WORLD FLABBERGASTED AT INDIAN WISDOM - Rediscovering a Management and Leadership Manual in Ancient Indian

Rediscovering a Management and Leadership Manual in Ancient Indian
Literature
Published: October 18, 2007 in India Knowledge@Wharton

Business has often looked for guiding principles in ancient literature
from various lands, including the sixth-century Chinese military
treatise The Art of War, by Sun Tsu, or India's Vedas, including the
battlefield epic Bhagvad Gita. Now, a new book brings to a global
audience the management and leadership insights contained in the
Thirukural, a collection of 1,330 aphorisms written some 2,000 years
ago by Tamil poet Thiruvalluvar.

According to V. Srinivasan, author of New Age Management Philosophy
from Ancient Indian Wisdom, the aphorisms, or "kurals," form a manual
for governments and corporations, and they are a favorite of Indian
finance minister P. Chidambaram. Srinivasan is CEO of IT services firm
3i Infotech in Edison, N.J., where he has overseen 27 acquisitions in
the last seven years. He spoke about his book and the connection
between ancient wisdom and modern management in an interview with
India Knowledge@Wharton. An edited version of that conversation
follows.

India Knowledge@Wharton: Could you tell us a little about the
Thirukural?

Srinivasan: The Thirukural is believed to be about 2,000 years old. It
has three parts that deal with wisdom, wealth and affection or love.
Several people have analyzed it, and it has been translated into
Portuguese and French.

It is considered the "Tamil Veda." (The Vedas are Sanskrit texts of
Hindu wisdom.) "Veda" [means] the knowledge, realization and
improvement of the self. It comes from the root "vid," meaning
"knowledge." With self realization and self introspection, [people]
get on a path different from those with just knowledge -- they become
leaders like Mahatma Gandhi or Mother Teresa.

While the Thirukural talks of the three qualities of wisdom, wealth
and love, Tamil literature talks of a fourth aspect of "veedu," which
refers to God, or nirvana. One school of thought is that if you follow
every "kural" (aphorism), you will automatically reach "veedu."

The Thirukural talks about how territories maximize their wealth, and
how there were princes, ministers and ambassadors. You [can] equate a
prince to a CEO, a minister to a COO and an ambassador to a sales and
marketing executive -- the qualities prescribed for each of these
functions correspond.

India Knowledge@Wharton: What aspects of the Thirukural does your book
focus on?

Srinivasan: My book concentrates on the wealth aspect of the
Thirukural -- how you derive wealth, protect it and improve it.
Management and leadership are closely related to wealth creation.

How does the evolution of leadership take place? From our childhood,
we learn a lot of things, including mathematics, physics, chemistry
and economics. The next stage is the refinement of our personal
qualities. When you don't have [refined] personal qualities, you may
be a knowledgeable person but you don't become a leader.

What are those qualities? Courage, conviction, determination, self
control, control over anger and emotions and a disciplined way of
life. To become greater, you may need to give up certain things such
as your ego, or "aham bhava" (arrogance) and the cravings of the five
senses.

India Knowledge@Wharton: What insights could one draw upon in the
present context of the sweeping changes underway in the Indian
economy? What are the key takeaways for management? For example, is
the Thirukural consistent with a corporation's focus on maximizing
profits for its stakeholders?

Srinivasan: To maximize profits, you need strategies and
implementation. Strategy is about what to do, when to do it, how to do
it and where to do it. The Thirukural has chapters on each of these.

One chapter is on deliberation before action. Another is on choosing
the appropriate time. A third is on choosing the appropriate place.
All the ingredients for profit maximization are contained in the
Thirukural.

Consider these kurals on decision making and implementation:

"The end of all deliberation is to arrive at a decision; and when a
decision is reached, it is wrong to delay its execution."

"Go straight for the goal whenever circumstances permit. When
circumstances are against, choose the path of least resistance."

"Five things should be carefully considered in carrying out any action
-- the nature of the action, the resources in hand, the instrument,
the proper time and the proper place for its execution."

And this one is on goal setting: "Let all your purposes be grand, for
even if they fail, your glory will never tarnish."

Even the greatest venture that has the wrong people will not succeed.
Take India's IT companies, for example. Some 20 technology companies
started operations in India between 1980 and 1985, but Infosys
[Technologies] and a few others succeeded; several others vanished.
What is the difference? The environment was the same and they were all
doing the same kind of IT projects, but leadership made the
difference.

Here are two kurals on this subject:

"Men who cannot drive home their point before a learned assembly, even
if they are very knowledgeable, are good for nothing."

"Behold the man who is eloquent of speech and knows neither confusion
nor fear; it is impossible for anyone to defeat him."

