domain-b.com : Excesses at the top could derail the great Indian economic miracle

Enjoying enormous personal wealth is not all that there is to the great Indian economic miracle.

In calling for some leaders of Indian business to cut back on "vulgar" public displays of excess and to control breakaway executive pay, Indian prime minister Manmohan Singh has had the courage to say in public what is privately troubling many political leaders in the west. More than that, he bravely delivered his message to some of the biggest corporate leaders at a Confederation of Indian Industry annual meeting, hardly a sympathetic forum to such views.

Some Western media have expressed alarm at the tone of this speech, speculating that it heralds a reversal of India''s drive for economic reform and growth. Others have politely ridiculed it as a "sermon" from an "elder statesman" figure.

But despite these attempted put downs, the powerful truth in Dr Singh''s speech is that in a country where the poor are still waiting to experience the "trickle down" of prosperity, excess is simply poor leadership and could lead to huge social unrest.

Making this worse, India does not have an entrenched aspirational drive, so dominant in the West, and the poorer Indian citizens meekly watch the open display of wealth of the rich, while putting down their own exclusion from it as their karma and hope that they, too, one day, will enjoy some of that prosperity.

The one thing that could derail India''s economic miracle is not the wise words of Dr Singh, it is the social unrest triggered by the open display of the excesses of corporate high flyers.

Excess is not a new thing in India. What is new is that this wave of outlandish spending by the few at the top comes at a time when more than half of the community is waiting, or feels that it is waiting, to enjoy the benefit of that economic growth. This simple timing could undermine any collective will to become a modern economy.

Contrasting the flamboyant and vulgar big spenders, are the many Indian corporate leaders who have learnt to combine success with humility - leaders such as Narayana Murthy and his top team at Infosys, which sets out core values as, "One should be humble, have respect for competitors and a healthy sense of paranoia, else we will disappear like dew on a sunny morning".

More from Infosys, "We would just like to be known as decent, honest and trustworthy people and then as smart people".

Of course, at Infosys words and actions go well together - in 1996 it set up the Infosys Foundation, which since then has funded medical facilities for remote rural areas, created pension schemes, provided aid for orphans and street children, adopted a "library for every school" campaign that so far has financed 5,500 libraries in rural government schools and has paid for the reconstruction of old schools. The company truly "walks the humble talk" and these corporate actions will keep people united around the drive for economic reform and growth.

The land of profound truths
As I have written before, India has given the world Ganesh, Krishna, the Upanishads, Buddha, the spirit of Diwali and in more recent times the wisdom of Mahatma Gandhi and others. Western business is ready to learn; perhaps due to the words of PM Singh, we now realise that many Indian corporate leaders also need to learn.

Mahatma Gandhi famously said "there is enough in this world for everyone''s need, but not enough for everyone''s greed".

Greed was a major theme of social commentary in the West during the years of the ''80s when corporate excess reached new heights. In the celebrated movie, Wall Street, the advocate of this corporate greed and excess, Gordon Gekko, tells his audience "greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit". What he failed to say was that greed is also the great divider; greed leads to social unrest and conflict.

Gekko would have had trouble should he have met the Buddha, who would have instructed him in powerful alternatives to greed - alternatives such as compassion, doing no harm to others, helping where possible, not clinging to "me, my, I" and finding happiness by helping others find their way. This is a vastly more caring corporate alternative to the single-minded drive for personal success and the ability to spend, spend and spend.

The brand experts and advertising gurus tell us that "caring is commercial", and when inspirational leaders such as Mahatma Gandhi urged us to aim for complete harmony of thought, word and deed, he was outlining a strongly commercial value system for business, but this has not changed the behaviour or profile of many business leaders and Dr Singh has done India a service in criticising excess.

Other Indian leaders have expressed concerns about the image of business - as Mr Kumar Mangalam Birla, chairman of The Aditya Birla Group, has pointed out, "The world of business today is going through a crisis of trust, where the credibility of business leaders and the legitimacy of business organisations are subjected to questioning."

