Leaders should ‘walk the talk’: Narayana Murthy

While delivering the keynote address at the two-day leadership summit organised by Confederation of Indian Industry (CII), Murthy said, ‘‘Most important lesson for the leaders is not to create two classes of citizens within the same organisation and not rewarding performers.’’

Murthy seems to be highly impressed by Amitabh Bachchan and Sachin Tendulkar when he said that their performance speaks for them and their fellow players or actors don’t feel demotivated. However, in case of many other sectors, an objective transparent system of measurement of performance is must which rewards good performance and doesn’t demotivate others.

By making Infosys as one of the world’s best run companies, Murthy also has the conviction to say that leaders have to demonstrate their commitment by sacrificing more and adopting similar measures what they expect from their employees in times of crisis including cost cutting.

At the same time, if he is against creating two classes of citizens in an organisation, he doesn’t believe in promoting incompetent people either. He is a firm believer that mediocrity has no place in a successful organisation and this will also help in retaining the best people.’’

‘‘The worst thing to do is to make an incompetent person believe that he or she is competent. The message should go to the person about the reality, though in private so that he or she doesn’t lose face in public,’’ says Murthy. ‘‘Communication with the person is very important,’’ he adds.

Also, that meritocracy creates a hierarchy based on performance and value addition, and not based on seniority, he said and added that it is imperative to foster excellence in the organisation.

Quoting Mahatma Gandhi, Murthy also said that good leaders are required to be open minded and should be receptive to newer ideas. ‘‘It is imperative to make sure that all ideas are welcome by not stifling the flow,’’ he said.

Regarding compensation of CEOs, Murthy said that, ‘‘Fairness, transparency and accountability should decide this with a variable component to alter it according to the fortunes of the company. This is an issue that has to be decided by the board and shareholders.’’

‘‘As long as you make part of the salary variable so that when the company does well, the CEO also gets a good salary and when the company does not do well, the CEO does not get good salary, there is no problem,’’ Murthy said.

‘‘We have seen particularly in the West when the companies did not do well, when they had to fire thousands of employees at lower levels, the CEOs continued to get very good salary which hurts people,’’ he said.

Murthy said the current time was the opportune time to raise India to the ranks of developed nations and for this strong leadership was the need of the hour. He said benchamrking on a global scale was the only way to competing globally and achieving excellence in all dimensions.

‘‘To do so, Indian companies need to have an export orientation. Recent experience in pharma, manufacturing and IT industries stand testimony to it,’’ he said, adding Infosys had benchmarked with Motorola for quality and Microsoft for their focus on EPS (earnings per share).