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A. V. Ram Mohan

In these days of dramatic corporate collapse, it is unbelievable that an organised entity lasted as long as a million years. When you read a thing like that you want to look around to see what kind of organisations have lasted long.

NOMINALLY a travel writer, Bill Bryson has written a remarkably different book on science. In A Short History of Nearly Everything, he has tackled a variety of science topics, such as nuclear physics, geology, astronomy, origin of species and many others, in a delightfully readable manner.

While tracing the predecessors of the homo sapiens, he describes what is possibly the first organised manufacturing activity in the world; it was one for making tools out of stones, in Olorgesailie in the Great Rift Valley in Africa.

In Bryson's words, "What the researchers found was a ten-acre site, where tools were made in incalculable numbers for roughly a million years, from about 1.2 million years ago, to two hundred thousand years ago. Not only did the early people lug hefty stones to considerable distances, but even more remarkably, they organised the site into areas where new axes were fashioned and others were blunt axes were re-sharpened. Olorgesailie was in short a kind of factory; one that stayed in business for a million years... "

Come again, did you say a million years? In these days of dramatic corporate collapse it is unbelievable that an organised entity lasted as long as a million years. When you read a thing like that you want to look around to see what kind of organisations have lasted long. Great religions, along with their rituals and observances, such as Hinduism, Buddhism, Islam and Christianity measure their longevity in thousands of years.

Next may come some intangible or concept based or art form institutions such as the Hindustani or Carnatic music, generations of traditional pottery or Ayurveda medical practice which may be several hundred years old. Modern institutions in India like government departments, courts, universities and railways are relatively recent creations, perhaps no more than 200-300 years old.

What about commercial organisations in India? Perhaps only a handful of companies can boast of a century mark, newspapers, family owned private banks, vendors of traditional recipes and similar cases. Organised industry and business is a relatively new phenomenon in India; when compared to European or American companies, our commercial enterprises have not been around as long. Hence the real question to be asked of Indian companies is not how long they have been around till today, but how long will they last into the future; will they endure long enough, and continue to make an impact in the commercial world, to qualify for the term `institution'?

Naturally our thoughts turn toward institution building; what kind of organisations survive and flourish into the millennium and what kind of companies gently spiral into oblivion? Is it possible to generalise based on the few survivors and great many failures, to draw some lessons for the future institution builder?

We will start with goals. Truly great companies, which really survive several decades in a meaningful way, do not have making money as their overarching goal; their mission would be to make an impact in the chosen field of endeavour in a dramatic manner.

Not that they would be averse to profits, or are run as a charity, or select a costlier alternative when a cheaper one will do; long-termers would decide things on the basis of how it would sustain them in their ability to contribute in a specific industry.

When the famous ICI of UK had its mission to make use of chemical engineering to improve the quality of life, it had some thing solid to aim for; constant pursuit of a lofty mission made it a world beating company in the chemical industry.

Unfortunately for ICI, when it started pursuing a sordidly commercial goal as `maximise shareholders' wealth', it went down within a decade to become a rump of a once proud institution. The second feature of long-termers, is that they judge themselves and their performance by well-defined internal standards, rather than some externally imposed or assumed standards.

Their internal standards would be more demanding and less forgiving than external standards, but more closely aligned to their long-term goals. A good example of this would be medium-sized engineering companies in Germany, collectively called mittelstande; for them success meant product innovation, technical excellence, world dominance and such internally generated norms.

Contrast it with the experience of American machine tool companies, which swung to the tunes of stock market gyrations; they went from world dominance to extinction in one generation. Such big names as Cincinnati Milacron and Bridgeport Machines took their eyes off technical excellence and pursued price multiples and market cap till their bitter end. Finally, the people angle. Long-term companies would encourage and reward formation and scintillating display of skills in their profession. Future leaders would be chosen from among those who exhibit industry-leading skills, consistently and with conspicuous distinction.

By definition these processes of building skills and evaluating by well accepted standards take time and a good deal of trust among its constituents.

Not for them the culture of `up or out' or star oriented leadership; in this set up you cannot be a CFO merely by virtue of being a good spin meister with the analysts community, without being a solid accountant and respecter of processes.

Again, the word `leaders' is chosen advisedly, because long-termers are not one-man shows, but a solid cadre of skills and attitudes. Long-term vision, strict internal standards, leadership with skills... These look like difficult conditions to impose in these days of quarterly results, mass voluntary removal of skills and spin oriented leadership. But, then, you wanted many Indian companies to last the next hundred years.

(The author is an executive with Ramco Systems Limited. The views expressed here are his own and not of the company he works for. He can be contacted at rammohan@rsi.ramco.com)

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