Thus
flows the river
The
Telegraph — March 3, 2004
On the 165th birth anniversary
of Jamsetji Tata, R. Gopalakrishnan takes at one
of India's pioneering figures — his times and
his legacy
Four
years before Jamsetji Tata arrived in the world,
Andrew Carnegie was born in Scotland; two
years before, J.P. Morgan, and D. Rockefeller
arrived the same year Jamsetji was born - 1839.
These three entrepreneurs went on to
become the business titans of
America in the late 19th century. After the
civil war, inventions such as electricity and
the telegraph buoyed American economic growth,
allowing entrepreneurs to
redefine in their own minds where the future
opportunity would lie. For example, in 1872, Andrew
Carnegie had become convinced that steel would
"lie at the centre of
the world". As a well-travelled person,
Jamsetji must have read and heard about these
builders of
wealth. They subsequently earned the unlovely
label of
"robber barons", because.in building
their empires and fortunes, they had adopted tough
postures with labour or restrained trade to
hold margins.
Frank
Harris, the biographer of
Jamsetji Tata, wrote that for twenty five
generations, the names of
the family ancestors of
Jamsetji were written on the priestly rolls.
Fourteen generations ago, one of
the ancestors took
the name of
"Tata", conjectured to
denote "hot-tempered". Into this
genealogy, in 1839, was born J.N. Tata.
It
is said that writers of
the time considered the Tatas as "backbenchers
in the Bombay business world". It was Jamsetji
who decided to
venture into industry through textiles. This
was not the only evidence of
his propensity for innovation. In Empress
Mills, he introduced the ring spindle when the
device was yet to
come into general use in the United States
of
America, where it had been invented. He also
introduced several labour welfare measures that
were yet to
become common. He even experimented with a
new form of
management whereby he became a salaried managing
director reporting to
a functional board of
directors, long before the word "corporate
governance" was even conceived of!
While
doing these, he was fired by a fierce sense of
nationalism, a passion to
advance the economic status of
India. Economists say that all entrepreneurs
must have a sense of greed and optimism. If at
all that be so, Jamsetji might have had his fair
share. The difference, of course, lay in what
he did with 'the fruits of his entrepreneurship.
He helped build institutions for his people and
his country even during his own lifetime.
Apart from his passion for the
nation's progress, he displayed a rare compassion
for the less privileged in his country. In this
respect, he replicated the virtues of wealth creation
of Carnegie, Morgan and Rockefeller, but as a
benign baron. He established the J.N. Tata Endowment
Scheme in 1892, at least a decade before the Carnegie
and Rockefeller Trusts were established in the
20th century.
Trusts and foundations are a
20th century phenomenon. After the American ones
in the early part of the previous century, the
first major British foundation to be established
was the Leverhulme Trust Fund in 1925. William
Lever was born in 1851, twelve years after Jamsetji.
At age thirty three, he introduced Sunlight soap
and never looked back. When he built Port Sunlight,
the Liverpool factory, he bought 56 acres across
the Mersey river. Right from the beginning, he
envisaged it as a community as well as a business.
Lever believed in profit as a reward for enterprise,
but it was not the chief incentive which moved
him personally. As was written of him on his centenary,
"The ruling passion of his life was not money
or even power, but the desire to increase human
well-being by substituting the profitable for
the valueless." Through his will in 1924,
he left a part of his wealth to the trust. The
Lever-hulme Trust was created a full thirty two
years after the J.N. Tata Endowment!
I
recount these events for two reasons: first, history
creates romantic notions about the past; second,
it sheds some light on what I call the samskar
of the business. Like individuals, business
enterprises too have a samskar. It is the mark
of a successful business that profits are earned
competitively in the early days. It is a mark
of a "great business" that, in addition,
good samskar gets so deeply embedded that it becomes
part of the DNA. Arie de Geus wrote in The
Living Company that an economic company is
like a puddle of rainwater - a collection of raindrops,
gathered together in a cavity. The other type
of company is organized around the purpose of
perpetuating itself as an ongoing community. This
type of company is like a river. It is turbulent
because no drop of water remains in the same place
for long, it finally flows out into the sea. But
the river lasts many times longer than the lifetime
of the individual drops of water which comprise
it.
For 135 years, the Tata "river"
has flowed on, exhibiting the characteristics
of the great rivers of the world -long traction,
turbulence, overcoming obstacles, growing might,
and sharing its might for the happiness and prosperity
of those on the banks of the river. In 1939, the
year of Jamsetji's birth centenary, when the British
government published a report entitled, "Indian
Business and Nationalist Politics", Tata
was listed on top. In 1969, when the report of
the Dutt Committee of Enquiry on Industrial Licensing
Policy was published by the government, Tata was
on top. Shortly, when the results of the year
ending March 2004 would be analysed, Tata could
well be on top once again. But it is not so valuable
to be at the top for economic performance alone.
It is far more valuable to be listed on top in
the hearts of people as a synonym for trust over
several generations.
It is that samskar, which Jamsetji created so
powerfully, that drives the business today. The
shareholding patterns and profits today are so
aligned that of the $ 1 billion plus of profit
after tax earned by the group, approximately a
fourth is attributable to the good causes that
the trusts espouse. It is to that that employees
pay homage each day when they get to work.
The
author is executive director, Tata Sons Limited
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