Thursday, 4 July 2013 00:01
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CIMA Business Leaders Summit shares expert insight
By Shabiya Ali Ahlam
With fame and fortune following in the footsteps of business leaders, they are in a way the rock stars of today’s times.
Although success is sweet, the fall from grace can be devastating. The question arises as to how a leader can do the right thing in a period where nearly all economic crises are blamed on people in power.
Gearing the leaders to face the reality, the Chartered Institute of Management Accountants (CIMA) Sri Lanka, hosted the Business Leaders Summit 2013 to articulate the need of today’s business for a transpersonal leader – one who knows how to transcend himself and put the success of true stakeholders first.
Held on the theme of ‘Get REAL’ which stands for Radical Evolutionary Authentic Leadership, the summit addressed what a leader should do better, or differently, since the next step is in the transformation of the corporate leader into a leader of people than just businesses.
The conference played host to a diverse mix of renowned global business leaders who challenged the existing dynamics while transfiguring the meaning of leadership as most know it.
Mind the gap
Understanding of different generations and the gap between them has many applications in all areas of life. This is from parents interacting with children, to sales people selling to younger or older clients, to managers who work with teams of people of different ages.
Tomorrow Today Co-Founder Dean Van Leeuwen stressed the importance of understanding as to why people of different ages see the world in such different ways and how a generation gap influences attitudes and behaviours.
Presenting the characteristics of the generations classified under four segments, Leeuwen said: “By understanding the impact of different generations, inside and outside your organisation, you can improve customer relationships, and the productivity and interactions of your teams.”
The Silent Generation: Born 1920s to 1945, were influenced in their youth by the ‘Great Depression’ and World War II. Having grown up in serious times, whether one liked it or not, everyone had to do their duties, and believed that children ‘should be seen and not heard’. Conservative, hard-working and structured, this generation prefers rules, order and formal hierarchies and have a “waste not, want not” mentality, and hate getting into debt.
Where they are today, Leeuwen stated that majority of this group are entering elder-hood, facing the future as fairly well adjusted older people, and are able to connect well with new technology and with young people.
Baby Boomers: Born in 1946 to early 1960, is the generation that believes that if they can put a man on the moon, they can do just about anything, according to Leeuwen. Currently the leaders and captains of industries and companies, their moralistic outlook spurred them on to activism against the establishment and are destined to hold onto power in politics, corporates and religion for more decades yet. While they love conspicuous consumption, they are identified as a workaholic generation that is driven, goal oriented and bottom line focused.
Stating that this is the only generation that understands the difference between the ‘vision’ and ‘mission’ statement, Leeuwen pointed out that they care more about creating a fair and level playing field for all who agree with them.
Generation X: Those born in the late 1960s to 1980s, is the generation that grew up during the collapse of communism. For them, adults had become busier and didn’t know what was going on. According to Leeuwen, this generation doesn’t need change consultants, as they are themselves all about change. “If there is no change, they will make changes to happen around them,” he said. Having less priority for family and partnerships, they also are noted to have less care for company and brand loyalty and are understood by the older generations as those who are rebellious.
Today, they need options and flexibility and dislike close supervision. Preferring freedom and an outputs-driven workplace, they want rules but from the right authorities only.
Generation Y: Born in late 1980s to 2000, this generation is defined as the generation that grew up in the new era of globalisation, communication technology and wireless connectivity. They are living in an age of unprecedented diversity and exposure to other cultures. While the Baby Boomers will love working with this generation, this generation demands reasons and rationale. Well aware of the fragile environment we live in today, they are noted to be emerging as ethical consumers who want to change the world.
Having presented the above, Leeuwen stated that having an elegant simplicity, the generational theory is immediately applicable, unlike other complex segmentation tools.
“Each generation is born in a different season, and each season shapes the attitudes and values of that generation. If you understand some of the values, you can look at the world and will be able to understand why certain people are the way they are,” he expressed.
Leeuwen noted that the challenges for leaders in all sectors of business and society come from a clash of the generations where there is collision of values, expectations, ambitions, attitudes and behaviours.
“As a real leader, you need to know what your quest is, communicate it to the younger generations, be realistic, and encourage fun in your workplace,” added Leeuwen.
From rational to radical
Believing that radical leaders can build businesses which bring out the best in people in society, Bridge Asia Pacific Managing Director Simon McKenzie pointed out that some businesses are run by leaders who destroy value, trust and ultimately people.
Recalling the well documented crisis of the banking system which took place in 2008, he highlighted the impact of such on people.
