Richard Leider, a bestselling author, asks this question, “What are the two most important days of your life?” The first answer is obvious: the day you were born, but the second is not so obvious. It is not the day you die; that is the end of the story, not a high point. It is not the day you graduate, get married, or have your first child — all significant milestones, of course, but not life-defining for most. The answer: it is the day you realise why you were born.
Not everyone experiences that day; many of us don’t even know to ask that question. But for those who do, that day becomes a major fulcrum in their lives. Nothing is ever the same once you discover your true purpose, your calling. It changes the entire complexion of your daily life and work. You are able to draw on reservoirs of energy and inspiration that you did not even know existed within you. Work becomes truly fulfilling, a source of satisfaction and joy.
Now let’s back up to an earlier time. The term ‘entrepreneurship’ can be traced back to as early as the Middle Ages, when the ‘entrepreneur’ was simply someone who carried out tasks, such as building and construction projects, by applying all the resources at his disposal. However, it was during the 16th century when ‘business’ was used as a common term and the ‘entrepreneur’ came into focus as a person who is responsible for undertaking a business venture. The 20th century saw the evolution of entrepreneurial history, the concept developing its most recent form when Harvard theorist Arthur H. Cole defined an entrepreneur as an ‘organisation builder’.
Capitalism: A double-edged sword
Then came a crossroads where capitalism also got portrayed as exploiting workers, cheating consumers, causing inequality by benefiting the rich but not the poor, homogenising society, fragmenting communities, and destroying the environment. The early intellectual case for capitalism was built almost exclusively on the theory that people create businesses to pursue only their personal self-interest. Adam Smith, founding father of modern capitalism, in his book The Theory of Moral Sentiments , outlined an ethics, based on our ability to empathise with others and care about their opinions. Through our ability to empathise, we are able to understand how other people are feeling and imagine what it would be like to be in their shoes.
Symptoms of dysfunction and disaffection abound in the corporate world. Top executives at the helm of major corporations have rigged the game to enrich themselves at the expense of the company and its stakeholders. Most regrettably, the drive for short-term gains has led to the destruction of many great companies such as General Motors and Sears and the bankruptcies of Enron, WorldCom, Kmart and Kodak.
The myth of profit maximisation appears to have come from two sources: a narrow view of human nature and an inadequate explanation of the causes of business success. Profits became essential to the long-term survival and flourishing of all businesses; but barring a few exceptions, entrepreneurs who start successful businesses don’t do so to maximise profits. Of course, they do want to make money, but this is not what drives most of them. They are inspired to do something that they believe needs doing. This is a very different narrative than the one that sees history through the lens of profit maximisation.
Bill Gates did not start Microsoft with the goal of becoming the richest man in the world. He saw the potential of computers to transform our lives and was on fire to create software that would make them so useful that eventually all of us would own one. He followed his passion and, in the process, became the richest man in the world, but that was the outcome, not his goal and purpose. You cannot have a conscious business without conscious leadership.
Conscious leaders are motivated primarily by service to the firm’s higher purpose and creating value for all stakeholders. Conscious leadership is not just corporate social responsibility. The whole idea of CSR is based on the fallacy that the underlying structure of business is either tainted or at best ‘ethically neutral’. A British consulting company, called Sustainability, coined a phrase Triple Bottom Line (TBL), in 1994. The three bottom lines that companies were asked to pay attention to are: People, Planet and Profit. The idea caught on and companies now produce reports that provide information on their triple bottom lines. While TBL is definitely an improvement over the CSR model, the TBL movement tends to focus heavily on social responsibility and environmental sustainability as major areas for business to concentrate on, besides achieving economic success. Business is the greatest creator of value in the world. Both non-profit organisations and governments depend on the prosperity and wealth business creates, as business is the ultimate source of all taxes and donations.
From its genesis, a century and half ago, the Tata group has been about community and nation-building. The business is not “owned” by the family. Two-thirds of the shares of the parent company, Tata Sons, are owned by charitable trusts. Through them, Tata run the two largest cancer hospitals in India, where half the patients are treated for free. Groups like Tata Sons have shown by example how social responsibility can be part of an organisation’s DNA and not just an afterthought or a stunt.
Ajay Mehra is managing director, South Asia, Airbus. This is an excerpt from an article to be published in the magazine ‘Thinkers’ in its forthcoming issue.
