Summary of address delivered on 11 March, 2000 to the graduating class
of the Indian Institute of Management, Calcutta.

For me, it is a matter of great honour to be here today, in the role that I have been asked to play. It is undeserved honour, because I have neither the accomplishments nor the wisdom the role demands, but it feels wonderful never the less. It is a pleasure and a privilege to be with all of you, on this day of joy and fulfillment.

This is, above all, an occasion for celebration. Let us, together, celebrate the journey that all of you are completing today. And, let us also jointly cheer the new voyage that all of you are about to embark upon.

The last two years have, in all likelihood, been demanding, perhaps even exhausting. You have learnt a lot, about calculating NPV’s and about developing competitive strategy, about creating brands and about building teams. If intellectual capital is the currency of the future, all of you have built bulging bank balances. That is what the journey over the last two years was about – developing both the knowledge and the judgement that leadership of busi8ness demands – and you have completed that journey in an institution that commends enormous respect all over the world.

But, over the last two years, intellectual capital is not the only form of capital you have accumulated. You have also built social capital, another highly valuable resource. The friendships that you have established with your cohorts and others will help you identify opportunities and will provide support in times of need in ways that you cannot even begin to imagine. Long after you have forgotten the formulae and the little jokes in Breely and Mayers, you will still enjoy the fruits of these relationships.

Over the last two years, you have been exhausted by both the mid-term exams and the mid-night parties. Let us today cherish the memories of both because together they have given you two critical resources for the future: your specialized knowledge of business and management and your treasure of lasting friendships.

But today is also the starting point of a new journey, as all of you prepare to take up your first assignments – whether it is as an entrepreneur starting up a dot.com company, as a consultant or investment banker, or as a management trainee in an established organization. You have built the knowledge and the relationships that will be vital for success in this new journey, but they will not be enough. You will need something more.

You will need emotional capital to convert your intellectual and social capitals into effective action. Management – and, in that term I include both entrepreneurship and leadership – is all about action. What you have learnt through your work here will help you identify what to do, but you have to have the courage and the will to translate that knowing into actual doing.

Some of you, even some of the brightest of you, may fumble this test of action. You may procrastinate. You may suffer from learned helplessness, paralyzed by analysis, or because of the fear of failure. Some others among you will excel in the domain of action, willing and able to do what they believe in, and taking the consequences – profiting from the successes, learning from the failures. What will distinguish these two groups? What does it take to combine the knowledge And relationships you have built over the last two years with the courage and resilience you will need for sustained, purposive action-taking in the future?

The French writer, Antoine de Saint-Exupery, created a striking metaphor: "If you want to build a ship, don’t drum up the men to go to the forest to gather wood, saw it, and nail the planks together. Instead, teach them the desire for the sea".

That is what you will need: a desire for the sea. For most of you, even if not for all, the sea will be the sea of business and management. Do you have a desire for that sea?

Yes, some of the rewards of sailing in that sea are obvious. You will make money; in all likelihood, more money than you today believe to be possible. You will have power in your organizations. You will have a high status in society. Irrespective of whether you value these things or not, they are going to be yours. But, are they enough to sustain a desire for the sea over the next forty or more years that you will spend sailing in it?

For remember, the sea will be choppy. Times will be good and bad. There will be failures. There will be occasions when you will need to do things that are very hard to do: closing a business, jeopardizing the lives of people you have known and cared about and being called a butcher or worse; firing a well-meaning subordinate who is both a decent person and a family friend but who is manifestly unsuitable for the job’ having to go away when your child is ill or when your spouse needs you the most. Management involves cooking sweet and sour, and while the joys of the sweet – the building, the growing, the giving – have a short half-life, the pains of the sour – the closing, the pruning, the taking away – linger for much longer. Do you really have a desire for that choppy sea?

And this is where I have a discovery to share with you. Over the last twenty years, while I have not sailed in that sea, I have hovered over it, watching others do the sailing. I have seen both corporate and individual failures and successes, both in India and abroad. But more than the fates of individual sailors, I have seen what the sea looks like.

There is much, much more in that sea than personal wealth or status. There is, above all, the excitement of creation. You will have so many resources – money, technology, people – to do so much with! Thank – how many people in the world have the ability that you will have, to take initiative, to try out new things, to create new products, to build organizations, to develop people!

A very senior manager in Reliance told me the following story. One day, over fifteen years ago, he was having lunch with Dhirubhai Ambani in the company’s Patalganga guest house. Dhirubhai ordered a soup and a papad. He himself asked for a single-egg omelette. And then Dhirubhai said, " This is all we need, right! This is all we can consume … but the excitement is to build … us me nasha hai".

Do you have that excitement? Then you have the desire for the sea. Then you will be able to marshal the amazing power of human will to convert what you have learnt over the last two years into effective entrepreneurial and managerial action.

But there is more to the sea than even this excitement of building or further developing a single institution. What you will do over your own careers will affect not just you, your family and your company; it will influence the lives of hundreds, perhaps thousands of people, and it will influence the overall development of the society in which you will live and work.

And that, I suggest to you, is the most wonderful and the most satisfying aspect of the profession you have today qualified to join. It is a profession that, perhaps more than any other, contributes to improving the quality of life of people and to the economic prosperity of nations.

