A Dialogue with Sir R. Gopalakrishnan

R Gopalakrishnan is an Executive Director with one of the largest Indian business groups – Tata Sons, a holding company to one of the largest Indian business groups The Tata Group.He was educated from St. Xavier’s College, Kolkata at the University of Calcutta. He has worked with Hindustan Levers Hindustan Unilever for over 31 years before joining the Tata Group.

Siddharth Acharya: From Hindustan Uni-Lever to Tata, Please share your experience on transition of Indian Economy and how do you see Indian Inc?

R. Gopalakrishnan: Well I always say that first half was LPR (License Permit Raj) career and second was LPG means Liberalization Privatization and Globalization.

My career grew in the middle of LPG and in the first four years under the pressure of all the crisis which was there in 1991. The broad thing that happens in every entrepreneurial activity is that under pressure you respond better. But our brain is wide to think that best decisions are taken when our brain is calm. I strongly feel best decisions are taken in pressure. And that is reflected in trend of affairs of our economy.

Siddhartha: Sir, you made a very strong statement that Crisis makes a leader…..what does make you think that way?

R Gopalakrishnan:  See there is nothing smart about leadership….What makes a big leader is the ability to perform under the pressure because anyone can sit down and give you immense gyaan. Suppose if I am an entrepreneur and banks are chasing me, distributors do not want to pay you, lenders have to be paid…you can turn into negative ways and follow wrong crowd….Whatever you learn from life you learn through struggle. Struggle and crisis are the best leaders…We never chase struggle for heck of it..It comes down, so that is the elaboration on my part.

Pragnesh Podar: Does it apply to individual and nation as well?

R Goplakrishnan: Absolutely. It applies to human effort as an individual, family and as a nation. you see best lessons learnt are not learnt; I would give you an example…When Congress movement started in 1885, it was not started by an Indian, it was started by a Scotsman and he started in Chennai. The great famine of India happened in Madras. The killing was inflicted on us and more people died due to different ruling. Had Britain not colonized India and had Indians been ruling themselves things would have been different. This happened again during famine of Bengal also. Even, after the Cabinet Mission Plan Gandhiji asked the Congress to disband and carry on the constructive work in villages. But that was his idea and opinion about changing India. Whether it was right or wrong it is a subjective opinion. It is just like that you cannot see Kapil Dev playing throughout life. Someday he needs to sit in Commentator Box.

SA: There is a common belief among the economic intellectuals that India’s planners lack innovative thinking. If they have innovative thinking then they have lack of adequate funds to execute them? What’s your take on that?

RG: I totally disagree. I believe Indian planners have a very fine thinking; although whether it is innovative or not is a debatable topic as it is an individual’s perspective. I don’t think there is any doubt that they are well informed, they have taken a global outlook and are skilled and educated thinkers. Where would an emerging nation which is not yet industrialized get a Cambridge trained person as their planner. So the answer is that I don’t agree with it.

The subsequent question could be that then, why have we created such fine thinkers? The answer is “the nation doesn’t live on its brains”….any company, society or an economic organization works on doing things…..” a nation full of Brahmins were only thinking but you also need the Vaishyas and Kshatriyas to keep the wheels of business moving”…. That’s why I feel that the Indian caste system have a lot of negative features which is not worthy of surviving today but it had a role at its time. Caste system began by assigning separate roles to separate people but unfortunately it began to be misused. The great genius of Indian society we need to keep the wheels of trade moving. The problem is that a lot of emphasis is given on thinking rather than implementation. Even the Gold medalists from IIM wants to get into Strategy and Planning, they do not want to get into Sales.

Pragnesh Podar: Sir, Mr. Jim Rogers came hard on India and put the blame on Government. He said that India has got highest amount of agricultural land and largest number of farming population.  Yet we have collusive failure of Government, in the most highly regulated and subsidiszed sector, has got the largest number of poverty. Isn’t it a paramount failure on part of Government? Won’t you agree with that?

R Gopalkrishnan:  You see Government is like a Buffalo. We blame buffalo usne doodh nahi diya etc etc.; It is not entirely wrong but not even correct. But there are other parts of society who play important role. The entire management and Board of Directors are vulnerable to be blamed but there are lot of other factors also which play a very important role sometimes union is lazy, technology is outdated, not adequate finance and accounting systems are not that efficient. A lot of factors are there which are not in hands of apex controlling body. It’s our own attitude towards this problem.

SA:  How to make our research and development more credible and functional?

RG : In life leadership in architectural dimension and engineering dimension. Architectural is about planning and engineering is about materializing and converting. We do not have shortage of scientists. We have a great talent pool and people are doing really well. I come back top the point that execution is important. The Government comes with a lot of committees let’s say Sam Pitroda Committee etc etc; I have been appointed as a member of a lot of committees in the past. From Railways to Power Sector and have deeply studied the problems but then it has not been materialized and has not been taken into the account. I have addressed the students in convocation and say that “Haath se Kaam karna Seekho. Bhashanbazi se kuch nahi hoga”. I will give you an example at micro level when I joined TATA and I met executive assistant from schools like Doon, St. Xavier’s and I found them scholars. They were intelligent but again the problem lies about the execution. We want a leader to be Mazdoor as well and he should have struggled and done the field job. “Maal becho Dhakka Khao”. Those are the real experiences and it teaches you a lot. Even Durga Shakti Nagpal who is going through a lot will learn from her struggle with the Government. Though it depends on her how she is going to take it. She might take it positive or negative but the point is that a person emerges to be strong after going through such a hassle in life.

