In this episode of†The Workwise Pod, hosts Sujatha Rao and Deepak Menon speak to Ravi Sreedharan about what for-profits can learn from nonprofits. Ravi is the founder and director of†Indian School of Development Management†(ISDM); he spent 24 years in the corporate sector before switching over to the social sector in 2011. In this conversation, Sujatha, Deepak, and Ravi talk about what complexity means in the business world versus in the social sector, the future of social entrepreneurship, and why it can be hard for individual for-profit enterprises to change without a systemwide shift.
Here are some excerpts from the conversation.
What can the social sector teach businesses about complexity?
Deepak: Can you just explain a little bit more about the leadership quality that you saw in the social sector, and the complexity of the problems that you saw?
Ravi: In [the] corporate world, there was always a formula to solve a problem. Here [in the social sector], there was no formula; there was a starting point. There are diverse aspirations, complex needs, forces that [have] exist[ed] for thousands of years. And youíre dealing with real [problems].
First of all, I donít think a manager in the commercial world would recognise the complexity because there is a myth that Ďmy corporate job was very complex, because it involved 80 countries, it involved a balance sheet of so many billion dollarsíóa numerical complexity. Here, there was a social complexity, and the moment itís social, itís [to do with] human being[s], which is very, very complex. There it was a balance sheet, and it was a process that was far more problematisable and solvable. So that is one complexity that I donít think we recognise at all when we come from one side.
The second side is, there is a belief that everything can be captured in a data point. And thereby itís easier to solve a math problem. Because once I have data, I can solve the problem. And if I donít have data, I canít solve the problem right here. And thereby thereís a tendency to use data a little excessively when you come in as a corporate guy. [Iím] not saying you shouldnít, but itís not easy to capture data for what does it mean to be a mother who ties a towel around her child while she goes to sleep hungry at night?1†What data is going to capture that? I remember talking to [this person called] Periodi (in Yadgir). For six years in Yadgir, our work didnít show any change in the results. And in the sixth year we are having a conversation with Periodi, asking him how things are going. ďItís going really well.Ē ďHow are you saying itís going really well? Because the data shows there is no change at all.Ē He says, ďNo, the children are very happy.Ē ďHow do you know children are very happy?Ē ďTheyíre playing, they come and talk to me. They are running around. They are burpingĒóthat was a data point he gave. Now, I canít imagine saying in the corporate world that my customer burped. But these are important things to understand. It is completely different. It is so complex, and you have to figure that out.
How do you operate in a pluralistic society, where you respect everybodyís opinion, desires, and aspirations?
The third thing is, how do you work in a system that is democratic? We know that a good society is driven by liberty, equality, and fraternity. The corporate world has completely avoided that. And how that is happening in todayís society is a wonder for me.†Samaaj,†sarkar,†bazaaróthese are the three pillars for any good society. How do you operate in a democratic society, in a pluralistic society, where you respect everybodyís opinion, desires, and aspirations?
Why should social complexity matter to the commercial sector?
Sujatha Rao: Iím imagining myself as the CEO of a commercial organisation, and letís say Iíve been manufacturing furnitureÖIíve been doing this for a significant period of time. I might sit back and ask myself the question, is my space as complex as the social space that Ravi is talking about? And while I acknowledge that the social space complexity requires me to pause and not jump into solutions, or to collaborate, or to look at my people quite differently, does it make sense for me in my context?
Ravi: Thatís a beautiful question, Sujatha. And Iíll be honest. Initially, I used to think that itís fine to be that way. Today I have come to the point, itís not fine to be that way. And itís almost like climate change. Can I keep producing something at the risk of the climate getting destroyed in, letís say, 100 years from now, when Iím not alive?Ö Earlier, because I didnít have that 100-year vision, I used to say, how does it matter? Iím not breaking the lawÖ I am now completely convinced that you donít have a choice but to accept the complexity. What the corporate world has done is to conveniently define their system in a very narrow senseóI follow the laws of the land. Donít now say that Iím not doing anything.
Iíll give you a very interesting exampleÖand it can apply to a furniture start-up also. So [this guy is] starting some venture where he wants to organise the car cleaners of the city because he believes thatís a huge opportunity. Every rich guy in this country, in the city, has a car; one thing they all need to do is to have the car cleaned. So Iím now going to uberise. And Ďuberiseí has become this new English word, which is, I will organise them, I will create an app, I will create access, and I will learn, etc. And Iím thinking, this is the classic capitalist mindset. Youíre trying to make money. Youíre not trying to solve anyoneís problems. Even if youíre trying to solve the problem, youíre trying to solve the problem of the person who doesnít really have a problem, because that person can find ways of paying. You need to solve the problem of the car cleaners versus the car owners. That mindset doesnít exist.
Now, if you agree that all of us are part of the citizenry, whether Iím in the corporate [sector], the social [sector], whether Iím in the stateóif we have to agree on what is a desirable or an aspirational society, and if that definition revolves around just, equitable, humane [systems], or justice, equality, fraternity, then that has to guide what youíre doing. Today, unfortunately, that has been conveniently kept aside.
Is social entrepreneurship the future of all businesses?
Deepak: This new trend of social entrepreneurship is trying to balance a business model with a social problem. Do you see that, over time, all businesses will become social enterprises? Right now, we see that there is a commercial world, there is a nonprofit world, and there is a social entrepreneurship world. But essentially all businesses are social enterprises any way.
