How to Scale up Your Enterprise: Conversations with Sadhguru & Dr Ram Charan

At Forbes India, studying and tracking capitalism is part of our core. Much of our work as journalists has been around observing entrepreneurs, their ambitions and the challenges they face in scaling up their enterprises. That is why we call ourselves the drama critics of business.

That is why a few months ago, when the Isha Foundation announced the setting up of a unique leadership programme designed to help ambitious entrepreneurs scale up their businesses, our ears perked up.

Sadhguru Jaggi Vasudev of the Isha Foundation, who without doubt is a child of the East, and Dr Ram Charan, one of the foremost CEO coaches in the world, author, and consultant, who has his roots in India but is a practitioner of management from the West, got together to create this programme. We were intrigued. Making it more interesting still is the fact that some of the best business leaders in the country are resource leaders for the programme.

To understand what seems like a dichotomy, Indrajit Gupta, Shishir Prasad and Shravan Bhat engaged in conversations with both of them. What emerged are a set of insights that puts fresh perspective on wisdom that draws from the East and the West. Edited excerpts follow.

The full video of the conversation between Indrajit Gupta and Sadhguru Jaggi Vasudev can be viewed at www.youtube.com/forbesindia


Forbes India: Can you share the inside story of how this programme was created?
Sadhguru Jaggi Vasudev: In India, when a good leader comes up, people start worshipping him. What a leader needs is not worship, but reinforcement. So, we have leaders who are like stars who come and go.

We ought to build leaders at various levels, particularly in business, because economic activity decides the nature of society. While speaking at economic summits and to leaders in India and outside, I have noticed that the most serious issue people have is a lack of insight into what they are doing, or what they could do. That’s how we ended up creating this programme called Insight.

To be a leader, you need integrity, inspiration and insight. Integrity makes people trust you. Without earning the trust of people, there is no activity you can perform successfully. And you need to be inspired because it isn’t roses every day. A rose plant is full of thorns. Once it pokes, you need to be inspired enough to go beyond that. But if you don’t have the insight you might climb up the wrong tree. Based on this we formulated this programme with Dr Ram Charan.

Most businesses in India are family-owned, or they come from a certain community. They grow to a certain level because of prudence, understanding of the situation and a fire in the belly. But a lot of companies are stuck between Rs 250 crore and Rs 750 crore. They have everything in them to go global because they have grown up in India, which is like being in an obstacle course every day—the lack of systems, infrastructure, interest rates. But they can’t go beyond because certain ingredients are missing.

What are these ingredients, and what stops them from growing? We focus on identifying bottlenecks and showing ways to get past them. Because what somebody sees as a bottleneck, somebody may see as an opportunity.

FI: Another stress point for an entrepreneur is managing peer
group relationships and performance all at once. How do you manage both expectations and performance?
Sadhguru: Being an entrepreneur means doing what you want to with your life. When you’re doing that, there is great joy. But slowly you forget that and try to live up to expectations. But success is not measured only in terms of your size. It also ought to find expression in terms of who you are, your capabilities and competence. So, there is no need to be pressured as long as you can find full expression and, above all, establish your way of being.

FI: The formal learning systems
in our country make it difficult to deal with failure. How much of a barrier is that?
Sadhguru: On the contrary, I think in our society, success is more stigmatised. Because whenever somebody succeeds beyond a certain point, people start talking about morality and religion to stigmatise them. The reason why Indian families and people are so much averse to failure is not because of the mental make-up, it is because of our social structures. In other societies, there is enough of a net that allows opportunities to climb up again. This can be changed by looking at failure not as some kind of done thing for life—but as an ingredient of adventure.

The question you ought to be asking is: What is the level of risk you are willing to take when there is no social net? It’s more a financial and social reality than a psychological one.

FI: Entrepreneurs from the West work in a better systemic way. It seems a deeper facet of their journey. But Indian entrepreneurs thrive in chaos. Would you agree?
Sadhguru:  There is a lot to learn from Western enterprise. But you need to understand that all Western markets are highly protected. If you open them up completely, you’ll see they have no chance of survival because systems are expensive. But people are flexible and mobile. Systems are fixed and need a lot to change. But if it is people, you can get them down and change things tomorrow morning. In India, we survive in spite of the broken system. In its essential nature, this is true enterprise.

FI: But in India we celebrate ‘jugaad’. Is ‘jugaad’ essential in a globalised world?
Sadhguru: No, it is not a magic potion. It is a survival kit. Sometimes, when things go wrong, jugaad could help. This is because the system has failed, and people find ways to survive. If you find the roads full of water, you learn to float on something. But that is not the way to exist. If you want to go boating, do it in the ocean, not on the streets.
 
FI: But that is a facet of emerging markets we see around the world.
Sadhguru:  If societies continue to remain without systems, they will have to find ways to survive. But that is not the way. Fundamental things should be organised. Other things can be left to individual genius. When I started driving in the US, I thought the cars are powerful, the roads are good, but I couldn’t understand why I couldn’t drive at 150 mph! Why am I restricted to 70 mph? But it is a place where even an 80-year-old woman drives a school bus. She can drive because there is a system in place. Imagine that in Mumbai. Forget driving, she can’t walk. So, the system is relevant because it can do many things.