McKenzie shared a study by the Bureau of Labour Statistics which found the median number of days away from work from a result of anxiety, stress, and related disorders was 25, which is substantially greater than the median of six for all injury and illness cases.
Speaking on the four big shifts for ‘beautiful businesses,’ McKenzie said: “The organisations we have studied seem to be building beautiful businesses by challenging conventional wisdom in four subtle, but significant ways. These four shifts in performance are allowing big organisations to behave like the best small businesses. They have found their soul, unlocked the talent of the masses and are displaying creativity and dynamism that is synonymous with great start-ups.”
Liberated Leaders: Stressing that one’s internal state as leader really matters, McKenzie said that when looking at stories of corporate failure, most believe it is much more about the leader’s internal state. “He confines himself into a box, which restricts him and those with him to reach out, extend boundaries, and do better. When in a box, one looks at the darker side of values, and by analysing the mind traps, one should try to get out of this,” stated McKenzie.
Audacious Purpose: With Unilever as an example, he said that the organisation has three ambitious goals for 2020, which is to help one billion people improve their health and wellbeing, improve livelihoods and halve the environmental footprint of its product whilst doubling the size of its business globally. According to him, to achieve this goal the business has to turn many of its big assumptions about how to succeed on its head. “This demands more than simply an enlightened approach to Corporate Social Responsibility; it requires a fundamentally different way of doing business. As Paul Polman, the CEO of Unilever puts it: Winning alone is not enough, it’s about winning with purpose,” noted McKenzie.
Leading Together: “While you know when you achieved this you can all look back and say, wow – we did this together, it all starts with conversation,” said McKenzie.
Taking the example of Toll, a global logistics organisation with operations here in Sri Lanka that has an inspiring story of leading together, he shared the story of Toll Ex-CEO Paul Little where he took the business from a USD$ 21 million company in 1986 to one of Australia’s biggest with turnover of USD$ 8.7 billion by starting a program to help ex-offenders get back on their feet.
While research in the UK suggests that 99% of ex-offenders who are not in work within six months will be back in prison within two years, this program was noted to reverse this, according to McKenzie.
Discovering Genius: McKenzie opined that this is about breaking two myths. The first, which is the myth of an insightful leader, “genius will never be found by those in thrall to their expertise or experience or even by those who think it is their job to come up with the great idea” he said and added that beautiful businesses realise that relying on too few minds habitually is a chronic waste of resource. They seek to tap into the genius of the whole.
The second, the myth of inspiration where many imagine the big breakthroughs come as the result of great acts of inspired thought.
“Whilst this may be true on occasion more often. True innovation requires both inspiration and perspiration. We ignore short term failure and rise above challenges, turning the beginnings of a good idea into a genuine ground breaking innovation through persistence and effort,” asserted McKenzie.
Best practice to next practice
Stating that leaders are obsessed with best practice, The Oaktree Foundation CEO Viv Benjamin stated that a best practice can be defined as a method or technique that has consistently shown results superior to those achieved with other means, and that is used as a benchmark.
“If best practice is the most effective method known, then surely as leaders our only task is to ensure our organisations meet best practice. At least, this is what many leaders assume,” said Benjamin.
She noted that there is a difference between administrative leadership, and true leadership.
Administrative leadership ensures the organisation is managed and maintained, that staff are supervised and processes are implemented well. While this is 99% of what most people in the leadership position do, true leadership according to her is about pioneering new horizons and is about radical, ground-breaking, revolutionary change.
“In administrative leadership, best practice benchmarking has become a common practice, which most organisations use to identify what must be done to emulate those who do something better. Unfortunately, most stop there with emulation, and that may doom them to mediocrity forever,” expressed Benjamin.
Noting that best practices do not always help us ask the hard questions that drive new thinking and experimentation, she opined that best practices in their very nature are backwards looking.
“Next practices are tested in action first and then proven. We need more next practices, especially for complex environments and in dealing with complex problems, which are more common in many organisations,” she stressed.
While fundamentally best practice seeks to provide answers about ‘what works,’ next practice seeks to ask questions about ‘what matters?’
While best practice thinking asks questions such as ‘what are other leaders doing?’ ‘what approaches are making other organisations successful?’ and ‘what are the tried and tested techniques?’ next practices gets one thinking by asking questions such as ‘who are we here to serve?’ ‘how can we best achieve our purpose?’ and ‘how will the world be different tomorrow as a result of what we do today?’
