Murthy admits, "not every leader has the energy to run this huge marathon."

On Infosys’ transition plan
To be very honest, I thought about it when I founded Infosys. When Infosys was founded in 1981, five of the seven were 10 years younger to me. I deliberately chose them, Mr [N.S.] Raghavan was three years elder to me but Nandan [Nilekani], Kris [S. Gopalakrishnan], Shibu [S.D. Shibulal], Ashok Arora were 10-11 years younger than me. The reason I chose them was that I have tremendous faith in the youngsters. I’ve always believed that youth is about future, confidence and enthusiasm, energy, etc, etc. Second, I knew that the only way this institute can continue to prosper is if there are younger people who can get the opportunity when they are still younger, energetic, healthy and enthusiastic. I had in my mind, right from the very beginning that one or two of those should get the opportunity to lead the company before I disappear from the scene. There was some method in the madness and it worked out according to the plan.

After I decided to give up my ambition in 1998 August, before we went public on Nasdaq, I started thinking about an instrument for developing the next generation for leaders. That’s when we started thinking of starting the ILI [Infosys Leadership Institute] and creating the platform where we could train our next, next, next generation of leaders. I discussed with my colleagues and we sent our younger leaders to study eight models of leadership including GE, Motorola and we finally started ILI in 2001. I got Dr. G.K. Jayaram to lead ILI.

That’s on the side of formal training but I also realised that parallel we have to create a mechanism for giving people an opportunity to take leadership positions. That’s how Raghavan and Kris at that time came out with the concept of strategic business units which then metamorphosed into IBUs [Independent Business Units] and they talked about the need for each IBU to be run as an autonomous wholesome unit which consisted of software, sales, HR people, etc. Before 2002, we had a model where sales reported to Phaneesh [Murthy] and people realised that model would not provide an opportunity to demonstrate the leadership potential. In 2002-2003 we moved over to the new IBU model.

Tier 1 – 45 leaders, Tier 2 – 125 and Tier 3 – 405… the idea is that three people at a certain level for one person at the higher level.

The Institute was based on three fundamental tenets: Our company is our campus, our business is our curriculum — that means leadership is always in a context, the Infosys business context is the curriculum — and I said our leaders must be our teachers, we must depend very little on outsiders on developing our leaders. The reason was that when the attendees come and attend our course, when you make statements in the training programme if it has to have credibility and authority those statements must be supported by facts and data concerning the context of Infosys.

At infosys there were five younger people at [the] level next to me, all of whom were the same age. We had to make an implicit decision — it is not written anywhere — that after five years you step back [as CEO] and give the other person a chance. You support him, you work as hard as before, you come to office, but let the searchlight fall on the other person. The good thing about Infosys is that because the founders made lots of money, in one dimension they have arrived, they don’t have to prove anything to anyone. So it’s easy for the founders after five years to say, ‘OK, I am done’ and give it up. We have yet to see whether that model will work later. I was CEO for 21 years and I am the wrong person to advice. But at this point itself, given that in the board itself there are five more people — there’s Shibu [S.D. Shibulal], Mohan [Mohandas Pai], [K.] Dinesh and Srinath [Batni] — all of whom are competent. We don’t [know] which one of them will become CEO. That is a decision for the external board to take. But again it’s very, very likely that it will be again for five years. Mohan is 50 and Shibu and Kris are 54, so it is very likely that it will again be five years.

On mentoring
Mentoring is a voluntary relationship, and the mentee has to ask for time from me, I will never ask them to do that. The mentor is not the boss, I am there to provide the distilled wisdom on any issue they want. They ask definitely once a month and most of the issues we discuss are [about] their career growth, the tough decisions they have to take whether in giving up a big opportunity because the prospect is being unreasonable about prices or dealing with a recalcitrant employee or balancing home and office. It is mostly the dilemmas that they talk about. I just tell them whatever my experience has been. I will not ask for their time, they have to ask me for it.

On leadership
You need leaders who are courageous because you need leaders to dream big, you need courage of conviction, you need courage to take bold steps when there are so many naysayers. Second, you must have high learnability because you have to take decisions quickly (snaps his fingers). Third, you must be able to communicate reasonably well, because leadership is all about creating a wonderful image of [the] future of the company and unless you can communicate reasonably well, you cannot rally, get behind people. Third, you must have a good value system and you must lead by example, because without [a] value system people won’t buy your dream. Leaders must be confident, which is the ability to admit I could be wrong, it is the ability to recruit someone smarter than me, it is the ability to participate in team work. Leaders must be human, in other words they must show emotions and not hide mistakes, they must not seem synthetic or flawless.

On the business challenges for the new leaders
As it is, about 50 percent of our revenues are coming from services which we did not have 10 years ago. That’s one change that has already taken place and continues to take place. Second, we will perforce be bringing certain changes in the model. So far, by and large the global delivery model at Infosys has leveraged the Indian talent both in India and outside. Because of all the regulatory changes coming out in the US and other countries we will be depending more and more on local talent. That is the other change we will see. We have our banking products and who knows we may have some more products like that as we move forward. Right now we don’t have anything on the table, though we have quite a few in the laboratory. Today about 30 percent of our workforce is out of India, that has to become local in the stable scenario. Today there are only 1,500 locals, i.e., the citizens and local residents of those countries. That has to change to 30,000 in the next three-five years. That is the only stable model in my opinion. You can’t run a business worrying about regulatory changes. You should simply accept that as a given and move forward.