India’s business families have unique values that are worth emulating

The late Brij Mohan Munjal would often admonish journalists who met him, about not eating properly. Interviewing him came with the guarantee of a special cup of tea that the founder of the Hero Group would pour out while adding an extra spoon of sugar to it for those of our tribe whose girth still didn’t show. Similar stories of courtesy abound about Tata group chief Ratan Tata who would often hold the lift door open at Bombay House if he saw an employee approaching.

Munjal, Tata, and many other business family patriarchs represent the old-world values of basic courtesy, and respect for others that make them more human than the cardboard figures of authority that are marinated by business schools, and are often held up as Western models of tough-love leadership.

In their dealings with employees, most Indian business families still adhere to the traditional way of dealing. When an executive in Aditya Birla group chairperson Kumar Mangalam Birla’s office was diagnosed with cancer, Birla and his wife Neerja ensured she received the best treatment while supporting her at work as well. It wasn’t just kindness. It was their way of valuing her expertise, and her experience. Another executive, then with Tata Sons, whose home was destroyed in the devastating floods that hit Mumbai in July 2005, called up her boss a few days later to tell him that she wasn’t sure she could rejoin work. The anxiety of renovating her house while looking for temporary accommodation was weighing on her. Within hours she found herself swept along as a special group team arranged a place for her to stay in while starting work on reconstructing her ruined home.

In a world where multinational corporations and professional managers think nothing of resorting to mass layoffs to lower their costs, some of India’s business families serve as excellent models of placing human beings before shareholder returns.

We saw this during the two years of the worst pandemic to hit humanity in the last 100 years. As the pandemic raged, many companies slashed headcounts in anticipation of falling revenues. Most tried to be as kind as possible though there was the odd case of a professional CEO tweeting pictures of himself lounging in the balcony of his apartment nestled within a golf course on the same day that his company had sacked dozens of employees whose combined annual salary would come to less than the price of his home.

He could have taken a leaf from the book of groups like M&M, Bajaj, and Reliance which publicly stated that they wouldn’t let go of a single employee in the midst of the crisis. Many went a step further, providing extra support by taking care of medical and educational expenses of family members of those hurt by COVID-19. It follows a time-honoured tradition in such businesses where an employee’s family is considered part of the group’s responsibility.

Sadly, some of these values are increasingly seen as outdated, and antiquarian. Hiring and firing, the mantra of Western corporations, is being aped by wannabe MNCs in the rest of the world. Evidence shows that such an approach has diminishing returns.

There is a price to be paid for the excesses of men like Albert Dunlap who made a career as a turnaround management specialist through mass layoffs, earning the sobriquet Chainsaw Al as well as Jack Welch whose brutal firing strategy won him many admirers in his time but appears short-sighted and ultimately destructive today. If employee loyalty is at its lowest ever level, its genesis lies in the headcount obsession of such corporate leaders for whom an employee was ultimately just a cog in the corporate wheel.

According to September 2021 data from the World Economic Forum’s monthly survey of more than 100,000 people in 10 countries during the last year, about 25 percent of them in the US, the UK, Canada, and Brazil have quit or plan to leave, while 20 percent in Germany, 17 percent in France, and 14 percent in Spain are resigning. That doesn’t include an additional 18 percent of employees globally, who are passively looking for new work.

The Great Resignation wave that is sweeping the world is a complete antithesis to the lifetime employment philosophy of Japanese corporations, institutionalised in the country following serious labour problems at companies such as Toshiba, Hitachi, Toyota, and Nissan, in the years following World War II. The philosophy led to huge efficiency and productivity gains besides securing years of allegiance.

A similar structure once prevailed in India’s traditional business families. Indeed, many of them are repositories of values that are worth being preserved, and practiced.