When Lenovo Chairman Yang Yuanqing met Ratan Tata sometime back he asked him for advice on how to build a company that will last 100 years. This conversation, perhaps apocryphal, illustrates Yuanqing’s fascination with institution building. In India the Tatas, Wipro and Infosys are torch bears of a tradition of institution building. Subroto Bagchi’s book, The High -Performance Entrepreneur, shows that this tradition is alive and well.
The anti-thesis of institution building is the Ken Lay school of company building. The real difference between the two is in dealing with power. In the Ken Lay school, power is liberating because it allows you to disregard other stakeholders. If you have market power, you get the permission to ride rough-shod over customers. If your stock price is doing well, you can ignore your investors. If your brand is on the upswing, you can overlook the interests of the employees. You know the storyline here.
In Subroto’s school of institution building, power is humbling. It burdens you to be more careful about what you do. It’s about exercising self-control and not about relying on external control. It’s about leaders setting a personal example. It’s about doing the right thing by the customer even if you can get away with not doing it. It’s about looking after the interests of employees and minority investors. It’s about taking a long view of things. In essence, this is JRD Tata’s concept of stewardship.
This book is about making a choice, right at the beginning, about what kind of company building philosophy you should embrace. Subroto argues that the success of many Indian companies like Wipro, Infosys, Cafe Coffee Day and Devi Shetty’s Narayana Hrudayalaya is as much to do with an institution building mindset as it is to do with spotting the right opportunity. Also implicit in the book is a notion that institutions are built in times of scarcity. Adversity provides a “rite of passage” that helps crystallize the basic beliefs that underpin the DNA of the new company.
Getting the core values and DNA established early confers a competitive advantage. Alvin Tofler has said that one’s ability to change is a function of their unchanging core. Once the values and DNA have been institutionalized, the company acquires a tremendous ability to change. We have seen Wipro and Infosys use this ability to accomplish orbit changes several times in their past. In fact, without orbit change, you can’t scale.
So for me the essence of this book is that an institution building mindset is essential, not optional, if one wants to create a truly global success story in today’s dynamic marketplace.
Subroto has a way with words. He writing is fluid, simple and evocative. The book is full of nature metaphors and stories. He talks of how “company is a river”, how the company “DNA” is the source of mission and values, about “fractal” leadership, and invokes Japanese stories about tending the garden to describe management activities. There is a strong eastern philosophy that suffuses the whole book. That management philosophy can have an Eastern or Western bias is not as corny as it sounds. Richard Nisbett has a wonderful book, The Geography of Thought, where he shares comparative studies to make a case that that the two cultures think about the world differently even though they use the same equipment for doing the thinking.
Subroto’s book covers a variety of topics related to entrepreneurship. It talks of the founding team, the business plan, hiring of the early stage employees, and dealing with investors, building a brand, avoiding common startup pitfalls, etc. Yet, as Subroto himself acknowledges, this is not a “how-to” book. While it may do justice to somebody looking for step-by-step guidance to setup a services company, it’s unlikely to answer the many questions that a product company entrepreneur has to worry about. For instance, there is no mention of the big bets that need to be made about business models, product architectures and bowling pin market segments. Nor does it cover the inherently difficult challenge of creating demand versus servicing demand.
Despite these limitations, this is a useful book for all aspiring entrepreneurs. It gives a ringside view of MindTree’s journey so far and uses that storyline to drive home some basic truths about entrepreneurship, the most important of which is that choosing the institutional building mindset is the best decision that an entrepreneur can make!
Sharad,
That’s a fine forensic review…I liked your insight. Keep it up.
Krishna
Sharad,
I agree. I have tried to keep up with Subroto’s interesting style for a long time … since he started to market himself (series of articles in BusinessWorld - ‘The making of MindTree’) in a way that I havnt seen anyone else do! Except of course, for, the brilliant Murthy (Infosys).
If you liked his book then I must suggest ‘48 Laws of Power’ by Robert Greene, which is very much the baseline for eastern thought on business and war. Find it on Amazon.
Deepak
HI Sharad ,
Great review . Looks balanced and unbiased .
Potharaju Ravindra , author of GIVE ME BACK MY GUITAR has written an article on Subrota Bagchi. He has given glowing tributes to him .
If you are interested you can check it out on http://ravi.givemebackmyguitar.com
rgds
Harish