C orporateTHE ECONOMIC TIMES Dossier

01 September 05-11, 2014*

TheThe Economic Times CorporateInfl Dossier presentsuentials India Inc’s defi nitive power listing

1 2 3 4 5 6 7 8 9 10 N R Mukesh Kumar Azim Anil Anand Chanda Sunil Natarajan Deepak Narayana Dhirubhai Mangalam Premji Dhirubhai G Mahindra D Kochhar Mittal Chandrasekaran Parekh Murthy Ambani Birla Ambani Man For All Seasons

Why N R Narayana Murthy How do you assess leadership potential? The fi rst requirement is courage. The second is the ability never fails to strike a chord to craft a grand vision and carry people along towards that By Dibeyendu Ganguly vision. That means being able to communicate that vision, with the tough things that go with it. A great leader also has aybe it’s his credo of simple living and the ability to make people an inch taller in his presence. higher thinking, reminiscent of Gan- dhi. Maybe it’s because he’s come to be How important is fi nancial performance to leadership? the face of India’s booming informa- Financial performance is important as an instrument to tion technology sector. Or maybe it’s the give back to society, in terms of jobs, taxes, higher edu- moneyM he’s made for his shareholders, employees and cation, image of India. A leader must be able to relate to anyone else lucky enough to be associated with Infosys. society because it is an important stakeholder. But there’s something about NR Narayana Murthy that has always captured the Indian imagination. The chair- How important is image management for a leader? man of Infosys has been at the top spot of the India Inc’s It’s important for leaders to realize that image manage- Most Powerful List more times than anyone else, and this ment is an ingredient of leadership but image can’t be year too, he has been voted Numero Uno. In an interview wholly different from reality. In an environment where with CD, India Most Powerful CEO talks about managing visibility is high and there are so many different infor- people and his legacy. Edited excerpts: mation channels, leaders who try to be something they are not will be exposed. I came from a lower middle class background. When we had access to wealth, we decided to continue to live in a way that comes naturally to us.

What’s your advice on managing people? You need to start every transaction on a zero base. Don’t bring in biases from prior transactions. Base the transac- tion on facts. You can disagree but you can’t be disagreeable.

That’s a very mathematical way of looking at people in- teractions... I’ve always enjoyed mathematics. It is the most precise and concise way of expressing any idea. If we use facts, forecasting, pattern recognition, big data, the truth will come out. Mathematical models can be used to simplify Why do you think people keep voting you India Inc’s complex things. For today’s VUCA world, there’s a branch Most Powerful CEO? of mathematics called Chaos Theory. There’s Prob-Stats It would be presumptuous of me to try and answer that. I’m for uncertainty modeling. I’ve used computer science, just grateful for this honour and hope I’m deserving of it. maths and physics in everyday life. I’ve surrounded my- self with some very smart people who do the same. What would you like your legacy to be? We demonstrated, for the fi rst time in the history of in- How stressful is it, leading a company like Infosys? dependent India, that a set of ordinary, hard working The biggest stress in India is dealing with the govern- people with strong values could create jobs, create wealth ment. It’s especially stressful for someone like me who and distribute wealth on a large scale, all of it legally and likes to get on with it, move fast. But those in government ethically. Infosys demonstrated to the world that an Indian are not used to quick resolution of issues. company could implement standards of quality, opera- tions, fi nance that compare with the best. That is a legacy Have you ever sought spiritual succor in times of stress? I am happy with. I’m a karmayogi. I believe work itself should bring happi- ness, mental peace and a good night’s sleep. I’m a devotee Was your second stint as executive chairman different of Lord Raghavendra of Mantralaya, but that’s personal. from the fi rst? Infosys is like my middle child, so when the Board invited Many believe you should be President of India... me to return and add value to the company, I could not say I’m 68 years old. We currently have an excellent presi- no, though some people said there would be no upside for dent and by the time he fi nishes his term I’ll be 71. We me in this. Leadership is about doing the right thing, even need to give responsibility to younger people now. Every if it going against a vast number of naysayers and medio- Indian needs to work 16 hours a day if we are to develop cre people. I took tough decisions in my second innings, as a nation. Younger people have the energy, they can do just as in my fi rst. It was no different. it better. The Influentials

