When you were building Infosys, were there certain points where you thought the company had undergone a phase shift? If yes, was it defined by revenues, profitability or number of employees?
For me, a phase shift was never about a specific revenue or profit milestone. It was defined by the orbit of credibility, respect and progress towards the institutional vision.
A phase shift occurs when your respect from the society goes to such a higher orbit; when you add higher economic value leverage to your customers by delivering more impactful and strategic solutions that impact the way the higher echelons of a corporation take decisions; when you compete with bigger and more respected competitors; when you attract higher quality strategic talent to work for the company; when you become the cynosure of longer term investors; when you improve your company’s per-capita productivity and per-capita free cashflow; when your standard of excellence moves into a higher orbit; and when you make a positive impact on the society.
Such phase shifts bring vast improvement in the openness of mind, higher level of self-confidence, more aspirational vision, and when a culture of fairness, justice and imagination become the dominant culture of the company. It also incentivises every employee to become a more valuable member of the society. Let me mention just three phase shifts that we experienced at Infosys.
The first shift was in 1991 with economic liberalisation. This shift allowed us to compete globally with confidence. It raised our aspirations and brought new benchmarks, new energy and new level of excellence.
The second shift was our IPO [initial public offering] in 1993. It was defined by a shift from looking after the interest of a small private group of friends to being trustees of public money. This was when we successfully executed the audacious plan to make the Indian software services industry, which was till then an unknown industry, to an investor-worthy industry. We enhanced fairness, transparency, accountability and corporate governance standards with our stakeholders. We brought respect and tolerance for capitalism in India by sharing wealth with our employees on a scale never done before. We enhanced our quality and productivity standards to global levels. We built India’s first software campus. We built the world’s largest corporate education and research campus. I can go on and on.
The third was the 1999 NASDAQ listing, which was defined by a shift to global level of fairness, transparency accountability and corporate governance standards. We brought respect and credibility to India by demonstrating that an India-headquartered company is as good as the best US company in good corporate governance. We gave opportunity to global investors to benefit from the growth of an Indian multinational. We started becoming multicultural. Our corporate social responsibility was extended to the US and other markets. We became the leaders on NASDAQ to adapt the innovations in financial reporting. I can go on and on.
Were there instances when you as a founder had to change your style of working and managing the company as Infosys grew in scale?
Certainly. In the early years, I was a ‘player-leader’. I was deeply involved in technical and operational details. My specialisation was system software. I built an IBM 1401 simulator for the DG MV/8000 machine that we imported for our export work. I was the first person in the world to design a driver for the 7-track magnetic tape units on DG MV/ 8000 that we had imported for our data-centre work.
I had to do these because I believed in leadership by example. This was also necessary to ensure that a culture of excellence and speed pervaded the entire company.
As we scaled, I had to learn to trust to delegate after verification, as President [Ronald] Reagan often talked about. I had to transition into the role of a 'chief mentor' and a 'chief values officer', focusing on mentoring the next generation of leaders and ensuring that the culture of 'Powered by Intellect, Driven by Values' remained intact even as we grew to several hundreds of thousands of employees.
I focused much more on good governance rather than on management as we became bigger and bigger because good governance is the foundation on which the longevity of a corporation rests.
3 February 2026
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There are not too many ‘machine-learning’ algorithms that we have developed independently. We need to move from the 'implementation era' to the 'invention era'
Many start-ups are going public where founders have little shareholding. Do you think such founders will be able to remain committed to the start-ups over decades?
Commitment should be a function of the ‘inner voice’, and should not depend on the percentage of equity. For me, as I have said often, Infosys has always been and will remain my middle child—between Akshata and Rohan—rather than an instrument to make money. If the founders view their start-up as anything other than parental, they will be unfair to their conscience. But if they view it as an institution they are building to strengthen the country, then they will have passion, enthusiasm and energy to be the parent of their enterprise.
I have always believed that it is better to own a small part of a world-class, desirable pie than a large part of a mediocre and rotting pie. It is important to remember that nobler values like commitment come from the passion to solve a problem; from the hard work to create more and more jobs; from the zeal to increase the exports of the country; and from the enthusiasm to enhance the respect for our country in the comity of nations rather from the market-capitalisation table.
