The Hindu Business Line : `Having a conscience is in our DNA'

It is time for brand talk at Infosys. Earlier this year, Medinge Group, an international collective of brand experts who meet annually, chose Infosys Technologies Ltd as one of seven global companies to be in the first list of `Top Brands With Conscience.' Medinge's list of top brands was based on principles of ethics and humanity rather than financial worth. The companies were rated on parameters ranging from the evidence of ethical programmes and human implications of the brand, to the ability of the brand to take risks in line with its beliefs.

Announcing the list, Medinge Group said: "Even the most traditional companies tell us that brands are emotive. Yet the brand valuation lists continue to measure only in financial terms. As the most authoritative and global group on branding, we put our heads together on how to shape this list. Brands are not about how much money they can generate, but how much passion. These brands tap into our consciousness and our causes."

Nandan Nilekani, CEO, President & Managing Director of Infosys, the company which is often considered as the mascot of the Indian information technology services sector, talked to Catalyst on the quiet journey of Brand Infosys and on what it means to be a "brand with a conscience." In the course of an interview, he says, " I think in the last 23 years there were many situations where we made the right choice for upholding our value systems. Whenever there was a choice, we made the right one." Having a conscience implies the company will be fair to its employees, trustworthy for its customers and be ethical to its investors, Nilekani adds. "When a company like Infosys becomes important in the milieu of society it has an obligation far beyond itself. We are very clear it is not sufficient for us to run a profitable company," he says. Excerpts:

Medinge Group has recognised Infosys as a top brand with conscience. Is this what Brand Infosys has been striving for?

It was not like any brand-building exercise where we went out and said let us build a brand with conscience. It is a fairly accurate representation of what this company is all about. When you go back to the genesis of Infosys, it is a company set up by professionals. All of us who founded it were working professionals. We created an idea at a time when there was no model in India for this kind of entrepreneurship. The existing models were large public sector companies, multinationals and family-owned companies. There was no concept of a bunch of professionals not from the same affinity group — we were not from the State, city or family — getting together to create a company for professionals, which has fair ethical practices. This is from day one and I am talking about 23 years ago. That is a fairly strong thing to say. We believed that our value systems were such that we could not compromise on them.

We said the company would treat all its stakeholders with respect, obey the law and comply with all the rules. This philosophy has permeated Infosys ever since. Even if you look at the tagline in my business card, it says `Powered by Intellect, Driven By Values.' It is a very considered statement.

I think in the last 23 years there were many situations where we have made the right choice for upholding our value systems. For example, in 2001, we gave guidance saying we would grow by 30 per cent because at that point we felt that the whole bubble was slowing down and our growth could come down. At the end, what we said was right even though people wondered why we did that. Also, way back in 1995 we disassociated ourselves from a commercial relationship with GE and went out and talked about it. There have been many episodes like that. Whenever there was a choice, we have made the right one.

Reaffirming that value system in every transaction is a very important part of what we do. We do that in terms of our employees and honoured every employee offer we made, particularly when things were not going well for the industry. Some companies didn't do that. They made offers and then retracted. We may not have taken them right then but at the end of the day we honoured every employee offer we made. Within the company, even though there was excess capacity we did not lay off anybody. We said this is our intellectual capital and have made investments in it. That they had come to Infosys with a certain vision or dreams and we abided by that. So I think having a conscience is ingrained in our genesis, value systems and blood streams. It is in our DNA.

Can we say having a conscience is the core value of Brand Infosys, or is it one among the core aspects?

I think it is very important because I will tell you what its implications are. The conscience implies that this company feels it has value systems, fair practices, believes in legal behaviour, keeping its commitment to all stakeholders, believes in being fair and courteous. Therefore, what it means to employees is that the company will strive forever so that their needs are met and will be fair to them.

What it means to the customers is that it is a trustworthy brand. That is very important in business today. If one of my people makes a commitment to a client, it means this company will do what it takes and deliver the solution that is promised. That is a very strong characteristic, especially in IT business where there is history of projects done by companies where there are cost overruns, time overruns, where the final product delivered is not what the customer expected, where projects are cancelled after spending hundreds of millions of dollars. In that milieu, if you are a company that is trusted, keeps its commitments, delivers on time, then that is huge value. Our customers will believe that these guys won't lead us down the garden path. It is a connotation that is very valuable.

Infosys is one of the earliest brands in the knowledge sector to affix a value to it. You have evolved your own model after taking into account the debate that is happening in the realm of brand valuation. How significant are human resources in your brand value?

See, we do business using our brains, intellect, knowledge capital, sitting with customers, understanding the business challenges they face and use our knowledge to evolve solutions for them, which makes their businesses better. So, it is really all about people, the quality of people you recruit, the training you give them, the quality of the knowledge capital you generate and the ability to harness that capital in different ways to create new value for customers.