02 Corporate Dossier September 05-11, 2014 INDIA INC’S MOST POWERFUL CEOs 2014

2014 2013 2013 2014 N R Narayana Murthy Infosys 1 NA* NEW 51 Sachin & Binny Bansal Flipkart Mukesh D Ambani Reliance Industries 2 1 NEW 52 S K Roy LIC Kumar Mangalam Birla Aditya Birla Group 3 4 49 53 Y K Hamied Cipla Azim Premji Wipro 4 2 79 54 C S Verma SAIL Anil D Ambani Reliance ADAG 5 6 82 55 G V K Reddy GVK Group Anand G Mahindra Mahindra & Mahindra 6 9 75 56 Kushal Pal Singh DLF Chanda D Kochhar ICICI Bank 7 5 85 57 Sunil Kaushal Standard Chartered India Sunil Mittal Bharti Enterprises 8 7 58 58 B Prasada Rao BHEL N Chandrasekaran Tata Consultancy Services 9 8 NEW 59 Sanjiv Mehta Hindustan Unilever Deepak Parekh HDFC 10 11 41 60 S S Mundra Bank of Baroda 11 13 67 61 Habil F Khorakiwala Wockhardt Arundhati Bhattacharya State Bank of India 12 NA* 70 62 R Thyagarajan Shriram Group Gautam S Adani Adani Group 13 30 52 63 N Srinivasan India Cements Shiv Nadar HCL 14 14 65 64 Ashwin Choksi Asian Paints Adi Godrej Godrej Group 15 15 83 65 K M Mammen MRF Uday Kotak Kotak Mahindra Bank 16 23 61 66 B C Tripathi GAIL Dilip S Shanghvi Sun Pharmaceuticals 17 56 88 67 Sanjay Lalbhai Arvind Aditya Puri HDFC Bank 18 10 47 68 Martin Pieters Vodafone India Naveen Jindal Jindal Steel & Power 19 17 63 69 Debu Bhattacharya Hindalco Industries A M Naik Larsen & Toubro 20 18 93 70 B N Kalyani Bharat Forge Sashi Ruia & Ravi Ruia Essar 21 19 62 71 R S Butola Indian Oil Yogesh Chander Deveshwar ITC 22 12 96 72 Rajan Raheja Rajan Raheja Group Shikha Sharma Axis Bank 23 21 NEW 73 Nishi Vasudeva HPCL Rajiv Bajaj Bajaj Auto 24 16 94 74 Onkar S Kanwar Apollo Tyres Sajjan Jindal JSW Group 25 44 53 75 Vijay Mallya UB Group TVS Group 26 26 NEW 76 B K Goenka Welspun Group T V Narendran 27 NEW 87 77 Gautam Thapar Avantha Group Pawan Munjal Hero Motocorp 28 45 NEW 78 S Varadarajan BPCL Venugopal N Dhoot Videocon 29 73 40 79 Arup Roy Choudhary NTPC Kalanithi Maran Sun Group 30 48 95 80 Shyam Bhartia Jubiliant Kiran Mazumdar-Shaw Biocon 31 43 NEW 81 Gautam Singhania Raymond Naresh Goyal Jet Airways 32 24 59 82 Shinzo Nakanishi Maruti Suzuki Rajan Anandan Google India 33 42 57 83 Narsing Rao Coal India D Shivakumar Pepsico India 34 NEW 39 84 K R Kamath Punjab National Bank Subhash Chandra Essel Group 35 37 81 85 Malvinder Singh Fortis Healthcare Prashant Ruia Essar 36 68 51 86 Kalpana Morparia JP Morgan India Nusli Wadia Wadia Group 37 32 71 87 Analjit Singh Max India G V Prasad Dr Reddy’s Laboratories 38 NEW 76 88 Harsh Mariwala Marico Sanjiv Goenka RP-Sanjiv Goenka Group 39 69 NEW 89 Ajay Shriram DCM Shriram Kishore Biyani Future Group 40 34 50 90 Naina Lal Kidwai HSBC India Ajay G Piramal Piramal Group 41 33 84 91 Pramit Jhaveri Citi India Bhaskar Bhat Titan Industries 42 60 35 92 BD Park Samsung India Anand Burman Dabur 43 55 100 93 Bhaskar Pramanik Microsoft India Anil Agarwal Vedanta 44 29 92 94 Roopa Kudva Crisil PRS Oberoi East India Hotels 45 NEW 90 95 Rana Kapoor Yes Bank A Vellayan Murugappa Group 46 54 NEW 96 Rajiv Lall IDFC Shobhana Bhartia HT Media 47 77 98 97 Meher Padumjee Thermax G M Rao GMR Infrastructure 48 80 74 98 T M Bhasin Indian Bank Dinesh K Sarraf ONGC 49 NEW NEW 99 Ajit Gulabchand HCC Harsh Goenka RPG Enterprises 50 66 NEW100 Deshbandhu Gupta Lupin * Mr Murthy was not a contender last year as he was then in a non-executive role at Infosys

