Tuesday, August 31, 2010

Family // Business.. Concept of transparency

Just back from a wonderful family reunion, and after reading a piece by Vineet Nayar, CEO, HCLT, in an HBS journal; here is an article which talks of how the business world needs to draw parallels from inside the personal lives of their inhabitants. There are innumerable ways by which functioning of family can inspire leaders to run business (as already mentioned by Vineet Nayar in his recent book 'Employees first..'), but I'll focus only on a few of my viewpoints.

Families in India have seen different phases of management styles. There was a time when we saw a patriarchal family with the voice of the father being the ultimate answer to every solution. Times changed, and Indian culture got 'westernized', similar to the westernization of Indian business market. Our business houses began to understand the importance of freedom and transparency amongst their employees, drawing parallel to the fact that parents began to give importance to the voices of the children.

Initially there was repulsion to this new 'brand' of family, with cool parents and involvement of every member in important family decisions; but as expected, this brand eventually found success and is currently regarded as 'ideal' by various 'family experts'. Similarly, there was a need in the Indian market to follow suit and create an environment where employees are not just members who follow the orders of their boss, but are integral members of the family created by the business house. This is being done, and 'Employee Satisfaction' is rated highly amongst various companies' major goals.

So the above proves, or at least strengthens, the belief presented by some of the recent 'Management gurus' that study of personal lives can be used to create business leaders. What more?

Business is always supposed to emulate successful models; and coming to the most successful model of a family, let us study a few cases. Take the case of a place in rural India where lack of infrastructure has led to limited knowledge in the younger members of the family and experience is the only criterion of measuring wisdom. Is the 'cool family' model the best fit for such a case? Well, based on my discussions with some of my friends with rural background, the answer is a clear 'No' and hence there is a need to create a median between ancient patriarchal laws and recent concept of freedom and transparency (an ideal case will be that parents exercise control without letting the children feel like 'bound in shackles'). Now taking the example of a middle class metropolitan family where parents try to impose their will and desires on their well educated children, we know that the ideal family model for such a case is very different from the former.

So my point is that we simply can't conclude the level of transparency needed in a firm without taking into account various other factors including customer demographics. So its not necessary that employees need to come before customers, the decision of whether customer or employee comes first should be driven by various other factors. This means a high level of flexibility in the firm is needed and the leader needs to ensure varying levels of transparency based on the performance of employees and the customers/ products involved.

However, whatever the case be, its important to ensure that employees feel that they belong to the company, in the same way as all of us belong to our personal families. The sense of belonging is generated by transparency and independence. If any control needs to be exercised, it should not be direct and hurtful towards freedom.

Controlled Transparency (level varying on various factors of market/ company) --> Disciplined sense of Belonging --> Better work Engagement --> Increased level of Trust within the Business house --> Growth of Ingenuity --> Better Service to Customers --> GROWTH and SUCCESS

So, would conclude by saying that the quotation "Its Business. Its not personal." is now passe, and the new quote should be "Its Business and so its Personal".


Harsh Shah said...

Well written and a justified point of view.

What is important in any business is the 'stakeholder'.

And hence generalizing "Employees first..." or "Customers first..." works only for cases where the stakeholder is the one in questions.

asu3011 said...

@Harsh.. perfect comment!

asu3011 said...

Stakeholder is THE word..

Anonymous said...


Vinay Gupta said...

Nice article!!!!!But just i was thinking..ki..If younger member revolt against their families then families will have no choice but to compromise or to give youngsters a sense of responsibility and involve them in part of decision making otherwise family wont survive ,,because there can be no replacement But in case of corporate world employees
can be fired and replaced to get things going the way they have been going......So two situation are not completely identical

asu3011 said...

@Vinay.. yes, u r right...

Vineet Nayar had mentioned in his book that emotional involvement between the supervisor and his employees is must, but what if the emotional involvement plays a spoilsport in the decision of replacement of an employee.
So exceptions are there, whenever the situations are difficult and not normal.