India Knowledge@Wharton: Some of the kurals you cite in your book seem
very direct and bold. One advises you against exposing your troubles
and weaknesses. They are also ruthless in some places: "Fell down
thorn trees when they are young..."

Srinivasan: Leaders of large corporations that become reputable
invariably follow these principles. But their people at the second or
third level don't know the nuances of these things. Take, for example,
premature disclosure. One kural says: "Do not reveal your troubles to
men who do not know them. Similarly, do not expose your weakness to
your enemies." Or this: "The man of action lets his purpose appear
only when the purpose is achieved, for an untimely disclosure may
create obstacles that cannot be surmounted."

Even to your board, you need to disclose things only at the
appropriate time in significant detail. If you have clearly
articulated in your mind the pros and cons of a proposal, you are able
to explain it to the board in 15 or 20 minutes and get it passed. If
you discuss your proposal prematurely without having thought it out,
you risk your board rejecting it.

I have seen CEOs of several midsize companies and even some bigger
companies who blame their boards for not getting their proposals
passed. It is predominantly because of their inefficient articulation
and inability to put forward their ideas in ways [that will] carry
their boards with them.

India Knowledge@Wharton: Do you recall an illustration of that?

Srinivasan: Among the people with those qualities I have personally
seen are Narayanan Vaghul [chairman of India's largest private bank,
ICICI] and K.V. Kamath [CEO of ICICI]. Somehow, even if the board
starts out on a negative note, saying that certain proposals are not
consistent with the corporation's core competence areas and so forth,
they get their proposals approved.

Take, for example, the way ICICI went about its retail banking
strategy in the mid-1990s. At that time, it was a predominantly
corporate finance institution. Vaghul and Kamath felt the company
could not continue to be viable as a project finance institution
because the new economic liberalization policies restricted access to
inexpensive funds and forced it to tap the public markets like others.

They went about [developing] their retail [services] through a shared
vision and ruthless implementation and made it happen, although a lot
of people felt ICICI did not possess the implementation capability --
HDFC was strong in housing finance, there was Citibank in auto
finance, and so on. That is where Vaghul and Kamath [offered an]
articulation of the competition's limitations that ICICI could take
advantage of. Without that articulation, it would have been tough to
get the board's approval.

India Knowledge@Wharton: What thoughts about leadership does the
Thirukural offer for Indian industry, especially now that it faces a
talent shortage across the board, attrition, wage inflation, etc.?

Srinivasan: A lot of people think you become a leader by throwing your
weight around -- that they need to shout at certain people and [punish
them] even for small mistakes. This is particularly true of middle-
level managers. Even some of the management schools create the
impression that a snobbish attitude is actually helpful for
leadership.

To become a leader, you have to command respect or force people to
have respect for you by creating awe around yourself. The boss who
forces respect is not creating a sense of belonging and togetherness,
and employees will leave for better salaries. This is one reason why
people complain that they cannot get the right talent; it is an
indication of weakness in leadership.

Until five years ago, a strategy of forcing people to respect you
worked because employment opportunities in India were scarce and
people held on to their jobs like a golden cage -- they could not move
out even if their leaders harassed them. Today it is an employee
market, and leadership styles have to change.

India Knowledge@Wharton: Your book talks about how the Thirukural
advocates an openness to dissent.

Srinivasan: Generally, a leader believes that certain things are
right. He may not come to know the details of how his strategy is
being implemented, and the people close to him may not reveal
everything. In an open forum, even the adverse aspects will come out.
But if you start punishing those who point out the adverse aspects,
then nobody will give you the right information, and whatever you do
will fail. A kural on this is: "A leader should have the virtue to
hear the words that are bitter to his ears."

I have personally experienced this. When the second line of people in
my company think what I am doing is wrong, in 75% to 80% of the cases
I have been able to articulate that what I am doing is right, and they
agree. And in 20% of the cases, I have agreed with what they say and
changed my approach.

India Knowledge@Wharton: Thiruvalluvar also talks about how one has to
be careful with the second tier of your organization's management. He
seems to suggest instant sacking of undesirable people.

Srinivasan: He is advocating two things. One refers to the traitors in
the camp. They know your strategy and your secrets, and help your
rivals. The moment you come to know that somebody is a traitor, or
even if you have a suspicion, you must remove that person or exclude
him from your camp. The 10 kurals on this subject advocate a zero-
tolerance approach.

Secondly, the Thirukural talks about an untrustworthy minister, or
your second-in-command. It says, "He is more dangerous than even 700
million enemies."

There are many parallels here in politics and companies. People stage
coups in countries because they were not removed at the right time.
You will find this true also with badly planned corporate succession
strategies.