In recent years, there has been a critique of founders enriching themselves ahead of other stakeholders by taking large Esops, selling shares via secondary rounds, giving contracts to their family through related-party transactions. What do you think?
It is good to remember [Roman philosopher] Seneca’s words that wealth is the slave of a wise man and the master of a fool. Enriching oneself before other corporate stakeholders is the practice of ‘extraction capitalism’ and not ‘compassionate capitalism’. Leadership is about sacrifice and deferred gratification.
A true leader who follows the ‘last-to-eat’ principle practises the following rules: no premature secondaries; always have skin in the game; keep arm’s length distance from related-party shenanigans; fully disclose to shareholders any potential conflict of interest; reject winner-takes-all model of equity and create a broad-based Esop; and be the leader who cuts compensation for self first before asking others to do so when bad times come.
Such a leader of compassionate capitalism will strictly adhere to the following pledges: I will be the last to benefit from the company's success. I will prioritise the junior-most employee’s security over my own luxury. I will never use company resources for personal or family enrichment.
I will lead by example, realising that my behaviour is the culture of the company.
Such a leader will also bring in independent directors based not on their resume, but their spine. Leaders must also remember that ‘a culture of silence is a culture of complicity’. It is very important for the independent directors of such start-ups to remember that governance is not about ‘policing’ the founders but it is about protecting the founders from their own human weaknesses. They should also realise their job is not to be members of the CEO’s fan club, but to be the company’s conscience.
There is a sentiment that VC investors are often lax in asking for tighter corporate governance in start-ups, whereas another school of thought is that irrespective of rules and laws, an unethical founder will anyways find a work around. What do you think is the way to ensure better corporate governance in start-ups?
Governance is an act of faith. It is the result of a person’s culture passed on by parents, grandparents, early teachers and early friends. While investors must be vigilant, the ultimate solution is to foster a 'culture of good governance'. In a 'culture of good governance and compliance', the junior-most accountant feels empowered to say 'no' to the CEO if a transaction looks suspicious.
VCs often focus on growth at any cost, which creates an environment where governance is seen as a 'slow-down' mechanism. This is false. Good governance is the foundation on which the longevity of a company rests. At Catamaran, our venture capital and investment firm, we have spent as much time auditing a founder's ethical history as we do audit their start-up economics.
We need independent boards with the spine to say 'no' to the founder. There must be a clear distinction between 'personal funds' and 'corporate funds'. Governance is not about following the letter of the law to avoid punishment. It is about following the spirit of the law because it is the right thing to do. It is important for leaders to remember the words of [ancient Greek philosopher] Heraclitus that character is destiny. It is also worthwhile to remember the words of [American lawyer and judge] Potter Stewart that ethics is knowing the difference between what you have a right to do and what is right to do.
While laws provide the 'fence', it is the internal compass of the founders that determines whether they try to jump over it. Governance isn't a set of handcuffs; it is a commitment to a higher standard of trusteeship. If you want to know if your governance is real, ask this question, 'Would I make this decision if the details were published on the front page of tomorrow's newspaper?' If the answer is no, you are following the letter of the law but failing the spirit of your mission.
A lot is said today about the company culture. At what stage should founders start thinking about culture and how should they go about defining it?
Leaders should not wait to build culture. It is not a project for the future; it is the reality of our present. Culture is the most important attribute of a corporation. Let us remember that [Austrian American author, popularly known as the father of modern management] Peter Drucker once said that culture eats strategy for lunch.
Culture is not a document written by HR. It is the observed behaviour of everybody in the company from the janitor to the CEO. If the corporate leaders are punctual, honest with customers and frugal with company resources, then these values get embedded in the reflex action of every employee and becomes the culture of the company. As most management and leadership gurus have said, culture grows by the 'tone at the top', and by the behaviour of the leaders.
At Infosys, our culture was enshrined in our soul by a simple rule: 'the softest pillow is a clear conscience'. We understood that our culture or collective character is our only true competitive advantage. Culture is the behaviour of the leaders. We define ourselves not by what we say, but by what we do when the stakes are high and no one is watching.
In every decision, from a line of code to a multi-million-dollar contract, we ask ourselves one important question: 'Will this decision let me sleep well tonight?' If a shortcut compromises our reputation, we don't take it. If profit comes at the cost of our soul, we have rejected it.
