Business Sutra |3.1| Ethical and Moral Dilemmas

Business Sutra |3| Business Ethics and Morals

In the first episode of the TV serial on CNBC 18, spread over three segments, Devdutt Pattanaik presented to us the most visible form of the business – the corporation : its meaning, its purpose and its action perspective.

In the second episode Devdutt Pattanaik discusses Leadership: Role of the leader, Context of the leader and Leadership in different business cycles.

The third episode relates to the ethical and moral dilemmas of the leader, and hence in turns that of the organization. The ethics and morality are the human concepts. Animals and plants belong to Prakriti or nature, where no one has choices. Everyone is fettered to their nature. Purusha or humans have the unique ability to make choices and hence reject what is ‘in their nature’ – the idea of dharma comes from this space, the core ethical and moral values of the human being. The concept is beautifully illustrated in the Ramayana and the Mahabharata. Dharma is a principle, not a rule, which is why in Ramayana rules are upheld and in Mahabharata rules are broken. Beneath the actions of Ram and Krishna is dharma – which may result in rule making or rule breaking, depending on the context.

Business Sutra |3.1| Ethical and Moral Dilemmas

Let us begin with first  things first and take a glance at what do values, ethics and morality mean- in the western management literature.

Bahaudin Mujtaba presents Understanding ethics and morality in business . He states that values are professed statements of one’s beliefs, ethics is delivering on one’s professed values and morals are actions of good conduct as judged by the society that enhance the welfare of human beings. ..With an understanding of values, ethics and morals while using ethical principles, a business owner or leader can form a framework for effective decision-making with formalized strategies. The willingness to add ethical principles to the decision-making structure indicates a desire to promote fairness, as well as prevent potential ethical problems from occurring.

Surbhi S has clearly presented the Difference Between Morals and Ethics . The word Morals is derived from a Greek word “Mos” which means custom. On the other hand, if we talk about Ethics, it is also derived from a Greek word “Ethikos” which means character. Put simply, morals are the customs established by group of individuals whereas ethics defines the character of an individual.

Basis for comparison Morals Ethics
Meaning Morals are the beliefs of the individual or group as to what is right or wrong. Ethics are the guiding principles which help the individual or group to decide what is good or bad.
What is it? General principles set by group Response to a specific situation
Root word Mos which means custom Ethikos which means character
Governed By Social and cultural norms Individual or Legal and Professional norms
Deals with Principles of right and wrong Right and wrong conduct
Applicability in Business No Yes
Consistency Morals may differ from society to society and culture to culture. Ethics are generally uniform.
Expression Morals are expressed in the form of general rules and statements. Ethics are abstract.
Freedom to think and choose No Yes

Business Ethics is a brief, structured, treatise on the subject.

Conventional Approach to Business Ethics  is a presentation prepared on the 7th Chapter – Business Ethics Fundamentals – from the book Business and Society. We get a quick-glance view of serval fundamentals of the subject.

12 Ethical Principles for Business Executives : Ethical values, when translated into active language, establishing standards or rules that describe the kind of behavior an ethical person should and should not engage in, are ethical principles. The following list of principles incorporates the characteristics and values that most people associate with ethical behavior. 

  • HONESTY – honest and truthful in all their dealings.
  • INTEGRITY – personal integrity and the courage of their convictions by doing what they think is right even when there is great pressure to do otherwise.
  • PROMISE-KEEPING & TRUSTWORTHINESS – worthy of trust.
  • LOYALTY – worthy of trust, demonstrate fidelity and loyalty to persons and institutions by friendship in adversity, support and devotion to duty.
  • FAIRNESS – fair and just in all dealings.
  • CONCERN FOR OTHERS – caring, compassionate, benevolent and kind.
  • RESPECT FOR OTHERS – respect for the human dignity, autonomy, privacy, rights, and interests of all those who have a stake in their decisions.
  • LAW ABIDING – abide by laws, rules and regulations relating to their business activities.
  • COMMITMENT TO EXCELLENCE – pursue excellence in performing their duties, are well informed and prepared, and constantly endeavor to increase their proficiency in all areas of responsibility.
  • LEADERSHIP – conscious of the responsibilities and opportunities of their position of leadership and seek to be positive ethical role models.
  • REPUTATION AND MORALE – protect and build the company’s good reputation and the morale of its employees.
  • ACCOUNTABILITY – acknowledge and accept personal accountability for the ethical quality of their decisions and omissions to themselves, their colleagues, their companies, and their communities.

The Seven-Step Path to Better Decisions : We make thousands of decisions daily.  Most do not justify extended forethought but when confronted by major decisions with no clear answers it can be easy to feel overwhelmed.  This seven-step guide to making good decisions is an excerpt from the book Making Ethical Decisions .

  • Stop and Think – One of the most important steps to better decisions is the oldest advice in the word: think ahead.
  • Clarify Goals – clarify your short- and long-term aims.
  • Determine Facts – You can’t make good decisions if you don’t know the facts.
  • Develop Options – make a list of options, a set of actions you can take to accomplish your goals.
  • Consider Consequences – Two techniques help reveal the potential consequences: “Pillar-ize” your options.  Filter your choices through each of the Six Pillars of Character: trustworthiness, respect, responsibility, fairness, caring and citizenship, and, “Identify the stakeholders” to determine how the decision is likely to affect them.
  • Choose – make your decision.
  • Monitor and Modify – re-assess the situation and make new decisions, if the outcomes do not follow the plan.

Having covered some details of the fundamentals of Ethics and Morals- as perceived by the West, we move on to what the present management literature has to state on the subject.

In a well presented article – How did Peter Drucker see Corporate Responsibility? –   in HBR, Frances Hesselbein notes that, according to Peter Drucker, “Leaders in every single institution and in every single sector … have two responsibilities. They are responsible and accountable for the performance of their institutions, and that requires them and their institutions to be concentrated, focused, limited. They are responsible also, however, for the community as a whole.”…Peter Drucker strived to make business leaders see the community as the responsibility of the corporation. He called on leaders to embody “the Spirit of Performance” by exhibiting high levels of integrity in their moral and ethical conduct; focusing on results; building on strengths; and leading beyond borders to meet the requirements of stakeholders, ultimately serving the common good.

In ‘What is Business Ethics?’, Peter Drucker  categorically states that the traditional Western moralist would probably treat Business Ethics as oxymoron. However, all the authorities of Western tradition are, however, in complete agreement on one point: There is only one ethics, one set of rules of morality, one code, that of individual behavior in which the same rules apply to everyone alike. They would accept the difference between what is ethically right or not would be grounded on social or cultural context. He then goes onto detail the evolution of term Business Ethics over 18th Century till now.

The individual ethical thinking and behavior in an organization has to be translated into the organizational level integrity.

Lynn S. Paine looks at the role of the organization in shaping the individual’s ethics in an HBR article, Managing for Organizational integrity.

We look at (only) some of the videos:

DuPont Sustainable Solutions  has compiled Workplace Ethics Scenarios that show, in the lighter style, the “wrong way” and the “right way” of handling 17 common ethics issues at the workplace.

Creating ethical cultures in business: Brooke Deterline at TEDxPresidio –

As Corporate Director for the Heroic Imagination Project (HIP), Brooke Deterline helps boards, executives, and teams at all levels develop the skills to act with courage and ingenuity in the face of challenging situations. This fosters leadership credibility and candor, builds trust, engagement and reduces risk.

Legal vs. Ethical Liability: A Crisis of Leadership and Culture | Mel Fugate | TEDxSMU

Professor Fugate argues that leaders at all levels and across industries need to focus on ethical liability above and beyond legal liabilities for themselves and their organizations. Ethical liability tests the true character of a leader and determines the character and quality of an organization’s culture. He illustrates this point in the context of higher education, where he contends a lack of accountability has led to a crisis of leadership and culture. Fugate uses scandals in college sports as common examples of a pervasive and larger problem of university leadership (at all levels) that fails to meet its ethical liabilities. He outlines a number of potential causes for the patterns of unethical behavior in higher education and also provides a few suggestions on how to overcome the challenges of this crisis.

