Almost exactly 356 days ago today, the worst terrorist attack we have ever known was unleashed on an unsuspecting city on a quiet Wednesday evening. And life as we knew it seemed to have ended. And yet here we are one year later with our faces resolutely turned to the future, at a Conference whose theme is about leading from uncertainty to certainty. I can’t think of a better tribute to those who fell on that day than the optimism this Conference displays that we must not just move but lead from uncertainty to certainty, with anticipation, courage and energy.
That’s theme of this conference - “Lead from Uncertainty to Certainty”. It’s a brave theme, even a heroic one. But I must confess that my first reaction, when I saw it, was that it goes counter to everything we have learned in the past year; indeed it goes counter to everything we have learned and unlearned in the past century!
The twentieth century started as an age of certainty. In 1900 the president of the Royal Society of Science made the ringing declaration that everything that was to be known in science was already known. He could be forgiven for saying this, because the world did indeed seem a very certain place in 1900. Newtonian physics appeared to explain the entire known universe. Economic certainty seemed to be assured when the US adopted the Gold Standard. The establishment of the International Court of Justice heralded the assurance of global peace. Belief in science prevailed. The dream of the Age of Enlightenment that the world could be understood through pure reason, seemed to be a reality. And there was smug belief that the sun would never set on the British Empire. Never had certainty, social, political and scientific, seemed more firmly entrenched.
What happened? Within 5 years of Lord Kelvin’s declaration of certitude, Einstein’s Theory of Relativity turned the certainty of Newtonian physics on its head. Within the same 5 years, Freud published his Interpretation of Dreams and put an end to the Enlightenment dream of pure reason, by showing that human behaviour is determined not by rational judgment but by the promptings of the unconscious. By 1908 Tilak was already calling for Swaraj. In another decade World War 1 shattered the certainty of world peace. The Great Depression swept away ideas of economic stability. World War 2 followed within 20 years of the First World War - which was billed as the war to end all wars. And as we know, the sun not only set on the British Empire but is currently rising in some of its former colonies.
The second half of the 20th century saw more uncertainty. The certainties of Einstein’s theories were assailed by the rise of quantum physics and chaos theory. The certainties of classical economics were shaken by the rise of behavioral economics. The wheel of history started turning the economic spotlight from the all powerful West to powerful new economies emerging out of the East. Countries broke up. New independent states were formed, but many other developments particularly the internet, started rendering traditional nation states irrelevant. By the end of the twentieth century, “certainty” was a not a very meaningful word.
And the twenty-first century began with a humble acceptance of uncertainty, which, as it turned out, was justified by its cataclysmic events. In the course of just one year – 2008 – Wall Street as we knew it collapsed, the River Kosi changed its course, there was a world wide recession and five terrorists held a great metropolis hostage for four days. At this time last year, it seemed as if everything had hit us at once. But if you look at it as a continuum, it was really nothing new. We have been living with uncertainty for more than a century. So what is the certainty we want to lead to when we say “Lead from Uncertainty to Certainty” Indeed can we talk about certainty atall?
I think you get your answer – at least partly - if you look at the programme. Look at the contents. So many of the topics talk about opposites and their reconciliation. “Environmental Values and Choices”. “Different Approaches to the Bottom Line” We are really asking can opposites coexist? “The Challenges of Inclusion” Again we are asking, can 2 ends of the spectrum be reconciled. “Personal and Professional Choices” “Leadership and Personal Transformation”. The consistent subtext is whether we can harmonize values and situations that are potentially in conflict?
The most difficult of these is probably the question of inclusion and in keeping with the paradox to the times it is also the most important. I don’t want to make this a harangue on inclusivity, but I completely agree with Lalu Prasad Yadav when he says that the Indian railgaadi can’t move forward if it leaves the Bihar bogey behind. We are beginning to defy gravity and take off but take off could be aborted if the gravitational pull of the other India, is stronger than the energy and growth that sets us free. So whichever way we look at it – whether we look at it as the right thing to do, or whether we fear the rise of social tensions, or whether we just look at it from the perspective of enlightened self interest because a more prosperous India means more consumers – from any angle inclusivity is the burning platform for the country as well as industry, and we have to resolve that conundrum.
To go back to my thesis, the content of this conference reflects conflicting tugs, conundrums, paradoxes. It reflects the need to find a solution to an accretion of opposites. And paradoxically that gives us the first certainty – the certainty that we will be navigating through paradox, complexity and chaos for a long time to come. Put another way the first certainty is that going forward, modern HR, as indeed, modern thought, is going to be about building pathways that traverse seemingly irreconcilable differences. That is why I believe that the content of this conference is prescient. It embodies current reality and foreshadows the shape of things to come.
The second certainty is that we as Indians are brilliantly equipped to navigate the first certainty. I don’t want to say that too loudly, for fear of hubris (you could also say “nazar”) but I do believe that at least in the short term, this is true. There is probably no nation in the world that is so comfortable with handling constraints and contradictions as we are. It is a cliché that whatever you say about India, the opposite is equally true. But it’s a cliché precisely because it’s true. We live with complexity uncertainty and contradictions every day, and our journey ever since liberalization has been about finding creative and successful solutions to the many paradoxical pulls that beset us. Our growth figures both for industry and for the nation are testimony to how well we have done this. The fact that we are used to things being difficult, tortuous and twice as hard to do as anywhere else, now gives us an advantage because it teaches us to think differently and act differently. I remember in the days when we were developing the Scorpio, , we didn’t have a clay modeling facility. So we used boutique engineering firm Hawtal Whiting in the UK.
