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A Debugged Operating $ystem

Take a cup of leftism. Stir in dashes of caring and fun. Blend with performance-obsessed managing. Garnish with middle-class values. Result: a success cocktail.

A Debugged Operating $ystem
Namas Bhojani
A Debugged Operating $ystem
As you drive through Bangalore, you know instinctively you've reached the epicentre of India's battered technology dreams. Half-built glass-fronted buildings that tell stories of crushed hi-tech hopes; fully-constructed vacant ones recount how the IT slowdown drove people out of the sector in droves. These are signposts on the road to New Economy perdition.

And then you drive away from the city down Hosur Road, and reach Infosys City.

The 50-acre spread can seat 6,500 people in its 1.3 million sq ft of constructed space, has nearly 14 km of power cabling, 22 km of optical fibre and jelly-filled cabling and, among other things, three atms, the largest video wall in Asia and an ice-cream stall that serves 20 different flavours. It is possibly the largest campus for any software services company anywhere in the world.

But then, Infosys—started by seven Kannadiga engineers under the leadership of the iconic N.R. Narayana Murthy in 1981—is also, at current American Depository Receipt prices, the second most valuable IT services company on the planet, after Accenture. It has grown its turnover from less than Rs 15 crore in 1993 to

Rs 2,600 crore in the year ended March 2002. That's a staggering 173 times in nine years! And downturn? What downturn? In the last three years, its turnover has been growing at 72.3 per cent a year and profits at an even faster pace, at more than 81 per cent!

And on the way to all these jaw-dropping numbers, it has been declared India's most admired company and the country's best employer year after year after year, and won every corporate governance and business ethics award in India and Asia.

How on earth do they do it? And keep doing it, come what may? Is there some divine touch to the Infosys way of life?

Enter Infosys City and the first thing that strikes you is the unconditional trust that every employee—from the receptionist to the management trainee to the mid-level manager—has in top management. Everyone believes what the top management says. And everyone is suffused with a quiet pride in the organisation and its achievements. "We know that top managers don't lie to us," says G.S. Sembi, project manager, Infosys.

This trust is neither instinctive nor impulsive. It's been built through personal anecdotes and spread through word of mouth. Take Sembi's own experience. In September 2001, he was working as a project manager at a client's site in Brighton, UK. Two days after 9/11, while walking to office, he was heckled by four construction workers. "One of them told his American friend that I was from the same community as the terrorists who destroyed the Twin Towers. It was frightening," he recalls.

Immediately, Sembi spoke to his HR people in Bangalore and a strong message went to the client that Infosys was "sensitive about racial discrimination". The catcalling subsided but Sembi was still scared, since his wife was pregnant and Asians were being routinely targeted. So in November, Infosys transferred Sembi to Bangalore, no questions asked. And this was no routine transfer. Remember, this was the time when people in his field were being sacked or "benched" (asked to hang around because there was not enough work to go around) without notice or warning.

But Infosys has always been run by its founders with a fanatical belief in doing things right: we shall not bribe, we shall pay our taxes, we shall share our wealth with all our employees. And this value system has percolated down the hierarchy, since the founders have visibly lived by their principles. Indeed, in the midst of all the bloodbath in the IT sector, Infosys firmly announced that it would not sack anyone. In 2001, Infosys' "bench" grew to several thousand engineers but the company didn't budge."It proved to me that the company was sticking to its claim," explains Sembi.

Many others have had similar epiphanic moments. Sunu Joseph, who was working at a telecom client's site in the US in 2001, would see people being sacked every day. "People were being handed pink slips and asked to leave the same evening. Obviously, I thought it'll happen to me sooner or later," she recalls. It didn't. She was brought back to Bangalore and continued working for the same client. Neither did it happen to her colleagues, even though telecom was the worst-hit sector, where IT spends were drastically slashed and getting new business was virtually impossible.

The story is the same even when Infosys was forced to dismantle large divisions. Geetha Kannan, an Infoscion since 1993, was part of an "elite" group that worked for e-business and dotcom clients and was 369-strong by 2000, when the New Economy was in full cry. These engineers were among the highest-paid in Infosys. Then came the tech crash in April 2000, and the dotcom dream died. Infosys decided to shut down Kannan's hot-shot department. But everyone was absorbed elsewhere. Kannan herself was transferred to HR but, according to her, "this was the first indication that jobs are not going to be lost in this company". Literally thousands of such stories kept morale and loyalty as high as ever. Mahesh Kamath, a civil engineer who joined Infy in May 2000, recalls how his two roommates were on the bench for months. "But they never looked frightened or scared."

Nandan Nilekani, ceo and managing director (Murthy has withdrawn from day-to-day management and now calls himself chairman and chief mentor), is not surprised by this intrinsic faith. "It's been built over a track record that spans 21 years. We have always meant what we have said." He adds that top management was clear during the crisis that "we have invested in extremely talented people. They were our assets and we had to keep these folks". K. Dinesh, director and one of Infy's original founders, reveals that the firm followed Murthy's motto, that "it was a company by the people, for the people and of the people".

In some way, the value system ingrained in everything Infosys does seems a mixture of the inspirational Murthy's early leftist beliefs and a deep-rooted Indian business tradition where workers are treated as a part of a family. Remember that the official term for an Infosys employee is "Infoscion" and the word "scion", according to the Concise Oxford Dictionary, means "a descendant, a younger member of (esp. a noble) family". Every time Infosys hires someone, it enters into an implicit social contract with that employee: give the company your best and the company will take care of you for all time to come. The company zealously fulfils its side of the contract (after all, it introduced the concept of stock options for employees at a time when it was unheard of in India, and certainly when it was not necessary to maintain employee loyalty). That's why India's best and brightest continue to work for Infosys (the attrition rate is a low 7.6 per cent), although it's not the best paymaster within the industry and the share options are no longer as phenomenally lucrative as they were in, say, 1999.

