Failure is an option, Fear is not – An Entrepreneurial Perspective

Dr.DD's speech at Ritz-Carlton at IBPC Dubai.

Date: 23th Feb 2013

Respected Chairman, IBPC members, Distinguished Dignitaries & Friends.

At the outset, I thank the organizers for giving me this wonderful opportunity of interacting with all of you, entrepreneurs.

A calm sea never produces a skillful mariner. Navigating on shallow water near the shore without exploring the sea is a sin. Not taking a risk in our life is a sin in my opinion.

I salute all of you – the risk takers who focus on “value addition” than just “validation”.  As value creators, I consider you as the creamy layer of the society. SME business is the backbone of any economy.

Well, given my time slot, I do not have the liberty of extending my vocal skills on exchange of pleasantries. Hence, let me take you to my topic – ‘Failure is an option, but fear is not’ – An entrepreneurial perspective.

There is a saying that for a 3 hour talk you can prepare in 30 minutes and for a 3 minute talk you have to prepare for 30 hours. But I have not come here with any prepared script. Today I decided to speak from my heart than from my head. It will be more of my experience & emotions than structured/research reports.

Three issues I intending touching upon –

•  The fragile economic world & the competitive landscape
•  The willingness to embrace failures
•  My personal experience as an entrepreneur

Let us take each one by one ….

1). The Fragile economic world today

Every day we hear about declining GDPs/growing unemployment and so on. I do not want to repeat them here … let me tell you a story …

‘Year 2008, It was a beach town in the Caribbean islands. One day a rich tourist walked into a hotel. The whole town was deserted. These were bad times. Everyone was in debt.

The guest pays 100 US$ to the hotel manager. He told the manager that he will go up and see the room and come back.

The hotel manager uses this 100 USD to pay the past debt to the butcher. The butcher in turn pays his debt to the sheep grower. He in turn pays back his debt to the fuel supplier. The fuel supplier in turn pays back the 100 USD to the same hotel to settle his old debt.

Mean while the tourist comes back. He did not like the room. He took back the 100 USD not and walked out.

No one earned anything. But everyone was out of debt. Everyone’s credit limit revived. The end result of all these fancy method is the great recession. A rocking horse keeps moving but does not progress. Every economy thought that it was growing but in reality there was only ‘motion’ and not ‘progresses’.

The epicenter of all these was in United States and tremor was felt all around – economic chaos all around.

We went through series of changes in economic themes –

Growth Growth

Growth first, Austerity next

Austerity First, Growth Next

Austerity Austerity

Growth with Austerity

Growth & Austerity are oxymorons.  Today we have two contrasting forces pulling us in different directions

• Debt contraction compulsions.
• Refusal to accept sacrifices on the part of people.

Developed nations are not able to force sacrifice on people, hence they soft peddle the debt contraction option. They take new debt and repay old debt. The nations are rolling over their finances. They are just elongating the detonating wires and delay the blast than diffuse the blast.

The other day an SME sector businessman was telling me that his financiers are telling him that he was over leveraged. While the Debt to GDP leverage ratio of nations are near 100%, he complained that his financiers advise him to deleverage – this is strange paradox.

This is the fragile economic world today. We are living in troubled times. But we can not complain. The role of entrepreneurship is pronounced more in these troubled times. We need more entrepreneurs, more risk takers – But we should not be afraid of failures.  Now we came to the second issue ‘Embrace Failures’ ….

2). Embrace failures …

You might have heard of the stories of achievers from motivational Gurus. Abraham Lincoln, Thomas Alva Edison, Sir C.V.Raman – all of them achieved after fighting innumerable battles. I will not address these again as you might be already familiar.

I will narrate the story of an SME sector businessman in USA.

A business execute was in deep debt and could see no way out. He sat on a park wondering what to do. Suddenly an old man appeared, listened to him and said ‘I can help you. Take this money, meet me exactly one year at the same place. You can pay me back at that time’.

He gave a cheque 5 million USD signed by Jhon D.Rock Feller, the richest oil magnet of that time.

