How SHE enterprises deviate

India presents a unique enigma. It has too many poor enterprises, but many rich entrepreneurs

During a speech in America in the 1890s, Swami Vivekananda stated that the West was groaning under the tyranny of too many Shylocks, while the East was groaning under the tyranny of priests! India needed, and still needs, SHE companies — sustainable, humane, enlightened — which are in the control of neither Shylocks nor priests.

There are real barriers. A founder may not have a purpose other than making mo­ney — like too many Indian entrepreneurs today, and as Cornelius Vanderbilt was in the 1860s. If the founder has a purpose, it may not be sustainable, humane, or enlightened. The founder’s good purpose may not be embedded into the enterprise, so it wanes over time. A future successor may deliberately depart from the original purpose. Some examples follow.

Walter and Roy Disney set up Disney Studios in 1923, saying “If you can dream it, you can do it.” Their four-point motto was: Think, believe, dream, and dare, and the purpose was to give wing to the human imagination. In its centenary year, what is happening? Disney is now a leading, diversified international family entertainment and media enterprise — Disney Entertainment, Pixar, ESPN and Disney Parks. Its current mission is stated to be “to entertain, inform, and inspire people around the globe through the power of unparalleled storytelling”.

Bob Iger had retired in 2019. His 15 years at the helm were eulogised (as was the tenure of Jack Welch at General Electric) by the Los Angeles Times as “the greatest success story of the entertainment industry” and by The Wall Street Journal as “Hollywood’s biggest and most powerful entertainment conglomerate”. There was also an underlying criticism that the company had achieved its success on the back of its consumers and employees. His successor, Bob Chapek, lasted just three years, and Mr Iger was reinstated as chairman and chief executive officer (CEO).

In 2022, Abigail Disney, Roy Disney’s granddaughter and an independent filmmaker, produced a documentary titled The American Dream and Other Fairy Tales. Her underlying message was that too many Disney employees just could not make ends meet, while the disparities between executive and workers’ pay widened unconscionably. “The company leadership have led the company brilliantly and deserve their bonuses. But the CEO pay in 2018 was 1,424 times the median pay of employees, and that is insane. Reward the people who make the magic,” she argued. (In FY23, the Amara Raja Batteries’ ratio of CEO to median pay was 1,872, JSW Steel’s was 871, and Hero MotorCorp’s 813). Are these symptomatic of having lost SHE moorings? Consider another iconic American brand, Starbucks, and its legendary founder, Howard Schultz. The company has been locked in a dispute with its workers who wish to form unions to negotiate better terms for themselves. And Starbucks just will not hear of it. (“Inside Starbucks’ Dirty War Against Organized Labor”, The New York Times, July 21, 2023).

The disruptions due to the pandemic had racked up record profits for the company, but left many baristas exhausted and embittered. Starbucks did nothing illegal, but it stonewalled, did not respond, and chased down recalcitrant employees at troublesome stores. This state of affairs does not sit well with a company that states its purpose as “to inspire and nurture the human spirit — one person, one cup, and one neighbourhood at a time.” By the way, Mr Schultz became CEO twice after retirement in the last two decades after botched attempts at inducting first, Orin Smith, and later, Kevin Johnson, as successors. Currently, a third CEO, Laxman Narasimhan, took over three months ago. Are these symptoms of the company having lost its SHE moorings? We must wait and watch.

Consider some Indian businesses and startups, which are currently deep in public controversies. The outcomes of the controversies will take time to be clear, though the haziness of the facts does give cause for lay folks to be suspicious. The barons who head them and strive to be among the richest may not have any sustainable, humane, and enlightened purpose. It is doubtful that they will flourish a century from now. Our paradox is that India has too many poor enterprises, but many rich entrepreneurs.

Consider the Rockefeller business, principally Standard Oil, which was humongous in the 1900s. John D Rockefeller was considered the richest human being in his heyday. Emma Calve, the French operatic dramatic soprano, was his friend, but also became an admirer and disciple of Swami Vivekananda during his sojourn in America. She persuaded Rockefeller to visit Swamiji. Calve recorded the conversation, which has been published. Swamiji suggested to Rockefeller that even if he was a hundred times richer than the average American, he was unlikely to be a hundred times smarter. “Could it be that you are a mere conduit for wealth?” posed Swamiji.

After 15 years, in 1912, Rockefeller endowed the Rockefeller Foundation. Today, while there is no Rockefeller business, 70 descendants own a piece of the Rockefeller Family Fund, which continues to do many wonderful things for society and people.

Deep purpose eats wealth for breakfast, lunch, and dinner, as Peter Drucker might have said.  

The writer is an author and a business commentator.   www.themindworks.me; rgopal@themindworks.me