30th, September 2019 FOUNDING FUEL
(*The author is a corporate advisor and Distinguished Professor of IIT Kharagpur. During his career, he was Director of Tata Sons and Vice Chairman of Hindustan Unilever. His latest book is “Doodles on leadership: experiences within and beyond Tata”, published by Rupa).
Ethics can be learnt, though it may be considered difficult to teach. What matters is the kind of experiences young managers are exposed to. B-schools and firms play a crucial role in shaping their thinking through such exposures.
This article explores the theme, Creating Ethical Leaders of Tomorrow: Why Management Education Needs to Rethink Its Role, as part of our learning project, MasterClass on TransformingSystems with Arun Maira. The project is based on Maira’s book ‘Transforming Systems: Why the World Needs a New Ethical Toolkit’. The other two themes are: A New Model of Change: Why Complex Global Problems Need Local Systems Solutions, and Building Purpose-Driven Networked Organisations: Why Their Time Has Come.
A note on the theme by Arun Maira: Over the last half century, the idea became ascendant, that not only should the business of business be only business, but countries, governments, and civil society organisations should also be run on business principles. Tools for effective business management taught in business schools and propagated by management consultancies are being applied widely. Concerns about business ethics have been growing at the same time, with egregious failures of governance in respected global companies, and with the global financial crisis caused by insufficient regulation of private financial institutions. Societal pressure is increasing on companies to care for communities and for the environment. Business management schools are being pressed to teach ethics.
A core ethical principle is to put the needs of others before one’s own. Business schools have two dilemmas. The first is, can one teach ethics in a class, or is ethics a way of thinking and being, that is imbibed from family and social norms?
The second dilemma is existential. Business schools are also businesses. A fundamental principle of good business is to produce what customers will pay for. Unless business corporations—their largest customers—are willing to pay a premium for ethical graduates who place social needs above shareholder returns (rather than those who excel at finance and marketing and producing profits for the corporation), business schools are reluctant to change themselves. With increasing societal demands for more ethical conduct of business, who will change first? Businesses or business schools?
I recall conversations with RS Kelkar, a salesman at Hindustan Lever (now Hindustan Unilever), from 52 years ago. Kelkar was to train me, an impatient and proud IIT engineer, on the art of selling. Apart from discussing the technical aspects of selling, he used tangential conversations to teach.
Question: Why is the entrance to our temples so low?
Answer: So that you are forced to bow while entering.
Question: Is human relationship more important or human intellect?
Answer: Things get done through relationships much more than through intellect.
Cut to 2019. Sitting at SP Jain Institute of Management and Research (SPJIMR), I recently chatted with MV Subbiah, patriarch of the Chennai-based Murugappa Group, about business ethics, how to preserve positive traditions, and transmit values in businesses. Subbiah posed two tangential questions.
Question: Why does a mother always place her baby on her left shoulder?
Answer: Because her heart is on the left and her heartbeat soothes the baby. Mothers speak to their babies through their hearts.
Question: Why does a mother always speak to her baby using nonsensical but endearing expressions?
Answer: Because the child learns through emotion and conversation. These positively impact the baby’s plastic brain.
As I reflect on these statements, my reductionist left brain instructs me to google and check the neurological validity of what Subbiah said. I resist that action. I allow freedom to my right brain. It is not important whether Subbiah is technically right, though he must have done his homework.
Subbiah’s message is that vibrant communication, training and sharing occurs through heartbeats, words and emotion.
This provides a fine basis to answer the question Arun Maira poses: Can one teach ethics in a classroom, or is ethics a way of thinking and being that is imbibed from family and social norms?
I would argue that managers are shaped by their world and life experiences, and early professional exposure. And there’s a crucial role for B-schools and firms in exposing them to experiences that will shape their thinking. They can “teach” ethics by following these principles:
During my career, I have learnt that principles similar to the ones I mentioned above teach young professionals valuable lessons about sharing, caring and respect (which add up to ethics) during their B-school years and their early career. During this period of what I call ‘professional childhood’, the ethical brain is plastic and malleable to influences. Here are some examples that I have experienced and observed.
1. SPJIMR insists on Abhyudaya: In my association with this institute, I found that MBA students were required to complete a compulsory project, called Abhyudaya, where they mentor underprivileged children. Through the programme, urban youngsters are confronted with the constraints and challenges of underprivileged life. Humility about their own demands and gratitude for their comfort are osmotically learnt, not taught. I doubt that they enjoy the experience while it is going on, but the lessons stay with SPJIMR students all through their professional career.
2. SPJIMR ethics project: For the last couple of years, teams of MBA students have interviewed CEOs about the ethical challenges they faced and how they addressed them. The conversation is intimate and frank. Prominent business leaders like HUL’s Sanjiv Mehta, Aditya Birla Group’s D Shivakumar, Nestle India’s Suresh Narayanan and former promoter of AFL, Cyrus Guzder, take the session very seriously and devote a lot of time to prepare and interact with the students. The students record their learnings and share them through a day-long session at an auditorium. Faculty members devote the whole day to challenge and to comment, thus accelerating the learning process.
3. Rural development projects: Hindustan Lever (now HUL) pioneered the idea that every trainee should spend eight weeks living with a family in a village in Etah district, Uttar Pradesh. Every trainee goes through the experience. Today’s successful global leaders like Manvinder “Vindi” Banga, Harish Manwani and Nitin Paranjape are products of HUL’s rural development experiences.
4. TAS social service projects: During my Tata career, on and after 2002, I introduced eight weeks of social service for every trainee under TAS, the Tata group’s leadership development programme. They probably hated the experience, but later, each one would recall how enriching it was.
5. Sustainability: Tata Business Excellence Model (TBEM) is one of the business pillars of every Tata company. Ethics is not just about honesty and integrity, it is also about respect for fellow beings and the environment. Sustainability was introduced into the TBEM assessment process in the mid-2000s. Over the last decade, the training of assessors and the test of sustainability have spread awareness and commitment deep and wide within Tata companies.
6. The tone at the top: Just as children are sensitive observers of elders’ behaviour, especially with respect to truth-telling and injustice, young managers are sensitive to judging their seniors’ behaviour more than their talk. I recall how in 1968, Prakash Tandon, legendary chairman of Hindustan Lever, drove home in his second-hand Fiat car after his last retirement function concluded. It left his driver, Bahadur, flabbergasted. In Tata, the lessons on ethics were noticed widely among young company managers when the Tata group blew the whistle on itself during the unfortunate Tata Finance “illegal transactions in stocks” episode dating back to 2001.
In short, my experience is that ethics, defined broader than just integrity, can be learnt even though it may be considered difficult to teach. It is done through the four principles listed earlier. These four principles work in family upbringing as well as in MBA teaching and corporate management training.
The techniques are limitless and allow ingenuity. The commitment to do something about imparting ethics training will be even more important in the future. You know why? Because competitive advantage, which used to be about physical assets, shifted to intellectual assets some 30 years ago. And in the coming 30 years, competitive advantage will shift from intellectual assets to ethical assets. The future will belong to strongly ethical companies and management institutes. Management trainers must engage with the subject.