or the business historian, India methodology is a fascinating country. For business community: By Tirthankar Roy centuries, its coastal regions Ftraded with the world and enor- mous caravan trains moved grain and How we did it cotton overland. The coastal trade encouraged the European East India Companies to set up bases in ports like he Economic Times Corporate Surat, Masulipatnam and Hooghly Rise and Decline Dossier commissioned IMRB in the 1600s. Out of Indo-European TInternational to conduct a survey trading enterprise three new port The ‘Marwari’ is now a part of history their business at the time of this politi- to ascertain ‘India Inc’s Most Powerful cities emerged in the 1700s, , cal shift. Several groups, including CEOs’ for the year 2014. The team at Chennai, and Kolkata. Between 1860 the Marwari, moved a long distance IMRB was provided with a long list of and 1940, employment in factories away from their original homes. They 115 CEOs, selected by referring to the using machinery and employing THE PEOPLE needed to reinvent cooperative bonds. ET-500. The 115 CEOs were divided into wage-earning workers increased THAT ALL The eighteenth century turmoil did five sets with each set comprising of from less than a hundred thousand NORTH not exactly give birth to the commu- 23 CEOs. Each of the sets had a mix of to two million. The rate of growth in INDIANS nity, but it led to a major consolidation CEOs from varied sectors and the sets were similar in composition. factory employment was above the USED TO CALL thereof. For the purposes of the survey, IMRB approached senior corpo- world average, comparable with those ‘MARWARI’ The second question takes us to rate executives of the rank Vice President, General Manager and of the other emerging economies of AROUND 1960 the other end of the cycle, the end of above. The respondents were from large business organizations the time, such as Japan and imperial DID NOT FORM the community as historians know across India, again selected by referring to the ET-500 list. The Russia, and without even a distant ASINGLE them. We see this process already in respondents were asked for their inputs using a small survey- comparison in the contemporary CASTE, WERE the 1920s when the leadership in col- instrument, which was self-administered or administered face-to- tropical world. VERY DIVERSE lective negotiation passed on from face by seasoned interviewers. For the survey, each respondent was Who led this capitalist surge? The AND UNEQUAL sectarian bodies to national cham- approached with a unique set of CEOs. The survey-instrument was theory of entrepreneurship defines AND DID NOT bers of commerce. Both the Marwari developed to firstly capture their familiarity with the list of CEOs. entrepreneurs as individuals who CONDUCT THE chambers were then absorbed in the The respondent could also add one CEO to the list that he or she con- sense unusual opportunities and take SAME KIND pan-Indian bodies. More recently, sidered as most powerful. This was to help in ensuring that the opin- extraordinary but calculated risks. OF BUSINESS the maturity of capital and informa- ion of the respondent was not restricted to the list of CEO’s that the For India around 1850, entrepreneur- EVERYWHERE tion markets made informal mode of survey instrument contained. At the same time, care was also taken ship did not quite mean this. More exchanging information about who to ensure that a respondent did not provide his inputs to a survey- often, the successful capitalist was was solvent and who could be trusted instrument, which had the name of his company’s CEO or the CEO a member of an ethnic group, a com- matters to successful capitalism. In very diverse and unequal and did not redundant. of his company’s closest competitor. munity. Without the support of that the past, cooperation was crucial to conduct the same kind of business Along with these two factors, glo- The respondents were asked to evaluate the CEOs on six param- group, enterprise would not succeed. address two issues, missing markets everywhere. And yet, some features balization has changed the communi- eters – Leadership, Strategy & Innovation, Performance, Stature, The staple ingredient in Indian busi- and collective bargaining. In an envi- of a community did attach to them. ties from within. The Parsis started Social Contribution/ Sustainability, and Governance. The respond- ness history, therefore, is the business ronment where capital markets were There was a Marwari chamber of com- moving away from trade and industry ents were first asked to allocate points to the six parameters, which community, the Parsis, Marwaris, missing or information was scarce, merce each in Mumbai and Kolkata. as early as 1900, and gradually be- would add up to a total of 100. The points were allocated based on how Khatris, Bhatias, Jains, Bohras, cooperation would be necessary. Such a confusing scenario makes the came a global community mainly en- important in their opinion each attribute was. This helped us to ar- Chettiars, Sindworkies, and others. Merchants also needed to negotiate very definition of a community un- gaged in the professions and the crea- rive at the parameters-weights used in the final analysis. It has taken sociologists many with kings in order to obtain diplo- stable. Secondly, community does not tive fields. Some of the most famous After determining the parameter-scores, we sought their famili- years to absorb this lesson. The great matic immunity or the authority to function in the way it did any more. It Parsis today are academics, writers, arity for each of the CEOs given in their specific survey-instrument. German sociologist Max Weber stud- follow their own civil law. In the past, has become obsolete as a business re- and musicians living outside India For CEOs the respondent was adequately familiar with, opinion on ied Hindu society and came to gener- cooperation on such matters took an source, if not as a sentiment. Why did rather than owners of family firms. each parameter was captured using the ‘free association method’ ally negative views about Hindu busi- ethnic character. Ethnic combines the change happen? A similar diversification has charac- followed by a rating on a 3-point association-scale. In this, each ness culture. In the last forty years ensured that members followed rules The first question can be easily terized all ethnic business groups of respondent was described a parameter and he/she had to mention many writers have shown that Weber by threatening to drive them out of answered. The business community India, and speeded up especially after which of the CEOs in the list did he associate that parameter with. was wrong. For one thing, Weber society if they did not. was a product of its time. It had no India embraced globalization in the The respondent had the freedom to associate, as many CEOs that he/ equated the business community with But “community” is a difficult fixed cultural core. It could instead 1990s, though the she felt could be associated. Once they had associated the CEO for caste, and just as caste could act as concept to work with. There are draw on a variety of cultural tradi- pace and the man- that particular parameter, they were then asked to rate that CEO on barrier to occupational choices, he two particular problems, neither of tions. In eighteenth century India, as ner of the transfor- a scale of 1 to 3, wherein 1 signified a weak association, 2 signified a thought caste also reduced risk-tak- which historians have made a seri- the Mughal Empire collapsed and the mation differ. moderate association and 3 signified a strong association. For each ing. But the community was not really ous attempt to address. First, what axis of Indian capitalism shifted from CEO a composite score was then calculated at a respondent level. a religious group at its core. is the core of a communal identity, if overland trade to the ports, a massive The author is a Across respondents, the sum of these composite scores gave the For another, institutional economic it is not, as Weber thought, caste or migration and relocation of enterprise professor of “Power Score” for the respective CEO. The ranking of the CEOs was history and studies on “social capital”, religion? The people that all north occurred. Most of the prominent busi- Economic History obtained by indexing their ‘Power Scores’. The higher the “Power “networks”, and the origin of commer- Indians used to call ‘Marwari’ around ness communities of the nineteenth at London School Score”, the higher the rank assigned to the CEO. cial law, have shown how cooperation 1960 did not form a single caste, were century had changed the nature of of Economics The Influentials

