Tradition of Trusteeship – ‘Doodles on Leadership’ by R. Gopalakrishnan

The business world today is at an inflection point. At the time of the industrial revolution, the basis of competitive advantage for the business world was industrial assets or physical assets. In the last thirty years, we have heard a lot about competitiveness being based on information assets or knowledge assets. As we go forward into whatever the next age will be called, I wonder whether the basis will be ethical assets.

I realize that this sounds rather pompous, but I can’t help feeling that there is enough evidence around us in society today to justify exploring such an idea. After all, commerce and business are predicated on the principles of capitalism, and it doesn’t matter where in the world you go—capitalism is associated with greed, avarice, ego and all sorts of negative qualities.

Excesses have happened periodically throughout the history of commerce. Ever since the Joint Stock Company was invented in 1856, the facts of such excesses have been recorded. Considering that excesses seem to be rampant today, it may be prudent to reflect on what the future might be. There are two factors that we need to consider. First, that the Joint Stock Company is here to stay as a major agent of change in social and economic development in all sorts of societies and countries around the world. Second, that there are more and more individuals in society who are driven by a set of personal values, which represent what they stand for and how they would work. They may work in a company which creates its own corporate environment and culture; that culture may be at variance with their personal values.

They struggle to reconcile these two. In other words, there is mutuality—an increasing nexus between the personal values of an individual and the corporate values of the entity through which he or she earns his or her living. These are two factors we cannot run away from, and both are important for the future. This aspect can be better understood with two episodes from a completely different arena, far away from business—mountaineering.

THE MOUNTAINEER’S DILEMMA
In 1982, a senior executive in Morgan Stanley, New York, Bowen McCoy, undertook a six-month sabbatical which was sponsored by his company. A mountaineering expedition in the Himalayas was part of that sabbatical, in order to achieve greater self-awareness and knowledge about himself. McCoy and another colleague of his almost reached the end and were just a little short of the last assault on the target peak that they had set out to conquer. Following behind them was a New Zealand team of mountaineers, and behind them, a Japanese group. They had reached a very important point, from where the final assault would begin.

As McCoy, his colleague and the porters set out on this last assault, they heard a groan from the ice around them. They found the body of a sadhu, who was naked, ill-equipped for the minus 38 degrees temperature, at an altitude of 18,000 feet. The sadhu seemed to be dying. This gave rise to a dilemma. Should all of them abandon the expedition and go back with the sadhu to save his life? Should they carry the sadhu with them to the peak? Should some of them take the sadhu back and some go ahead with the expedition?

McCoy’s individual values, which must have undoubtedly been benign, religious, and fraternal, required him to save a fellow being. That task should have been put on highest priority. But the group’s mountaineering attitude, laced with  the competitive desire to reach the mountain peak, argued that the sadhu may live or die, but they must definitely achieve their goal.

Finally, they left the sadhu and went on to conquer the peak. It is not clear whether the sadhu lived or died.

McCoy wrote it up as a case, which the Harvard Business School has published. It is about the ethical dilemma that this posed to him and to his colleague. McCoy revealed that until his dying day, the issue of his own role in determining whether the sadhu would survive or die would continue to haunt him. He was not able to reconcile his individual value system with the ambitions of the mountaineer’s value system into which he found himself incorporated.

Had the mountaineers reached a consensus through discussions on what had to be done, his conscience might have rested easier. As it happened, they did not work out a consensus.

In 2007, there was another mountaineering episode. This one involved a mountain climbing event for disabled people. Mark Inglis, a double amputee from New Zealand, achieved a remarkable feat by climbing Mount Everest. However, as it so happened, on his way up Inglis found one man of his forty member team, David Sharp, dying. Inglis had to choose between helping Sharp and going ahead with climbing the mountain. He chose to climb the mountain. It became a subject of great controversy on the subject of ethics and human values. So, despite the great achievement of climbing Everest as a double amputee, his feat became controversial on the grounds of ethics.

I mention these two stories because they bring out, in a non-corporate context, the kind of conflicts we face every day in reconciling our individual value system and the organizational value system, in negotiating our values within the value system into which we are placed. This happens all the time when we operate in business. My instinct tells me one thing, but my company environment suggests another. Finding harmony between the corporate value system, which I influence through my behaviour, and my personal value system, which the corporation influences through its behaviour, is an essential part of understanding the true nature of business.

Business is not merely commerce; it has a humane aspect to it. The events around the world today suggest that we tend to forget this. In the Tatas, we have had several such experiences within the realm of corporate trusteeship and the group’s tradition of trust.

‘SERVANT LEADERSHIP’ REDEFINED
The first lesson that I learnt is that business is a servant to society and not the other way around. If you observe how business leaders behave, you might get the feeling that business controls society.

In the late 1800s, Swami Vivekananda went to Chicago to attend the Parliament of Religions. He became a very ardent and outspoken advocate of human values. One of the people he met in Chicago was John D. Rockefeller, who had made a great fortune in the booming oil business at that time. Rockefeller was introduced to Swami Vivekananda by a French woman disciple. She wrote about their meeting in her diary.