We optimised our decisions for the long-term legacy over the short-term wins. Our culture is defined by the worst behaviour we are willing to tolerate. I did not expect of my junior colleagues what I did not demand of myself. Throughout my stay at Infosys, I was the first to arrive, the last to leave, the last to cut corners and the most committed to the 'clear conscience' standard.
Our philosophy has always been that we are building more than a company. We are building a standard of excellence that will outlast us. Therefore, you cannot 'install' culture later; it must be part of the company's DNA from the very first hire.
In which areas do you think Indian start-ups and enterprises are doing well on artificial intelligence (AI) and where are we lagging?
I see a clear dichotomy in the Indian AI landscape. There are areas where we are doing well. One example where we are leading is in the application tier. India has currently done well in AI application and implementation. Our enterprises and start-ups are world-class at taking existing AI tools and weaving them into complex workflows to drive massive productivity gains. We are proving its unit economics at scale. This is where our heritage in software services gives us a massive head start in solving real-world business frictions.
There are areas where we are lagging. An example is the foundational tier. We are currently 'renters' of intelligence rather than 'owners’. We are heavily reliant on Western foundational models. This creates a significant gap in our ability to fully exploit the capabilities of AI.
To truly compete, we must pivot from building 'AI wrappers', which are essentially layers of code over someone else’s IP [intellectual property] to investing in deep tech. This means developing indigenous large language models that are purpose-built for India’s unique linguistic diversity, cultural nuances and specific social datasets.
This means developing ‘self-learning’ algorithms for our applications. There are not too many ‘machine-learning’ algorithms that we have developed independently. We have a long way to go. We need to move from the 'implementation era' to the 'invention era’.
I would like to be remembered as someone who proved that it was possible to create a world-class, globally competitive, multi-billion-dollar enterprise in India without compromising on values
Do you think AI could enable a new generation of IT services start-ups to come up who might challenge the legacy IT majors?
Work productivity is effectively decoupling headcount from output. AI is adding value in the productivity area. We have, in some way, conquered the problem of scale by using productivity technology of which AI is one.
I have heard from youngsters that they have reached a factor 10 in work productivity in many business applications. What this means is that a small team of intelligent, innovative, hardworking, disciplined and nimble start-ups can challenge legacy incumbents in speed, productivity, innovation and quality in developing critical business applications. This is one way of lowering the barrier to entry for start-ups.
However, the 'legacy majors' still have two massive assets—deep domain knowledge and institutional trust. For the newcomers to win, they must move beyond being 'cheaper and faster' versions of the old model. They need to exploit the incumbent’s dilemma.
Large legacy firms are often too structurally tied to 'billing by the hour' to embrace technologies that shrink those hours. The start-ups that succeed will be those that solve high-stakes, unstructured business-critical problems through outcome-based models rather than traditional labour-arbitrage models. They should not limit their smartness just to do the work faster and cheaper. They have to change the fundamental nature of the contract.
Finally, as we look towards 'India at 100', my message to the youth is this: do not settle for being the world’s back office. Strive to be the world's moral, business and intellectual leader. Technology like AI will come and go, but the values like high aspirations, hard work, discipline, honesty and integrity are timeless.
We have the intellect. We must match it with an unwavering commitment to advance compassionate capitalism by creating good jobs and sharing the outcomes of our companies to make the lives of the poorest of the poor better.
Only when we use our entrepreneurial success to create a 'better India' can we truly say we have built a 'better world'. Remember that 'growth is the result of what you do, but respect is the result of how you do it'.
What is the biggest challenge facing the Indian IT sector in the next decade?
The challenges are many.
The first is reskilling of our engineers at scale. The world is moving towards a future shaped by AI, cloud, block chain, crypto currency, embedded systems and green energy.
Indians are good at dutifully doing what customers ask them to do. To add bigger value to our customers, we have to develop critical and independent thinking, analysis, Socratic questioning [Greek philosopher Socrates' method to stimulate critical thinking and illuminate ideas through dialogue] and innovating.
Our software engineers have to move towards identifying critical business problems and issues of our customers proactively and independently and find solutions to those problems.
Our education system and our corporate employee enablement programmes must shift from rote learning to teaching learnability. I define learnability as the ability to extract generic inferences out of specific instances and use those generic inferences in solving new unstructured problems. Learnability is very important because we operate in a world where the only constant is change.