03 Corporate Dossier September 05-11, 2014 High Flyer India Inc’s numero uno banker, professional and woman CEO By Dibeyendu Ganguly fter breaking into the all- How would you describe your leader- male club that was the Top ship style? 10 of the India Inc’s Most It’s difficult to describe your own lead- Powerful CEOs listing in ership style, but I’d say it’s about mix 2010, Chanda Kochhar has and balance. Broad strategic thinking remainedA there for the past four years coupled with an eye for execution. as India Inc’s No.1 woman CEO. In a An ability to balance the big and the list dominated by promoters, she is the small. I constantly gauge the environ- country’s most powerful professional ment and look for opportunities. I con- CEO. And as CEO of ICICI Bank, she stantly communicate with our people, also happens to be the country’s most whenever I go to a regional office or a powerful banker. Ms Kochhar spoke branch. I talk about the future, where with CD minutes before taking off on a the organisation is going. flight to Delhi. Edited excerpts: Are you big on mentoring like your Why do you think you’ve been voted predecessor KV Kamat? as India Inc’s No. 1 woman CEO? Mentoring is important. I look at it in It’s probably because of my job and not two ways. One is to mentor people at me personally. the highest level of the organisation, those who report to me and ICICI’S LEGACY SHOULD BE ITS a few layers down as well. CONTRIBUTION TO THE COUNTRY’S There’s the second aspect GROWTH VIA A SUSTAINABLE BUSINESS of multi-faceted teams. MODEL. THAT’S WHAT I’D LIKE PEOPLE There is a need to give peo- TO THINK OF WHEN THEY THINK OF ICICI ple exposure to different kinds of work so that they learn to adapt. To me, this aspect of Why are bank CEOs perceived as creating multi-faceted teams is very powerful? important. Banks do play a very important role in the lives of individuals, of com- What would you like your legacy at panies, the economy and society as ICICI to be? a whole. Banks are catalysts for the I have many years ahead of me, so I’m country’s economic growth and have not thinking in terms of personal leg- the capability to create an impact. acy. I’m focused on the present. But as That would be the reason bank CEOs an organisation, ICICI’s legacy should are considered powerful. They have be its contribution to the country’s a lot of responsibility since every step growth via a sustainable business they take touches the lives of large model. That’s what I’d like people to Chanda D Kochhar numbers of people. think of when they think of ICICI. 1 ICICI Bank INDIA INC’S MOST POWERFUL WOMEN

263 45 78 910 Arundhati Shikha Kiran Shobhana Nishi Kalpana Naina Lal Roopa Meher Bhattacharya Sharma Mazumdar Bhartia Vasudeva Morparia Kidwai Kudva Pudumjee State Bank Axis Bank Shaw HT Media H P C L JP Morgan HSBC CRISIL Thermax of India Biocon The Influentials

04 Corporate Dossier September 05-11, 2014

musings on power: Padmasree Warrior INDIA INC’S TOP 10 Staying Authentic MNC CEOS

A regular on global power lists talks about the responsibilities that come with power By Moinak Mitra

any consider Padmasree Warrior, You have been quoted in an interview that there Chief Technology Officer and is no such thing as a perfect job? Chief Strategy Officer of Cisco, It was in the context of using it as a coaching to be the most likely successor to moment for people who are young and aspir- 1 2 CEO John Chambers. CD caught ing to grow in their careers. Sometimes we wait Rajan Anandan D Shivakumar upM with Warrior on her recent visit to New Delhi for the perfect job to show up before we make a Google Pepsico India to gauge what makes her tick in a space where change. In my career, I have done so many differ- obsolescence often cuts short positions in the ent jobs. My degree is in chemical engineering. I drop of a hat. Edited excerpts: started as a manufacturing engineer in the semi- conductor industry. Now I lead a global internet You’ve figured quite often in the world’s most technology company. Throughout my career, I’ve powerful lists and ranked 71 in Forbes Most Pow- approached opportunities by asking myself if I erful Women. What does power mean to you? have the skill sets to deliver. At the same time, if For me, power is leaving behind a legacy. It is it is something that is very evolutionary, then you about changing the status quo and making a dif- are not learning as an individual. You also have ference that is lasting. In the business world, that to have some parts of the job that you don’t know, 3 4 would translate into building or transforming a that you want to learn. So I normally look for a Sunil Kaushal Sanjiv Mehta company or extending a company’s portfolio into 70:30 mix—70% I feel that I know I want to make Standard Hindustan a new area. Outside business, it could be changing a difference and 30% is new to me and I want to Chartered India Unilever something in the political or cultural context. learn. Actually, not knowing everything about a job makes me a better leader because you don’t So how long do you think the legacy should re- come with any presuppositions. main? Power is not something you can hold on to forever. What advice for women aspiring to the corner I think the impact has to be more than a year and office? less than a decade (laughs). That’s because a lot of The numbers are still small and we have a long things in technology come and go, and in my role, way to go. The first thing I would like to tell wom- I have to pick something that is truly going to be a en is to be confident. Women have a tendency to market transition. second-guess themselves. They have to exude 5 6 confidence and people have to see that. Second, Martin Pieters Shinzo Nakanishi they should be opinionated. People, especially in Vodafone India Maruti Suzuki MY ROLE IS TO SEE AROUND THE India, feel it’s counter-cultural if women have an CORNERS AND FIGURE OUT WHERE opinion. I actually respect people who are opin- TRANSITIONS ARE HAPPENING. THAT ionated. Though it’s good to have an opinion, DEFINES ME AS A LEADER don’t be dogmatic. Be willing to listen to other people’s views. Third, women should be passion- ate about what they’re doing. What kind of responsibility does power bring on? The key responsibility is one of accountability. In How do you describe your leadership style? my role, I feel really accountable to our custom- I believe in being authentic, especially given the ers, our shareholders, our employee base. I think access people have today. When I was growing up when you’re a leader, you’re truly having the re- early in my career, we were all told to act in a cer- 7 8 sponsibility that you are accountable for many tain way. If you were leading people, you had to Kalpana Morparia Naina Lal Kidwa people’s jobs. So helping people grow in their ca- be the boss and not show your expression and al- JP Morgan India HSBC India reers or delivering solutions to customers is the most be viewed as someone who’s a robot. These biggest responsibility. days, people don’t value that. They see through The trick is how you realize accountability with- it. So being authentic is something I truly pride out abusing power. That’s because a title gives you myself in. I’m very direct and decisive and peo- authority. It doesn’t necessarily give you a follow- ple know what they see is what they get. I’m ership. A leader has to build that followership. My considered to be someone who can see the future title as CTO gives me authority on certain things being a visionary. My role is to see around the but it’s through influence that I create a follower- corners and figure out where transitions are hap- ship of people who believe in the vision and strat- pening. That defines me as a leader. I surround egy, who want to come and work with us, whether myself with people and do a lot of mentoring and 9 10 they’re partners or startups we invest in or wheth- coaching. People give me energy. Pramit Jhaveri BD Park er it’s customers that do business with us. It is the Citi India Samsung India

