Anand Mahindra: A New Code of Conduct

Perhaps there was some truth in the contention that large Indian businesses were oligopolistic and sleepy; like alligators basking in the sun that needed to be rudely awakened and forced to glide back into the fast flowing river with reptilian aggression.

However, there are signals of the birth of a new idea, one that is not a single manifesto, but an amalgam of beliefs that have been under construction for some time. There has been a widespread perception for a while — even before the great meltdown — that a new mindset was called for. With news of Enron, Madoff, Ramalinga Raju, Lehman, we all knew something was not quite right. The Rolling Stone article that referred to Goldman as a ‘giant vampire squid’ was exercising poetic license to its fullest, but it did indicate a groundswell of discontent.

Business schools responded to this sentiment with initially desultory efforts to draft an ethics code, or to teach integrity in the classroom. But I do not believe such exercises effectively acknowledged the call for a new zeitgeist; one which proposed a new and expanded role for business in the context of the wider community.

There is an evolutionary argument for such a role modification. Commerce was begun when the world was a much more hostile place, and societies still functioned much like their ‘hunter-gatherer’ precursors. In his book Conflict Resolution, James A. Schellenberg says that “…socio-biologists believe that human nature has been profoundly shaped by the competitive conditions under which it emerged as the present species. They don’t all see this as producing a general human instinct for aggression; but they do see mankind as faced with a wide range of conditions for which aggression may be a very natural response.” I suppose this would account for why phrases such as “killer instinct,” and “take no prisoners” form part of the corporate world’s core vocabulary.

That’s why despite growing messages being relayed to business — first by semaphore, then more explicitly — that consumers and communities wanted to see a new ethos in companies, these signals were greeted with disbelief and resistance. Businesses continued to believe that community activities were kosher only if couched in the garb of ‘enlightened self-interest’ leading, ultimately, to enhanced
shareholder returns.

Of course, the need for financial returns is, and always will be, self-evident. A healthy bottom line is not just what shareholders require, it’s a resource enabler for all other good things.

But it’s also time to move on.

The world has shrunk considerably, and resources are so excruciatingly finite, that not just governments, but businesses also need to change their vocabulary and move to a more collaborative approach. Competition will remain fierce, but a zero-sum approach to competitors and a ‘hunter-gatherer’ interface with the environment is no longer sustainable.

We need to confront the changing order more squarely. Collaboration with our wider communities is not just one more way to build a brand, or gain subsidies, or curry favour with customers; it is the ONLY way to do business. That’s what customers, I believe, have been trying to tell the corporate world for some time, and earning their trust is now going to be a hygiene factor for all companies.

We, in the world of commerce, will not earn that trust simply by adopting a set of community activities, all the while believing that these are tools for enhancing shareholder returns. We need to intrinsically believe that the 21st Century company will be comprised of a different genome sequence altogether. We have to recognise that success will not be defined just by quantitatively measuring the aggregate of our CSR activities. We have to believe, instead, that integration with our local and wider communities is the sine qua non of our existence. And that we will rise only if our work helps the fortunes of all our stakeholders to rise with us.

The interesting thing about this idea is that it requires not one messiah, but a multitude.