The executive instead of using the cheque kept it in his safe and started with renewed optimism At the back of the mind the 5 million USD was giving comfort to him. Slowly he came out if his debt, while the cheque was lying in his safe. 

Exactly one year later he went back to the park. The old man appeared. Just before handing over his cheque, a hospital nurse came running, she said, ‘good I caught him. I hope he is not bothering you. He goes on telling people that he is Jhon D.Rock Feller. He is actually a patient of our hospital’.

The executive was stunned. He realized it was not the real but imaginary money that gave him the courage, that courage made all the difference, Humility in success and courage in failure is what we have to follow. Failure is an option, but fear is not!

3). Preacher or Practitioner ….

Now we come to the third issue. It is always easy to preach than practice. Ronald Regan one said – ‘When your neighbor loses the job you call it a normal business cycle, but when you lose your job you call it a great depression’.

Similarly a question may arise in your mind whether I have ever faced a failure – Am I talking here as a preacher or a practitioner of entrepreneurship. The question is valid. Here is my story …

Life was a smooth ride for me, nice things were happening at a right times. During this easy phase, I was also not an exception that hits everyone, yes; I am talking about the entrepreneurial bug. Your life is successful; you have spent a decent time on other’s business expansion. Why not we do ourselves! This bug also hit me. Success is lousy teacher; it seduces the smart people to think that they can never go wrong.  If you are successful in one area, you tend to think you will be successful in all areas. The tail wing was taking me to the dizzy heights with no exposure to failures. Ego is an anesthetic that deadens the pain of stupidity. Repository of ego base started setting into my system slowly. I was feeling that the bottom is overcrowded; therefore I should reach the top quickly.

Then came the sudden wind that twisted the whole picture, a wave of macroeconomic changes, led me to face the jaws of my first defeat on my first entrepreneurial move.

The people who betted on me departed, the friends who invested with me turned into vociferous foes, the illustrious personalities on my board who voluntarily annexed themselves with me, resigned from the board immediately at the first sight of the problems in my business model. Suddenly I saw chaos around me. I started getting so many free advices. No one had time to go into the process of “why the failure”, but everyone looked at the outcome and not the process. I realized the world rewards the end and not the means. The world recognizes the performance and not the passion.

Getting back to the MNC corporate main stream was as a problem, as they do not take the executives who take entrepreneurship, seriously. The question that crossed my mind was – How do we handle failures, miseries and manage success or happiness? Success is your friend, failure is your teacher, I thought. Excess happiness syndrome and the lack of exposure to failure daunted me, tested me.

I had two options – “Brood over, Get frustrated and perish” or “Accept the realities, identify my USP and understand to recreate myself”.

I opted for the second one, I could not revive the unit or invest in that unit I could not get back to my plum job in a MNC – hence I took up a reasonable position in a relatively small corporate belonging to a Board of Director of my failed company.

The Board of Director who took a risk on me at this bad phase is a UAE based Businessman to whom I will ever be grateful. In Ten years I could do my doctorate, establish our corporate brand strongly in the market and stand in front of you with the wisdom gained, in the form of the book “A Saint in the Boardroom” Every pain has a gain, you see. Have you every failed in your life? If not, I invite you to taste the thrills of the failure. I guarantee you; you will become a balanced personality with abundant wisdom. Success tells you what you are; Failure tells you who you are. Failure is an option, while fear in not. Folks, it does not matter what happens to you in life, but what you do when something happens is the key.

Having staked my claim of being a Practioner of entrepreneurship, now I take you to my concluding session –Concluding Remarks

We can control a process/strategy but can not control the outcome. Failures may erupt we need to fight it out. The champions are not made in the gym but are made in the inner walls of the chambers of your soul. You are fighting the greatest wars in the silent chambers of your soul. Fight it out ….

Life may crown you or crucify you on a cross…

Chase your passion but learn to face the outcome of whatever nature. Focus on the roots and not on fruits. Failure will teach you great lessons. Don’t shy away from failures in your entrepreneurial role. Never give up – stay hungry, stay positive, grow your risk appetite. Convert your inner sparks into fames of achievement. Continue to build entrepreneurial spirits into the societal DNA.

