India’s 70th Independence Day is just a few weeks away. It is an opportunity as good as any to reflect on the kind of society and nation that we’d like to see. The events of the last one month alone – led by Brexit and Turkey – have given us enough reason to pause and ponder over the state of the world.
Even before we get there, already, there’s much hoopla and hype being generated over the 25th anniversary of our liberalisation programme, kicked off by the then Prime Minister Narasimha Rao and Dr Manmohan Singh. Sure, there’s much to celebrate. After all, it helped unleash the entrepreneurship genie that had been bottled up for many decades.
In our key economic and business centres across Delhi, Mumbai and Bengaluru there’s plenty of chest-thumping about our GDP growth rates, that make us one of the fastest-growing economies in the world. Yet income inequalities are rising faster in both India and China than anywhere else in the world. So-called trickle down models of economic growth aren’t delivering results. So while some of our biggest billionaires in India build opulent, palatial homes for themselves, we are still a long way off in pulling out large parts of our society from abysmal levels of poverty, malnutrition and ignorance. Jobs are scarce for the 12 million young minds who enter our workforce every year. And those are becoming the potential breeding grounds for terror and violence in our society. Nearly one third of our country is under the control of the Naxalites. Instead of fixing our primary education and basic health systems, we seem to be more obsessed about whether Nehru pops in our textbooks far too often. And when Reserve Bank of India Governor Raghuram Rajan initiated the conversation about prioritising structural reform in our banking system over merely chasing economic growth, look at how that debate panned out.
We need our business elite to actively engage in a wider conversation about a new India. Instead of merely obsessing about the GDP growth and lower interest rates – and the trajectory of our economic growth – we need more business leaders to speak out openly about our lopsided economic model. Even if they feel strongly about such issues, most prefer to keep quiet, for the fear of alienating the powers-that-be in the government. It’s perhaps time to shed some of those inhibitions and help frame the debate about how business can be a more credible and effective partner in social change.
Meanwhile, management theory is itself undergoing a transformation. As Harvard don Michael Porter once told me in an interview, traditional management theories have tended to be too simple, too narrow, and haven’t quite recognised new ways of working with society. In India, we inherited the American model of capitalism, with all its ills. Primary among them is the focus on short-term, quarter-on-quarter results and its deleterious impact on long-term planning. Today, many lighting lights from the world of business are speaking out against this system. Unilever’s Paul Polman has been advocating the need for more inclusive, sustainable business strategies and jettisoning the quarterly reporting model.
Mr Porter’s shared value framework suggests that the best way for a business to have an impact is to see the business as a business, which is able to innovate and find ways of developing products that meet the needs of the community it serves. So the measures of business performances don’t change. What changes are the tools and techniques that are used to generate returns, growth and productivity. For instance, Mr Porter says that any company, for the next 20 years, that is not exquisitely efficient in the use of energy will be in trouble. Already, a few analysts are gradually starting to look at the use of energy, water and resources. They will look at how companies penetrate non-traditional markets and look at customers’ needs that allow the business to grow, he said.
So far, the public may have had a very limited view of business. Stories of crony capitalism, regulatory capture, governance failures and unending business scams have dented society’s trust in business. Yet there’s a lot that businesses can do to solve societal problems, if they articulate a higher purpose and decisively act on it. Many employees who feel suffocated by this narrow view of business are likely to rise up to the challenge of delivering on a higher purpose. There are enough opportunities in not just health care and education, but in practically every market space to apply this shared value thinking.
So what will it take to bring about a mindset change? I believe it calls for an entrepreneurial mindset, loads of creative imagination and open source innovation models. And it needs pragmatic business leaders, like Azim Premji, to stand up and remind us about the role that the role that the business elite can play in helping build a new India.
The writer is the co-founder of Founding Fuel, a new generation media and learning platform which seeks a community of entrepreneurial leaders
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