Pragnesh Podar: Do you think even the High Class executives of big Companies should have this hand working experience?

RG : Absolutely. No one should reach that level until and unless he does not have that experience. Our Institutions and Universities are also running that way. What’s the point when we have academically sound scholar around but they do not know how to make their knowledge practically useful? Thus the crux of my answer is that practical experience plays a vital role in success of an enterprise whether it is a micro-level organization or macro level organization.

SA : Sir, our Prime minister is an economist but we are going through a miserable economic turbulence. What is stopping us from bringing the pivotal change of reforms?

RG : This is a very good example of execution, where the architect was a engineer, same story, you think such a talented man requires everybody’s advice, even though he is 80, and past his prime he is a smart guy he knows what to do. But the obstructions in his path are mostly political he get scared, you and I will also get scared if we had obstruction from such political forces and that is the heart and I mean everybody knows this, I am not telling you something you don’t know. Which is why sometimes the Narendra Modis and the Mulayam Singh Yadavs they have come through the ‘hate kite’ the fight and the perils of politics. You will see 2 types of ministers the intelligent, very sophisticated ministers, who are great pleasure to listen to, you call them to inaugurate and give the convocation talk to you, call Chidambaram so wonderful,  ‘par apnea hath se Kama karma key lie ye hi chaiye’ and different people have different combinations.

SA: Sir, Currently Modi’s idea of development is a hot topic of discussion. Issues of development have worked in states like Gujarat, Rajasthan and Madhya Pradesh. Will it be successful on the national level?

RG : It has to be, yeah. I can’t say whether Mr. A’s model or Mr. B’s Model will work but a model adopted to that particular background or culture will definitely work and it is desperately needed.

SA : Sir will it slur with the anti incumbency factor this time in the upcoming elections. What’s your opinion?

RG : That is difficult to tell because I will tell you what is happening is our national politics is being regionalised. So when somebody is voting in Madurai, he is worried about Amma and Karunandhi, Mulayam Singh dada (the voter) doesn’t listen to him doesn’t understand him and conversely in Uttar Pradesh, they don’t give a damn about that. So there is a lot of regionalization, you see the Chief Ministers are becoming far more powerful. Some of them may be good or bad, but that’s a separate matter. But I sense that when a guy goes to vote, Indians think instantly of a God, “Saraswati ko tike lagao, arti karo’. The picturization of a hero is very important. In every government office there will be pictures of Pandit Nehru , Indira Gandhi  or somebody and I believe the Indian voter has pictures, they have got two different pictures, one picture for local politics state elections, assembly elections, panchayat elections, he has got another box which opens for the national elections.

I mean if I ask you to go and vote for the United Nations, You will say ” yaar ,yeh kaha pe hai , kaha hai , thik hai New York mein hai” , but you will immediately try to get a picture, Mr X and Mr Y he is Australian and that guy is that type and then you will vote for one of them.

So in the national politics the reason why it has gravitated to Mr. A Vs Mr. B, Narendra Modi Vs Rahul Gandhi is exactly this, you know if you go and sit in my village, no one will give a damn, but when it comes to there own state they have an opinion because it touches them and that’s why Narendra Modi at an Independence Day, will speak from a college in Ahmadabad and make sure everybody in the country can see it. He will go to Hyderabad, he will go to Chennai, I am sure he will in due course and he will speak in English because he wants Chennai audience to understand.

Pragnesh Podar: Sir there are talks that companies have held back scale up plans because they are not sure what’s going to happen in the next election. Do you think that’s true?

RG: Absolutely.

Pragnesh Podar: And what sort of result would encourage companies to scale up?

RG: You see Businessmen are trained to look for certainty because we are putting our money on the table, so if you tell me there is a good trading opportunity for your product but you have to go past some man-eaters , “ya to main tijori chod ke jaunga ya tijori ke saath yahi baitha rahunga” thats not a business place, if you are a nature lover you may go, an army general may go, but not a businessman. Businessman likes security. Security doesn’t mean zero uncertainty but minimum and I think that’s where statements that people make they should deliver on them and that’s what everybody is waiting (for).

SA: Sir You are a member of National Innovation Council. What has been the report card of performance of that body?

RG: It’s a bit mixed there is a lot of talking going on but it has no teeth. There is an attempt to correct that now. Experiments are being done, I would say given that its only one and a half years old the recognition that we could end becoming a talk shop, is certainly driving people to the National Innovation Council?

Mukul Lather: What’s your opinion on the Corporate Social Responsibility introduced in the Companies Bill 2012 and do you think change is recommended to strengthen the corporate governance.

RG: I don’t think this can change corporate governance. The corporate governance in a country cannot be vastly different than governance in that country.

“Yatha raja , tatha praja”. (As is the king so shall be his subject). So if you think every minister, bureaucrat, politician , MLA can plunder and loot, but he will pass in parliament the bill, I think Indian people are not lacking in generosity, go back to the villages- “gaon mein kuan banaya, gaon mein school banaya”. In every family you will find somebody, some grandfather , father , somebody , who has done all this. Our big problem is not knowing how much to give and who can you trust with it. And the CSR doesnt address that, you know people hesitate to write a cheque to the Prime Ministers National Relief Fund, When Uttrakhand happened, that shows you where the problem lie. CSR is good but doesn’t solve that problem. Problem in India is not spending its taking.

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