Rockefeller probably came for a lark; he had been told that a saffron-clad monk was electrifying the people of Chicago, and it is possible that he went out of curiosity and wasn’t really interested in meeting Swami Vivekananda. Swamiji didn’t even look up from his desk when Rockefeller entered. He continued to do his work. After a while, he looked up at his visitor, who was not really used to being treated like a commoner. He took his seat and a conversation ensued. It became apparent to Swamiji that Rockefeller was very wealthy. Swamiji posed him a question, ‘If you have that much more money than other people, do you think you are that much smarter than the others too?’ Rockefeller replied in the affirmative. After all, if he wasn’t a hundred times smarter, he wouldn’t have a hundred times more money, would he? Swamiji impressed on him that perhaps he was not one hundred times smarter, but merely three times smarter. If he had made a hundred times more money by being just three times smarter than others, then perhaps he was merely an instrument through which this money had to go back to somebody else? Swamiji urged Rockefeller to consider leaving some of his money for other people.

This sounded absolutely ridiculous to Rockefeller, and he departed with the polite statement that he had worked really hard to make his money. He had absolutely no intention of leaving it to other people. But curiously, three weeks later, he came back to see Swami Vivekananda, this time of his own accord. He threw on his table a piece of paper, through which he had endowed a certain sum of money (it was small by Rockefeller’s standards) for some noble purpose. He asked Swamiji, ‘Are you happy now that I have done this?’ Swamiji responded, ‘Why should I be happy? You have to ask yourself the question—have you given enough out of the total wealth that you have?’

It took another fifteen years—until 1913—for John D. Rockefeller to set up the Rockefeller Foundation, which has done an enormous amount of good work in society for the last several decades. The element of trusteeship comes out so clearly in this conversation between Swamiji and Rockefeller.  When you have earned a lot of money, whose money is it? Did that money come to you entirely because of yourself, or is it possible that you are merely an instrument through which you should channelize it back to society? These are very interesting questions to ponder.

TATA’S COMMITMENT TOWARDS TRUSTEESHIP
When I joined Tata in 1998, I learned the fact that probably the world’s first charitable trust was set up by Jamsetji Tata in 1892, a long time before the Rockefeller Trust, the Andrew Carnegie Trust, the Ford Foundation, and the Leverhulme Trust, all of which came in the 1900s. So what made Jamsetji, who was wealthy by Indian standards of the 1880s, but probably not so by international standards, set up an instrument—the J.N. Tata Endowment Trust—that was not well known or widely practised by companies at that time? As he articulated its purpose, it would enable talented Indians to go abroad to get advanced training so that they could return to India to work for the betterment of their country.

He was firmly of the belief that if you want to advance a society, you need good people to become better people, and finally become the best. As it so happens that between 1892 and today, the J.N. Tata Trust has sent over 3,000 Indians abroad. Of the many illustrious alumni, one of them became a Chairman of the Atomic Energy Commission, another, a Director-General of the Council of Scientific and Industrial Research, and a third, the President of India.

If you nurture good people and allow them to become better—or the best—they can play very significant roles in the nation’s economic development. Pakistan got its first Finance Minister, Ghulam Muhammad, from the Tata boardroom after Prime Minister Liaquat Ali Khan called J.R.D. Tata to seek his agreement in offering the job to J.R.D’s colleague. India got a Railway Minister—who later became the Finance Minister—from the Tata boardroom in the form of John Mathai. India found an Ambassador to the USA in the Tata boardroom when Nani Palkhivala went on to perform that role. All of these are examples to illustrate how business can be the servant of society.

The ulterior motive behind making profits is not merely to declare a dividend or bonus shares. As J.R.D. said, what came from the people must go back to the people. Who does the company earn its profits from? From the capital given by shareholders, and consumers, and accrued from trade with vendors, using transport contractors and so on. If there is some surplus, who does that surplus belong to? Not just to the shareholders—it belongs to whole community, the whole society. In this global world, this means that what comes from the six and a half billion consumers of the world must, in some way, go back to the six and a half billion consumers of the world. Thus, the fundamental characteristic of working with the trusteeship concept concerns the real purpose of business—to return to society what you earn from it.

A LEADER’S PRIVILEGE, NOT HIS PLIGHT
If you are going it to return it to society, you must work with a certain attitude that was described by Lord Leverhulme. Lord Leverhulme founded Unilever, Britain’s largest company, and in so doing, made the first modern multinational. He believed that the task of a leader is to act with the humility of the mason who paves the roads. The man who paves the roads works with his toil and sweat; he knows that for decades after he has finished paving the road, millions of people will travel on those roads. They will travel with hope in their heart and ambition in their eyes, trying to seek out a fortune for themselves in whatever they are doing; but not once will they ever stop to think about the man who paved the road for them. A business leader must be like the mason—an anonymous servant of those travellers. But being an anonymous servant of humanity is very much a part of a leader’s privilege, and not his plight.

When that idea seizes leaders, the concept of trusteeship leaps out at them. It makes leadership effulgent and meaningful. When you depart from this world, it is not your name or fame but what you leave behind that can make the biggest difference to someone.

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