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How to Transform Companies through Ancient Indian Wisdom - Dr. Ram Nidumolu


Excerpts from a talk on Corporate Governance and Citizenship Leader-Speak series, at the
Indian Institute of Management-Bangalore (IIM-B) by the author. The talk is based on the author’s book “Two Birds in a Tree: Timeless Indian Wisdom for Business Leaders,”Harper
Collins India (2013).

Being-Centered Leadership

Ancient wisdom in general is most connected with the Axial Age (circa 800 to 200 BC), which includes ancient China, India, Middle East, Greece, etc. Ancient wisdom had one common theme. It was really to bring about change at the societal level by bringing about change at the individual level.

At the root of it, you need to know who you are. Knowing yourself is where true change exists and when that change happens (the awareness of the larger self that you are), everything else is possible. This is the link to personal commitment. This link is missing in most of the business literature. This link is especially to a personal sense of being.

I use the word ‘being’ rather than spirit because ‘being’ is neutral. ‘Being’ is defined as that which is at the core of existence itself. It enables the atheist, agnostic and others to also be part of the conversation.

In fact this raises the question of “Is there a ‘being’ underlying all of us?” Is there an underlying unity that is essential to existence and in fact really at the core of existence? In all the diversity among all the people in the world, is there a common core? Is there something that we all share? This probably is the oldest philosophical question in this world. It was raised in 1500 BC in the Rig Veda and other ancient literature and is the source of many of the world’s philosophies and religions. Unfortunately this question has been neglected in the last century.

 Given that ‘being’ makes us all human beings and not human “havings” or human “doings,” we can raise the following additional question - How does this sense of being help us understand what sustainable business is about?

Being-centered leadership is based on this internal sense of ‘being’, or in the Indian wisdom tradition, an internal sense of the Atman. It is easy for us Indians to talk about this higher or larger self or the Atman because many of us have heard about these ideas from our childhood. In the West, this sense of a larger self has not been part of society and culture for many centuries. Perhaps we Indians even take it for granted.

The Upanishads are suffused with this sense of the larger self, or the Atman. In fact, the great and astonishing assertion of the Upanishads is that this underlying reality of our individual selves, the Atman, is the same as the underlying reality of the world, or Brahman. To know absolute reality, know thyself.

Two Birds in a Tree: A Metaphor for Business

One way to apply timeless Indian wisdom to the sustainable business or enterprise of the future is to understand the image of the two birds in a tree. This image is one of the oldest 
images of the relationship between ourselves and being itself. It first appeared in the Rig Veda and was then picked up in the Upanishads. In the Mundaka Upanishad in particular, there is a discussion of two birds sitting near each other in a tree. One of the birds (the lower bird) is filled with anxiety and is eating greedily all the fruits it can find, thereby stripping the tree bare. The other bird, which is at a higher level in the tree (or a higher level of consciousness) watches in compassionate silence.

These two eternal friends, the lower and higher self, the jivatman and parmatman, together in the same body, area suitable metaphor for business. The lower self is the conventional self of business itself, the core of conventional capitalism that is about the power of profit maximization at all costs. It is the financial gain, independent of society and nature, which can come from unconstrained self-interest and efficiency. But it is also about the damage that it can do to the tree, which is society and nature within which business and the economy are embedded.

The higher self, which every business has, is the power of sustainable capitalism or sustainable business, which is aware of the impacts of business on society and nature. It is the power of enlightened leadership that is aware of the larger relationship of business to society and nature, understands this larger context, and is anchored in a long-term orientation to business.

Regardless of the religious or other beliefs of business leaders, it is absolutely important that they develop a sense of this higher self or higher purpose to business, and think, decide and act in ways that make business sustainable in the long-term and have a positive impact on society and nature. Otherwise, the tree gets stripped bare and there is soon nothing left for the business to survive on.

