Business leaders must learn much faster

Businesses were already in a world of ‘volatility, uncertainty, complexity, and ambiguity’—a VUCA world—before Covid19. With Covid, business has become even more uncertain.

Great leaders see through the fog; they see the big picture; they show people the way. With hyper-VUCA, businesses are being impacted by changes outside their industries, and also by socio-political upheavals. Therefore, ‘domain knowledge’ has diminishing value for business leaders now. They must ‘unfocus’, to look beyond the walls of their industry and outside the world of business too.

Leaders, to be effective in these uncertain times, must step out of their mental, social, and business silos. They must shape a learning agenda for themselves.

In The 7 Habits of Highly Effective People, Steven Covey asks business leaders to reflect on what matters most, and then make weekly plans of what they will do. The question they should ask is, are they spending precious time on what really matters, or just doing what is usually done. Leaders, to be effective in these uncertain times, must step out of their mental, social, and business silos. They must shape a learning agenda for themselves. They should read books beyond business books; meet people outside their circles; and listen more deeply to people who do not think like them.

I recommend three books for business leaders, which are not conventional ‘business’ books, and therefore maybe good books for them to read.

The Covid shutdown has highlighted systemic problems that require new solutions. One is the chronic problem of unemployment. Fragilities of incomes were revealed with millions of migrant workers who fell out of the economy when the economic engine stopped. The need for more secure employment and atmanirbhar was highlighted. However, economists berate the government for ‘thinking local’ when the country must become ‘more global’. Others point out that it is a matter of sequencing, and unless enterprises within India become competitive the country cannot participate equitably in global supply chains.

The informal sector provides steps up for people at the bottom of the pyramid. Therefore, rather than looking down upon it, policymakers must listen to it and nurture it.

 Empire of Cotton: A Global History by Sven Beckert, is a masterly history of global trade and its impact on societies. Beckert’s analysis looks at global trade through a broader lens than conventional trade experts do, who focus on volumes, tariffs, and prices. He reveals the sources of political power that cause shifts in trade patterns. His account of how small, independent farmers, and village producers of textiles in India lost their sources of livelihoods, as well as their political power, provides insights into larger, and deeper forces that should be seen by advocates of free trade and global supply chains who, in their pursuit of more globality and large volumes of trade, lose sight of who the winners and losers are, and what they gain and lose beyond incomes.

The chronic problems of the Indian economy, according to mainstream economists, are the large size of the informal sector of the economy and the paucity of large-scale enterprises. They would like to formalise the informal sector quickly and they would like larger enterprises to be formed to create more employment. In fact, the informal sector is an essential feature of a resilient economy. It accounts for 60% of the global economy. Within developing countries it is 90%. India is not an outlier. The informal sector provides steps up for people at the bottom of the pyramid. Therefore, rather than looking down upon it, policymakers must listen to it and nurture it.

The Web of Freedom: J.C.Kumurappa and Gandhi’s Struggle for Economic Justice by Venu Madhav Govindu and Deepak Malgham is an eye-opener on the Indian economy. Kumurappa was sometimes referred to as Gandhi’s ‘planning commission’. Gandhi’s ideas about village communities are generally considered a romantic vision. Govindu and Malgham present Kumurappa’s analysis of why local systems solutions, developed and implemented by local communities, are the only practical way to make systemic changes for inclusive, and environmentally sustainable, growth. 

When considerations of the public good clash with the pursuit of private profit, the debate is confounded by an ideological belief that interference by governments with a free market, in which people can pursue their private interests, is always bad.

Kumurappa and Gandhi’s strategy for bottom-up development of India’s economy was rejected by Jawaharlal Nehru’s government which adopted, instead, a strategy of developing the economy top-down from the ‘commanding heights’, with big factories, big dams, and large organisations. Kumurappa pointed out that both—the Soviet model as well as the Western capitalist model—were top-down models in which the means of production are owned by people at the top—in one case capitalists and in the other bureaucrats. Workers have little room for exercising enterprise in both systems. Moreover, they remain wage workers: the wealth created by their work accumulates elsewhere. Whereas in Gandhi’s and his model, the workers would be the owners of their own enterprises and wealth creators for themselves.  

Technology, especially technology of the digital variety, seems to have become a panacea for almost all problems. No doubt, science-based technologies can have transformative impacts in many fields—in health, education, financial services, etc. However, they can have harmful side-effects too and must be restrained. 

Technology has run far ahead of wisdom and does not understand that all men are sustained by the society around them, and that Man is a part of a large, complex system.

Fortunes are often made by private investors in new technologies, as they have been by investors in the four largest global companies that dominate the internet. Controlling them has become a political problem for governments now. When considerations of the public good clash with the pursuit of private profit, the debate is confounded by an ideological belief that interference by governments with a free market, in which people can pursue their private interests, is always bad.

It is dawning now that more technology is not the solution. More wisdom is required to create a more sustainable and equitable world, as His Holiness the Dalai Lama explains in The Universe in a Single Atom: The Convergence of Science and Spirituality. Technology has given men great power over other people, and Man great power over Nature. It has created a hubris that Man can overcome all obstacles to economic progress, with his science and technology, including the damage to the natural environment that economic growth with technologies has caused. Technology has run far ahead of wisdom and does not understand that all men are sustained by the society around them, and that Man is a part of a large, complex system. Therefore, any harm caused to others, and any harm done to Nature by economic growth and technology, harms Man himself.

Time is running out. Paradigms of business leadership must change. Leaders must learn quickly.

(The writer is a former member of the Planning Commission and author of  The Learning Factory: How the Leaders of Tata Became Nation Builders”)