We are now geared up to listen to what Devdutt Pattanaik has to say, in Segment 1 of the episode 3 – Dharma and Dharma Sankat.

Humans are the only creatures on earth that can choose to overturn the law of the jungle to outgrow the beasts within us. Firing this eternal struggle is our ability to imagine, imagine a better place.

But the problem with imagination is also that it amplifies our fears. I can think of the worst situations. I can imagine problems which do not exist. Even in times of abundance I can think of drought and go into a depression. So it is a tragedy of imagination, while I can imagine good things I can also imagine horrible things. It amplifies joy, it amplifies fear too. The most tragic and interesting thing about imagination is suddenly we ask ourselves and because you can imagine and because are aware we can die, we start asking the question what’s the point of it all. That is where everything starts. That is the home. That is the source of our solutions and our problems.

How is it connected to Dharma?

I can imagine not being afraid. If you look at all the gods, they have their hand sticking out and what they are saying is ‘do not be afraid’. This is the Fearlessness Pose (Abhaya Mudra). The fact is any deity, anyone, is holding the hand out. That is what a leader is supposed to do.

Just visualize a simple number chart. There is a positive axis and there is a negative axis. Now imagine the number zero as what is call in Sanskrit as Matsya Nyay, A Law of the Jungle. The big fish can eat the small fish in the sea.

This means I am allowed to be territorial. I can be dominating because I want to survive. That is an animal instinct. If I can outgrow this animal instinct of survival, then I start thinking about others. I empathize because I can imagine your fear, and because I can imagine your fear I can empathize with you. If I can walk towards empathy that is outgrowing the beast, But if I allow the fear to amplify my fear then in my fear I will say that I have to stay alive and I have to thrive and others don’t matter. Nobody else matters, but me. Then I start exploiting people. I will tame other people. I will dominate. I’ll become worse than an animal. Animals don’t exploit, humans do. Animals are not cruel, humans are. So exploitation comes or the empathy comes from the human imagination. Both these, the exploitation and empathy come from the same space of the human ability to imagine and be creative. So both are possible. If I move more towards positive scale, then this is Dharma. It is a work-in-progress.  It is not an endpoint, it’s not destination, it’s a process. If I move in the opposite direction, overwhelmed by fear, it is Adharma. The choice is ours and every choice has consequences, if not in this life, then in the next life.

What is the Dharma Sankat (Ethical or Moral Dilemma)?

Dharma Sankat is the ability to take this decision, What is life all about?  Every moment we have to take decisions. At a moment of time what do I decide? What decision do I take? Let me give you an example through a story.  Once upon a time there was an eagle. The eagle was chasing a dove and the dove came to a king and told the king: save me. The king said I will save you and the Eagle said what will I eat now. So the eagle ate another dove. That is cruel. King said do not eat dove, eat rat. So the Eagle said, that’s cruel why should a rat die to save the dove. Finally the king said because I say so. The Eagle then said you are foolish. How long can you feed me? Sooner or later you will die and I’ll have to eat the Dove. So you are just delaying its death. This is Dharma Sankat.

In nature nobody would have come to the rescue of the dove. Now the King thinks he is very noble in saving the Dove. King is imagining that by saving the dove I am being a nice man, but in effect he is cruel to the eagle. You decided that the eagle is bad, the dove needs saving. Now look what is happening – the Dove is calling the king a kind king and the eagle is calling the king a cruel King. Who is right?

What should the king do?

There is no prescription.

How do you fit this in a business or corporate context? What are the more common Dharma Sankat situations that business leaders face and how are they supposed to overcome them?

There is a recession. Company has to cut costs. I have two ways of cutting cost: reduce salaries of the top management or give pink slips to the bottom of the pyramid. Which way should I go?

The former sounds less cruel. But, to those people it is as cruel.

That would mean that the top management which is running your organization may leave and the company can collapse and the shareholders will withdraw money.

What do you do?

That IS Dharma Sankat. That is why you need a leader. If there was a prescription out there then why do you need a leader? You have to ask yourself – if I have to evolve, I have to ask myself: why do I take the decision? Where from comes a decision that I am taking? Am I taking a decision because I’m afraid? Am I doing it to protect myself? Am I doing to protect my self-image? Am I doing to protect my business, which is actually an extension of my self-image? Or, am I doing it for the good of the people? More often than not it is never for the good of the people.

We have, thus, seen that West and Hindu points of view broadly converge on the basics of Dharma – the Ethics and the Morality. They also do take cognizance of the reality that ethics or morality is not the absolute – they manifest in light of the then socio-economic-cultural milieu in which the human being lives.

When we look at the literature on the values that shape the ethics and morals, we do find a subtle difference in the approaches of the West and the East. For the present, that is beyond the scope of our discussion. However, both ideologies do converge and agree that it is the value system that drives the (ethical and moral) behavior.

In our next session, we will take up the logical extension of the topic – Relationship between the owner and the organization – in the second segment of the Third Episode of Devdutt Pattanaik’s TV serial Business Sutra

Note: The images used in this post are the irrevocable property of their respective creator. They have been taken up courtesy the internet, so as to illustrate the point under discussion.

Business Sutra |2.3 | Leadership in different Business Cycles

Business Sutra |2| Leadership

In the first episode of the TV serial on CNBC 18, spread over three segments, Devdutt Pattanaik presented to us the most visible form of the business – the corporation : its meaning, its purpose and its action perspective.

In the second episode Devdutt Pattanaik discusses Leadership. The first segment of the second episode dealt with the role of the leader and the second segment what impact the context has on the leaders. The third segment looks at the context in the light of different business cycles.

Business Sutra |2.3 | Leadership in different Business Cycles

Allison McSparron-Edwards, founder and managing director of Consultrix analyzes Business lifecycles and the need for different leaders at different times. It may seem fairly obvious but as companies grow they appear to follow a corporate life cycle including Creation, Growth, Maturity, Turnaround and Decline. [Kimberley, J. R., Miles, R. 1980, and associates The Organisational Lifecycle: Issues in the Creation, Transformation, and Decline of Organisations. San Francisco: Jossey-Bass.]…In tandem, it appears that, in order to be successful in each stage, companies need to employ different types of leaders including Creators, Accelerators, Sustainers, Transformers and Terminators. [Ward, A., The Leadership Lifecycle: Matching leaders to evolving organizations. Ebbw Vale: Palgrave MacMillan]

A Ward’s book – The Leadership Lifecycle – presents a model of the leadership process that identifies which factors create an effective leader at different points in the organisation’s lifecycle and which forces act as moderators to that effectiveness. The dimension of how the dynamics of leadership play out over time is what distinguishes this work from previous books on leadership.

So here is your challenge: Do you know whether your leadership behaviors suit your company’s growth cycle?

The Business Lifecycle & The 5 Phases of Leadership :

Phase 1: Innovation

During the startup phase, the leader is very single-minded and highly driven. Their enthusiasm and energy alone is enough to inspire others to shared greatness.

Phase 2: Entrepreneurial

Due to limited resources and a lack of deeper understanding, entrepreneurial leaders tend to surround themselves with followers and, sometimes, subservient players who are not necessarily leaders. A “my way or the highway” attitude could lead the business down the wrong road.

Phase 3: Managerial

The transition from entrepreneur to manager is very challenging. The entrepreneur tends to be a high energy, powerful, dominant, controlling leader. The entrepreneur also dislikes process and procedure. If we don’t transition to a managerial leader, the business will have a ceiling on its growth and potential. New team leaders may put ideas into play that don’t mesh with the original company vision. Getting On Purpose will ensure the business is not sacrificing passion for process, while ensuring a fluid transition of vision to the leadership team.