How to Become a Being-Centered Leader

But how do we enable this sense of the higher self or ‘being’ among business leaders? In my experience, there is a sequence of four stages (Recognition, Experience, Anchoring, and Leading-by-Example) to follow to enable ‘being’-centered leadership. I call it the REAL framework for ‘being’-centered leadership since ‘being’ is all about reality. In ancient Indian wisdom, there is no difference between what is real and what is true. What is real is true and what is true is real.

Real capitalism and business practice is ultimately about enabling such ‘being’- centered businesses where business leaders make decisions that are grounded in this larger reality, where the impacts of business on society and nature are central to decision making and action.

Compassion is another vital theme of the Upanishads. As the Isa and Brihadaranyaka Upanishads say, he who sees himself in others and others in his own self loses all fear and does not shrink from the world. It is really the definition of empathy and can be applied  to the business context. In particular, it is a sense of empathy with customers and seeing them as human beings. Of course, this is how the great leaders of society we revere, such as Gandhi, also saw in people.

In the REAL framework, the first step is to recognize that there is a higher something in us beyond our ego self. For many of us, this comes through flashes of recognition of our higher self. In the business context, this is a recognition of the higher purpose of business (“Why does a business exist?”), which is to benefit society and nature. The second step is to deepen this recognition through business experience. Those business that provide this experience make a huge difference to their employees and customers, and therefore to
their own performance, as many companies throughout the world are now finding out.

The third step is for the business leader to find ways to be anchored in this recognition and experience. But this is not easy, since in the everyday world our immediate work takes over. We forget ourselves, the reason why business exists in the first place, and how to stay connected with this higher purpose. In the pressures of day-to-day work, everything else is forgotten. To remain anchored is the most difficult of all the four stages. It requires discipline, processes, systems, and work cultures that keep you anchored in this sense of higher purpose. The last step for a business leader is to lead by example. It is not enough to recognize, experience and anchor in this larger business self or purpose. You have to demonstrate it to others in your thoughts, decision making and actions. In other words, you have to lead by example and close the say-do gap.

The most important thing for business leaders to realize is that ‘being’-centered leadership actually improves business performance. There are hundreds of examples worldwide, and I’ve described the research and company case studies behind this assertion in my book. One Indian example that stands out is Aravind Eye Hospitals, started by Dr.Venkataswamy (Dr. V) after his retirement at the age of 58 years. It is a highly profitable organization, with 40% operating margin inspite of the Aravind hospitals providing free services to those who need it, as well as highly subsidized services to others. The Aravind hospitals provide services at 1% of the cost of other world-famous organisations. The productivity of this organization is also very high. Dr. Venkataswamy had himself conducted 100,000 operations prior to his death at the age of 88 years. His doctors do 2,000 operations a year compared to surgeons in the West who do around 200 operations.

‘Being’ Capital

But what does ‘being’-centered leadership mean for the different kinds of capital that business and capitalism are all about?

Thomas Piketty in his book ‘Capital’ argues that there is a growing inequality in society due to conventional capitalism. Capitalism reinforces inequality because the rate at which productivity of capital grows is higher than the rate of growth of labour productivity.

Aside from this growing social and income inequality, it is also important to recognize that conventional capitalism is also associated with growing destruction of natural capital. We are truly creating the 6th great extinction in history, which is being called the Anthropocene extinction. This extinction is human made; previous extinctions were due to events beyond humanity’s control. The rate by which we are now wiping out world species will be 30-50% by the end of the century. Global warming beyond two degrees is very likely. One way we can look at it is through the notion of planetary boundaries, which are boundaries we should not cross in order to preserve our civilization. These boundaries include climate change, ocean acidification, biodiversity, etc. We have already crossed three of these boundaries and we will rapidly cross two more.

At the root of the problem is that conventional capitalism and the consumption culture it encourages leads to our consuming resources at a rate where we need 1.5 times our Earth’s carrying capacity. At this rate, in 2030 we will need 2.5 to 3 times of the Earth, and by 2050 it will be 5 times of the Earth. But we have only one Earth, which means we are rapidly eating into our capital stock of natural resources. In other words, we are clearly accelerating the destruction of nature as measured through national capital. What does this mean for the other kinds of capital we use?