“We need to know the why before the how. As a leader, you cannot truly find what works unless you first know why you do what you do and develop a crystal clear purpose. Only then can you focus on how to get there. It is just common sense, and yet is so frequently neglected by leaders,” asserted Benjamin.
She went on to say that next practice is a commitment to a process and not an end product. In moving from ‘best practice’ to ‘next practice,’ one must acknowledge that the best solutions come from development and not imposition.
While the majority of those in the audience were confronted when Benjamin asked if knew what they stood for, she pointed that a company’s mission statement is what any leader can recite. Presenting her argument that not every leader has purpose that is true, deep, rock solid, and burning hot, Benjamin pointed out that it is just no longer sufficient to see the work of leadership as limited to one’s position in a single organisation.
“Leaders must provide vision and purpose. All effective leadership requires the generation of collective vision and shared purpose. Radical change across organisations has to take everyone with it, and unity is forged from the fires of purpose,” asserted Benjamin.
Opining that just as one’s purpose should be unique, she emphasised that one should accept the fact that practices for pursuing that purpose may also need to be unique. According to her, seeking best practice is about keeping up with the existing known way and following what others are doing. But next practice is about pioneering the unknown way for one’s unique purpose.
“Best practices only allow you to do what you are currently doing a little better, while next practices increase your organisation’s capability to do things that it could never have done before,” said Benjamin.
Evolutionary leadership
Tracing the evolution of key leadership skills that NASA employs in managing its billion dollar projects such as the building and deployment of space probes and spaceships, he stated that organisations prefer to invest more into building hard skills, technical knowledge, and project management skills rather than in what has become known today as soft-skills, leadership wisdom, proficient communication and team building.
“Technical people focus so intently on their tasks that they fail to notice, much less manage their team’s social context,” noted the award winning space scientist. However, he opined that the term ‘soft’ is unfair, since this expertise is so important yet so difficult to be developed.
According to Bratasanu, the failure to recognise the importance of team social context leads to severe problems in the organisation such as high financial losses and devastating effects on personal health and relationships. He added that un-noticed social shortfalls destroy even the best-managed programs and projects.
“Tragic consequences follow when companies and organisations do not reach balance in their team and do not properly manage their social contexts. Now corporations have the opportunity to learn from world’s renowned space programs tools and techniques to manage and enhance their social contexts and performance,” he said.
He shared that former Director of Astrophysics at NASA and Professor of Leadership at the University of Colorado Dr. Pellerin developed a successful system for measuring and enhancing the performance of teams by improving social context management. The examples were chosen from the aerospace industry because when accidents happen in that environment, investigations are extremely detailed, not limited by time and resources and they reach the root causes of the failure.
While pointing out powerful lessons that can be learnt from the history of aerospace, Bratasanu shared NASA’s Space Shuttle Challenger incident which occurred in 1986, where it exploded immediately after launch, taking the lives of six astronauts and a high-school teacher before the eyes of their families and friends.
Bringing to light the reasons for failure as stated by Stephen Johnson from NASA in 2008, Bratasanu pointed out that frequently; it is found that failure effects and proximate causes are technical, but the root causes are social and psychological, and according to Johnson, 80-95% of failures are ultimately due to human error and miscommunication.
“The people involved in this project were world-renowned experts, Nobel Prize winners, and very smart and incredibly talented engineers. They knew how to build a spacecraft, how to send it into orbit and bring it back safely since they have done it several times before. However, the pressures from management and the leadership styles were so psychologically violent that engineers and scientists decided to launch the spacecraft although these technical problems were known in advance. According to NASA Scientist Dr. John Mather, more than 50% of the cost of a project is socially determined.
Highlight another scenario in the 1990s where NASA launched the Hubble Telescope, a masterpiece of technology and innovation, the US$ 1.7 billion satellite was built to take images of universe’s distant objects. After many years of research and engineering, the satellite was sent into orbit with a flawed mirror, an error that could have been committed only by an amateur with no engineering experience. Bratasanu shared that extended investigations revealed that NASA’s management had been so hostile that they would not report technical problems and were simply worn out due to frustration, anger, threats and beatings.
While many people lost their careers because of this incident, many lost their reputations and some of them even lost their lives.
In that backdrop, he questioned that in any project, what is it that creates the biggest and most expensive problem? Is it technology or people? Bratasanu asserted that in any project, the biggest, most expensive and dangerous problems are created by unmanaged, flawed social contexts.
