Download It is barely two decades of economic and social reforms in India

What is the Business of Business – in our times
It is barely two decades of economic and social reforms in India. It is almost
the same time since the fall of the Soviet Union and the Berlin Wall. And, we
are already in yet another set of turbulent moments figuring out whatever
that happened to the new found joy of the market economy. Prof. Amartya
Sen, Nobel Laureate in Economics recently said that, “The market economy
can be vigorous and productive, but also amazingly stupid and degenerate. The
world is now much engaged in working out how mindless markets are and can
be made to function better…”
Are we learning something from this recession?
Mr. Jeff Immelt listed out his 5 learnings. Two of them were in common with
the five top priorities listed out by Mr. O P Bhatt, Chairman of India’s largest
bank, the State Bank of India, when he spoke while receiving the ‘Best Banker’
award third time in a row. They both seem to agree that high employee
motivation and serving communities in different forms were as important as
better handling of liquidity or planning of capital expenditure. Mr. B
Muthuraman, Vice Chairman of Tata Steel mentions that, their “...focus on
people, society, environment / safety and the culture of nurturing
relationships would now become the driving forces of a strategy responding
to the economic slowdown.”
All in all, Sustainability does really matter when it comes to addressing the
deeper problems of business where social and economic interconnections
and more importantly, when the present moment decisions have their
linkages with tomorrow. It provides two major opportunities. [a] There is
need for deeper research to know from CEOs and business leaders as to how
they would balance short-term with long-term goals of an enterprise; and, [b]
What are the basic fundamentals lending credibility to a business
model>Whether they need a thorough review? How is Sustainability
becoming core to Leadership and Strategy?
In the last 5 years, Sustainability champions, especially at Tata, have been
seriously debating action which has led us to certain beliefs:
1. Business is highly recognized for its contributions to society, and ‘profit is
no longer a dirty word’. What needs more attention is the manner in
which businesses are run with integrity wherein their ‘creative power’ of
wealth and ‘distributive generosity’ are maintained in a balance. So, basics
of Ownership and Governance of a business will take the first scrutiny.
Are financial institutions (global banking agencies, IFC, World Bank,
perhaps OECD and others), regulatory bodies, voluntary standard agencies
What is the Business of Business – in our times
(ISO, SAI, AccountAbility, GRI and so on) really looking into the basics of
value creation? Are we creating sustainable value? It will mean asking
tough questions. For instance: that the wealth created does not belong to a
few or select participants, but it is the whole process of co-creation where
all stakeholders have a sense of belonging and ‘ownership’ at various
levels.
2. The nature of slippages, mistakes, blunders and even fraud in businesses
in recent years have led regulators and civil society to demand
‘accountability’ and ‘transparency’ in business dealings. A short point on
this third issue is that: a corporation should be able to present a well
defined Business Model. It should assure there are ‘capabilities’ and
‘deliverables’ to resonate the values one claims to stand up for.
3. Since organizations can at best be ‘enablers’, and people really matter and
have an active role to play, the fourth and fifth challenges would be the
need for an exemplary form of Leadership that will resonate in the form of
‘Employee behavior’ and the true nature of ‘Stakeholder engagement’.
We wonder whether the 5 issues of ownership, governance, business model,
leadership and employee / stakeholder engagement are some important
things to work upon in the coming years if business of business is ….in our
times ….sustainable value creation!
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Anant G Nadkarni
Email: [email protected] & Mobile: + 91 92233 56587