Finally, again, I invite you to taste the thrills of failure. I guarantee you that eventually you will win!

-          Good Luck!!

Corporate Lessons from Mythology - 7

Corporate Lessons from Mahabharat
For Objective planning, leading and decision making in a corporate, we need to nourish a healthy mind. Emotional balance is the key.

Lord Krishna counsels Arjuna in the war – “Yudhyasya vigata jwara’ viz., ‘Fight without mental fever’. This is what we call us emotional balance in the modern day corporate parlance.

In Mahabharata, we come across a king by the name Yayati, who in order to revel in the endless enjoyment of flesh, exchanged his old age with the youth of his obliging youngest son for a thousand years. However, he found the pursuit of sensual enjoyments ultimately unsatisfying and came back to his son pleading him to take back his youth. This “Yayati syndrome” shows the conflict between externally directed acquisitions (extrinsic motivation) and inner value and conscience (intrinsic motivation). For example, an employee’s conscience might tell him to do an honest day’s work, yet the emotion may prompt him to relax. Moreover we long for things not because they are great in themselves, but because our greed exaggerates them and make them appear great.

I could tell you many, many stories of ‘excess greed’, but the point driven from these stories is that ‘Excess greed erodes your fortunes.’ I once read that the twenty richest Indians have as much wealth as the bottom three hundred million. We can recall F. Kennedy’s words here – “If a society cannot help the many who are poor, it cannot save the few who are rich.” It is our duty to create wealth while human dignity is also enhanced. Mr. Narayana Murthy, Chairman of Infosys, stresses “Bringing the power of greed driven capitalism to the benefit of the masses is Compassionate Capitalism”.

This is more important for all of those who wear the crown of a CEO. Today, greedy behavior from corporate leaders has strengthened public conviction that free markets are tools for the rich to get richer at the expense of the welfare of the general public. The Economist says, ‘It is a market driven by conflicts of interest, swelled by covert deals and protected by successful lobbying.’ Consequently, a large majority of the developing world sees no legitimacy in a system in which they have been proven losers. We have to make the leaders in countries like India who are skeptical about capitalism appreciate its power in solving the problem of poverty.

Now, let me come to the most important question: How do we practice compassionate capitalism? Business leaders have to take the lead in regaining the trust of society. They have to conduct themselves more ethically and legally. The people at the vanguard of the capitalist movement have to make themselves, more acceptable to those left behind by shunning a vulgarly rich life. Compassionate capitalism is about putting community interest ahead of private interest in the short term and being a good corporate citizen. It is about civilized behavior and about long- term orientation. It is about making life better for the next generation. This is what civilized societies are about and history has shown that it is such civilized societies that have always
progressed.

The basic dynamics of our mind is that it will not enjoy what it has but will always aim for the next big thing. If we live with discontent, we will always face some turbulence or the other. If you live with contentment, your mind will not wander like the wind but will find everlasting solace. Do you want to live with Contentment or Discontent?

You want to become like your neighbor, your neighbor wants to become like his neighbor and so on… Lord Buddha says, “Run and compete yourself.” We should stop comparing ourselves with others and live by comparing ourselves with our own self. This is one of the greed-breaking mechanisms.

Again, a person has to search for becoming more human than search for fame or money. When we have more of fame or wealth, we waste our time to protect them and it spoils our energy. Our strength drains and gets blunted. We need to have simplicity and not poverty. Today’s need is yesterday’s greed. Greed is not a sin. There is no chance to live without desire to-day. We should not borrow our desires from others. It should not be the endless enjoyment pursuits of yayati in the Mahabharat.

We can live our life like a “Post it Note. This self, sticking adhesive will not get glued to the paper to which it is struck. It can come out without leaving any traces.

We have to be attached like a ‘Post it Note’ as far as wealth maximization function but should get detached without leaving the traces of the glue as far as wealth distribution.

We should not be a “Fevicol”, but a “post it” sticker we should live like a ‘realized soul’ living in this world with detachment.