Presenting the world-renowned 4-D system provided by Lightman Consulting to deliver measurable capability and behavioural change in technical teams and organisations, Bratasanu said that the four dimensions of cultivating, visioning, including, and directing should be taken into account along with having, mutual respect enjoyable work experience and energising collaboration along with sustained, effective creativity by looking at innovative solutions. In addition to this, he mentioned that leaders should be authentic, aligned and must be highly trustworthy, and should be outcome focused, have clear responsibility, and achievable expectations.
Achieving authenticity
Tata Sons Director R. Gopalakrishnan started off by saying that at the time of the industrial revolution, for the business world the basis of competitive advantage was on physical assets. “In the last 30 years, we have heard a lot about the basis of competitiveness being based on knowledge assets. As we go forward into whatever the next age will be called, I wonder whether the basis of competitiveness in the world of business will be based on ethical assets,” he said.
Opining that his statement sounds rather pompous since commerce and business are predicated on the principles of capitalism, he observed that all over the world, capitalism is associated with greed, ego and similar negative qualities and the excess of such has taken place periodically throughout the history of commerce.
Gopalakrishnan emphasised that one must reflect on what the future might be by addressing three questions, which are: Who really owns the corporation? Can business be a servant of society? And are there principles to build a long-life company?
Addressing the first question of ‘who really owns the corporation?’ he said one needs to keep the concepts of trusteeship in mind and should understand that being an anonymous servant of humanity is very much a part of a leader’s privilege and not his plight. “When that idea seizes leaders, then I think the concept of trusteeship leaps out at you, it makes leadership look effulgent, makes it meaningful. All of us must lay our head on pillow for the last time sometime in our lives. It makes you realise that what you leave behind can make a big difference to someone. It is not your name or fame,” he said. Gopalakrishnan elaborated that according to him, such a situation would be the ‘nirvana’ of business where it would earn business a respectful place in the society, and business people can hold their head high. Regarding the second question, can business be a servant of society, he said, that a business is a servant of society and it is not the other way around. He opined that in the current context, when one observes how business leaders behave, it is felt that the business controls the society.
“When I joined TATA 10 years ago, I learned the fact that probably the world’s first charitable trust was set up by Jamsetji Tata in 1892. I ask myself the question, what made Jamsetji Tata, who was wealthy by Indian standards of the 1880s, but probably not so by international standards, set up an instrument which was not well-known or widely practiced by companies at that time, to set up the J.N. TATA Endowment Trust? As he articulated its purpose, it would enable talented Indians to go abroad to get advanced training and so that they could return to India to work for the betterment of their country,” Gopalakrishnan shared.
He noted that the ulterior motive of making the profit is not merely to declare a dividend or bonus shares. Since what came from the people must go back to the people, ‘who does the company earns its profits from?’ he questioned. Answering the same, Gopalakrishnan said that a company earns from the capital given by shareholders, consumers, trade with vendors, and so on. He asserted that the surplus earnings belong not just to shareholders, but to the community and society as well. “The fundamental characteristic of working with the trusteeship concept concerns the real purpose of business, to return to society what you earn from society. To do this, you must work with a particular attitude described by another great business leader,” said Gopalakrishnan.
Moving on to the third question, ‘are there principles to build a long-life company?’ Gopalakrishnan opined that just as anthropologists and physiologists are interested in factors that influence human existence and life-spans, management practitioners and academics spend a lot of time in understanding what makes some companies enduring while some become irrelevant in a short time.
“An organisation must be viewed as part of a bigger eco-system in line with the very fundamental law of nature which states that survival of a species depends on having a mutually rewarding relationship with its environment. Employees within organisations need to have just that little extra stretch in their efforts to take the organisation to its potential,” he said.
Pix by Upul Abayasekara
Best practice to next practice
Stating that leaders are obsessed with best practice, The Oaktree Foundation CEO Viv Benjamin stated that a best practice can be defined as a method or technique that has consistently shown results superior to those achieved with other means, and that is used as a benchmark.
“If best practice is the most effective method known, then surely as leaders our only task is to ensure our organisations meet best practice. At least, this is what many leaders assume,” said Benjamin.
She noted that there is a difference between administrative leadership, and true leadership.
Administrative leadership ensures the organisation is managed and maintained, that staff are supervised and processes are implemented well. While this is 99% of what most people in the leadership position do, true leadership according to her is about pioneering new horizons and is about radical, ground-breaking, revolutionary change.
“In administrative leadership, best practice benchmarking has become a common practice, which most organisations use to identify what must be done to emulate those who do something better. Unfortunately, most stop there with emulation, and that may doom them to mediocrity forever,” expressed Benjamin.
