to worry: "Why worry about an issue over which we have no control, while we have hundreds of issues that we have to solve and over which we have control." Asked about US visa politics, he said only the US government and citizens could comment, and Indian companies had to grow "under whatever constraints exist in our market place."
This was the operating posture of a man who lost eleven of his twenty-one years as CEO to "darkness." He did complain about the bureaucracy, constantly, but he never let it become the explanation for performance. The early strategy, he said, was "excellence in execution": on-time delivery and quality, the variables he owned.
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Controllables vs. Weather
How Murthy sorted problems, reconstructed from his own statements.
| Issue | Category | Murthy's response |
|---|---|---|
| Rupee appreciation | Weather | Raise productivity: more revenue per person in the same time. |
| US visa rules | Weather | Grow within whatever constraints exist. |
| Licence raj delays | Partly controllable | Lobby relentlessly; never let it excuse execution. |
| Software quality and delivery | Controllable | Compete on excellence in execution and on-time completion. |
| Talent quality | Controllable | Build the Mysore training campus. |
Tactic: In your next planning review, put every risk into one of two columns, controllable or weather, and spend no meeting time on the weather column beyond defining a hedge.
Principle 6
Run every relationship at zero base
Murthy's self-described "transaction-based" approach meant that past credit did not shelter present failure, and past failure did not taint present success. "If you applaud me for three or four transactions where you think I have done well, you can always criticise me for one where you think I have failed. I will not take it amiss." Pai's memory, that "the best argument won the day, not the person, not the position," is the same principle seen from below.
It is a powerful tool for meritocracy in a culture where seniority and connection traditionally dominate, and Murthy deployed it even against the chief minister's recommended job candidates. But the 2017 conflict reveals its edge. A zero-base mind does not bank goodwill. Rao had been nurtured by Murthy for three decades; the board had commissioned three law firms; neither fact softened his response to what he saw as a bad transaction. Zero base is a superb discipline for evaluating decisions and a perilous one for sustaining alliances.
Tactic: Use zero-base evaluation for decisions and performance reviews, but deliberately maintain a separate, longer ledger for relationships, so that one disputed decision does not erase a decade of trust.
Principle 7
Make compensation ratios a governance issue
Most governance fights concern accounting, related-party deals, or board independence. Murthy's 2017 opening shot concerned a ratio: a 60 to 70 percent raise for a top executive against 6 to 8 percent for everyone else. He argued that senior management "has to fight for maintaining a reasonable ratio between the lowest salary and the highest salary in a corporation in a poor country like India," and that a board should "create a climate of opinion for such a fairness by their actions."
The framing is non-obvious and worth borrowing. Murthy treated pay dispersion not as an HR matter but as a test of legitimacy, both for the company with its own employees and for capitalism with Indian society. "No previous resolution in the history of the company has received such a low approval," he noted. One can disagree with his conclusion about Rao and still see that he correctly identified compensation as the place where employees decide whether leadership's rhetoric about sacrifice is sincere.
Tactic: Publish internally, every year, the ratio between your highest and median compensation, and require any change to it above a set threshold to be justified to the whole company.
Principle 8
Build the school before you need the graduates
In 2007 Murthy acknowledged that the quality of incoming engineers was "slowly deteriorating," and placed the blame squarely on the system rather than on young people. Infosys's answer had already been built: the Global Education Centre in Mysore, established in 2002, able to train 14,000 employees at a time, with roughly 125,000 graduates trained by 2015. Pai credited Murthy with "huge investments in internal education and training."
The insight is that in a services business, the binding constraint is not demand but the supply of trainable people, and that a company growing at 30 percent a year cannot wait for national education policy to catch up. Murthy lobbied two prime ministers about higher education; he also built his own university. His recruiting criteria were consistent with this: he said anyone with "algorithmic thinking" and strength in logic could become a good software engineer, regardless of degree, and noted that no more than 7,000 of Infosys's 70,000 employees held MBAs.
Tactic: Calculate your hiring need three years out, compare it with what the market can supply at your quality bar, and fund an internal training capacity sized to the gap before the gap appears.
Principle 9
Hand over power while you are still at your peak
Murthy left the CEO's job in March 2002, at fifty-five, with the company growing 37 percent a year, so that "the others should also have their day in the sun." Nilekani then grew revenue sixfold. Gopalakrishnan and Shibulal followed. An orderly, founder-to-founder rotation lasted until 2014.
Stepping down at the peak has two advantages Murthy seems to have understood. It gives successors a strong base rather than a salvage job, and it converts the founder's reputation from "operator" to "institution," which compounds. The handover of 2002 is the cleanest act of his career, and it is the reason his authority remained intact enough to be summoned back in 2013.
⏳
The Arc of Authority
Formal roles versus actual influence, 1981–2017.
1981
Incorporates Infosys in Pune; CEO for the next 21 years.
1990
Refuses a buyout; offers to buy out his co-founders instead.
1999
Nasdaq listing on 11 March; declines a government post.
2002
Hands CEO role to Nandan Nilekani; becomes chairman.
2006
Reaches retirement age 60; becomes chief mentor.
2011
Retires in August; K. V. Kamath becomes chairman.
2013
Returns as executive chairman on 1 June, son as executive assistant.
2014
Vishal Sikka named first external CEO; Murthy steps away.
2017
Governance campaign; Sikka resigns 18 August; Nilekani returns 24 August.
