“If a corporation wants to run a marathon, it requires a value system.”

Statistically, the average life expectancy of Fortune 500 multinational companies, from birth to death, is between 40 and 50 years. Most companies die prematurely because of learning disabilities, says Peter Senge. A full one-third of the companies listed in the Fortune 500 had vanished by 1983 - acquired, merged, or broken to pieces. So, what has enabled some companies to survive and succeed for over 100 years? Drawing upon the findings of a six-year research project at the Stanford University, Jim Collins and Jerry Porras wrote an excellent book, Built to Last, to answer the question: ‘What makes truly exceptional companies different from other companies?‘

Contrary to Business School doctrine, we’d not find ‘maximizing shareholder wealth’ or ‘profit maximization’ as the dominant driving force or primary objective through the history of most of the visionary companies. They say, “Profitability is a necessary condition for existence and a means to more important ends, but is not an end in itself. Profit is like oxygen, food, water & blood for the body; but they are not the point of life, but without them there is no life.”

When Robert W.Johnson founded Johnson & Johnson in 1886, his idealistic aim was ‘to alleviate pain and disease’. By 1908, he expanded his business ideology placing ‘service to customers‘ and ‘concern for employees‘ ahead of ‘returns to shareholders‘.

Paul Galvin, founder of Motorola (1928) viewed profitability as a necessary means to pursue the company’s objectives, but not the ultimate aim. His son and successor Robert W. Galvin wrote a series of essays to employees about ‘who and why we are’. Emphasizing the importance of creativity, renewal, total customer satisfaction, quality, ethics, innovation etc but not once did he mention maximizing profits.

Thomas J. Watson Jr, the son of the founder of IBM, wrote about the importance of core values in his 1963 booklet, A business and its beliefs : “I believe the real difference between success and failure in a corporation can very often be traced to the question of how well the organization brings out the great energies and talents of its people. I firmly believe that any organization, in order to survive and achieve success must have a sound set of beliefs and the most important single factor in corporate success is faithful adherence to those beliefs. If an organization is to meet the challenges of a changing world, it must be prepared to change everything about itself except its basic beliefs.”

Sam Walton, the founder, put Wal-Mart’s number one value as ‘the customer ahead of everything else’. David Packard and Bill Hewlett held deep convictions about the way a business should be built which was basically about ‘Do unto others as you would have them do unto you’.

George Merck, founder of Merck (1891) deeply believed that, “We are in the business of preserving and improving human life. All of our actions must be measured by our success in achieving this goal.” Honesty and integrity– corporate social responsibility, science-based innovation, not imitation-profit, but profit from work that benefits humanity – are among Merck’s core values.

Azim Premji , Chairman of Wipro, is a man of exemplary personal integrity deeply committed to ethical principles and practice. He says, “To meet the challenges of the future we are prepared to change everything about ourselves, except our beliefs, as they alone guide, govern and bind us together as an organization. It is essential that we consciously internalize our beliefs and be fanatical about consistently practicing them. Our beliefs define our business philosophy of managing business and will remain the spirit and essence of Wipro.”

Narayan Murthy, founder Chairman of Infosys, says, “I really value honesty. I also place a high value on a strong commitment to society. I want to be a doer; I have tremendous respect for people who do things, rather than just talk. I am impressed by people who are honest, hard-working and intelligent. If a corporation wants to run a marathon, it requires a value system. A value system is what separates the men from the boys. It provides you energy and enthusiasm in moments of tribulation. We, at Infosys, have a saying : ‘A good night’s sleep is worth a billion dollars. A clear conscience is the softest pillow.’” Murthy’s global vision is to be a globally respected software corporation delivering best of breed solutions to customers, employing best-in-class professionals on a global scale.

Deepak Parekh left a glamorous career in an international bank to spearhead housing finance in India and made HDFC the dominant player in the field. “I have run this company as if I owned 10% of the stock, although I didn’t own even one-fourth of one per cent. I have acted as an entrepreneur. Building relationships is our core competency. Transparency, accountability and a clear conscience paved the way to win the trust of all stakeholders. Tomorrow’s leaders will need newer skill sets, they will need to be far more aware of international trends and global information. Good leadership results in sustainable brand equity. In the long term, integrity, transparency, quality and higher levels of service do more for your brand than any advertisement or communication programme” says Parekh.

Raghunath Mashelkar, an outstanding Polymer Scientist and Director-General of CSIR ( Council of Scientific and Industrial Research) has transformed India’s laid back 40 odd scientific research establishments in the country employing over 10,000 highly qualified scientists and technologists and made them commercially relevant. Having lost his father at the age of six, Mashelkar worked on a casual basis in shops. He lived with his mother in a one-room tenement in a chawl in Mumbai’s Goregaon area. The hunger for knowledge and a better life was planted in him and nurtured by his literate mother who brought up her son with great courage and determination. He studied for his SSC examination under the streetlights at Chowpaty. His excellent grades led well-wishers to offer him Rs 200 needed for college admission and was selected by the Sir Dorab Tata Trust for their prestigious scholarship. He completed one of the fastest doctorates in Chemical Engineering. In 1998, he was made a Fellow of Royal Society, London, a rare honor. The same year, he was given the prestigious JRD Tata award for corporate leadership.

“The CSIR of my dream,” says Mashelkar, “will be an organization that will have all the attributes, namely innovation, compassion and passion. It will be an innovative organization using the latest tools of science and technology in the innovative process. It will have compassion at it’s heart; it will make sure that it contributes to social development, worries about the downtrodden, and will try to bring quality to their lives. Finally, it will be an organization showing an unusual passion in the way it works and delivers.”

Are we not blessed to have such outstanding leaders in our country? What better proof do we need to know and believe that being ethical enhances the power to rise to the highest positions in industry, business or government and to do the maximum good. Occupying the highest positions in the country today are men of proven integrity and competence, APJ Abdul Kalam as President and Dr Manmohan Singh as Prime Minister.

V.C. Viswanathan
Consultant and former VP (Mkg.), JK group, Bangalore