Phase 4: Administrative

While the administrative phase is generally successful from a business perspective, the success is unsustainable because the company can lose the On Purpose vision. Leadership must be vigilant and strive to allow innovation while constantly resisting the devolution/transition into the “Bureaucratic Phase”.

Phase 5: Bureaucratic

Unchecked, politics and bureaucracy become the accepted cultural norm, with a culture that operates on rules and guidelines. Strong, determined change through On Purpose coaching strategies can re-vitalize leadership, empower the team and bring the company back into the entrepreneurial, maturity or administrative phase.

Leadership Style and the Organization Life Cycle is a research paper and was executed to explore and test the belief that a transition of organization life cycle has a relationship to leadership style

Business Lifecycle and Leadership Fit By Eric Hansen

Leadership Style Lifecycle: Choose the Right Leadership Style for the Right Environment Rod King, Ph.D., AUTHOR of “Business Model Canvas: A Good Tool With Bad Instructions?“; CONSULTANT on Business Model Hacking (BMH):

In 6 Leadership Styles, And When You Should Use Them Robyn Benincasa notes that great leaders choose their leadership style like a golfer chooses his or her club, with a calculated analysis of the matter at hand, the end goal, and the best tool for the job. Here are the six leadership styles Daniel Goleman’s study that his Leadership That Gets Results  uncovered among the managers he studied, as well as a brief analysis of the effects of each style on the corporate climate:

If you take two cups of authoritative leadership, one cup of democratic, coaching, and affiliative leadership, and a dash of pacesetting and coercive leadership “to taste,” and you lead based on need in a way that elevates and inspires your team, you’ve got an excellent recipe for long-term leadership success with every team in your life.

Robyn Benincasa is a two-time Adventure Racing World Champion, two-time Guinness World Record distance kayaker, a full-time firefighter, and author of the new book, HOW WINNING WORKS: 8 Essential Leadership Lessons from the Toughest Teams on Earth, from which this article is excerpted. (Harlequin Nonfiction, June 2012)

Leadership and Life Cycles: Barbarians to Bureaucrats is an edited (20min) presentation on corporate life cycles and leadership styles by Lawrence M. Miller.

Now, let us look at what Devdutt Pattanaik has to say on the subject in the Segment 3: Leadership in different Business Cycles

Why is success so individualistic when we talk about in the context of business? Of course, in successful companies we almost always connect them to one overwhelmingly successful individual. Almost everything about the success of leadership connects to that leader. We rarely praise the board of Apple but Steve Jobs is God. Similarly for Microsoft Bill Gates is God and for Reliance Industries Dhirubhai Ambani is a legend for what he has achieved. Why is success so individualistic when everything in mythology seems to be talking about the community, the other, the outside.

Everything in Indian Mythology talks about other, the outside. The Western mythology is a complex combination between Greek ideas and biblical ideas. In the biblical idea there is God and there is a prophet. The Prophet brings the rules of God to man and we have to align to the rules. The prophet is subject to these rules. He is not independent of the rules. He is not creator of these rules. He is subject to these rules. The Greek model is very different. In the Greek model the hero is someone who challenges the gods, who fights the gods and who triumphs despite the gods.

Now when we use the word leader today in common parlance, these words have come from the Western context. When they are using the word leader they refer to the heroes of Greek mythology who challenge the gods, that is the status quo, who challenge the establishment and innovate and create something new breakthrough. Today there is the Hercules of modern times. Hercules is always alone. Have you seen him with family or Theseus or Jason?  None of them are with family. All of them are individuals. Some of them are kings but you never hear about the kingdom. You only know about their great adventures. All our leadership books that we have are basically Greek heroes.

When we are that individualistically oriented and if the board is not as responsible, as revered, then the Board is always going to come second to the individual leaders. If the Board always comes second to the individual leader, then let us go back to the conversation we had in the very first episode – how is the board ever going to be able to stand up to that leader.

This is the Great Western conflict – the individual versus the community.

In the Indian context how do you apply this concept?

It is not achievement which makes Ram worthy of worship; it is sacrifice that makes him worthy of worship. So I would actually argue a leader has to begin as Parshuram, then become Ram and then evolve into Krishna. Unfortunately many have to become Buddha or Kalki depending on the situation. These are the avatars Parshuram is rule-follower, he is like this very strict teacher who punishes you if you break the rules.  Then he becomes the model leader, Ram, who hopes that by being a model of sacrifice the people will understand the meaning of sacrifice. Because the whole kingdom is watching this great king serving them, making sacrifice in his own personal journey.

He leads by example.

He eventually becomes Krishna. Krishna is the ultimate coach, he is coaching and creating new talent and hoping that the Pandavas will become like Ram. They don’t.  They gamble away their own Kingdom thinking that Kingdom is property. So he has to put them through a great period of exile in the forest and sort of repair the damage and get them back on the trail. There is a lot of bloodshed which happens. So he is coaching them and finally becomes Buddha who switches off.  Or, he becomes Kalki who just breaks the system completely because it is not worth upholding.

So either you withdraw if it is worth sustaining or you destroy because it’s not worth maintaining anymore.

So it is a very beautiful narrative which is in a way saying the evolution of leadership. It is not becoming one style it is context driven. In the early phases, Parshuram, in the perfect phase Ram then become Krishna – create talent move out, go away. The world will continue without you it has been continuing without you.

If it does not continue it will self-implode. Leave it. Detach.

We thus observe that both, Western and the Indian view of leadership styles evolve in terms of the context.

In our next session next month, we will take up Segment 1 of Third episode – Dharma Sankat (Ethical Dilemmas) – of Devdutt Pattanaik’s TV serial Business Sutra viz. Dharma and Dharma Sankat (Ability to grow beyond animal instincts and Ethical dilemmas)

Note: The images used in this post are the irrevocable property of their respective creator. They have been taken up courtesy the internet, so as to illustrate the point under discussion.

Business Sutra |2.2 | Context of Leaders

Business Sutra |2| Leadership

In the first episode of the TV serial on CNBC 18, spread over three segments, Devdutt Pattanaik presented to us the most visible form of the business – the corporation : its meaning, its purpose and its action perspective.

In the second episode Devdutt Pattanaik discusses Leadership. The first segment of the second episode dealt with the role of the leader. In the present, second segment, what impact does the context have on the leaders.

Business Sutra |2.2 | Context of Leaders

Team Activ8 in its blogpost 4 leadership “weapons” used by great leaders states that ‘good business leaders display many traits but there are 4 leadership “weapons” used by great leaders:

  1. They use their “business binoculars” to provide CONTEXT
  2. They instill VALUES using their “moral compass”.
  3. They build TRUST with their “business shield”.
  4. They encourage MOMENTUM with their “business rocket booster”.

This gives us one dimension of the context of leaders wherein the leader sets the direction for the organization. Neither the leader nor the context impacts each other. Leader sets the sail w.r.t. to the given context.

In The Leadership Paradox, Jim Selman adds one more perspective.  He states that leadership is inherently paradoxical in that it is inclusive of both the individual and the group or team or community. If this is so, then leadership is a context, a powerful opening for innovation and something new to emerge. From this perspective, leadership isn’t about process, or technique, or some set of skills beyond the capacity to be authentic and committed to a possibility larger than oneself.
Leadership from this perspective is the ability to operate within the present and appreciate the larger context: that results and possibilities grow not from our individual choices only but from the power and contributions of those we lead.

Tony Mayo states that Context-based leadership manifests when environmental factors and individual action come together. And “come together” is the most important part…..The environmental factors create a specific and sometimes unique context for business. Within this contextual framework, some individuals envisioned new enterprises or new products and services, while others saw opportunities for maximizing or optimizing existing businesses, and still others found opportunities through reinvention or recreation of companies or technologies that were considered stagnant or declining….. In other words, it can be construed to reflect awareness of and ability to adapt to the contextual intelligence…..The ability to succeed in multiple contexts is based on what Warren Bennis and Robert Thomas in Geeks & Geezers called adaptive capacity — the ability to change one’s style and approach to fit the culture, context, or condition of an organization. Success in the twenty-first century will require leaders to pay attention to the evolving context.