ASHWANI NAGPAL sphere of influence that defines a leader. [email protected]

business community: By Medha Kudaisya The Family and the Firm Kumar Mangalam has turned the kin-based managerial capitalism of the Birlas into a true meritocracy

or most of its over 150-year history, delegated easily and was able to build up an day was modernized by GD to run his large the Birlas have been a major player inner circle of talented people upon whom industrial enterprises. Of course, in a large in the business life of India. Since he depended. In his lifetime he expanded global conglomerate, it may be difficult their entry into industry in 1919, the business from a family-run firm into to follow such a system, but its essentials immediately after World War 1, one which evolved into managerial capi- continue to be used in the practice of daily Fthey have consistently stood amongst the talism, although based upon kinship ties. reporting and strict prudence in keeping leading industrial houses, jostling for the top Basant Kumar and Aditya Birla worked track of financial flows. spot with the Tatas. In terms of leadership largely within this structure. The coming Adaptability is yet another trait which amongst big business and influence in politi- of Kumar Mangalam meant the shedding of has proved advantageous to successful cal circles, the Birlas were unsurpassed, the kinship-based baggage and expanding business families advantages. Marwari at least till the 1970s, under the group’s the pool of managers, drawing the best tal- businesses are known patriarch GD Birla who was responsible for ent wherever it could be found. To Kumar THE GENERAL to have maintained a forging much of the solidarity which private Mangalam goes the credit of turning the ADVICE TO THE highly versatile trading enterprise displayed in the momentous dec- kin-based managerial capitalism into a YOUNGER GENERATION and financial portfolio ades from the 1920s to the 1960s. true meritocracy. However, in doing so he WAS TO ‘EAT ONLY VEGETARIAN which enables them to What lies behind the Birla success retained the spirit of the ‘family’ in that re- FOOD, NEVER DRINK ALCOHOL shift their priorities story? It is worthwhile to speculate what lations with top managers are seen as long OR SMOKE, KEEP EARLY HOURS… when faced with chal- has enabled the family-firm to remain term and based upon mutual trust and loy- KEEP IN TOUCH WITH THE lenges as well as to take dynamic and at the forefront of business alty. This family-oriented style has worked FAMILY, AND ABOVE ALL, DON’T up new opportunities. leadership. The firm had started in the mid well for the fourth generation of the Birlas. BE EXTRAVAGANT Many examples may 19th century with trading and speculation, Another Birla trait is of frugality in be given of this adapt- first in Bombay and then from its gaddi in personal life, which has historically ability. For example, Calcutta’s Bara Bazaar. After making wind- been a code of behavior for generations of despite the move into industry in 1919, the fall profits in speculative markets during Marwari merchant families, a trait shared Top: GD Birla with Pandit Jawaharlal similar to the ethic of the Protestants. Birlas continued with their traditional World War 1, the family made the transition by Chinese business families and not dis- Nehru, Below with Mahatma Gandhi Merchants have been expected to maintain operations in the satta markets well into from old-style trading to modern industry a frugal life-style, as personal conduct the 1920s. In 1957 GD Birla became the first by first entering jute and then expanding is closely related to credit and ‘trust’ in industrialist to invest in the state of Kerala into a number of sectors. This expansion the market place. An austere life-style even after a Communist government had continued in the colonial period and then and a strict code of personal behavior are come to power under the leadership of EMS independent India, through the somewhat practices which the Birlas imbibe from Namboodiripad. Tired of the hurdles posed restrictive regimes of ‘Nehruvian social- childhood. Thus, GD Birla emphasized to by the License-Permit Raj, Aditya Birla led ism’ and the ‘license-permit Raj’ of the 1960s the young Basant Kumar to ‘never utilize his group to invest into Thailand in 1969, and ‘70s. When the country embarked upon wealth only for fun and frolic,’ to ‘spend the then in the Philippines, Malaysia in the liberalization in the early 1990s the Birlas bare minimum on yourself,’ and to deride 1970s, much before the economic miracle were well positioned to take advantage of ‘worldly pleasures.’ Such austere behavior occurring in the region was being widely the opportunities it brought. was taken to great lengths and the younger noticed. This made the Birlas truly the first It is now well acknowledged that capital- generation was advised to exercise re- Indian multi-national. Kumar Mangalam ism thrives on certain traits and values straint in consumption of food; ‘those who has built on these legacies; boldness of vi- – the stuff of culture. It may be worthwhile eat food only for taste die prematurely,’ sion and daring have become hallmarks of to discern what values have shaped the GD warned his children, advising them the Birla entrepreneurial culture. Kumar Birlas and how these may have contrib- to ‘take food as you would take medicine.’ Mangalam’s goal of making his business a uted to their success. A key tenet has been The general advice to the younger genera- $65bn conglomerate by to look upon the family as a social entity. tion was to ‘eat only vegetarian food, never 2016 exemplifies this Individualism is discouraged and relations drink alcohol or smoke, keep early hours… boldness. within the business are built for the long- keep in touch with the family, and above term. A broad view is taken of the family all, don’t be extravagant.’ The author is Associate to include kinsmen, business associates, This personal frugality is carried for- Professor at the managers and employees. GD Birla was ward in practices of financial management Department of History, known for his legendary ability to hire at the work-place. The centuries old parta National University of and retain mangers and delegate responsi- system perfected by traditional Marwari Singapore and author, bilities to them. Much of these relations of traders which allowed for an accounting of The Life and Times of

