The humane factor

THE HEART OF A BUSINESS

Author: Hubert Joly

Publisher: HBR Press

Pages: 304

Price: Rs 1,250

Humans yearn for a simple world. The reality is that we coexist with opposites: The humble and the pompous, the good and the bad, the greedy and the generous. According to the Chinese, those who conquer the opposing yin-yang, conquer the world by combining complementarity between opposing forces.

Research on corporate goodies and baddies abound. Opinion is divided between two extremes: One is that all corporations are greedy bloodsuckers, and another is that corporations are a positive force for human good. During my career, I have been involved with my company’s initiatives — creating employment, reskilling staff, delivering fair incomes to people, while greatly expanding economic activity. Did I serve the nation? Of course, despite any mean-mouthed minister thinking otherwise. Maybe, I even contributed more than many others. Having worked 50 years in Unilever and Tata, I may be pardoned for thinking, like Alfred Marshall did in 1910, that “if India had a score or two of men like Mr Tata, India would soon be a great nation.”

Hubert Joly’s new book, The Heart of Business, is of the goodie variety. It is about how corporate leaders can create humane and passionate companies, which, as a byproduct, achieve impressive growth and great profits. Unfortunately, do-good stories interest people less than baddie stories. Look at the Netflix menu of offerings, or, for that matter, a morning newspaper anywhere. 

In an insanely bad-deeds world, Mr Joly’s book stands out—to me, like a lone candle in a dark room. Much of the content is based on his experiences and lessons from turning around Best Buy, a retail company in America, between 2012 and 2019. The ideas espoused are in the genre of Good to Great, Conscious Capitalism and Firms of Endearment.

The author asserts, “I firmly believe that it is business’s business to get involved in societal issues.” Community and CSR activity? Yes, sure. What happens in the unbelievable reality of India is different: If a firm runs a public campaign showing an inter-religious marriage, or a same-sex relationship or uses an Urdu expression for a Hindu festival, then from the dark recesses of obscurantism, there emerge forces and voices that disapprove, threaten, and damage that firm’s property? Recall a public functionary in Madhya Pradesh, shamefully and openly disapproving of a company’s advertising approaches; worse still, he gets away with his shenanigans because his chief minister would not speak up. Such reality tests Mr Joly’s conviction so far as India is concerned. Mr Joly is right, but which firm wants to risk damage to its properties?

Many Indian firms need a turnaround. Unlike standard turnaround literature, Mr Joly advocates an intriguing algorithm: “Always start with people, always end with people, and generate human energy.” He exemplifies his mysterious statement through his experiences at Best Buy.

Imagine applying the Joly formula to Air India as Tata gets ready to occupy the pilot’s seat. The pink papers want to know about the plans for rationalisation, aircraft refurbishment, route optimisation, cost cutting, retrenchment, and other blood sports. What if the Tata plan is to start the turnaround with people, end with people, and, in the process, generate human energy? In a sense, that has been the Tata DNA for over a century, isn’t it? However, left-brained, analytics-driven commentators could find such human-driven gibberish as soft. The Joly formula—to me, a “patented Tata formula” — may work for Air India!

Mr Joly explains how he had to reorient his own mind to a new way of thinking when he heard Jean-Marie Descarpentries, CEO of Honeywell Bull, explain his winning approach. One surprise—the purpose of a corporation is not to make money —and a bigger surprise, focus on people first, business second and finance last!

What if these ideas were applied to the Air India turnaround? The current loyal but badly bruised employees may initially be stunned, curious thereafter, and hugely energised to make a tidal wave of the turnaround efforts. Time will tell. When I took over as Chairman of Unilever Arabia, the first appointment I made was not the Operations or Marketing Director, it was the Human Resources Director!

One last reference from the Joly book: What happens if the majority shareholder has disagreement or unhappiness with the direction of the company as seems to be happening in ZEEL-Invesco and Dish-Axis cases?

Dick Schulze, the founder of Best Buy, retired in 2012 after the then CEO had been fired. As the majority shareholder, Mr Schulze wished to mitigate his concerns by taking the company private. This accelerated the decline in share prices, apart from creating disruption to morale.

As the new CEO, Mr Joly writes, “A company fighting with its majority shareholder seemed crazy to me.” So, he met Dick Schulze, schmoozed with him until Mr Schulze softened. After establishing a relationship, Mr Joly drew the line of control with Schulze, “I am really good at taking input, but I am terrible at taking directions, as, I suspect, you are.” By the time Hubert Joly retired in 2019, the total shareholder return to shareholders was 335 per cent compared to 104 per cent for Standard & Poor’s.

It has been a delight to review this book and taste the soft marshmallow inside.