FI: We just released a list of the 100 richest people in India. A lot of people have told us that celebrating wealth in India isn’t right. What is your take?
Sadhguru:  Everybody wants to be wealthy. But if somebody else gets there, it becomes vulgar. We chose the market economy. That means the market will decide. Once that is so, being rich is an important aspect of being in the market place because that is power. It is perfectly all right.

Money need not necessarily mean greed. I see money as something that facilitates my work. I am sure a lot of business people also look at it as a means to do what you want to do. It is unfair to say that just because you make money, you’re in the wrong. If that is the case, let us stop all businesses and move back to poverty. Would that be morally correct?

FI: Scaling up requires focus. But there is also the growing expectation that entrepreneurs give back to society. How do they reconcile?
Sadhguru:  I don’t think entrepreneurs need to give back to society. They should use their money to make this a vibrant economy rather than doling out something to somebody. Giving is the government’s business. Every business person should have every rupee of theirs—except what they need personally—floating in the market, generating opportunities.

Forbes India: You’ve articulated in your work that “to stay successful over a long business cycle, leaders need to be perceptive to change”.  How can this be cultivated consciously?
Dr. Ram Charan: The key part of leadership in business is that people at the top commit to their consumers and decide what consumers they should have and shouldn’t have. They also connect to front line employees who go interface with customers. That’s one source of knowing early what is to come.

The second is that market demands can change with technology. Leaders scan what technologies are coming in and try to understand what kind of behavioural changes they can create.

The third is looking at domestic and global economies. Is it a recession? Are we in growth? Are interest rates up? Down? Before becoming a top leader, they prepare for it.

FI: Is this entire process better done completely through data analysis or the route you have adopted through the Esha Foundation?
Dr. Ram Charan: The key point is that data is needed. But data driven interpretation is a mental skill. Asking which data is important is a mental skill. It is developed over time. On the other hand, if we have intuition and no data, that is not going to last very long. If we have just data and don’t know what questions to ask, how to connect, you are not going to go very far.

FI: You spoke of living in a multi-speed world. What specifically do you mean by that?
Dr. Ram Charan: Some economies are growing faster than others. Europe is flat, American is at two percent or less, India’s is at five percent, China at seven. Different countries are growing at different speeds. But the world is interconnected by trade and this causes imbalances.

You need to see the globe as your market and that’s where real leaders focus. They make choices about which countries and which markets work. They have to choose a strategy. This is important because then you know where to allocate resources.

FI: Sometimes it seems that decisions are easier for companies in Europe or America because those economies are down and they go to emerging markets. What is an Indian company to do?
Dr. Ram Charan: Indian companies are moving; you have smaller companies like Marico and they have a very clear, focused strategy, mainly in south-east Asia where they are going about in a methodical way and creating a large footprint. Then you have the Tatas who bought Jaguar and Land Rover, which are global brands for a global market. You have the Birla group, for whom 55 percent of their sales are outside India.


FI: Are there a set of traits you think a globalised company ought to have?
Dr. Ram Charan: The fundamentals never change. In addition to energy, character, the ability to inspire people and having a vision, what makes a difference is the ability to understand better than others the external factors, government policies, economic changes, collecting the right people. Thinking is not enough. People have to execute. Look at a Nokia or a Kodak: they had the ideas, they had the technology, they knew what was coming, but they did not execute.

FI: What prevents execution?
Dr. Ram Charan: It takes skill and discipline. People are not trained. It requires coaching people.
 
FI: Do you think Apple knows how to execute better than anybody else?
Dr. Ram Charan: I’m writing a new book that shows Steve Jobs had that rare combination of being able to connect new ideas and executing tasks. Those are repeatable skills. He was the master integrator—highly focused, and he understood consumers. And that’s the reason Apple succeeds and others don’t.

FI: What does an ‘integrator’ mean exactly?
Dr. Ram Charan: In organisations structures develop where you have silos. Marketing, operations, technology, finance, human resources—and then you have a general manager. But their actions have to be integrated, they have to be synchronised. That skill is missing in many companies. When Steve Jobs came back, he put design first, as the major driver, and then he built a weekly joint practice of various experts to integrate various ideas. He did that every Monday for 14 years. He got people from materials, software, hardware, supplies—everybody together, just like a football team. By integrating, he innovated.

FI: You say “companies who succeed, put people before the numbers”. But a lot of companies who succeed really seem to push their people around the bend. How do you reconcile these two ideas?
Dr. Ram Charan: Let me explain. Steve Jobs was a human being—when he was not there, his predecessors failed. But he collected people around him and those people are there to this day. They are driving the game. After the people are with you, you ask, ‘How do you measure success?’ Part of that is numbers. If the numbers don’t make sense, they will change gears or they will have a new idea that will drive new numbers, but it is they—they means people!

 
FI: When times are tough, even the most successful leaders have taken shortcuts. You see role models taking short cuts. Why does this happen? How much of a danger does this pose for the India story?
Dr. Ram Charan: With values in place and a code of conduct, people at the top have to be role models and enforce it. The good news is everybody can do it. There will always be in a corporation of 100, a few bad apples. It’s not something limited to India. It happened in London, in Singapore, in JP Morgan recently. So, people will always find a way to cheat the system.

I think if you are in a group of people who follow a code of conduct, ethics and spirituality, that content makes you determined not to do dumb things. But if you are in a society that cuts corners, you get drawn into it and that’s what happened with Satyam.