When we consider the variety of capital used by business, we see a growing imbalance between financial capital, natural capital, human and social capital, and material capital. Conventional capitalism and economic growth have emphasized material and financial capital to such a degree that it has come at the cost of natural capital and human and social capital. Studies show that we destroy 7 to 8 trillion dollars of natural capital every year in order to support our global economy. That’s about 13% of the world’s economic output. Clearly there is an imbalance.

So we can naturally ask, is there a kind of capital that can guide business leaders in creating the right balance between all these capitals? We want especially to ensure that
natural, human and social capital do not get adversely impacted by material and financial
capital.
It is here that ancient wisdom, and the concept of ‘being’-centered leadership and ‘being’-centered companies, provides us with an answer. The kind of capital we need to develop is what I call ‘being’ capital (in Sanskrit, Atmashakti). This is where Indian wisdom has a message for Western models of capitalism. When we talk about integrity, trust, caring, empathy, connectedness and related concepts, we are talking about concepts that are all related to the sense of ‘being’ that was described earlier.

In this sense, ‘being’ capital is the infinite stock of inner resources that is available to every human being, business leader and group (and even society), that acts as a guide for ensuring a balance between all the other kinds of capital. So some of the dimensions of ‘being’ capital are the concepts I just described: long-term orientation, integrity, trust, caring, connectedness and empathy. These concepts were traditionally considered separately, and in fact have not been considered as capital that you can draw upon. What ‘being’ capital does is to bring them together as indicators of a deeper concept, which is the sense of higher self or being.

‘Being’ capital is the kind of capital that thinks of the system as a whole, of business, society and nature as a whole, and ensures that the system is sustainable in the long-run, for centuries and even millennia. Without ‘being’ capital, there is an imbalance that will soon lead to human, social and natural capital being depleted beyond recovery. It is this global balance that our ancient Indian wisdom called as dharma.

‘Being’-Centered Capitalism

Being capital in turn leads to a new kind of capitalism, which can be called ‘being’- centered capitalism. At the crux of this capitalism is the realization that there is a hidden and unbreakable connection between business, humanity, nature and the rest of the world. Business is not separate from this world at large; instead, it is deeply interconnected to all these other elements for its existence. Our ancient sages believed that human beings were deeply connected to everything else in the world because of ‘being’, which was the underlying essence of the world. In fact, this is the secret meaning of the word Upanishad itself and there are wonderful stories that help us realize this interconnection. This is why the Upanishads are filled with ‘being’. 

On the other hand, neoclassical economics looks at business and the economy as being separate from society and nature. It assumes that the economy can grow without limit and without any real damage to society and nature. In fact, society and nature are viewed as resources which can be used by the economy to fuel its growth.

Conclusion

To truly transform the business enterprise, so that we all have a better future, we need to
think at three levels of changes: 

Level 1 - Business Models, Strategy & Innovation, Financial, Material & Natural Capital.
Level 2 - Business Processes, Culture and Collaboration, Human & Social Capital
Level 3-Leadership Mindset and sense of self, ‘Being’ Capital

To my mind, for the reasons described above, the most important of all these levels is Level 3. As we have seen, our ancient Indian wisdom is especially relevant here and gives us the concepts of ‘being’-centered leadership, ‘being’ capital, and ‘being’- centered capitalism.

Dr. Ram Nidumolu is globally recognized for his thought leadership in the Harvard Business Review, the Stanford Social Innovation Review and at leading industry consortia. He is also the author of the book, “Two Birds in a Tree: Timeless Indian Wisdom for Business Leaders,” Harper Collins India 2013. E-mail: ram@innovastrat.com
PS: To listen to the talk register on to www.teachcsr.com for free.



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