An offshoot of this construct is an all-out attempt to make the working environment an enriching one. Infosys was one of the first Indian companies to have gymnasiums and basketball courts in its offices. Today, in addition, Infosys City has a swimming pool, sauna, jacuzzi, putting range, jogging track and two tennis courts!

Now add to this leftist + "staff as family" + "work is fun" blend a dash of strong middle-class values. The founders, each of whom is today worth thousands of crores, lead normal middle-class lives, queue up at the food courts with management trainees for breakfast and lunch, remain accessible to the lowliest employee and still try to bargain while shopping.All have donated vast sums to favourite causes. Nilekani (who claims he learnt all the management he needed to know while organising the inter-college cultural festival Mood Indigo in his iit Bombay days) says he finds it boring to handle his enormous wealth and his chartered accountant deals with such mundane details.

And now add the last element to round off the Infosys recipe: management techniques obsessed with performance evaluation. The idea, says Nilekani, was to convert the IT slowdown crisis into an opportunity. "During the boom times, our focus was on scalability, how to ramp up operations in view of an ever-growing business. Suddenly, we had to change our mental model. We had to deal with competition, streamline cost structures and look at efficiencies." It was a realisation that value in this business has to be created every single day, that raking in exponentially-growing profits was not Infosys' birthright.

This awareness forced Murthy, Nilekani and their core team to create a new world inside the campus. Working for a software firm was no longer just fun and frolic. Flexihours were out and people had to report at 9 sharp. No one could now take off for a game of basketball or a swim during office hours; all that had to be done after 6 pm. These days, you can hear a distant pin drop in the vast building interiors of Infosys City. Working is now deadly serious business. And everything is monitored, every employee constantly benchmarked against best of breed.

To the newcomer, the extent of monitoring may appear nearly Orwellian. While employees are proud of being Infoscions, every move they make is watched through pitiless, utterly impersonal systems and processes. Where uniformity, consistency, quality and efficiency are the buzzwords and people perform by clockwork. There's a time-frame to finish everything, from your task to your lunch. A time to go to the gym and a specified period to acquire new skills required for your next job.

Hear how it works from the people who manage the project management software system. Aparna Goenka, group manager (IS), Infosys, explains how each employee needs to log in his worksheet every evening. Using the software, one can easily tell the detailed status of any employee—whether he's on the bench or on a project, project status, amount of work completed, at what cost, whether it needs mid-course correction. And it automatically builds a database that allows managers to judge how fast a specific operation—any operation, however small—can be done and at what cost. In what is touted as a "knowledge business", Infosys has returned to the extreme levels of the early management theory of time-and-motion study.

There's nothing left to chance and if Infosys could have it that way, not even the hand of god would be able to interfere with its systems and processes. Just one example: everything an Infoscion does, or doesn't do, is decided by this big brother software. Before the beginning of any project, apart from the budget, the team is decided and a role assigned to each member. Then, says Goenka, the competencies required by each member is listed and gaps highlighted. And a full training schedule devised for the team. "Similarly, training needs are continuously evaluated for all employees, even those on the bench."

What training is to be offered to which workers can only be approved by the immediate supervisor or manager. The employee himself can only suggest what he (or she) wants to do but (s)he needs an OK from the top. By the beginning of each fiscal, annual training schedules are frozen, and are mandatory. The system has become so rigid that, jokes Goenka, "it has resulted in an informal system where employees constantly trade their schedules with others who need similar training so that a red cross is not marked against them".

However, these 1984-ish systems help the organisation and aid the bigger cause. Top managers know at the click of a mouse exactly what to bid for new projects. Project managers know the status of their work at any given instant and can make instant mid-course corrections if something isn't going as per schedule. The employees have their futures sketched out. And what you have is a nimble, flexible, efficient company that delivers 100 per cent each and every time (and manages a record of 90 per cent repeat clients). The meticulous planning has brutally excised any possibility of nasty surprises and created the comfort of total predictability. And no Infoscion whines about it, or gets worked up about it.

Yet, the question that stuck in my mind was: was Infosys creating software robots, whose job was to do the same work better and better, in a hi-tech environment? To test my theory, I decided to speak to someone who would really understand what I was talking about. About how Infosys was replicating a manufacturing shopfloor in its software development centres. About a global masterclass company that was creating software mechanics who were mindlessly doing the same operations again and again in a bid to perfect it even more.

M.R. Ravi Shankar has had a long stint in manufacturing firms like Larsen & Toubro and Bharat Earth Movers, before he switched to IT in 1994 and joined Infosys four years later. He refuted my contention and added that success in the software sector depended on constant improvement of the same operations. That's why, he says, at Infosys, "we measure whatever we do". It's now a metrics-based organisation, where everyone uses figures, analyses, numbers to prove any point.

We chatted for a while and again the subject came back to micro-specialisation. "Specialisation is good, nothing wrong with it. Especially since strong domain knowledge is critical," Shankar explained. In fact, even in his own group, he has sub-specialised manpower in auto, aerospace and process engineering. "After all, if I hire PhDs in aerospace, they would want to design aircraft, not become programmers and coders."

What Shankar was saying was that specialisation was a reality, a necessity. The brilliant ones who joined Infosys were already skilled in a micro area, the others would be forced to specialise by the organisation. And whether you did dazzling, innovative work or dull, monotonous coding depended entirely on one's personal skills. In this churn, many would have to give up their personalities as Infosys' needs were overriding. After all, good times or bad, the company has to keep travelling up the majestic trajectory it has set for itself. And if it managed to stay on that course, it would take care of every problem that you could ever face. You don't even have to ask.
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