Noting that best practices do not always help us ask the hard questions that drive new thinking and experimentation, she opined that best practices in their very nature are backwards looking.
“Next practices are tested in action first and then proven. We need more next practices, especially for complex environments and in dealing with complex problems, which are more common in many organisations,” she stressed.
While fundamentally best practice seeks to provide answers about ‘what works,’ next practice seeks to ask questions about ‘what matters?’
While best practice thinking asks questions such as ‘what are other leaders doing?’ ‘what approaches are making other organisations successful?’ and ‘what are the tried and tested techniques?’ next practices gets one thinking by asking questions such as ‘who are we here to serve?’ ‘how can we best achieve our purpose?’ and ‘how will the world be different tomorrow as a result of what we do today?’
“We need to know the why before the how. As a leader, you cannot truly find what works unless you first know why you do what you do and develop a crystal clear purpose. Only then can you focus on how to get there. It is just common sense, and yet is so frequently neglected by leaders,” asserted Benjamin.
She went on to say that next practice is a commitment to a process and not an end product. In moving from ‘best practice’ to ‘next practice,’ one must acknowledge that the best solutions come from development and not imposition.
While the majority of those in the audience were confronted when Benjamin asked if knew what they stood for, she pointed that a company’s mission statement is what any leader can recite. Presenting her argument that not every leader has purpose that is true, deep, rock solid, and burning hot, Benjamin pointed out that it is just no longer sufficient to see the work of leadership as limited to one’s position in a single organisation.
“Leaders must provide vision and purpose. All effective leadership requires the generation of collective vision and shared purpose. Radical change across organisations has to take everyone with it, and unity is forged from the fires of purpose,” asserted Benjamin.
Opining that just as one’s purpose should be unique, she emphasised that one should accept the fact that practices for pursuing that purpose may also need to be unique. According to her, seeking best practice is about keeping up with the existing known way and following what others are doing. But next practice is about pioneering the unknown way for one’s unique purpose.
“Best practices only allow you to do what you are currently doing a little better, while next practices increase your organisation’s capability to do things that it could never have done before,” said Benjamin.
Evolutionary leadership
Tracing the evolution of key leadership skills that NASA employs in managing its billion dollar projects such as the building and deployment of space probes and spaceships, he stated that organisations prefer to invest more into building hard skills, technical knowledge, and project management skills rather than in what has become known today as soft-skills, leadership wisdom, proficient communication and team building.
“Technical people focus so intently on their tasks that they fail to notice, much less manage their team’s social context,” noted the award winning space scientist. However, he opined that the term ‘soft’ is unfair, since this expertise is so important yet so difficult to be developed.
According to Bratasanu, the failure to recognise the importance of team social context leads to severe problems in the organisation such as high financial losses and devastating effects on personal health and relationships. He added that un-noticed social shortfalls destroy even the best-managed programs and projects.
“Tragic consequences follow when companies and organisations do not reach balance in their team and do not properly manage their social contexts. Now corporations have the opportunity to learn from world’s renowned space programs tools and techniques to manage and enhance their social contexts and performance,” he said.
He shared that former Director of Astrophysics at NASA and Professor of Leadership at the University of Colorado Dr. Pellerin developed a successful system for measuring and enhancing the performance of teams by improving social context management. The examples were chosen from the aerospace industry because when accidents happen in that environment, investigations are extremely detailed, not limited by time and resources and they reach the root causes of the failure.
While pointing out powerful lessons that can be learnt from the history of aerospace, Bratasanu shared NASA’s Space Shuttle Challenger incident which occurred in 1986, where it exploded immediately after launch, taking the lives of six astronauts and a high-school teacher before the eyes of their families and friends.
Bringing to light the reasons for failure as stated by Stephen Johnson from NASA in 2008, Bratasanu pointed out that frequently; it is found that failure effects and proximate causes are technical, but the root causes are social and psychological, and according to Johnson, 80-95% of failures are ultimately due to human error and miscommunication.
“The people involved in this project were world-renowned experts, Nobel Prize winners, and very smart and incredibly talented engineers. They knew how to build a spacecraft, how to send it into orbit and bring it back safely since they have done it several times before. However, the pressures from management and the leadership styles were so psychologically violent that engineers and scientists decided to launch the spacecraft although these technical problems were known in advance. According to NASA Scientist Dr. John Mather, more than 50% of the cost of a project is socially determined.
