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RISE to the occasion: Capitalism’s purpose must benefit communities, says Mahindra Chairman

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By Anand Mahindra

There is a story from Indian mythology about the ‘manthan’, the great churning of the cosmic ocean. The gods and the demons decided to jointly churn the ocean to obtain its treasures. The churning wasn’t easy. But, at the end of this enterprise, wonderful things emerged. Lakshmi, the goddess of wealth, appeared. Chandra, the moon, came forth. And most important, there emerged the amrut, the nectar of eternal life.

The Covid-19 crisis is perhaps the most drastic churning we have witnessed in our lives. It has shaken up the way we view the world. It has shown that many of our political and social structures are built on the sands of privilege and inequality. It has turned the spotlight on what is truly important — a popular meme advised us never to forget how during the crisis, we were not desperate for lawyers, actors or athletes (and let me add, businessmen). We needed teachers, doctors, nurses, shop workers, delivery drivers and countless others we usually take for granted. The crisis underlined how our prosperity depends on many — the domestic help, the sanitation worker, the hospital attendant — about whom we normally don’t think, but whose well-being is the foundation of our own well-being.

As a businessman, the crisis also brought home to me how interlinked the cogs of our economic wheels are — a factory in Mumbai, a construction site in Delhi or a plantation in Kerala depends on the labour of a migrant from the farthest corners of India. When migrants flee, because their life has become unbearable, the scaffolding that props up our prosperity collapses. The same applies to the environment, which is inextricably intertwined with our own well-being. The pandemic has shown that this interconnectedness, of people with each other and with the planet, is nonnegotiable.

In our group of companies, we were fortunate that our leadership experienced this epiphany several years ago. India, with its vast disparities, its chaotic but functioning democracy, and its tension between development and environment has always been a fertile ground for innovative business models. India grew enviably after the liberalisation of the economy in the 1990s. But the benefits were very unevenly split between the top, the middle and the bottom of the pyramid. From a business perspective, we recognised that if we wanted to grow sustainably, we could not rely on a relatively narrow customer base of the prosperous — we had to create value collectively for the entire spectrum of stakeholders, including our colleagues, business associates, shareholders, potential consumers, local and global communities and our planet. We aimed to make them all partners in our success.

This thinking crystallised into our business philosophy of ‘RISE’. Our Core Purpose is to enable others to rise by driving positive change in their lives. There is no explicit mention of ‘profits’ in this Core Purpose because we believe that if we enable others to rise, we will rise with them and profits will inevitably follow. In a sense, we were articulating a philosophy of ‘Shared Value’, but we were shaping our vision of RISE well before Michael Porter coined the term in his seminal article.

This strategy of working to a core purpose has served us well. It is the touchstone by which we judge all our business decisions. It is the galvanising force that inspires our people to feel they are working to make a better world. Concern for the planet has incorporated sustainability into our strategies, our factories, our offices, our products and our lives, resulting not only in better environmental practices but innovations and savings as well.

The pandemic underlined that we are all part of a larger community. Its fault lines also revealed that inequality is a very unstable foundation on which to build, and what is good for just the shareholder is not necessarily in the long-term interest of the community. I believe one of its consequences will be that communities will act as a powerful brake on the excesses of shareholder value-led capitalism. Communities and their priorities will increasingly dictate the directions that businesses adopt. A step in that direction is the idea of community capitalism, which places priority on the well-being of a community. In the RISE philosophy, we interpret ‘community’ in the widest sense of all stakeholders — individuals, associates, social groups and the planet. However, I disagree with terming this ‘purpose-driven business’. To my mind, that has an underlying implication that purpose is something companies have to graft onto their otherwise natural state, that it requires a higher level of human evolution than we have currently attained. In that case, the dominant refrain would soon be, ‘Wouldn’t it be nice if we could put purpose first?’ This runs the risk of becoming a mere box to be ticked, rarely done with the full force of conviction.

Instead, I believe purpose will truly come first when it is aligned to Adam Smith’s assumption that human beings act out of enlightened self-interest. Our RISE philosophy assumes it is in our self-interest to enable others to rise — if they rise, we rise with them. That doesn’t detract from the idealism of the purpose. On the contrary, it enables that idealism. If the world absorbs the pandemic’s lessons, communities will increasingly seek evidence of companies caring for people and the planet through adherence to a purpose. The companies that do this with conviction will create the greatest shareholder value. Such a transformation may well be the amrut, the nectar that emerges from this churning, to benefit all of us.

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