Corporates look to tread the India Way  

Venu Srinivasan couldn’t have been more emphatic. Speaking recently at a symposium organised by Indian Foundation for Quality Management (IFQM), of which he’s the Chairman, the TVS Motor Co Ltd Chairman said that India needs to build its “unique Indian way of progress” to position itself as a global leader and a go-to place for high-quality services and products.

If India follows the traditional trajectories of other countries, such as Germany, the US, Japan, Korea, or China, then we would always lag the world, he asserted.

So, what is the ‘India Way’? Srinivasan’s exhortations have found an endorsement all the way in Vienna, where on November 13, the Global Peter Drucker Forum will see prominent business leaders and management thinkers converging to debate and come up with a strategy to meet the challenges of today’s business environment. The event will also see the launch of ‘The India way’ concept, for which the forum is in a partnership with the Living Machine Institute, founded by M Unni Krishnan, a former MD of Brand Finance India.

A growing movement

The India Way, Krishnan points out, is a movement, nascent still, that seeks to apply India’s ancient wisdom of balance, renewal and longevity to corporate management. As corporates face increasing pressure for short-term growth and rising existential risk, this approach offers a path to sustainable, self-renewing success. “We believe it’s time to rethink what constitutes organisational success by embedding the principle of longevity as a superior marker, to which growth and profitability are duty-bound,” he says.

Krishnan says many examples abound in the world of corporations — from GE to Credit Suisse — where the focus has been purely on quarter numbers, return on capital, and achieving monetary targets, which ultimately led to them going aground. “These companies were reduced to soulless machines, purpose and trust were thrown to the winds when it came to achieving numbers. The alternative is what we refer to as a living machine, where the ‘living qualities’ such as mindset, purpose, trust and culture, along with contemporary management processes, create perpetual value. We need to build compounding returns that are nonlinear; it’s different from the shareholder maximisation model. This is an important choice that Indian leaders need to make,” he elaborates. Organic, compounding, slow, persistent path to growth is what many Indian companies have shown and, while they have not talked about it, they have practised it, he points out.

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More business leaders from Indian industry are articulating this view. Sanjay Behl, Chairman, CII Leadership and HR Committee, and a former CEO of Greaves and Raymond, says that almost everyone senses that the way organisations are run today no longer works. Employee engagement, customer trust and brand loyalties are at an all-time low. “And, yet, we keep flogging the traditional management practices of the 20th century, hoping that the solution lies in smartly managing more of the same,” he adds.

New metaphors needed

Behl, who’s on the global advisory council of the Living Machine Institute, describes how the engineering jargon we use to talk about organisations reveals how deeply ingrained is the metaphor of the organisation as a machine. “We talk about units and layers, inputs and outputs, efficiency and effectiveness, pulling the lever and moving the needle, information flows and bottlenecks, re-engineering and downsizing, and so on and so forth. We treat humans as a ‘resource’ that must be carefully aligned on the chart, rather like cogs in a machine,” he elaborates.

The India Way, says Behl, paves the way for a new metaphor of treating organisations as living organisms or systems. It recasts the foundational assumptions of modern management theory — sweating finite assets to maximise profits — to offer an alternative that blends human compassion, self-awareness and interconnectedness. It propounds that enterprises infused with living elements — such as purpose, mindset, culture and trust — prolong their life and garner much higher compounded returns. “It repivots the enterprise success to health and longevity rather than the short-term profit extraction model of today,” emphasises Behl.

R Gopalakrishnan, former executive director of Tata Sons, who is a member of the global advisory council, says longevity and long term are a mix of the soft and hard; focusing only on the hard metrics — such as market cap, return on capital and gross profit — does not work in the long run. He emphasises the need for a vibrant SHE — sustainable, humane, enlightened enterprises —atmosphere in the private sector. “Large groups which fit into a SHE framework include Godrej, Bajaj, Tata as a group, Asian Paints; and then there are small giants… giants in thinking… such as Galaxy Surfactants,” he says. India, he adds, needs more enterprises that have a compulsive purpose, deeply embedded in an organisational culture.

NV Balachandar, former CHRO of buses and trucks major Ashok Leyland, says the India way tries to understand the life-giving forces in an organisation that contribute to building a long-term and sustainable organisation. “Essentially, we look at how an organisation is beyond numbers: a network of people who have feelings, anxieties, concerns and ambitions, and how the leadership can weave all this and get the whole organisation to imbibe a certain way of working and subscribe to its vision. An organisation has a soul, and if leaders can understand this soul they can build a sustainable organisation,” says Balachandar.

Ashok Leyland, for instance, has seen ups and downs, but during the hard times its leaders retained their focus on product development and relationships with employees and dealers, he says. The Ashok Leyland way, which defines its purpose, includes trust, agility, innovation, customer centricity and partnerships, he explains. “When you understand what works well in an organisation, we can build a sustainable one; profit cycles will happen, but let not market demands alter the soul of the organisation,” he exhorts.

Multiple actions

Nagaraju Srirama, President and Director, JK Fenner, who has worked in Saint-Gobain and groups such as TVS and Tata, says in today’s business environment the need for an emphasis on people couldn’t have been greater. Machines and technology are no longer a differentiator like they were a couple of decades ago. That can be sourced from anywhere in the world. “Take our own group; we are more than 100 years old and continuously doing well and growing. It’s only the ethos and philosophy of the group, where we want everybody to work happily for us and put in their best efforts to achieve the goals… That is a big difference,” he explains. Srirama says the company invests in people development programmes at multiple levels — from executive coaching for senior leaders right down to shop floor workers, spending around two per cent of its revenues on these activities. “Sustaining organisations for longevity means it is not one action but multiple actions at multiple levels which are needed,” he adds.

More than a decade ago, rather presciently, Michael Useem, Professor Emeritus of Management, Wharton Business School, wrote in his book The India Way: How India’s top business leaders are revolutionising management that Indian companies emphasise not only shareholder value but also holistic engagement with employees, community, country, and family. “Indian leaders have taken the best of what the West has to offer and brought forward additional ways to make things happen based on their wisdom and culture,” he had said.

In an interview related to the the book, he had also said that big investors and shareholders pushed companies to raise their quarterly earnings and their focus remained on numbers. “If you look at Indian company annual reports, it doesn’t talk about shareholder value but about employees, purpose, mission and giving back to the country,” he commented. Perhaps it’s time for Indian companies to formalise the Indian Way, like the Japanese Sensei Way or the German Mittelstand Family Way of its mid-sized companies.