Ravi: So social enterprise is a good thing. Thereís no doubt about that. But enterprise management, the way it is [done], is a bad thing. If you manage a social enterprise, the way your business is traditionally managed, where you narrow your boundaries, and you have a very narrow view of what success is, you have a serious problem. And thatís the biggest danger to social enterprise. And today, that force of the management view is not easy to run against, because thatís a huge tide. And some small enterprises claim that ĎI will go against thatí, I think youíre fooling yourselfóitís like, you try to push the waves back, but youíre just going to finally give up and tire yourself. So management has to change.
If you donít bring a healthy respect for human beings and the planet, you will have a serious problem.
Now, social enterprise, impact investment, pay for performance, social stock exchangeóthese are all newfangled ideas to figure out how to bring the money. So the objective is good. But if the way you do it is not correct, it can turbocharge a bad thing. And thatís the risk you have with social enterprise, impact investing, and all this sort of newfangled stuff thatís happening. Youíre all good intentions. But if you donít bring that transformational nature of management, the collaborative nature of work, a healthy respect for human beings and the planet, respect for the ideas of justice, equality, and fraternity, you will have a serious problem. But if we can figure out how the management itself can change, then social enterprises can be a very, very powerful way [to create change].
How can for-profits that are willing to change take a more equitable approach?
Sujatha Rao:†Letís talk about a commercial enterprise CEO or manager, who has begun to realise that the way that they had been operating and the techno-managerial systems that they had put in place are not right. And they do want to make this change. Looking at the nonprofit world, what could be one or two things that could kick-start these little levers [so] that we begin to change, that could help them move closer towards the kinds of organisations and workspaces we are looking atójust, equitable, flourishing?
Ravi: There is no easy answer to that question, Sujatha, because Iím in a system, and youíre telling me to change while the system remains the same. I as an organisation canít change because thereís no way I [can] succeed, all I will do is Iíll set myself up for failure. So what can I learn from the social sectorís structures? Itís very simple. How do I ensure that there is a voice of the common man in any business that is done?
Now, in the democratic system, we have created a way to get the voice of every person in the state. In the market space, we havenít figured that out. But the principle of, how do I involve human beings in deciding whether Iím doing a good job or not, in the reward structures that I get [is fundamental to a democratic system]. There are ideas that are talked about in the corporate world. How do I give a lower cost of funds for somebody whoís great on†ESG (environmental, social, and governance) guidelines? Now, those are [some] ways of doing itóand there must be more ways of doing this sort of stuffóbut thatís the principle that we have to follow.
In the absence of a systemic shift, can individuals exercise agency?
Deepak: Ravi, the systemís not going to change. But we also know that humans have a power to change the system. If you were to go back to a bank, letís say HSBC, having spent the last 10Ė12 years in the nonprofit sector, and having [had] these complex thoughts and experiences, how would you be different as a manager?
Ravi: This is a very personal question for me.
The first thing is, I had a certain arrogance when I was in the corporate world, and I lost the humility that I had as a lower-middle-class child. [I thought,] Iím in control, I know whatís going on, I can make things happen. I need to lead people, I need to show the way, so thereís an arrogance. So if I were to go back, I would resort to humility. I think somewhere the business world has forgotten or lost that understanding of how a Gandhian idea can be very powerful in leading change-makingÖ and so on and so forth. Itís become very techno-managerial.
The second thing is that I think businesses willÖI hate to use the word ĎprofitíÖbut will derive a lot of value if they believe in the agency of the people versus creating pigeon holes for people to say, this is your job. And I donít need you to comment on anything other than that. In fact, there are business processes (such as the†quality circles†used in Japanese manufacturing) built on the idea that the greatest ideas can come from anywhere. In fact, more likely from the field rather than from the conference rooms and chambers that we sit in. So how do you create some frameworks and systems to believe in that agency and bring those ideas to bear on the work that you do? That will be the second thing.
The third is that, and this is the one that is very personal to me, you donít realise that when youíre in a job, that job defines the person that you are. And eventually, you become a person who is a function of all the jobs that you did over a 10-year, 20-year period. And I try and say this to youngsters, and Iím not sure Iím able to communicate, that the career path you choose will make you a certain [kind of] person when youíre 50. And if I had somebody who had explained this to me in a manner that I would have understood when I was 20, my career choice would have been very different.
You can listen to the full episode†here.
Deepak Menon is an executive coach who supports entrepreneurs, social entrepreneurs, and progressive corporate leaders to become powerful leaders, develop high-performing leadership teams, and design thriving work cultures. Deepak co-hosts†The Workwise Pod†with Sujatha Rao.
Ravi Sreedharan has 24 years of experience in the corporate sector. He spent much of this time at HSBC where he served in multiple roles, the last of which was CEO and president director of Bank Ekonomi. He quit his corporate career and switched to the social sector in 2011, joining†Azim Premji Foundation†as the head of education leadership and management. In 2016, Ravi founded†Indian School of Development Management†(ISDM).
Sujatha Rao is a social entrepreneur and the co-founder of†Chaabee, a digital learning platform for flexible, out-of-school learning. She is also an academic and organisational design consultant working with social purpose organisations to create purposeful, sustainable, and impactful institutions. Sujatha co-hosts†The Workwise Pod†with Deepak Menon.
This article was first published in IDR Online
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