Highlight another scenario in the 1990s where NASA launched the Hubble Telescope, a masterpiece of technology and innovation, the US$ 1.7 billion satellite was built to take images of universe’s distant objects. After many years of research and engineering, the satellite was sent into orbit with a flawed mirror, an error that could have been committed only by an amateur with no engineering experience. Bratasanu shared that extended investigations revealed that NASA’s management had been so hostile that they would not report technical problems and were simply worn out due to frustration, anger, threats and beatings.
While many people lost their careers because of this incident, many lost their reputations and some of them even lost their lives.
In that backdrop, he questioned that in any project, what is it that creates the biggest and most expensive problem? Is it technology or people? Bratasanu asserted that in any project, the biggest, most expensive and dangerous problems are created by unmanaged, flawed social contexts.
Presenting the world-renowned 4-D system provided by Lightman Consulting to deliver measurable capability and behavioural change in technical teams and organisations, Bratasanu said that the four dimensions of cultivating, visioning, including, and directing should be taken into account along with having, mutual respect enjoyable work experience and energising collaboration along with sustained, effective creativity by looking at innovative solutions. In addition to this, he mentioned that leaders should be authentic, aligned and must be highly trustworthy, and should be outcome focused, have clear responsibility, and achievable expectations.
Achieving authenticity
Tata Sons Director R. Gopalakrishnan started off by saying that at the time of the industrial revolution, for the business world the basis of competitive advantage was on physical assets. “In the last 30 years, we have heard a lot about the basis of competitiveness being based on knowledge assets. As we go forward into whatever the next age will be called, I wonder whether the basis of competitiveness in the world of business will be based on ethical assets,” he said.
Opining that his statement sounds rather pompous since commerce and business are predicated on the principles of capitalism, he observed that all over the world, capitalism is associated with greed, ego and similar negative qualities and the excess of such has taken place periodically throughout the history of commerce.
Gopalakrishnan emphasised that one must reflect on what the future might be by addressing three questions, which are: Who really owns the corporation? Can business be a servant of society? And are there principles to build a long-life company?
Addressing the first question of ‘who really owns the corporation?’ he said one needs to keep the concepts of trusteeship in mind and should understand that being an anonymous servant of humanity is very much a part of a leader’s privilege and not his plight. “When that idea seizes leaders, then I think the concept of trusteeship leaps out at you, it makes leadership look effulgent, makes it meaningful. All of us must lay our head on pillow for the last time sometime in our lives. It makes you realise that what you leave behind can make a big difference to someone. It is not your name or fame,” he said. Gopalakrishnan elaborated that according to him, such a situation would be the ‘nirvana’ of business where it would earn business a respectful place in the society, and business people can hold their head high. Regarding the second question, can business be a servant of society, he said, that a business is a servant of society and it is not the other way around. He opined that in the current context, when one observes how business leaders behave, it is felt that the business controls the society.
“When I joined TATA 10 years ago, I learned the fact that probably the world’s first charitable trust was set up by Jamsetji Tata in 1892. I ask myself the question, what made Jamsetji Tata, who was wealthy by Indian standards of the 1880s, but probably not so by international standards, set up an instrument which was not well-known or widely practiced by companies at that time, to set up the J.N. TATA Endowment Trust? As he articulated its purpose, it would enable talented Indians to go abroad to get advanced training and so that they could return to India to work for the betterment of their country,” Gopalakrishnan shared.
He noted that the ulterior motive of making the profit is not merely to declare a dividend or bonus shares. Since what came from the people must go back to the people, ‘who does the company earns its profits from?’ he questioned. Answering the same, Gopalakrishnan said that a company earns from the capital given by shareholders, consumers, trade with vendors, and so on. He asserted that the surplus earnings belong not just to shareholders, but to the community and society as well. “The fundamental characteristic of working with the trusteeship concept concerns the real purpose of business, to return to society what you earn from society. To do this, you must work with a particular attitude described by another great business leader,” said Gopalakrishnan.
Moving on to the third question, ‘are there principles to build a long-life company?’ Gopalakrishnan opined that just as anthropologists and physiologists are interested in factors that influence human existence and life-spans, management practitioners and academics spend a lot of time in understanding what makes some companies enduring while some become irrelevant in a short time.
“An organisation must be viewed as part of a bigger eco-system in line with the very fundamental law of nature which states that survival of a species depends on having a mutually rewarding relationship with its environment. Employees within organisations need to have just that little extra stretch in their efforts to take the organisation to its potential,” he said.
Pix by Upul Abayasekara