That brings us to the theme of Victor H Vroom and Arthur G Jago’s paper:  The Role of the Situation in Leadership – Leadership depends on the situation. Few social scientists would dispute the validity of this statement. Three distinct roles that situational variables play in the leadership process are:

  1. Organizational effectiveness (often taken to be an indication of its leadership) is affected by situational factors not under leader control.
  2. Situations shape how leaders behave.
  3. Situations influence the consequences of leader behavior.

Looking at behavior in specific classes of situations rather than averaging across situations is more consistent with contemporary research on personality and more conducive to valid generalizations about effective leadership. If . . . then . . . relationships are not only at the core of attempts to understand what people do but are also the basis for attempts to understand what leaders should do.

In What the Best Leaders Know: Context Matters, John Kamensky sees ‘the traditional leader is seen as a charismatic hero, a lone figure, towering above the rest.  These are seen more in the military or business worlds – General George Patton, auto executive Lee Iaccoco, computer guru Steve Jobs.  But in reality, the success of a leader depends on the context or environment, in which they work – the deck they’ve been dealt….Today, new forms of shared leadership are evolving – where a leader serves as a visionary, a broker, a convener, a mediator.  And occasionally is recognized as a hero!  

In an in-depth study, Leadership in Context, Michael Bazigos, Chris Gagnon, and Bill Schaninger note that ‘even the best scripts can ring hollow in the wrong settings. (Their) research suggests that the most effective leadership behavior reflects the state of a company’s organizational health. Top-management teams that are serious about developing vibrant businesses and effective leaders must be prepared to look inward, assess the organization’s health objectively, and ask themselves frankly whether their leadership behavior is strong enough in the ways that matter most at the time. This question has implications not just for developing but also for assessing a company’s leaders. However much an executive may seem to have a leadership “it” factor, the organization’s health, not the claims of individuals, should come first when companies determine which kinds of behavior will be most effective for them. In short, they should spotlight different sets of actions in different situations. Fortunately for aspiring leaders, they don’t have to do everything at once.

Reams and reams of literature have been published on the subject of The Context of Leadership. Within the limitations of only one post on the subject, we have set up the stage for enlisting some of the articles and papers to know what the current Western thinking is on the subject.

In Leadership in Context, Kim Turnbull James sets the tone for the future. He states – the leadership literature has begun to identify that if leadership is to meet the organisational requirements of organisations with complex bureaucracies, with multiple stakeholders, multiple professional practices, politics (with small and big ‘p’), working across boundaries within and across organisations, then hoping for a few, or even a whole raft of individuals who can influence deep into an organisation will be insufficient. In addition to good strategic leadership from the top, leadership must be exercised throughout an organisation. Identifying individuals who have leader potential is not the (only) solution. Leadership development ‘in context’ does not just mean individual leadership development adapted to a specific locale, but means people from that locale coming together to learn to lead together and to address real challenges together.

Now, let us look at what Devdutt Pattanaik has to say on the subject in the Segment 2: Context of leaders: jaisa yug, vaisa avatar

Do various incarnations of Vishnu represent leadership at different stages of a corporation’s life cycle?

Before go into reply to the question of different incarnations, we need to understand Vishnu. Mythology is a method of communication of ideas through form. Let us look at image of Vishnu. Vishnu manages the world. He holds a conch with which he communicates with the people. He has a wheel on the other side. He also has a mace and a lotus flower, called Padma. The wheel in his hand is for review. Lotus flower is for appreciation whereas mace is for maintaining the discipline.

In a way this image represents ideal traits of leadership. We do not see any rule book here, but if he has to set the discipline, rules of reference are needed.

However rules exist in a given context only. Rules can thus be interpreted differently, but have to be interpreted with reference to a fixed principle. The concept of context is explained in mythology using the age (Yuga). Human cycle of life has four parts. There is childhood when we learn, then youth when we mature, then old age that represents systems slowing down and then comes death.

In many ways, this represents the phases that a corporation also undergoes. Each of the Age will have different set of rules based on a common principle called Dharma(loosely translated a Faith of morality). Dharma is a principle, not a code of conduct and certainly not religion. So you have to understand the principle of Dharma and then you have to understand the concept of The Age, and then the Incarnation in each of these. Each one is upholding Dharma but following very different rules. For example you have Ram who is monogamous, faithful to one wife and you have Krishna, lover of beautiful, many women. How do you reconcile the two who both are Gods and both are upholding the Dharma. For Parashuram, there is no wife around in his life.

So we have three gods and each has a different rule. In other words, there an overarching principle: different kind of leadership is required in different phases of the life cycle of an organization, but all are abiding one Principle.

All these are equal, they just represent different phases and different styles of leadership, then why is one greater than the rest? For instance, every time we talk of a perfect society we call it Ramrajya. It is supposed to be heaven on earth. There are many other leaders, there are many other gods, then why is Ram revered so much more than the rest?

Remember that’s the only form of God which is visualized as a king. Krishna is not King he’s a kingmaker. You worship Krishna as a cowherd and a charioteer not as a king. Ram is only deity of all the deities in India who has so many temples in India. He is only one deity who  was visualized as a king. He is the only one king who’s worshipped.

But it can’t be his position that draws the faithful. The fact is that being the king is not instrumental in why he is so visual. What is different?

Difference is in his role. Krishna is Vishnu but so is he the cowherd or the charioteer.

Why so much emphasis on the kingliness of Ram?

Because he is doing what a king is supposed to do; he’s living the life of as what a king is supposed to be. That is what Ram is associated with. And, what is that supposed to be? He is living for the people, to the point that when given a choice between an honest and faithful wife and cruel, unjust, unfair subjects, the King takes a decision to choose his cruel subjects and rejects his faithful wife. It’s the classic conflict between personal life and professional life. He chooses the professional life over the personal life. He sacrifices.

But he sacrifices the professional life for the good of the people not the professional life for his own personal advancement in the profession.

If you look at our legends, not mythology, people who have sacrificed their children are put on a higher pedestal, because we know how impossible that is.

So Ram Rajya is almost the attainment of the impossible, because it is about sacrificing what your love for your dearest, and chooses to love others.

We thus observe that both, Western and the Indian view of role of leadership are driven by the context. In so far as the leader does what the context has demanded to do in terms of the dictates of the fundamental principle(s), of is caring for others, first , he has done justice to his role of befitting the Leader.

In our next session next month, we will take up segment 3 of second episode – Leadership – of Devdutt Pattanaik’s TV serial Business Sutra viz. Leadership in different Business Cycles

Note: The images used in this post are the irrevocable property of their respective creator. They have been taken up courtesy the internet, so as to illustrate the point under discussion.

Business Sutra |2.1 | Does a leader create, sustain or destroy?

Business Sutra |2| Leadership

In the first episode of the TV serial on CNBC 18, spread over three segments, Devdutt Pattanaik presented to us the most visible form of the business – the corporation : its meaning, its purpose and its action perspective.

In the second episode Devdutt Pattanaik discusses Leadership. What is the role of a leader? Does he exist for the goals or for the followers? The goals being too impersonal, he feels leadership should be about people. That is why Mughals rulers were called Jahanpanah – shelter of the world or Maratha rulers as Chhtrapati – the bearer of the roof. Leaders care for their people, give them direction and purpose. However a manager is, typically, focused on a goal. In fact, so much focused on the goal that, over the time, people, or ethics, stop to matter.

In our present post, take up first segment of the second episode and see whether a leader should be like Indra or be like Vishnu.