Mr Birla understands what he is talking about for he heads India''s first major multinational company, The Aditya Birla Group, which has over 72,000 employees sourced from over 20 nationalities and produces viscose stable fibre, cement, metals, branded apparel, chemicals and is a large private sector insurance company and among the largest asset management groups in India.

Mr Birla knows that "caring is commercial" and he puts it this way "Once again, people are searching for the soul of the corporation." As the Indian economy unleashes immense opportunities for business growth, it is important that beacons like Mr Birla shine on the leadership and values opportunities that can grow at the same time. In fact, these can underpin long-term success for Indian business.

What could Mahatma Gandhi offer to the modern debate about leadership, excess and values? First he would be a strong advocate of applying your ethics to all parts of life, with no exceptions. That is, business is no different from your life in community or family, so apply the same ethics.

Gandhi would stand today for complete honesty in business, for generating good profits but at the same time giving back to the community in which you operate. He would regard business very much as a service to the community, not merely a generator of windfall profits.

He would also urge business to bring people together and to foster community. He would probably be suspicious of many multinationals and you could imagine him campaigning on contemporary environmental issues, pointing out with great passion that business needs to be a friend of the earth.

This caring approach to leadership is often criticised in the West as being too soft, but it can have commercial outcomes — a survey of 7,500 workers by US firm Watson Wyatt found real dollar benefits within caring organizations. It found highly committed employees produce a 112-per cent three-year total return to shareholders, whereas those with low employee commitment returned 76 per cent.

Add to that research showing that when businesses lose customers, in 70 per cent of cases they loose them because they do not like the human side of doing business with you.

The evidence for caring goes further and lends more support to the Gandhi approach; the Gallup group is the leading researcher into what makes up a strong brand, and their findings highlight the value of human qualities. Gallup looked at customer loyalty and brand advantage, finding people want a brand that:

In training leaders and managers to improve their communication, I often say, "nobody cares how much you know until they know how much you care".

Mr Birla has explained the extent of his commitment to values: "Great businesses are never built on the quick sands of opportunism. I reiterate that if living by our values means, perhaps, growing at a pace slower than we would otherwise have liked, so be it. For us, leadership lies at the heart of knowing what we stand for."

One call to leadership from former US President Bill Clinton sums up this mood. "We all need to find as few demons as possible - and as many dreams as possible".

R Gopalakrishnan, executive director, Tata Sons, who addressed the search for leadership, has also outlined four features of ethical leadership:

He concludes that the gap between the demand for leadership and the supply of leadership is huge, and warns, "The greatest mistake leaders can make is to assume that results alone matter, that morality and goodness do not count."

Gopalakrishnan sums it up well, "Like human happiness, leadership is easy to recognise but difficult to grasp."

Wealth and the Indian ethos
Through the Bhagavad-Gita, India gave the world the doctrines of "karma-yoga", selfless action performed with an inner detachment from its results. With this view, corporate leaders would primarily see themselves as custodians, maximising the benefits for everyone, not just for a small elite. Indian philosophers have long seen the seeds of destruction as being found in self-centredness and ego, so Dr Singh is echoing this long held philosophy.

One of the most popular of Hindu deities is Ganesh, the chubby, roly-poly god with the elephant head who is the remover of obstacles, and who is venerated at the start of journeys, in new homes or in new business ventures. In sculptures, the position of Lord Ganesh''s trunk is highly meaningful - to the left, is the direction for success in the world, while to the right it represents "moksha", good for renouncing the world.

Perhaps those who have been lavishing small fortunes on themselves should choose a Ganesh with the trunk to the right, and thereby find that happiness is not a matter of money alone.

*Stephen Manallack is a communication consultant, professional speaker and trainer. His training programs include creating a corporate communication culture, and how managers and leaders can create engaged employees. Stephen is the author of You Can Communicate (Pearson 2002). He is a member of the committee of management of the Australia India Business Council.