The kurals talk about the desired qualities in a minister or an
ambassador and advocate that the person you select must have the
organization's larger objectives in mind.

India Knowledge@Wharton: What can one learn from the Thirukural about
financial management?

Srinivasan: This kural is useful in financial management: "It does not
matter if the feeder channel is narrow, so long as the draining
channel is not wider."

You may also apply the following kural to managing your company's
debt: "If you put too many of them, even the pea***'s feathers would
break the wagon's axle."

India Knowledge@Wharton: M&As are now a popular route for many Indian
companies. But many firms are new to the game, and there are concerns
about whether they have the relevant experience -- whether they might
overpay and so forth.

Srinivasan: A lot of M&As are driven today by concerns that a company
may not be able to grow and gain market share unless it acquires or
gets acquired. Also, there is a fear among promoters that the value of
their stock may fall. One kural says: "Take into consideration the
inputs, the wastage, the output and the profit that an undertaking
will yield; these are the yardsticks for any new venture."

The Thirukural also says: "There are enterprises that tempt with a
great profit but which perish even the capital itself. Wise men will
not undertake them." Also: "Before taking up any enterprise, determine
first the exertion necessary, the obstacles on the way and the
expected profit at the end."

In addition, the kurals encourage you to be pragmatic. For example:
"When the territory of the king (market share of a company) declines,
leading to a fear in the mind of the king (CEO) that he will not be
able to survive the opponent (competition), it is better for him to
submit to an alliance with a stronger king (acquiring company)."

Also, consider these kurals on the right time to [acquire]: "Bend down
before your adversaries when they are more powerful than yourselves.
They can be easily overthrown when you attack them at the moment when
their power is on the decline." And: "When the tide is against you,
feign inaction like the stork. When the tide is on, strike with
swiftness and sure aim."

India Knowledge@Wharton: What does the Thirukural say about corporate
governance and social entrepreneurship?

Srinivasan: Basically, corporate governance is openness, transparency
and not doing things for private benefit. If you follow the virtues
prescribed in the kurals, you will automatically be on the path of
good governance. One kural says: "Let the thing you decide to do be
above reproach, for the world looks down upon the man who stoops to a
thing that is beneath himself."

Another kural could be related to nepotism and playing favorites: "If
you choose an unfit person for your job just because you love and you
like him, he will lead you to endless follies."

And there are others that could apply to social entrepreneurship, such
as: "The prince (CEO) shall know how to develop the resources of his
kingdom, how to enrich his treasury, how to preserve his wealth and
how to spend it worthily."

India Knowledge@Wharton: You say in your book that 3i Infotech faced
many challenges as it grew with acquisitions. How did you use the
Thirukural to deal with them?

Srinivasan: At 3i Infotech, I relied on the Thirukural mainly in the
selection and removal of a lot of people. For example, the kural [I
mentioned earlier] was helpful to me: "The minister that sits in the
council and plots the ruin of his prince is more dangerous than 700
million enemies." At the time, I was in India, and a senior company
executive started cutting off communication with employees and became
unapproachable to them. He began making it appear as if I had
authorized some decisions, basing them on half-conversations with me
and extracting a "yes" from me on some things.

One day, after I returned to the U.S., I realized he was dangerous to
the organization. He had stepped out for lunch and when he returned I
dismissed him on the spot.

I had also hired some people without proper checks and had to remove
them. Another kural says: "Never trust men without testing them, and
after testing them give each one of them the work for which they are
fit." These days, I first place [hires] in some relatively less
sensitive positions before elevating them.

India Knowledge@Wharton: Are there kurals that seem to go against
popular wisdom but are, in fact, worth following?

Srinivasan: Regarding the retention of your good second-level people,
one kural says that if a certain person is very good at his work,
don't mind the small liberties he takes. It says: "If the king (CEO)
is harsh of word and unforgiving, his prosperity, even if it is great,
will end quickly." If somebody is good and you pep him up, his ego
gets boosted and he may take some small advantages. If you become too
tight with the rules, it may hurt him and you may lose some bigger
things. That is an unconventional thought.

Another kural encourages you to make friends with your enemy's enemy.
If a CEO or a minister converts an enemy's enemy into a friend, half
your battle is won because your enemy is weakened -- you become two
and he becomes one.

India Knowledge@Wharton: Many other ancient philosophical texts and
religious works from different faiths must also have lessons for
management and leadership. How is the Thirukural different?

Srinivasan: Compared to the Bhagvad Gita and the Vedas, the Thirukural
goes into more detail and nuances rather than the broad philosophy.
The Thirukural is more like a manual and has 10 kurals on every
aspect; it lays out the procedures and processes. The other works
don't talk about the right time and strategy for an enterprise, people
management, and so forth.
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