We invited the Ford top brass to see it. Much to our surprise, the whole phalanx showed up; Lord Alex Trotman, Vice Chairman Wayne Booker, Jack Nasser, and head of R&D Richard Parry Jones.
Hawtal Whiting had never seen this prestigious a delegation and they gave their facility a fresh coat of paint before the meeting! First there was a PowerPoint presentation by Pawan that showed that the vehicle would be developed at a cost of one-fifth the cost of development in the U.S. In particular, they were astonished by the low cost of Indian engineers. They mentioned that in the U.S, the engineer’s costs amounted to almost 60% of the cost of a new vehicle.
After seeing the clay, and examining it in close detail, (Jack pronounced it acceptable), Wayne Booker, in a fit of enthusiastic support suggested that Ford depute around 30 engineers to help support the remaining development effort. Trotman immediately stopped him in his tracks, and said, “Wayne, let’s not send anyone to help them. If we do send 30 Ford engineers, the product will come out looking like a Ford at the cost of a Ford. However, if they manage to develop that vehicle we saw at the cost they presented, and then we’d better be sending our engineers to learn how they did it!”
And he was right – because we ultimately did build the Scorpio for less than one fifth of what it would have cost to develop it in Detroit.
And I think it is the same for HR. Our Indian model of HR today is driven by a confluence of 3 factors that make us very different. The first factor is Purpose. There is the story of 3 men who were engaged in the humble task of cutting up slabs of rock. A passerby asked each one of them what they were doing. “I am breaking up rocks” said the first one. “I am building a wall” said the second. The third man looked up at the heavens and said “I am building a cathedral”. Everyone in this room is in the happy position of building a cathedral. We are incredibly lucky to be working at a time when we can all see the link between our work and a larger national purpose. It is a very rare Indian CEO or manager who expresses his or her aspirations in terms of increasing profits or bottom line. Instead they will talk about building India’s skills, or taking India forward or revolutionizing telecommunications in India. It’s not so much profits that drive us, as purpose. My own farm equipment sector, even though it aspires to be the largest tractor company in the world, doesn’t see its mission as selling tractors. It sees its mission as the creation of rural prosperity. Just last week I judged a competition for our young managers who are encouraged to come out with new business ideas. None of the ideas they proposed were only based on chasing profits - they all had social impact as well. Using IT for low cost health care, sustainable energy for rural areas, combining holidays with bridging the rural urban gap, harnessing the energies of Gen Next to reap the demographic dividend – those were the ideas they championed. Even if our jobs involve just laying the bricks or putting on the mortar, we can all see ourselves as contributing to a cathedral – and that in itself, is an incredible competitive advantage.
The second building block of our Indian HR model is People – and that is not as trite as it sounds. A short while ago 4 professors from Wharton did a study for the National HR Network on the DNA if Indian business leadership. They are also writing a book based on this exercise, which I have been privileged to preview. One of their main findings was the completely different way we look at our people as compared to the USA. Indian companies see people as assets; US companies see them as costs to cut when things get rough. Indian companies use HR strategically. US companies tend to use it operationally. Indian companies invest in training for capability building, even though they know the person could leave. US companies train less, and train for execution rather than organizational capacity building. Very tellingly the vast majority of Indian companies thank their employees in their annual reports. Very few US corporations do. I am not going to say one model is better than the other. They are both the products of very different business environments cultures and circumstances. Both can be effective. But I will argue that an HR culture that values people and lets them know they are valued is more effective in the kind of shifting and uncertain scenarios in which most of the world now operates. Purpose and people make a very potent business combination.
The third block of the Indian HR model is Pride. If you have purpose and you value people them you will very likely also have Pride – pride in what the organization stand for, and pride in what it achieves. It sounds soft and fuzzy – but I have seen it work over and over again. In 2002 Mahindra was on the skids. Our profits, return on capital, return on investment and share price were all abysmal. We got kicked off the BSE bellwether stocks. We looked as if we were going the way of many old time companies that were chewed up by liberalization. Well we got together that December and decided that that this loser image was just not who we really were. And that we may have stumbled but we were not going to fall. I set certain targets at that conference for free cash flow and profitability that were to be achieved over 3 years time. We achieved them in 12 months! What was behind it? Just purpose and pride. That success converted our defensive pride into an aggressive one – and we haven’t looked back. My experience tells me that if you have a culture that nurtures pride, that pride will nurture out-performance. So I am not surprised that the Wharton study showed that Indian CEOs see shared vision and values as one of the top two leadership capacities they need, and that they see shaping employee attitudes as one of the main roles of HR. Purpose, people and pride is what they are talking about.
And that brings me to the third and last certainty – the certainty that our time for thought leadership has come. Indian HR is gradually evolving a very distinctive model that can handle the paradox and uncertainty of our times. Certainly it is based on a culture and a state of economic development that is particular to India. But the challenges that it tackles and resolves are challenges that are common across the world. And it seems to be what a disillusioned world is looking for. Bill Gates recently called for a new form of capitalism where business aims to solve social problems besides making money. That sounds a lot like what my young managers in their competition were talking about. So perhaps its time for us to go out and evangelize. Perhaps its time for us to talk more in international fora and share what is working for us. Perhaps its time for us to teach as well as to learn. And that may be the most valuable way we can lead from uncertainty to certainty - lead in showing how we manage with certainty in an uncertain world.