PHOTOS: TIMES ARCHIVES PHOTOS: trust led to associations forged for life. He cash and credit at the end of the business G.D. Birla The Influentials

05 Corporate Dossier September 05-11, 2014* Humanity, Philanthropy and Ethics PHOTOS: TIMES ARCHIVES

There is no other business Stakeholder. But and those who group on earth like the Tatas followed him never used that formula. They re- formulated the criteria of business success, and says author Peter Casey made humanity, philanthropy, and ethics not ad- juncts to profit, but its very core. Tata companies continually aspire to better ethics, just as they are ompanies are traditionally organised committed to better business practices. The two on two lines – either to make money are not only quite compatible; they are essential for their shareholders or, in idealised to one another. The company has not merely refor- socialist theory, to deliver services for mulated many of the business principles we have sections of the community. My book, been taught for generations – it has turned them The Greatest Company In The World? upside down. CThe Story of Tata, is a story about a truly unique Instead of specialising, Tata has ventured into company which was established to do both. an array of unrelated industries and has become a This company has not merely reformulated world leader in several – from steel, chemicals and many of the business principles we have been IT to hotels, energy, automobiles and insurance. taught for generations; it has turned them upside In fact, it is easier to think of an industry that Tata Jamsetji Tata with his family down. While many of its companies are publicly is not involved in than to list those that they are. traded, the has evolved from being A diversified global enterprise, philanthropic a family-owned business to becoming one of the at its core, the company shares profits with em- best-run and professionally-managed groups in ployees, shareholders and the societies in which the world. they live and work. The most senior Tata manag- legacy, like the other two, continues to change Philanthropic Trusts control over 66% of the ers don’t live in sprawling and multiple mansions, people’s lives for the better on a daily basis. In Tata holding company Tata Sons, while the Tata as so many American and European CEOs do, but business terms, he founded the greatest com- family is a very small shareholder. The owners in modest apartments and homes. pany in the world. are only one of four stakeholders Tata sets out to The guiding principle for everyone at Tata is serve. In addition to the owners (which include sharing the wealth. My top three heroes – people Peter Casey is founder chairman of Claddagh shareholders) are employees, customers, and so- who actually and positively changed the world Resources, a global recruitment firm. He is also a ciety itself. Society is what the company’s leaders Jamsetji Tata we live in – are Leonardo da Vinci, Michelangelo business columnist with Ireland’s largest-selling call the Fourth Stakeholder. And it looms large, Buonarroti, and Jamsetji Tata. Jamsetji’s newspaper The Sunday Independent maybe largest, among all four. Society drove Jamsetji Tata when he built his first company more than a century ago. He did not use so ab- stract or neutral a term, however, but undertook his enterprise with the active mission of using it simply to make people’s lives better. As founder and Executive Chairman of Claddagh Resources, I initially decided to write this book to help my recruiters and executive search consultants have a better understanding of Tata Consultancy Services (TCS) who over 14 years, had become my company’s biggest client. It was supposed to just be a short 15-page summary, but the more I started studying TCS and the Tatas, the more captivated I became. The project devel- oped a life of its own. There are amazing companies and amazing sto- ries, but none match the Tatas. In 1869, Jamsetji converted a bankrupt oil mill for the production of cotton. It was a humble start, but he had grand visions of what India could become. He embraced the Zoroastrian religion’s most central tenet: that the mission of the righteous person is not merely to live a good life, but to make life better for others. Whereas other successful capitalists and captains of industry started companies to create profit and thereby wealth, Jamsetji planted the seeds of philanthropic trusts which now own two thirds of the Tata Group. In harmony with his re- ligion, Tata’s company would exist to finance and initiate projects to improve the lives of the people of India. So Jamsetji became not only a catalyst for sweeping change in his vast homeland, but, in the process, conceptualised an entirely new way of do- ing business as well as philanthropy. What he began has changed the lives of bil- lions, as the company he founded continues to work for the betterment of society. In the words of Jamsetji: “We think we started on sound and straightforward business principles, considering the interests of the shareholders our own, and the health and welfare of the employees, the sure foundation of our success.” We are now living in a world where the richest 85 people own more than the 3.5 billion poorest. Currently, 99% of the wealth is owned by less than 1% of the people and if all the wealth in the world were divided into all the people in the world, everyone would be a millionaire. I am an unapolo- getic capitalist but I have now realised that there is a different way for capitalism to succeed – the Tata way. The spectacle of an enterprise as highly moral as it is profitable is rare in a society which has grown accustomed to thinking of business suc- cess as a zero-sum game, in which my triumph requires your defeat. Success that follows a zero-sum formula is incompatible with a Fourth The Philanthropists India Inc’s Most Socially Responsible CEOs