Business Sutra |2.1 | Does a leader create, sustain or destroy?

Leadership should be one of the most discussed, extensively studies and exhaustively documented subject in the field of management art and science.

So we will take only so much of references from the western world that can set the tone of our topic.

Marissa Levin’s article – Preserve, Destroy, Create: Your Only Path to Breakthrough Growth quite succinctly reflects the western world’ views on role of the leadership w.r.t. to the title of our post:

Over lunch with my executive coach, Mike Harden (www.ceosuccesscoach.com) I learned that business activity falls into three buckets: Preservation, Destruction, or Creation. These buckets can actually be applied to any life situation, from something serious like ending a relationship,  to something “easy” like cleaning out your closet or changing your diet/workout habits.

Preservation: Keeping the lights on

Most organizational activity can be categorized as “Preservation.” Everything a business owner does to keep the company running falls into this bucket .All of these activities are necessary but too much of a focus on them creates a short-term mindset, or a mindset that is focused on immediate needs. Preservation happens when a company expends energy on leveraging existing competencies, rather than developing new competencies, or worrying about today’s competitors, rather than scanning the landscape for new entrants.

Destruction: Courage to discard the broken and outdated

For a business to grow, it must closely analyze what isn’t working. This is where the Destruction phase comes in…Not everything we do today works for us. It takes courage, but to move forward, we need to selectively forget the past. ..To quote one of my all-time favorite authors Marshall Goldsmith, “What Got You Here Won’t Get You There.”  (http://www.marshallgoldsmithlibrary.com/html/marshall/books.html)

It is the pain of the change that brings the reward of the growth.

Creation: Infusing new life

Creation activities prepare your company for long-term growth – beyond survival.

Linear vs. non-linear thinking

Creation also means breaking away from linear thinking in which a company simply makes a current product better.

Non-linear thinking doesn’t make a product better; it makes a new product. It requires the ability to forget the past, move beyond organizational memory, and create a new future. It’s looking at all situations with a “wouldn’t-it-be-cool-if…” perspective to formulate ideas on where you want to be in the future.

Moving from surviving to thriving

So how does a company incorporate the three phases of Preservation, Destruction, and Creation? It starts with awareness of the idea that some practices just have to go. Simply being aware of the need to make a change is the first step in making it. This step, followed by the change itself (to include getting rid of the old to make room for the new), leads to breakthrough growth.

Awareness, courage, action, reward form the recipe for making the changes you need to take your organization to the next level.

The following image presents another – more mundane – facet of Destruction. This very clearly puts across the impact of role the leadership, knowingly or unknowingly, plays in this process.

Kathy Caprino, in her article – 7 Traits of Inspiring Leadership That Uplifts rather Than Destroys – provides direct linkages of the role of leadership on the destiny of the organization:

  • They are clear about the challenges ahead, but they inspire faith, hope and collaboration, not fear.
  • Blame is not in their rhetoric – they never stoop to recrimination or demeaning, belittling language.
  • Their self-esteem is strong enough to take constructive criticism and critique, and in fact, they welcome it.
  • Their communication style is positive, with words that inspire greatness and growth in us.
  • They don’t surround themselves only with people who “yes” them – they surround themselves with diversity, truth and openness.
  • The success that they long for is success and opportunity for all – not just one faction, group, or organization.
  • They operate at all times with integrity, truthfulness and transparency, even when that’s excruciatingly difficult to do.

Now, let us look at what Devdutt Pattanaik has to say in Segment 1 of the episode 2 – Does a leader create, sustain or destroy?

In his present talk, he has used the role models of Indra and Vishnu to present how Indian mythology looks at the role of leadership.

Indra, king of gods and the lord of heaven is in constant pursuit of success and wealth Lakshmi but Lakshmi prefers the side of Vishnu.  Are you Indra chasing success or are you Vishnu with success chasing you?

Therein lies the answer to who is a leader and what are the ideal leadership qualities.

Indra really is not a leader because the definition of leader here we are talking about is someone with a wider role. What is Vishnu’s role? He is taking care of the world.  In other words this means his reference point of action is the world, others not him. It is not about self-actualization. He is not trying to actualize himself. He is taking care of others and in just doing that he becomes a fortune magnet. Indra the other hand is taking care of nobody except for himself, his own self-actualization.

Indra is self-focused and therefore is insecure, and therefore chases Lakshmi.  Vishnu is focused on the others, therefore more secure, and therefore Lakshmi chases him.

In fact, Vishnu is not secure because he looks at the others. He is secure, and therefore looks at the others.

And yet when we talk about the creation of the world, we talk about three gods. At least, this is popular perception. These are: Brahma (the Creator), Vishnu (the God that maintains) and Shiv (the destroyer).  So the logical question is why is Vishnu the most important of these three gods and the most revered?

When we talk about creation, even the word creation implicitly visualizes the god as it is told in the Bible, one who creates the world. But in the Indian context the man who is creating the world is not worshipped, but the one who is destroying the world is being worshipped. Now either we are mad or there is a problem with our understanding of the words.

Creating what? Destroying what? Preserving what? These are the questions to be asked.

When we see Brahma’s action, when you read the scriptures, it can be seen that He is a God who is yearning constantly, he’s chasing things because he is seeking to understand who he is and therefore he creates the world to answer this question of who he is. When he creates the world, rather than figuring out the answer he starts chasing it and wants to possess it and wants to control it, wants to dominate it. In the process, he lost his eye and he has lost his original purpose. So he is forgotten, and therefore should not be worshipped. Because of his yearning he is chasing the wrong thing.

One could say that this Brahma is aham brahmasmi, you and I.  We, as human beings keep chasing something, so we keep losing sight of what we really want and we have to introspect to figure out what it is.

On the other hand the gods that are worshipped are Vishnu and Shiva. Neither of these gods chase the goddess but the goddesses comes to them. Now, the difference between these two gods is: Shiva says the world doesn’t matter, this is wrong, it is Maya , a  delusion, I shut my eyes to the world and I switch off. So he gives up, he lets go. Vishnu says when the world doesn’t matter so let us enjoy it. It is a question of perspective.

We, thus, have three different characters in mythology, which are engaging with the three currencies in a very different way. One says I (constantly) yearn for Lakshmi, Saraswathi and / or Durga. That’s Brahma. That’s you and I.  This is no average human being.  On the other extreme is Shiva who just switches off. He does not want any of these. So he is Vairagi, the Hermit. He is surrounded by cold icy mountains, the destruction. He is switched off. The goddess goes to him and says you know what you may have figured it out but the rest of the world has not. So please, open the eyes. She marries him, appeals to him to engage with the world.  Now, you have two forms of Shiva – Shiva whose eyes are shut and Shankara whose eyes are open. He is the benevolent one, the boon giving one.  He is engaged with the world. The Vishnu is that the server, his eyes are always open. So when you go to Vishnu temple, you will find his eyes are always open, he  is looking at you and is amused by you. He is amused because we are all Bramhas, he is caring, telling us that you know your direction is wrong. In that respect he is similar to Shankara.

This is what we need to try and be. This is what a leader should be, which means he is to be wise enough to care. So leader is someone who enables you to grow materially (L), intellectually (S) and emotionally (D). That is the role of the leader. In doing so, grows himself, so your growth becomes his growth.

So the logical question is – why is the Creator, the man who has helped create all of these, not given equal importance.

To answer this we have to find out what has he created. To know this, we have to go back to the Scriptures. He has created desire, he has created ignorance, he has created the chase. He has created the reckless human being, he has created rat race. Now would you worship the creator of the rat race or will you worship the person who tells you how to step out from the rat race so that the goddess of wealth chases you. You decide.

We have two apparently divergent views.  What would be applicable depends on the context of the situation. You decide which model you would follow

These discussions are as much applicable to leadership in the management of business as leadership in type of human activity.