Tactic: Set the date of your own handover during a strong year, announce it at least twelve months ahead, and make sure your successor inherits momentum rather than a turnaround.
This is the principle Murthy's career teaches by counterexample. He left in 2011 having written that he and Infosys were "inseparable." He left again in 2014, against the advice of co-founders, and later said he regretted it, attributing the decision to idealism and emotion. In 2017 he was a minority shareholder with no formal role and an enormous informal one, and the collision between those two facts produced the board's statement that his "continuous assault" had driven out the chief executive.
Neither side had a pre-agreed answer to the question: when the founder objects, through what channel, with what information rights, and with what weight? Lacking one, the founder used the only channel he had, the press, and the board used the only defense it had, outside lawyers. A modern founder can avoid this by negotiating the post-exit role explicitly: information rights, a defined advisory forum, and a clear statement of what he will and will not do publicly.
⚖
Two Readings of 2017
The record supports both interpretations.
| Claim | Board's position | Murthy's position |
|---|---|---|
| Company performance | Moved into top quartile; attrition down from 23.4% to 16.9%. | Governance standards had fallen regardless of results. |
| Panaya acquisition | Three law firms found no wrongdoing. | A report by lawyers hired by the accused cannot clear the accused. |
| CFO severance | Disclosures were appropriate and timely. | "Unusual and unprecedented"; why not disclosed proactively? |
| Founder's conduct | Risk "Continuous assault"; "inappropriate demands." | "Below my dignity to respond to baseless insinuations." |
Tactic: Before you step down, put in writing, and get your board to sign, the information you will receive, the forum in which you may object, and the circumstances under which you would go public.
Principle 11
Never exempt yourself from your own rule
Murthy's public authority rested on the claim that he applied the same standard to everyone: the chief minister's candidate took the test; family stayed out; "of the professionals, for the professionals and by the professionals." In 2010 he said the probability of his son joining was "somewhat low." In 2013 he brought his son in as his executive assistant, and The Hindu asked whether the "compromise on self-professed principles" had hurt the company.
The cost was not that Rohan Murty was unqualified; he was a Harvard PhD who went on to found his own company. The cost was that a man whose influence derived from never making exceptions had made one, and it was available to every critic thereafter. For a leader whose power is moral rather than formal, the first exception costs far more than its practical stakes.
Tactic: List the three rules you have stated most publicly about how your company operates, and commit that any exception to them will be proposed by someone other than you and approved by someone with no stake in it.
Principle 12
Distinguish an ethic you chose from one you prescribe
Murthy worked, by his own account, more than seventy hours a week for about forty years, and he described it in November 2024 as his choice. His 2023 call for young Indians to do the same, and his 2025 endorsement of the 996 schedule, provoked a backlash he never fully defused. The difference between those positions is the difference between a co-owner sacrificing for an enterprise he controls and an employee being asked to sacrifice for one he doesn't.
The founding team had chosen deferred gratification together, with equity attached. Murthy's own phrase, "sacrifice today, fulfilment tomorrow," assumes the person sacrificing will receive the fulfilment. When that link breaks, as it does for most salaried employees of a mature company, the same words change meaning. His November 2024 clarification, that nobody can demand long hours, was the right instinct; it came after the damage.
Tactic: Before urging your team toward any sacrifice you made yourself, check whether they have the same ownership stake in the outcome that you had; if not, offer the stake or withdraw the request.
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Part IIIQuotes and Maxims
In their words
— N. R. Narayana Murthy, farewell letter to Infosys, May 2011I have been the Number One actor in every major decision taken in the company. I have rejoiced in every significant milestone of the company. I have commiserated in every false step that this company has taken.
— N. R. Narayana Murthy, interview with Pritish Nandy, Rediff, November 1999We realised rather early that it is better to have a small part of a large, growing pie than a large part of a small, shrinking one. Most people are obsessed with control. But that is no way to grow.
— N. R. Narayana Murthy, live chat with Economic Times readers, 10 September 2007Why worry about an issue over which we have no control, while we have hundreds of issues that we have to solve and over which we have control.
— N. R. Narayana Murthy, interview with CNBC-TV18, July 2017Generally, I find that I am a very emotional person. A lot of my decisions are based on idealism and probably, I should have listened to them.
— Infosys Board of Directors, statement, 18 August 2017Mr. Murthy's continuous assault is the primary reason that the CEO, Dr. Vishal Sikka, has resigned despite strong Board support.
Maxims
- Hire for values, cast for temperament. Shared willingness to defer gratification is what keeps a team together through the year that tempts it to sell.
- Dilute early, and keep the receipts. Founding restraint is the only currency that later buys you the right to demand restraint from others.
- Disclose before you are asked. For an underdog, bad news volunteered early is the cheapest credibility there is.
- Price the company, not the crisis. A buyout offer during a regulatory winter usually values the winter.
- Sort the weather from the work. Spend your hours only on what you control; let execution, not circumstance, explain your results.
- Judge decisions at zero base, keep friendships on a longer ledger. The discipline that makes meritocracy possible can also make alliances impossible.
- Watch the pay ratio. Employees decide whether leadership's talk of sacrifice is sincere by comparing raises.
- Build the school before the shortage. In a people business, the binding constraint is the supply of trainable talent.
- Leave at the peak, and define the afterlife. A clean handover compounds reputation; an undefined post-exit role invites a public war.
- Make no exception for yourself. For a leader whose power is moral, the first exception costs more than all the rules saved.