Ratan Tata Azim Premji

Kumar Birla Shiv Nadar

Sunil Mittal The Influentials 06 Corporate Dossier September 05-11, 2014

Sabaq phir padh sadaqat ka shujaat ka adalat ka off-beat: By Raza Mir Liya jayega tujh se kaam, duniya ki imamat ka Learn then the lessons of truth, justice and courage For you will be asked to lead the world in this age

hese words by Mohammad Iqbal, written around the turn of the twentieth century, would not be out of place in a business For Better or for Verse school or in a course on corporate social responsibility in the current age. As we Society’s changing attitude towards leaders is closely reflected in Urdu poetry move inexorably toward an era of late capitalism, corporations are steadily of poets would be vanguards in a new struggle for self Humsafar chaahiye, hujoom nahin self-aware and introspective words of Jan Nisar Akhtar: becomingT the dominant vehicle by which social product determination and social justice, working alongside the Ek musafir bhi qaafila hai mujhe is produced, appropriated and distributed. Leaders of toiling masses. In his conceptualization, the leader and I desire a fellow traveler, not a congregation Bhoole na kisi haal mein aadaab-e nazar hum corporations constantly wield the power to alter the lives the led were partners in struggle: For me the caravan could be a solitary companion. Mud kar na tujhe dekh sake waqt-e safar hum not just of the citizens of their firms, but also of society at Jeene ka hamen khud na mila waqt to kya hai large. At the same time, the massive failures of corporate Tum se quvvat le kar ab main tum ko raah dikhaoonga Viewed then from the perspective of Urdu poets, leader- Auron ko sikhlaate rahe jeene ka hunar hum leaders in recent years to do right by their stakeholders Tum parcham lehraana saathi, main barbat par ship continues to be a work in progress. That demands I never did lose sight of the protocols of the gaze calls their leadership into question. The induction of a gaaoonga the virtues of selfless stewardship from their leaders, but Thus did not turn to say goodbye as we went our ways normative component to leadership is essential in this I will derive strength from you and show you the route are not shy to censure and chastise them when they do not I admit I had no time to lead my own life but age, and Iqbal’s couplet, with its exhortation toward the Wave the banner friends, and I will sing on my lute rise to those lofty standards. They caution their readers My advice guided so many through life’s tricky maze. triple values of truth, courage and justice remains rel- against blind followership, and encourage them to take evant even today. The moment of independence was seen by many as paths that are taken by few. And finally, they are ready What can business leaders learn about leadership inaugurating a new breed of leaders, who were servants to don the mantle of leadership themselves, but are often The author is the Seymour Hyman Professor of from Urdu poetry? To begin with, the traditions of Urdu of society, as harbingers of a new kind of leadership. aware of their own inabilities as well. To conclude in the Management at William Patterson University poetry offers a multitude of history lessons that include Makhdoom Mohiuddin gave rhythmic voice to this opti- ruminations on leadership over the decades and centu- mism: ries. Like poetry in any other language, Urdu poetry has mirrored myriad so- Hayaat le ke chalo, kaayenaat le ke chalo cial problems and aspirations. The issue Chalo to saare zamaane ko saath le ke of leadership has been especially sali- chalo ent in Urdu poetry. A leader has been Carry life as you walk, and carry the fir- variously described as a rahbar (one mament too who shows the way), a rahnuma (one who Walk so, that the entire world should illuminates the path), an imam (a spokes- choose to walk with you person) or a sardar (one who stands at the forefront). Hardly has a poet gone by who has However, independent India not reflected on the characteristics of a leader, did not offer a panacea to the ills sometimes admiringly, and often critically. of the nation. In the modern era, As a tribe, poets tend to be individualists, and Urdu poets of the progressive tradition skepticism towards leaders often marks their especially acted as the interlocutors of the new approach. For example, Mirza Ghalib one of the fore- regimes. For instance, Kaifi Azmi aimed a stinging most Urdu poets, professed a reluctance to being led: retort at those who led their congregations toward ruin without experiencing any pain of their own. He recom- Chaltaa hoon thodi door har ek tez-rau ke saath mended that followers expect the same fate from their Pehchaanta nahin hoon abhi raahbar ko main leaders as their own: I walk a while with every swift traveler But I do not recognize among them my leader. Gar doobna hai apne muqaddar mein to suno Doobenge hum zaroor, magar nakhuda ke saath The classical Urdu poets of the nineteenth and early If the passengers of the boat must drown in this strait twentieth century experienced their lives as turmoil. Then we must insist that the boatman share our fate. Their erstwhile leaders, the rajas and nawabs, were prov- ing to be completely ineffectual and self-absorbed, while The indifference and attention deficit of leaders has the emerging masters of India, the British, proved ut- often attracted the ironic ire of modern Urdu poets. For terly venal and non-inclusive of the native and subaltern example, Javed Akhtar slyly castigates those leaders who classes. As the struggle for independence began to build do not have the time to listen to the problems faced by momentum on the Indian landscape, Urdu poets found their followers: the official paradigms of leadership to be bankrupt, and framed a call for a new leadership that was more revolu- Chaar lafzon mein kaho jo bhi kaho tionary in character. Many poems written during the in- Us ko kab fursat sune faryaad sab dependence struggle excoriated the British for their self Convey your petition in but four words centered approach to governance. For example, Jagan Of your dilemmas, your leader is bored. Nath Azad, one of the poets of the freedom struggle, wrote this ringing couplet: It appears that in their attitude to leadership, Urdu Ba faiz-e maslehat aisa bhi hota hai zamaane mein poets across the centuries traverse a full circle. The Ke rahzan ko ameer-e kaarwan kehna hi padta hai iconoclasm of Ghalib was mirrored by Ahmed Faraz In this benighted age, in the name of compromise in the late twentieth century, who wrote poems that We refer to looters as the leaders and the wise. were deeply suspicious of multitudes who followed lead- ers like lemmings to an uncertain fate. In his opinion, Sahir Ludhianvi on the other hand exemplified a sometimes the worthwhile path to follow was a lot lone- revolutionary approach to leadership, where a new class lier and less crowded:

family business: By Kavil Ramachandran Winds of Change The new-gen is thinking of options other than joining the family business

ost business families believe manager too. The reasons for the promot- their members should be er to operationally run the business, such deeply involved in the opera- as occupation, monetary rewards, social Mtions of their business. It has status and trust may still be true. But the always been considered a right as well as a question is whether he is the right person responsibility. But the scenario is chang- to do so, purely from the angle of the busi- ing with the shrinking size of families and ness and its competitiveness. growing complexities of business, often re- In European and American compa- sulting in a shortage of competent family nies, there are major shareholders who members to work in the business. Young are not involved in anything at all but family members now openly ask, “Why I continue to enjoy dividends and capital should I work in the business”? appreciation as investing owners. The as- Most often such a question is never sumption that owners should be involved asked because the best person to ask it is in the business on a day to day basis is a the promoter himself. It is only under ex- myth. We can break it if suitably quali- treme compulsions such questions are no- fied persons can be appointed for the job. ticed. In several entrepreneurial and fam- This is not easy primarily because ily ventures, big and small, old and young, there are several ownership related one can now hear echoes of this or similar concerns to be addressed, of which trust questions. Emergence of several new and in integrity and confidentiality are exciting alternative opportunities is mak- the most important for any promoters. ing many next-gens sit up and think of the Of course, they do not want their hard options. Indeed, there are solutions if only work of years of building the business promoters are willing to listen. destroyed by an ‘outsider’. The way out The premises for promoters working is to design organization structure and in their ventures are many. Besides hav- systems professionally. One has to cre- ing the freedom to build the business ate robust systems and processes, high as one likes, the person believes (often quality internal and external audits and rightly) that he alone (and his immediate performance linked incentives. family) has the passion and commitment. Owners need to think like entrepre- He knows that he cannot easily trust any- neurs and find opportunities for growth. body. Above all, running the business They should no longer see operational keeps him busy. It allows him opportuni- involvement of their successors as a re- ties to account for his expenses, personal sponsibility; they should cultivate their or business. In essence, the owner is the interest and capabilities as strategists operating head as also the head of strat- and investors. Such an approach not egy and governance, besides being the only helps grow the wealth but also find key investor. a number of family members connected When the business is small, it is easy with the business in one way or other. to have all the above capabilities blended in one person. But as the business grows, The author is the Thomas Schmidheiny several of its critical success factors do Chair Professor of Family Business & change. That is when ownership rights Wealth Management, Indian School of do not necessarily make a person a good Business, Hyderabad

Regn. No. MAHENG/2002/6295 Volume 13 Issue No. 30 “Published for the proprietors, Bennett Coleman & Co. Ltd. by R. Krishnamurthy at The Times Of India Building, Dr. D.N.Road, Mumbai 400001 Tel. (022) 6635 3535, 2273 3535, Fax-(022) 2273 1144 and printed by him at The Times of India Suburban Press, Akurli Road, Western Express Highway, Kandivli (E), Mumbai 400101. Tel No: (022) 28872324, 28872930, Fax No (022) 28874230 Navi Mum- bai - 400708 and Plot No 4, MIDC, Digha Village, Thane Belapur Road, Airoli Tel. (022) 27609700 and Editor: Vinod Mahanta, (Responsible for the selection of news under PRB Act).© All rights reserved. Reproduction in whole or in part without the written permission of the Publisher is prohibited.”