Our corporations have to learn to compete on value rather than on price. Most Indian companies compete on price today. This tendency has resulted in a commoditised market that has weakened our companies. They may even lead to the destruction of many of our companies.
Economists say that a customer pays a certain price for a product or a service but he or she seeks a certain value. The ratio of value-to-price is what I call 'value leverage' or value delivered per unit price the customer pays. Our focus must be to increase this leverage.
We must focus on developing systems and tools to deliver most of the project effort in our country rather than resorting to on-site staff supplementation. Such focus on delivering value from India will eliminate the need for visas, our ability to grow our revenues faster and increase our profitability. This policy will also lead to better stability in the growth of our companies.
We must improve the quality of written and spoken English of our software engineers. The quality is becoming worse and worse day by day.
We have a lot of work to do to improve the domain knowledge of our engineers. Without a deep knowledge of the domain of our customers, we will not be able think critically about the problems of our customers, recognise their problems independently and proactively, and find solutions. This will also help to move up the value chain.
We must also significantly improve our quality and productivity standards. We must strive to be the best in the world in everything we do.
It has been 3 years since ChatGPT burst on to the scene. Do you think generative AI has lived up to the hype in terms of changing daily life of people and companies?
We have to distinguish between incremental productivity and fundamental innovation. Generative AI has proven to be a good 'co-pilot'. I have personally used it to improve my productivity in areas like speech writing.
The draft for this conversation was produced by Gemini 3.0 and improved by me. How good your speech is will depend up on your prompts that should communicate unambiguously to your generative AI co-pilot: what the theme of the lecture is; what your unshakeable beliefs are about the theme; that you do not want to use anybody else’s ideas without clearly attributing them; to buttress your opinions and beliefs with new data and facts that you may not have; any attribute of your speech that the co-pilot can communicate with better clarity, better terms, better language and better data; and finally with good, attractive and relevant quotations and the language that will polish up your speech.
While generative AI has helped in certain areas, I must admit that it has not yet triggered a structural re-architecture of the enterprise. We are currently seeing a gap between the utility of the tool and the transformation of the business model.
Many experts feel that much of what is being branded today as 'AI' in the current market is simply legacy automation or 'silly, old programs' with a new interface. We are still in the 'labelling phase.'
The true, deep-tech utility—systems capable of autonomous, multi-step human logic—is still in its infancy. For now, GenAI is helping us refine the present, but we haven’t yet reached the point where it invents the future of how a company functions.
In the age of AI, how do you see the role of Indian software engineers changing?
An engineer’s primary professional responsibility is to solve problems for the benefit of the context around him or her.
AI is a powerful tool like electricity, computers, automobile and the internet. It will help us to automate the mundane tasks, allowing our engineers to focus on designing new types of solutions to the problems of our society and our corporations.
Our job is to bring innovations in requirement definition, architectural design, quality, user interface, handling large scale databases and, very importantly, in domain areas.
Indian software engineers must move from being 'coders and technicians' to 'solution providers'. We must use AI to solve new kinds of societal and corporate problems, to increase our productivity, and to move up the value chain.
I have always said that the mind is the ultimate instrument; AI is merely a nice song we play with that instrument.
You have often advocated compassionate capitalism. How can start-ups balance hyper-growth with social responsibility?
Compassionate capitalism is the best combination of two 'isms'. It is an amalgamation of capitalism in mind and liberalism at heart. Revenue and profit growth of a company are essential, but they must be sustainable and must result in fairness in the upliftment of every employee of the company. We have to keep the following principles in mind when we look at growth.
Compassionate capitalism is about creating wealth legally and ethically, and then sharing that wealth in some appropriate proportion with the employees who made it possible. This sharing will have to be based on the value contribution of the employee to the corporation.
It is important that we grow the revenues and profits of our companies while being ethical. It is easy to be ethical if you use simple rules. Simple rules are easy to understand, easy to follow, easy to implement and easy to explain.
I often say that if you cannot explain your business practises to your grandmother without feeling ashamed, then you are doing something wrong.
Start-ups must realise that earning respect from the most important stakeholder—the society—is their first task.
Do you think the attitude of the Indian society towards entrepreneurship is changing? Has our affinity towards taking risky bets increased significantly?