In our next session next month, we will take up segment 2 of second episode – Leadership – of Devdutt Pattanaik’s TV serial Business Sutra viz. Context of leaders

Note: The images used in this post are the irrevocable property of their respective creator. They have been taken up courtesy the internet, so as to illustrate the point under discussion.

Business Sutra |1.3 | Short Term Vs. Long Term

Business Sutra 1

Business Sutra |1| Corporations

In the opening part of the first episode of his TV serial, Business Sutra, Devdutt Pattanaik dwelt upon the subject of the Indian way of doing the business. The second part then dealt with purpose of the corporation.

In our present post, the third of the three parts of this first episode, we will have a detailed look at oft-discussed short-term vs. long-term view of the corporation and its purpose.

Business Sutra |1.3 | Short Term Vs. Long Term

This video gives us the basics of short-term (planning) and. long-term (goals.).

Some lightly told, but meaningful messages will also whet our appetite for the subject:

So, what is your long term goal?

When organizational leaders are asked if they think in the short term or in the long term, there is a pretty consistent answer: “Long term, of course” notes Dr. Gustavo Grodnitzky in his article Short Term vs. Long Term. … Long term thinking should create and sustain long term growth for all the stakeholders and by extension, community, society, and the environment), not just the shareholders. Rising water raises all ships. This is the model of social capitalism…Yet when we look closely at many organizations and their decision making process, it appears to be clearly short term thinking, too often driven by quarterly, “Wall Street” numbers, which focus on shareholder alone. This is a model of classic capitalism. 

The Long-Term Benefits Of Short-Term Thinking solidly puts forward the case for building up a sound business, if so required, by making good every short-term opportunity that comes up on the way up.

One of the most reported cause for such an approach is high volatility of the entire ecosystem over last couple of decades. In a (now) famous letter that BlackRock CEO Larry Fink had sent to CEOs of S&P 500 companies and large European corporations, he argues that today’s culture of quarterly earnings hysteria is totally contrary to the long-term approach we need. Over the long-term, environmental, social and governance (ESG) issues – ranging from climate change to diversity to board effectiveness – have real and quantifiable financial impacts…At companies where ESG issues are handled well, they are often a signal of operational excellence.

Gus Levy, at Goldman Sachs, urges his people to “be long term greedy, not short term greedy.”

In their article – The Biology of Corporate Survival –  on HBR, Martin Reeves, Simon Levin, Daichi Ueda have conducted a survey to check the longevity of 30,000 pubic firms of America over last 50 years. The results are quite stark: Businesses are disappearing faster. They are of the opinion that this because hey are failing to adapt to the growing complexity of their environment. Many misread the environment, select the wrong approach to strategy, or fail to support a viable approach with the right behaviors and capabilities. The authors have compared business corporation with any other biological body, who survive (or don’t) on account of their inherent and adapted biological survival skill and strategy.

In an another article – Long-Termism Is Just as Bad as Short-Termism – on HBR, Ken Favaro cites Drucker: “He recognized that all companies face an inescapable reality: they must invest in their future if they are to have one, but they must also produce earnings today in order to pay for doing so. Moreover, you have to meet your previous promises of returns from investments made in the past in order to have the license to continue investing for the long term. You cannot sacrifice the short term for the long term and expect to have a future any more than the other way around. In other words, ‘long-termism’ is just as bad as ‘short-termism.’”

In “Short-Term or Long-Term: Where Do You Live?” Marshall Goldsmith provides us a model that shows five different modes of behavior and how they can characterize our relationship to any activity — either at work or at home:

  • Stimulating is for activities that score high in short-term satisfaction but low in long-term benefit. A life spent solely on stimulating activities could provide a lot of short-term pleasure but still be headed nowhere.
  • Sacrificing is for activities that score low in short-term satisfaction but high in long-term benefit. A life spent solely on sacrificing activities would be the life of a martyr — lots of achievement, but not much joy.
  • Surviving is for activities that score low on short-term satisfaction and low on long-term benefit. A life spent solely on surviving activities would be a hard one indeed.
  • Sustaining is for activities that produce moderate amounts of short-term satisfaction and lead to moderate long-term benefits. A life spent solely on sustaining activities would be an O.K. one — not great, yet not too bad.
  • Succeeding is a term for activities that score high on short-term satisfaction and high on long-term benefit. A life spent in succeeding is a life that is filled with both joy and accomplishment.

The perception of both short-term satisfaction and long-term benefit is dependent upon the individual engaged in the activity. If we cannot change our activities, then we can at least try to change our attitude toward them

So, one may conclude that –

Let us now look at what Devdutt Pattanaik has to say in Segment 3: Short Term Vs. Long Term from the point of view of Indian mythology.

Here are the key points from his present discourse:

One of the conflicts continuously in the creation and sustenance of systems of corporations really is the ability to balance shorter with long-term radius. Jack Welch has this to state:

When you look at mythology you know there is a God sustains the world – Vishnu. He is associated with two animals one is called Serpent (Sarpa) and other is Eagle (Grauda). Their way at looking at things is known as Serpent Vision (Sarpa Drishti) – the immediate goal – and Eagle Vision (Garuda Drishti) – the long sight – respectively.

Question is what should one focus first?

Right when you look at how the story of creation, the moment to they talk about creation they also talked about its destruction. They talk immediately about destruction, which means you don’t just talk about the building of the organization at the day it is begun. You also discuss how it’s going to die. It’s not assumed to be immortal because mortality is the universal truth and you are aware of it. You are discussing about mortality. When you say that okay if I’m going to be born and am going to die too, then how do I live a healthy and happy life? How long can I sustain?

As much as that applies to health, it applies to the organizations as well.

Unfortunately the way we are structured, we break it down into bits, into say, years. When you look at your lifespan over two years or three years and you have to win every year. You know I am not allowed to lose. So effectively, than the pressure is on the Serpent’s vision – at your shadow’s level. You have to keep winning every year, keep growing to be more and more profitable year in year out. We are told that that’s the measurement and that’s the reward. So, if I have to last for three years, I just make sure that I win each of the three years. I am not thinking of 30 years and 300 years.

The system, per force, unwittingly perhaps, is saying Serpent vision.

How do you correct that because you’re always going to have someone in charge for a limited period of time? They’re going to try and excel within that limited period of time, and therefore, for them, short-termism will always be the first goal to achieve as opposed to long-termism. We do understand that the ideal should be long-termism but not all of us can actually put that bill, in that sense.

In the case of health, you see you can’t escape the consequences. It is personal.

In an organization you can escape the consequences because perhaps you may not be around. Or that I may not be held responsible for doing what I did in good faith, for the good of the organization. Particularly in the case of a limited company, individual’s role is also limited. A shareholder tends to behave more like a moneylender and may create any type of pressures to get their returns. However, all employees would  not feel the direct, and equal,  consequences of his /her actions.

In a way, Short-termism breeds freedom from long-term consequences.

Interestingly this seems to make a case for family-owned businesses. For almost 10 years now in this country the phrase family-owned business is looked at with some amount of contempt. It is again a Western concept, that we have inherited over the past 20 30 40 years, that ideally an organization must have separation between ownership and management. It should be professionally run and it should be run for the benefit of all stakeholders as opposed to the benefit of the entrepreneur that may have started that organization. But, the problem is that if you’re going to have leaders that come in for limited periods of time, they’re going to be concerned with their immediate term. So, again back to the short-termism. But if you have organizations owned by families that will patronize these organizations, help them sustain, help them grow over generations over the long term. It is obvious that you’re making the case then for family-owned business a phrase that we looked down upon in some ways for the last 10 to 15 years.

As professionals, we’re using it again without context. Used anywhere anytime, if it’s professional it is good. What does the mean to be professional? It means – cut out emotions, be logical. So of the three goddesses (L,S,D) which 40,000 years have been celebrated, one, D (Durga, Shakti, Power), is out. That is the one thing that we crave for as human beings, we want to feel powerful and if I look at physiologically you’re seeing focus on the left brain, right brain is bad. Right brain is not good, focus on the left brain and that is good for the organization.