We advocate simplicity and not poverty, realization and not renunciation. The mind should be firmly under the control of the intellect.

Corporate Lessons from Mythology - 6

The Concept of Corporate Karma

The concept of Karma theory is applicable to the corporates as well. It is not just enough to perform, but you have to be perceived well for a better reputation.

The corporate image, public perceptions on the corporates – all these lead to the term corporate reputation. The reputation is the result of past actions past karma.

Way back in 1982, Johnson & Johnson, the health care MNC introduced cyanide quoted capsule ‘Telenol’. Consuming this pill, eight people died.

There was an internal crisis management group advocating for a liberal compensation and close the case by quietly withdrawing these pills from market.

But the company took a bold step. They publicly admitted the mistake, withdraw the whole pills from the market, and took a huge hit to their top and bottom lines.

This past action created a wave of goodwill and even to-day it is recognized as one of the best governed companies by the public.

Every action has a reaction. See how effectively the corporate Karma works. There are several other examples in terms of corporate actions which will support this theory.

Take a negative action – let us take Enron as an example. Once upon a time, this company was the darling of the stock market. They boosted the results with creative manipulations.

The accounting irregularities were too many. Accounting model was driving the business model. The cart was pulling the horse, than the other way round.

The so called watch dogs became a pet dog with wagging tails, creative manipulations started on a small scale. A frog, when thrown into a heated pan will jump out immediately.

But when it is thrown into a pre heated pan, it will enjoy the initial phases of slow heating, but ultimately will get fried.

The same way, when people are asked to carry out a major violation, they will refuse. But they start enjoying small manipulations (without getting caught), but they finally get fried like a frog.

This is what happened in Enron. The past negative actions lead to a global disaster. This is also the corporate karma – bad result of past bad actions.

The acceptance of  “made in Japan” in the seventies and eighties were due to the good past actions of Japan earlier. Even when we aim at change management, we take validations from past precedents.

The Karma theory is therefore applicable to the corporates, as they apply to the individuals.

Corporate Lessons from Mythology - 5

Corporate Lessons from Ancient Indian Sastras

In the Northern Zone of India, which gave birth to the Aryan ethical code, the debt of a father has to be passed on to two generation below, if not settled. Thus honesty in the settlement of debt was therefore a promulgated policy of the Aryans. As far as adopting an objective approach to perform any task, Lord Krishna laid down rights and obligations of each and everyone.

A manager must look upon the task that he has been set or that he sets himself, not in terms of personal gain or profit but in terms of fulfillment or satisfaction that he gets out of them.

Bhagavad Gita also addressed “Karma Yoga” which means that one has to perform the task without attachment – Objective approach. This is contained in the following sloga of “Bhagavad Gita”.

Karma yoga states that without attachment perform the work that has to be done, for man
attains highest, by doing work without attachment. (Objective approach)

“Tasma dasaktah Satatam

Karyam Karma Samachara

Asaktho hyacaran Karma

Paramapnothi Purusah”

Manusastra says that for existence of an orderly society, the desires (Kama) for material enjoyment and pleasures (artha) should always conform to rule of Dharma. Dharma has been explained to be that which helps to be that which helps the long term upliftment of all living beings. Further, Kaudlya in his Arthasastra a laid down the duties of kings and ministers, which served as a governance manual for several centuries. Later the Mughal emperor Akbar gave us a clear and stable commercial setup for regular ethical functioning.

In the southern Dravidian culture of India, the St.Poet Thiruvalluvar defined the business conduct in his couplets as under:

“Behold the businessman who looks after the interest of others as his own: his business will flourish”. Thirukkural No.120. Further, the Ancient Tamil Sangam literature stressed the need for straight forwardness in trade.

In the Eastern region of India, Lord Buddha used to advocate the Rig Veda Sloga which “The trader is like honeybee, which sucks the honey without harming the beauty of fragrance of the flower”. In the words of Rabindranath Tagore from the same Eastern region, greed degrades our values; there is enough for everyone’s need, but not for the greed. Swami Vivekananda emphasized the purity of the means than the focus on the end.

