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G. Ramachandran

MANAGEMENT gurus are expected to drop unique pearls in the company of learners and practitioners of management. They are expected to string their pearls into lectures and guidebooks that can be commented upon with ease. The reputation of gurus is predicated on their ability to drop and then string the pearls impressively. The trouble with such a route to acceptance as a guru is that the unique pearls have to be recognised as unique pearls.

Learners are those that have yet to absorb the published wisdom of gurus. Hence, it is likely that they would have difficulty in distinguishing the prosaic from the profound. Practitioners face a similar problem. They would not seek advice from management gurus if there were easy answers. Learners and practitioners are, therefore, most unlikely to take serious note of any pearl. Gurus depend on the capability of others to take note of the pearls.

Gurus face a formidable challenge in sustaining their reputation. They have to necessarily produce new and more unique pearls even while their past works of wisdom remain unnoticed and unused. Learners and practitioners would most likely fail to take note of the new wisdom too. Gurus face great risk if a reinforcement of any old pearls is necessary to exploit the benefits of the new pearls. They face greater risk if `practice' is necessary to exploit the benefits of the old and new wisdom. Gurus depend on the capability of learners and practitioners to practice what is preached.

Action orientation

Professor C. K. Prahalad of the University of Michigan has been uniquely successful in building a global constituency comprising business and political leaders. This constituency is quite heterogeneous but considers a large part of his published and consulting work to be immensely useful. It has assimilated and practised his ideas. Professor Prahalad has overcome the risks associated with reinforcement and practice. He has also borne the risk of repudiation while guiding implementation by others.

His reputation is an outcome of the action orientation of his ideas. Their utility — the true measure of anything in the material world — lies in their ability to goad action. His ideas do not stop at being good ideas since effectiveness in business, politics, and governance and security is guided solely by action than by good ideas. The helplessness of the police in Kolkata in a situation of great danger a few days ago underscores the importance of action orientation.

Effective and repeated action inevitably makes every good idea mundane and prosaic. Profundity is often the virtue of good ideas that are not practised. Professor Prahalad's ideas have never had to pass the test of profundity since their emphasis has been on practice. Moreover, action orientation is neither original nor unique. All humans, including cavemen, have had to be action oriented. However, those that practise good ideas dominate those that practise inapt ideas. Good ideas are necessary for effective action.

Load of good ideas

Professor Prahalad reinforced four ideas at a lecture on January 7 in Chennai. He emphasised the `will to act' in a crisis. He expressed anguish at the freezing paralysis of the educated managerial class. He reinforced the need to view India's domestic demand as the principal sources of big businesses. Cement and candy were among the examples. This newspaper has argued consistently since 1999 that the Indian economy would have to grow on the back of demand for simple household and consumer products. He said quite dispassionately that the inadequate infrastructure would have to be taken as a given or be changed, but a discussion would make no impact at all. The fourth emphasis was on `scaling up' to lower unit costs.

Quite surprisingly, the four ideas have been evaluated by Mr B .S. Raghavan to be pedestrian (Business Line, January 9). They may be pedestrian because Professor Prahalad can `walk the talk'. They may be prosaic because they are action-oriented. However, they are extraordinarily powerful ideas. Three examples of how participants in the Indian economy have been walking the talk follow. Each of the examples reinforces one or more of the ideas emphasised by Professor Prahalad.

Six Sigma in Sewri

Mumbai is among the world's biggest, busiest and most productive metropolises. It does not offer many luxuries, but makes available more jobs than any other city. It is grimy, but is a cheerful and caring home to millions who belong to its conscientious workforce.

Sewri is an old industrial part of the city. Many of its residents are part of an effective chain of entrepreneurial workers that constitute the city's lunchbox delivery system. The workers would fail to qualify for the lowest paid jobs in New Delhi's government offices because of their enterprise and lack of formal education. But they collectively `own' and manage a homegrown public service that is both friendly and profitable. It is a public service that can be accessed by the public for a legitimate and transparently set fee. Happily, there are no regulators.

The lunchbox delivery system exploits the demand for food made at customers' homes and then delivering it warm at their workplaces. This is an important service to customers who leave home before sunrise and reach after nightfall. Customers eat food made at their homes but while in office. It would be both comical and disappointing if a customer's lunchbox was delivered late or wrongly to another.

Neither happens. The entrepreneurial workers take the city's public train system as a given, but work conscientiously through the seasons and the snafus to deliver right and in time. It is said that they have perfected their delivery system so conscientiously that 99.99966 per cent of the lunchboxes are delivered right. This level of perfection qualifies for the Six-Sigma quality level inspired by GE around the world.

Dr D'Silva's in Dadar

Dadar is a sprawling part of Mumbai and comprises residences, small businesses and some textile mills. Dr D'Silva Road in Dadar is an extraordinary example of how unpretentious businesses and self-employed retailers continually and dynamically respond to shifts in demand and supply. A time series analysis of these businesses shows that their practitioners have managed discontinuity and stress better than the big businesses in Mumbai. Owners of small businesses have remained in business though their businesses have changed in content and character.

A formal doctorate dissertation in management has often been regarded as a prerequisite for becoming a management guru. Owners and employees of these businesses have been their own gurus and may qualify for doctorate degrees in economic analysis, logistics, supply chain management, customer relations and, above all, in financial management.

Dr D'Silva, perhaps a physician who loved to care for the sick, would have been most willing to award them doctorate degrees because they have remained close to a colourful mosaic of local customers with poor to modest means.

Scaling up in style

Six-Sigma lunchbox delivery and customer-focussed merchants demonstrate the power of the will to act on domestic demand and to build volumes even while accepting uncomplainingly an indifferent and insensitive public infrastructure. Commonsense and conscientiousness drive their successes. Business is a mundane activity that thrives less on intellectual piety than on the vigorous acceptance of the primacy of behaviour aimed at satisfying customers.

Such simplification does not undermine the importance of formal education. It is more than likely that the lunchbox delivery system evolved gradually over time and that it can be put into practice faster with a formal education in business management. Such formality would necessarily have to shun the intellectual exuberance of theorising but focus on the nuances and complexities of structuring and running businesses. It has to confront the likely facts associated with economic analysis, customer relations and competition.

The opportunities and need for formal business education are immense in countries such as India. However, the reputed business schools are too comfortable with their small graduating classes and certain incomes. They would incur huge costs if they had to scale up and expand to locations outside their present location. Moreover, graduating students from the reputed business schools have become unaffordable to domestic businesses.

With the objective of meeting India's big demand for quality education in business management, the ICFAI Foundation has established the Icfaian Business Schools (IBS) in eight Indian cities. It has `scaled up' while others have not. It delivers the same high quality at all locations.

It has done more. It has written a large number of original and contemporary 'cases' in management. These cases are used in its classrooms and have been included in the European Case Clearing House. No other business school has this distinction.

Cases for emulation

Cases are important because business is a mundane activity. Commonsense, conscientiousness and the acceptance of the primacy of the customer drive success in business. The Six-Sigma lunchbox delivery system, Dr D'Silva Road and IBS are cases. They forcefully reinforce the ideas of Professor Prahalad. The Central and State Governments could emulate these.

They could accept the primacy of the citizen as the customer, they could scale up and deliver `right' everywhere, and practise the 24x7 model — every hour, every day — like the soldiers at the border. They could aspire to achieve 97 per cent perfection or Three-Sigma service levels. They could walk the talk because intellectual piety is not a good idea. It never was.

(The author is a financial analyst.)

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