48
We are here today because of the consistent message of those Indian business leaders that Tomorrow’s Company has a message, a community, a way of working and a purpose which are relevant and timely, in, with and for India and beyond. Charles Handy’s words from that excellent first lecture echo down the years: ‘Above all I want to say that in a time of change we must always question whether the things that used to work will work so well in the future. We must not be slaves to our history but trustees of our destinies. Our businesses are too precious to be lost because we have not dared to question the past or to dream the future. Let us start now, before it is too late.’ Charles argued with great force that ‘the principal purpose of a company is not to make a profit – full stop. It is to make a profit in order to continue to do things or to make things, and to do so even better and more abundantly.’ In his speech, Charles reflected on his experience as a ‘lowly regional manager in a distant outpost of a great oil company’ working with village people 200 miles up the Rejang River in Borneo. He confesses to selling much needed petrol required for trading nuts used to make chocolate at a discount locally rather than forcing up prices and exploiting a monopoly position. He says that this was ‘a form of social contract but it needed profits to make it work and to go on working.’ The social contract is therefore revealed as the end, and profits as the means, a point we all too easily forget in the more complex arrangements of business today. A word about profit: I think profits are great: there is nothing I will say that does not celebrate making a profit. But it is surely legitimate to ask today, as Charles did decades ago, profit for what and profit how – perhaps above all, profit for why. The latest insights of the Catholic Church, Caritas et Veritate, are interesting in this context: ‘Once profit becomes the exclusive goal, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and creating poverty.’ (Caritas et Veritate, which means ‘Charity’ or ‘Love in Truth’, the Encyclical Letter of the Supreme Pontiff, Benedict XVI) Ravichandran of HP said it beautifully when he wrote to me as we were getting to know one another:‘There is a trust deficit and that needs bridging. Companies are more worried about quarterly performance than long term sustainability…because short term investors and their greed seem to be of more importance than true shareholder value.’ So, indeed, what is true shareholder value – and more fundamentally still, what is value? This is an important question, which has long been a subject of debate for economics. We would do well to remember the words of John Maynard Keynes who once famously said:‘Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.’