The problem with the family-owned business is that talks too much of the, emotional, right brain – my son is better or my son will not be better.

India is called Bharat. But we forget a story of the character whose name is Bharat. There are Bharats in mythology. But there is one very obscure story, which is amazing and is very interesting. It is about is the son of Shakuntala. He had many wives and many sons but he rejected all the sons and we don’t know why. He said he doesn’t look like me. That is the literal translation. But perhaps that is why, he then adopts, or is given by the god, a son, allegedly an illegitimate child, rejected by a spell, an orphan. He elevates him to be the heir.

If the story is decoded, basically being a king he rejected his own biological children in favor of a son who was good enough to rule. Remember, we are named after that man BhArat.

It is equal to meritocracy.

So that’s that-

In our next session next month, we will take up episode 2 of Devdutt Pattanaik’s TV serial Business Sutra viz. Leadership.

Note: The images used in this post are the irrevocable property of their respective creator. They have been taken up courtesy the internet, so as to illustrate the point under discussion.

Business Sutra |1.2 | Purpose of a Corporation

business-sutra-1Business Sutra |1| Corporations

In the opening part of the first episode of his TV serial, Business Sutra, Devdutt Pattanaik dwelt upon the subject of the Indian way of doing the business.

In our present post, we will have a detailed look at the second of the three parts of this episode.

Business Sutra |1.2 | Purpose of a Corporation

500 corporations control about seventy percent of world trade and each year approximately 3 million new limited liability companies are registered. The way these corporations are managed can therefore affect the potential for either positive or negative change, depending on the chosen stewardship. The biggest question we face goes to the very core of business: What is the purpose of these corporations?

However, the subject has ever remained any simple either in tone or in its content. Depending on the context, the related discussions have remained as much exhaustive as hotly debated.

The most discussed and debated view – The Social Responsibility of Business is to Increase its Profits -is attributed to Milton Friedman. The core of of Milton Friedman was: There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.

One of the strongest rejoinder, and by now a fairly widely accepted view, is that of Peter Drucker. In his book The Practice of Management, Peter Drucker declares -“The purpose of a company is to create a customer” and “a business….is defined by the want the customer satisfies when he or she buys a product or a service. To satisfy the customer is the mission and purpose of every business.”

purpose-of-business-peter-drucker

The views expressed by our own Gandhiji also echo a similar sentiment.

purpose-of-business-mahatma-gandhi

Let us look at several other points of views so as to gather a wider perspective of the discussion:

In The meaning of Bill Gates has been discussed Bill Gates interpretation of the direction that Microsoft should take up on the basis of what was his understanding the then purpose of the organization.  As with many great innovations, Bill Gates’s vision has come to seem so obvious that it is hard to imagine the world any other way. Yet, early on, he grasped two things that were far from obvious at the time, and he grasped them more clearly and pursued them more fiercely than his rivals did at Commodore, MITS or even Apple.

The first was that computing could be a high-volume, low-margin business. Until Microsoft came along, the big money was in maintaining a select family of very grand mainframes. Gates realised that falling hardware costs, combined with the negligible expense of making extra copies of standard software, would turn the computer business on its head. Personal computers could be “on every desk and in every home”. Profit would come from selling a lot of them cheaply, not servicing a few at a great price. And the company that won a large market share at the start would prevail later on.

Gates also realized that making hardware and writing software could be stronger as separate businesses. Even as firms like Apple clung on to both the computer operating system and the hardware—just as mainframe companies had—Microsoft and Intel, which designed the PC’s microprocessors, blew computing’s business model apart. Hardware and software companies innovated in an ecosystem that the Wintel duopoly tightly controlled and—in spite of the bugs and crashes—used to reap vast economies of scale and profits. When mighty IBM unwittingly granted Microsoft the right to sell its PC operating system to other hardware firms, it did not see that it was creating legions of rivals for itself. Bill Gates did.

Noel Tichy and Ram Charan have unraveled Jack Welsh’s the then interpretation of GE’s purpose and the consequent direction GE ought to chart in Speed, Simplicity, Self-confidence: an interview with Jack Welsh: In 1981, Welch declared that the company would focus its operations on three “strategic circles”—core manufacturing units such as lighting and locomotives, technology-intensive businesses, and services—and that each of its businesses would rank first or second in its global market.

GE’s strategic redirection had essentially taken shape by the end of 1986. By then, Welch has embarked on a more imposing challenge: building a revitalized “human engine” to animate GE’s formidable “business engine.”

His program had two central objectives. First, he championed a company-wide drive to identify and eliminate unproductive work in order to energize GE’s employees. Second, and perhaps of even greater significance, Welch lead a transformation of attitudes at GE—struggling, in his words, to release “emotional energy” at all levels of the organization and encourage creativity and feelings of ownership and self-worth. His ultimate goal was to create an enterprise that can tap the benefits of global scale and diversity without the stifling costs of bureaucratic controls and hierarchical authority and without a managerial focus on personal power and self-perpetuation. This requires a transformation not only of systems and procedures, but also of people themselves.

In an HBR article, Ben W Heineman, Jr. presents Steve Jobs and the Purpose of the Corporation : His deep commitment was to make innovative, robust and beautiful products that delighted customers. There can also be no question that Jobs was not focused on shareholders or taking short-cuts or short-term actions to maximize shareholder value.

In a TED Talk, Profit is not always the point, Harish Manwani while presenting the Unilever Sustainable Living Plan, which said, “Our purpose is to make sustainable living commonplace, and we are going to change the lives of one billion people over 2020”, traces his own career of how this was and is being done.

In a paper published in 2011 – The Purpose of the Corporation in Business and Law School Curricula – Darrell West examines law and business school curricula to determine which perspectives are taught in professional education, and student perceptions about business schools based on surveys at leading business programs over the past decade. The paper concludes that having broader conceptions of corporate purpose is necessary to effectively address the ways in which corporations impact life in contemporary society.

Firms of Endearment: How World-Class Companies Profit from Passion and Purpose: Rajendra S. Sisodia, David B. Wolfe, Jagdish N. Sheth, Pearson Education, February 2014, Second Edition : Today’s greatest companies are fueled by passion and purpose, not cash. They earn large profits by helping all their stakeholders thrive: customers, investors, employees, partners, communities, and society. These rare, authentic firms of endearment act in powerfully positive ways that stakeholders recognize, value, admire, and even love. They make the world better by the way they do business-and the world responds. They had created radically new rules:

  • Build a high-performance business on love (It can be done. We’ll prove it.)
  • Help people find the self-actualization they’re so desperately seeking
  • Join capitalism’s radical social transformation—or fall by the wayside
  • Don’t just talk about creating a happy, productive workplace: DO IT!
  • Honor the unspoken emotional contract you share with your stakeholders
  • Create partner relationships that really are mutually beneficial
  • Build a company that communities welcome enthusiastically
  • Help all your stakeholders win, including your investors

Chris MacDonald proposes that it really is foolish to think that the purpose of a corporation is to make money. But that’s only because it’s foolish to think that corporations have purposes at all. That is, it’s foolish to think of a large, multifaceted organization as having a single, unitary “purpose” in the universe, rather than thinking of it as serving many purposes for many interested parties. Arguing over what a corporation is “really for” — building shareholder value? making products to make people happy? Providing jobs? etc. — is a fool’s errand. He poses a question: How you should behave yourself in the course of your job, in pursuit of your goals? This is a question of ethics. And that question is much more enlightening than some grand question about purposes.

The Purpose of the Corporation project has released a video animation to review the purpose of the corporation and the myths of the shareholder value maximisation model. A backgrounder is also available online offering further information and data studies.