In Western India Chatrapathi Shivaji demonstrated the best lessons on political governance. The greatest personality of the last millennium Mahatma Gandhi who hailed from the western region stated that there are three simple business rules. ‘One – Treat the customer as God, Two – Be honest, Three – Respect hard work in any form”.

There is no dearth of lessons from ancient India on character and governance. In spite of having such rich ethical background emanating from cultural heritage, India has been given a low grading by several global governance rating agencies in terms of macro rating.

However there are several Indian corporates with extra ordinary corporate governance grades in terms of micro rating.

Corporate Lessons from Mythology - 4

Corporate Lessons from Sastras 

The nineteenth century was that of entrepreneurship, the IT driven twentieth century was that of management and the twenty first Nano technology era is that of direction and control leading to corporate governance.

Digitalization, Deregulation, Privatization and Globalization were once the buzz words. Noises are heard on high regulation, nationalization and de-globalization and de-leveraging even at the very root of capitalism.

The corporate goals are heavily skewed towards profit goals eclipsing other goals. The term corporate governance is doing its round in various global forums today.

We have no dearth of lessons on corporate governance in our ancient Indian Sastras. ‘A trader is like a honey bee, which sucks the honey without damaging the beauty and fragrance of the flower’ say Rig Veda.

We should make profits for the society without damaging the environment is very well brought out by this saying.

The corporate firm was used around 800 BC itself and was referred to as “Sreeni”. This was compatible to the modern day Anglo – American Corporate.

Artha (wealth creation) and Kama (materialistic enjoyment) have to conform to Dharma (righteous conduct) as per our Sastras. This is like the modern theme of “aligning all stakeholders with fairness”

The maxim ‘samastha jananam sukhino bhavanthu’ (Sundara Kandam of Ramayana) propogates ‘maximum welfare for maximum people’ – The concept of corporate social responsibility was very well thought in those ancient days. We also have maxim like ‘Vasudeva Kutumbam’. This means we have to treat the whole world as one family. This matches the Vedic maxim ‘Man lives individually but survives only collectively’.

There are several terms of corporate governance spelt out in Sastras –

Lok Sangrahm – Greatest possible good to all

Dhanam – Creation of wealth through competence (Kausalam) and productivity
(utpadhakta)

Swatantrata – Autonomy and independence in business development.

Dharm yudh – Level playing field for all

Vividhata – Variety or innovation.

Ancient Sastras says it all.

Corporate Lessons from Mythology - 3

Corporate Lessons from Ancient Indian Sastras

The Upanishads do not demand that one should live a life of poverty and renunciation. Artha (wealth) and Kama (Desires) have to conform to Dharma (righteous conduct).

The set of principles for the conduct of the man to attain happens is called ‘Sanatana Dharma’. These texts refer to a certain divinity or energy. The energy takes various forms in the Hindu mythology in the context of the specific tasks.

The science of Yogas gives four margas (paths) to attain the ultimate. The Jana Marga (intellectual route) is to enable a manager what is to be done and why it is to be done.

The Bakthi Marga (the devotional route) comes next. Having understood the goals, the manager has to faithfully proceed to implement them. Then comes the Karma Yoga (the activity route), the manager has to keep doing the work, having accepted the task. He has to do the worknot because it benefits him in any manner, but because he has to consider it his duty to to.

Then comes the Raja Yoga (Linking strategy to action with values). This involves focus on the long term concern of the stakeholders.

The Indian tradition brings out three basic qualities of a man “Sattva”, “rajas” and “tamas”.  “Sattra” represents unstained vision, unattached approach, balanced emotions,enthusiastic energy, calm and spiritual mind. “Tamas” is at the extreme end of these virtues,while “Rajas” fall between the two.

The management is the art of synergizing the strengths of these people and to strengthen the “Sattvie” nature of the people.

The concept of Karma is that one’s action determines one’s future. It is an eternal law that works out automatically and immediately. The Indian tradition suggests that every person should take responsibility for himself.