Business with purpose: Real or fluff?

A story of hunter-gatherers, planters and rainforests

In recent years, I have noticed myriad initiatives for entrepreneurship promotion, everywhere by everyone -— for example, Niti Aayog’s AIM, IITB’s SINE, Pune’s TIE, Chennai Angels and Calicut’s ULCCS, to name just a few. At one level, startups and entrepreneurs seem to be intensely active and alive, confirming the statistic that India counts among the top three start-up nations in the world. At another level, the initiatives may appear to be haphazard, causing an observer to wonder whether seemingly random activities will lead anywhere. Rainforests offer some hint of an answer.

An innovation ecosystem should resemble a rainforest. Five traits are required to synergise its emergence: A clear focus on recipe rather than ingredients of success, social behaviours that encourage free flow of talent, the freedom to self-organise, promiscuous collaborations/experimentalism among individuals and, finally, personal motivations that represent irrational economic behaviour. Using these concepts, a fascinating book explains why San Diego is far more innovative than Chicago. (The Rainforest: The Secret to Building the Next Silicon Valley by Victor W. Hwang & Greg Horowitt; Publisher: Regenwald; 2012). The Indian ecosystem does demonstrate these five traits.

In this context, a remark at a conference last week by Saji Kuriakose, president, CMA (Calicut Management Association) is noteworthy. He said that among businesspeople, there are hunter-gatherers, planters and foresters: The first are those who start firms opportunistically, the second are those who pursue efficiency and nurture for the long term, and third, those who deeply care about their business purpose and its impact on society. This is fascinating since the metaphor is coming from a businessman who is surrounded by forests and plantations which occupy more than half of Kerala. I was, of course, further intrigued because a co-author and I wrote in our recent book, “The rainforest principle, illustrating the principle of creation and effectiveness in nature, may well differentiate thriving and growing institutions from orderly, well-run organisations.” (the way Kiran Mazumdar-Shaw fermented Biocon...)

Is this point about a business having a higher social purpose real? Or is it management fluff?

ULCCS Ltd stands for Uralungal Labour Contract Co-operative Society Ltd. Outside of Kerala, readers would not have heard of it, indeed may even have difficulty pronouncing the name. This institution was started in Uralungal in Kozhikode district with a great social purpose in 1925 by a social reformer named Guru Vagbhatananda. Skilled building and construction workers had lost their jobs in the 1920s and 1930s. To mitigate unemployment and loss of livelihood, the workers were banded together into a co-operative to undertake construction projects and earn a living — an inspiration not dissimilar to Kaira co-operative, started much later in 1946 by Tribhuvandas Patel for milk. Now almost a century old, ULCCS has all the makings of an institution: It provides work to almost 12,000 rural workers, it has constructed 6,500 projects of bridges and roads all over Kerala, it has an order book of Rs 3,000 crore, and enjoys growth of 25 per cent every year. It is the first primary co-operative to be recognised as a permanent member of the International Co-operative Alliance. Over 95 years, its accomplishments are so many that UNDP is making a film on the institution. To put it simply and only slightly inaccurately, ULCCS is a mini-Kerala version of L&T!

Consider ULCCS and its relevance in the digital era. Their logo shows two bare-chested labourers, pulling a road roller. Significantly, this labour co-operative has recently set up UL Cyber Park to attract IT jobs to Calicut and to encourage startups. Further, ULCCS has set up UL Technology Solutions as a “co-operative corporate” — sounds as much of a riddle as JRD Tata stating that Tata represents “socialistic capitalism”. UL Technology Solutions works on AI and analytics, GIS, Application Development, IoT, Blockchain and cyber security. UL Technology Services is headed by some top-notch ex-IBM professionals. Labourers pulling a road roller and IT geeks working on cutting edge technologies — how is that for rainforest innovation in an organisation that started with a purpose?

India must be having many ULCCS-type rainforest organisations. I would love to hear of some from our readers. I wish I could learn about them and visit them. It is so inspiring for innovative India.

The writer is a distinguished professor of IIT Kharagpur. He was a director of Tata Sons and a vice-chairman of Hindustan Unilever. rgopal@themindworks.me