It is about creating a highly motivated workforce because this is not a factory where you can monitor the quantum of output at the end of the day. But in the intellectual business you cannot do that. So, you have to create a motivated set of people who can operate. Attracting the best and the brightest and creating a milieu where they operate at their highest potential is very important. Our campus and technology infrastructure is world-class, we pay a lot of attention to training and competency building, we try to have sophisticated appraisal systems, we try to reward performance through variable pay. These are all part of the same motive.

So, how do you help Team Infosys live through the core brand values? What role does the leadership play in translating the brand experience into reality?

I think it is leading by example. They see how we conduct our relationship with customers. They see how we create employee facilities and opportunities. They see how we conduct ourselves in the marketplace with investors and all that. They see how much of a contribution we are making to the society. These are all the mechanisms by which we reinforce in the minds of all people including our employees that this company is socially conscious, has ethical value systems and that it is not going to compromise on those values when it comes to practice. This company believes that all its stakeholders trust it a lot and they have an obligation not to let them down.

You are saying the company is visibly accountable for its actions. Have there been occasions when you have had to apologise to your stakeholders?

Oh, absolutely! There have been occasions when a customer would call up and say you haven't delivered on the promise and when I get in and find out that we haven't, I would stand up and tell him I was sorry. Recently, we had some employee changes and we were pushed back on that. I stood up in an employee meeting and said we should have done some of these things in a better way. Wherever we have stumbled, we have stood up and said that. You stand up, apologise and resolve not to do it again. That's the only way you can improve.

Repeat businesses account for nearly 90 per cent of Infosys revenues. When you talk to your loyal clientele or the marquee customers, how significant is the Infosys brand to them?

It is very important. Today, outsourcing has become mainstream. People have accepted it's the way to go ahead. They are realising it's not only about cost. It is about quality, reducing time to market, it is about a host of strategic leverage points that we have beyond cost. And today being an outsourcing partner is not like being any other vendor. The choice of outsourcing partner, the value that he brings to the table, is huge and a wrong choice can set you back immeasurably. We have many customers who come to us because they tried some outsourcing and suffered. Customers are looking for low risks, a trusted advisor, somebody who will be a strategic partner who will give unbiased advice, and who at the end of the day will deliver. That is where trust again becomes important, right? When you make a decision to partner a company, you must inspire that trust. That's where being a brand with a conscience helps us, because it inspires trust in our customers that these guys won't lead me astray.

The technology companies listed at the top of the Interbrand-Businessweek survery — IBM, Intel or Nokia — have a strong product base. There is an argument that Indian IT companies aspiring to become top brands need to be more than pure play service entities. The lack of product offerings could hamper the scaling up of brand value. Do you agree?

There is no connection. Don't you think McKinsey is a good brand? They are in services. It is about creating value for your customers, providing solutions that make his life better. What is Virgin Atlantic? It's service again.

There are very high-quality product brands and very high-quality service brands. It has nothing to do with what you offer. You can offer an intangible and still be a good brand. Take the case of Disney. So, there is nothing like one is better than the other. Obviously, brand enhancement will take place over a period of time, as you become large, as you expand your base over the world and invest more in marketing and branding. As you have more clients, the brand will get built more and more.

Remember, we are not a mass consumer brand. Our customers are huge corporations which use our services. It is about how they perceive our brand. They see it as trustworthy, predictable. A company that means what it says and says what it means. That is the strength of the brand with a conscience.

Through an internal valuation, Infosys has put a value against its brand. Would you be looking at a third-party valuation of the Infosys brand? Some leading Indian corporate names, like Tata, have done it.

It's not any decision we have taken at this point. We are comfortable with the brand valuation model that we show in our annual report. I think it is fairly transparent. Tomorrow, we may look at other options. But I don't want to commit either way whether we really need third-party ratification. We will cross that bridge when we come to it.

What is the future direction of Brand Infosys? How do you see it scaling up?

Infosys, the brand with a conscience, has dimensions. For all aspiring youngsters in India, it is an aspirational brand, the company they would be like to be part of. For customers, it is a trustworthy brand, which offers predictable results and therefore gives them comfort. Similarly, for our investors, it is a company with high ethical standards, transparent ones which disclose both the good as well as the bad news to the market immediately. When you have global investors, they don't have the time to come here and check, they need to do it by trust.

Then very importantly, I think Infosys is a brand that stands for high social consciousness. We are very clear it is not sufficient for us to run a profitable company. We believe that we are in a society in a state of transition, becoming more open to market forces, which is the right thing. At the same time, when a company like Infosys becomes important in the milieu of society it has an obligation far beyond itself. That reinforces the fact that we are a brand with a conscience. We have to demonstrate that. There is a host of things we do, both officially and personally.

Certainly, we think the company should be financially strong, profitable, pay its employees well, give shareholders dividends. We are very much committed to strong fiscal discipline and a strong culture. But at the same time, we believe that that there is a larger social goal.

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