For good or far worse, we live at a time when business is the primary engine of social and economic progress. It is business, not abstract economic forces or governments, that create and distribute most of an economy’s wealth. It is companies, big and small, that innovate, trade and raise the living standards of people.

That is why, amid the decay of influence and legitimacy of other institutions – think of the state, political parties, even the joint family – business firms have emerged as perhaps the most important economic institutions in practically every society around the world, including here in India. Beyond this economic role, business firms have also become the primary institutions for socializing individuals. Increasingly, people look to them for community and identity as well as for their economic well-being.

Yet, this value creating role of business and, by implication, of the management profession, often remains obscure to most people, including to the managers themselves. That is why we see a peculiar paradox. At the same time that society is inviting business into sectors such as health, education and infrastructure that were historically managed by the State, there is simultaneously a growing ambivalence among people about companies and their managers. Hero-worshipped by the few, they are deeply distrusted by the many.

In India, in particular, this distrust of business firms is pervasive. In movies and TV serials in any language, an entrepreneur or a manager rarely appears in any role other than the villain’s. In public opinion polls about the integrity and trustworthiness of professions, managers are rated the lowest of the low – below even politicians and journalists.

I grew up in a middle-class Bengali family, and experienced the full force of this distrust. Anything, any profession, any job would be better than business, which was the last refuge for scoundrels.

There are good historical reasons for this distrust. In India’s highly regulated economy, business, with some notable exceptions, had indeed fallen victim to a profound corrosion of its soul. Amid pervasive scarcity, procurement of monopoly rights was far more lucrative than the creation of new value through efficiency and innovation."Managing the environment" was more important than managing the firm. Access to politicians and bureaucrats was more rewarding than intimacy with customers. In that environment, business had largely become focussed on appropriating value – from employees, from employees, from suppliers, from customers, from the public exchequer – rather than on creating value.

But those days are now over. In the emerging liberalized economy, yesterday’s value appropriators have been on the retreat everywhere. A new class of entrepreneurs and managers have come to the fore in India, who look and act very differently.

A die-hard socialist in his heart, N.R. Narayan Murthy recognized that wealth creation must precede wealth distribution. That was the goal behind his founding of Infosys – to create a hundred rupee millionaires in India, via the establishment of an ethical business firm, based on a highly competent and skilled workforce, in the area of software development technology. He believed that by making Indians rich, he would make India rich.

Similarly, H.T. Parekh, the founder of HDFC, believed that business must create value for society, and that a wholesome business, meeting an important social need, could also be highly profitable. It was very difficult for a middle-class Indian to build a home, and he wanted to solve that social problem.

It is companies like Infosys and HDFC that are the most valued in India today, both in the capital markets and in public minds, and collectively they illustrate the profoundly important role of companies and managers as the primary value creating institutions of modern economies. They are the role models demonstrating the spirit, passion and moral commitment of which entrepreneurs and managers are capable, and the enormous contributions they can make to a society.

What they have done, you can do. It does not always need the starting up of a new company; people like Ashok Ganguly, Sushim Dutta and Keki Dadiseth have shown the same passion, the same moral commitment to integrity and the same spirit of value creation in an established company like Hindustan Lever. As they have shown, management can be much more than a profession; it can be a calling.

And it is this excitement – of creating value, of contributing to a broader goal than just personal wealth or even company prosperity – that is so exciting about the voyage that you are about to embark upon.

While India’s achievements since independence have been many, we all know that the country has not reached its economic potential. Politicians and government officials cannot make India achieve this potential; all they can do is to help by creating a facilitative and supportive context. Ultimately, it is only business that can achieve India’s economic potential, and whether it does so will depend, above all else, on the quality of Indian management.

In other words, you will have the steering wheel. That is the excitement. If you can feel that excitement – if you can visualize it, not as an abstraction or a lofty rhetoric but as a concrete goal – then you can develop and sustain not just a desire but a passion for the sea.

Graduating doctors take the hippocratic oath. This is the hippocratic oath for the profession of business management: it exists to create value: value for employees, by giving them the freedom and the opportunity to become the best they can be; value for customers, by creating new products and services and by constantly improving the existing one’s; value for suppliers and collaborators, by developing partnership relationships of mutual benefit; value for the investors of capital, not just through superior returns but also through transparency, effective governance and honest communication; and value for society at large, by efficient use of society’s resources, both tangible such as land, capital and people, and intangible such as the natural environment, the social values and the cultural norms.

If this sounds overly idealistic to some of you, I say yes, but idealism matters. In a practical discipline like management, it matters even more. The historical delegitimization of industry and management in India was caused by a moral vacuum. You are the products of a world-class professional institution, and you owe this to your last journey as you transition to the next: to counter this delegitimization of your own profession by committing to the moral philosophy of value creation. This is both your obligation to the last two years, and your responsibility for the next forty.

A few exceptions apart, the ancient seafarers were motivated not by the lure of plunder but by the passion for discovery, for extending the horizon, and for expanding the reaches of their own societies. To develop a desire for the sea of commerce and management, you need the same passion for discovery, the same commitment to extending the horizon for Indians, Indian companies and India. That, I believe, must be your joy and your duty.

So, let us once again cheer the successful completion of your short journey of learning and building relationships at IIMC. But, more than that, let us also heartily celebrate the commencement of your long journey of discovery and of creating value, for yourself, your company and your society. I wish you all the very best of luck.