The Project launched a global roundtable series on corporate governance that brought together experts from business, academia, regulators and civil society to discuss the future of big business. Events were held in London (September 2015), New York (June 2015), Zurich (October 2015) and Breukelen (The Netherlands – February 2016). Paris (April 2016), Oslo (August 2016). The results of the global roundtable series were presented at a high-level conference in September 2016.

The report is available here: http://www.purposeofcorporation.org/corporate-governance-for-a-changing-world_report.pdf

In his talk, Start With Why, Simon Sinek, consultant and author, explain the emergency for companies and organizations to wonder “why”: why, fundamentally, did they build up themselves, why do they exist and which are the values in which they believe? Each company owns a combination of three strategic components: why they exist (“Why”), how they to business (“How”) and what are its products and services (“What”). The specificity of this mix, if the company succeeds in expressing it, becomes its strength. Companies that understood this approach of leadership are more innovative and more long-lasting than the others.

How to Identify Your Team or Organization’s Purpose – Jesse Lyn Stoner seeks replies to these three questions

  1. What business are you really in? Who are your customers and what do they really need from you? Knowing “what business you’re really in” informs strategic decisions.
  2. What is the real value you offer? How do people benefit from what you offer? How does your service or product benefit society at large?  A significant and valuable purpose inspires commitment and provides meaning to daily activities.
  3. What is the end-result that you offer? Focusing on the end-result you create is engaging and energizing.

The Power of Purpose for Innovation and Transformation – Cheryl J Grise and Vallerie Keller – Successful companies embed purpose at the heart of their strategy. But how do you identify and articulate a company’s purpose? And, having done so, how do you translate it into successful innovation and strategic transformation? This article provides important insight into purpose-led transformation and how it can help build a better working world.

Thus far, we have had representative samples of what the West has to say on the subject of the purpose of the corporation.

Let us now look at what Devdutt Pattanaik has to say in Segment 2: Purpose of a Corporation.

The purpose of the organization can be represented in the form of concept of happiness or LSD.

Here are the key points from his present discourse:

In India the belief is also wealth and not the only wealth. The core question that most of us are faced with in our daily existence is that what is the purpose of a corporation? What is the motivation that should ideally drive a corporation?

Typically it should not be profitability because profitability is also equal to a certain efficient way of running a certain distribution of wealth. The profits can only come if you produce goods and products that consumers wanted, in the best most efficient manner.  Is the profitability the generosity, is it ambition, is it agreed.

lsdThe motivation of corporation is to create happiness. In India currency is of three types and it was represented using the three goddesses – one goddess who is sort of famous for sitting on a lotus everywhere in India, holding an pot overflowing with wealth. Another goddess is famous because she holds a veena in one hand and scriptures in the other hand.  She is he goddess of knowledge. There is a third goddess. She has a trident in her hand.  The first one is called Lakshmi[L], second one is Saraswati [S] and the third one is Durga[D].

One represents material wealth, the second represents the intellectual wealth and the third one is emotional wealth. These are the three things that human beings transact each other.  This also represents material needs, intellectual needs and the emotional needs of a human being. The organizations have to work at all three levels,

The question is of striking a balance somewhere along the line.

If you closely look at the balanced scored, it is about LSD.

“The number of people who are really motivated by money is very small,” Drucker once remarked. “Most people need to feel that they are here for a purpose, and unless an organization can connect to this need to leave something behind that makes this a better world, or at least a different one, it won’t be successful over time.”

Follow Drucker’s lead and change work from being transactional to transformative. Productivity will go up, and so will joy at work. We may call that positive business.

We will take up discussion of Short-term or long-term thinking (professionalism or family business), as presented in the Segment 3 of the first episode of Devdutt Pattanaik’s TV serial Business Sutra in our next episode.

Devdutt Pattanaik’s Business Sutra |1.1 | Is there an Indian way of doing Business

business-sutra-1Business Sutra |1| Corporations

Devdutt Pattanaik opens the discussion in his TV serial Business Sutra by taking up the subject of:

What is the purpose of a corporation? Why does it exist? And is there a difference between corporations in India and those in the West? Wherefrom come these differences?

He goes on to explore the ideas of Happiness as well Strategic versus Tactical thinking. All this discussion leads one to wonder if professionalism is a good thing.

Typically, Devdutt Pattanaik gives no prescription.  He has provided the frameworks; the leader has to take the call.

In our present post, we will have a detailed look at the first of the three parts of this episode.

Business Sutra |1.1 | Is there an Indian way of doing Business

Apparently, since the core of any business activities remains more or less same, the way of doing business must also be the same anywhere. However, as is said in a 2010 HBR article – The India Way of Leading Business – these similarities are “different’ as well. In the same article, K V Kamath is quoted – “Time and again it has been proved that the Western model of doing business would not be a success here.” We “think in English and act in Indian,” is how R. Gopalakrishnan, the executive director of Tata Sons, puts it. “For the Indian manager,” he explained, “his intellectual tradition, his y-axis, is Anglo-American, and his action vector, his x-axis, is in the Indian ethos.”

The authors of this HBR article – Peter Cappelli, Harbir Singh, Jitendra Singh, and Michael Useem – in their book – The India Way: How India’s Top Business Leaders Are Revolutionizing Management – what Indian managers do differently, including: looking beyond stockholders’ interests to public mission and national purpose, drawing on improvisation, adaptation, and resilience to overcome endless hurdles, identifying products and services of compelling value to customers, investing in talent and building a stirring culture. Here are the interviews with Michael Useem and Peter Cappeli on this subject.

In an article – The Indian way of management –  published in Business Today in 2010, Sumant Sinha  notes that it’s a mix of organizational capabilities, management practices, and company culture that sets Indian enterprises apart from firms in other countries.

In an event at the American Enterprise Institute in 2014, Bill Gates speaks on what India does right

Here is one more video clip of Vodafone’s CEO Marten Pieters in a refreshingly honest conversation with ET NOW’s Sonali Krishna about the telecom industry, the plan ahead for Vodafone and why Vodafone doesn’t want to be the number one player in the country just yet, in the context of Indian business model.

This would be true for a business operating in any other country, may be some factor more dominant at one time and the other factor playing up in somewhat differently at other time.

Devdutt Pattanaik traces the roots of these differences in the (known or unknown) influence of the Indian mythology on the Indian psyche in Segment 1: On the Indian versus Western Context.

Here are the key points from his present discourse:

It was East India Company that brought to India the concept of a modern corporation a charter company issuing stock paying dividends and multinational in presence

Indians and Chinese have learned a lot from the West but they don’t have to copy. They cannot create a Chinese or Indian version for Western model.

To understand this, we need to visit the story of Alexander, The Great, when he met a naked ascetic at the bank of Indus. Though the ascetic was apparently doing nothing he did seem to be wise in every respect. Alexander asked the gymnosophist what he was doing nothing sitting over there staring at the Stars. The gymnosophist replied that I am experiencing things. He then asked Alexander as to what he was doing. Alexander said that he was conquering the world. Both laughed at each other. Alexander laughed because he thought the gymnosophist was a fool for doing nothing. The gymnosophist laughed because he thought it’s waste of life to do anything.

If we understand these differences in each other’s point of view, then we can understand the difference between the Indian mindset and the Western mindset

The Indian Way of doing business was not about doing business but using the act of doing business to figure out why you are doing what you’re doing. In the answer to that question there is growth, intellectual growth and emotional growth.

One really needs to understand the purpose of business.

It was this very point that in a 1994 Harvard Business Review article, Peter Drucker argued, “the root cause of nearly every [business] crises is not that things are being done poorly. It is not even that the wrong things are being done. Indeed, in most cases, the right things are being done—but fruitlessly.”

We will take up discussion of Purpose of Business, as presented in the Segment 2 of the first episode of Devdutt Paatanaik’s TV serial Business Sutra  in our next episode.