Yes, the attitude has changed dramatically since I started Infosys in 1981. Back then, ‘security of job’ was the primary goal, and failure was a social stigma. Today, the youth are smarter, more knowledgeable, much more confident and aspirational. They are willing to take bigger risks than we did. However, I distinguish between ‘taking reckless risks’ and taking ‘educated and calculated risks to achieve a strategic goal’.
While the affinity for risk-taking has increased, we must ensure that it is backed by disciplined and innovative planning and execution rather than just a desire for quick exits. We must also become a society that honours the journey of the entrepreneurs, rather than their destination.
What is your advice to a young entrepreneur starting up in a Tier-II or III city in India?
Geography is not a constraint for leveraging one’s intellect and practising one’s values for the betterment of the society around us.
My advice is: look at the problems that you see around you every day. Define how your idea will solve any one of such problems in a simple sentence. Not a compound sentence nor a complex sentence. Estimate the size of the population which has the disposable income to afford the price of your solution. This will help you estimate the potential market size. It will also help you to estimate the growth of the revenue for your product or service in the market.
Prepare a 5-year revenue, cost, gross margin, operating margin and net margin model.
My belief is that there are plenty of problems around us in healthcare, education, transportation, clean energy, city or village planning, pollution or agriculture.
Collect a team that has complementary skills, expertise and experience. Ensure that this team has a common enduring value system of high aspirations, leadership by example, sacrifice, austerity, honesty, sharing, integrity, fairness, hard work, discipline and compassion for the less fortunate.
Profits are necessary because they are like the air we breathe. You need them to survive. Remember that God has given you the ability to think and articulate. But you are not born on this earth just to breathe.
Remember that entrepreneurship is not a 100-metre dash, but a marathon, whose rewards will come slowly and in the medium and long term. Also remember that life will have dark days and glory days. Accept it like we do on Ugadi day (Karnataka new year) when our parents wanted us to eat both jaggery and neem together in one gulp. They wanted us to realise that the ensuing year would have both positive and negative events and that we must accept them and move towards progress despite the negatives. It is the day when we pray to God that He gives us the strength to overcome adversities with equanimity, and, at the same time, not get our head swollen when good things happen to us.
Keep respect from the society as your first and most important objective. Build your institution so that respect is a non-negotiable objective.
How do you view the debate around work-life balance for the youth in a developing nation like India?
I believe that the most important asset of a nation is the brain and hard work of its citizens. My view remains that for a nation to move from the 'developing' state to the 'developed' state, its citizens—especially the youth—must have high aspirations; must practise desirable values, must demonstrate national pride in achieving excellence in everything they do; must conduct themselves as honest and decent citizens; must be prepared to work smart and hard; and must be disciplined. I do not know of any nation that avoided this painful process and yet succeeded.
At their young age, I would request our entrepreneurs not to count their hours of work. Just count what you have achieved and what remains to be achieved. When we started Infosys, we did not count the hours, we counted the milestones.
Our first priority must be the health and betterment of our nation. Our rupee is losing its value vis-à-vis US dollar and is becoming weaker by about 4% every year. The only way we can correct it is by increasing our exports to create a trade surplus in our favour, like China has done.
If we want to succeed in our exports, we have to improve our work productivity, sharpen focus on excellence in what we produce and provide the best value for money to our global customers. We must become globally credible and competitive in every dimension of our operation.
India’s work productivity must be enhanced to compete with the best in the world. We owe it to the future generations to build a strong foundation today through our aspirations, smartness, hard work and discipline. Japan, Germany and China have demonstrated the value of what I have said.
Reflecting on your journey, what is the one legacy you wish to leave behind?
I would like to be known as a fair person. Fairness is following the golden rule—do unto others what you want them to do unto you. I would also like to be remembered as someone who proved that context was not a constraint and that it was possible to create a world-class, globally competitive, multi-billion-dollar enterprise in India without compromising on values.
I want my legacy to be the belief that ‘good governance resulting in respect from the stakeholders is the best business policy’. I want to be remembered for my belief and for my actionising that belief that a group of ordinary people can achieve extraordinary results when they are guided by a common set of enduring values, and when they put the interest of the company ahead of their personal interest in every decision they took in the company.
I would also like to be remembered that I was one of the very few business leaders who have practiced compassionate capitalism.
