Monday, December 13, 2004

A small matter of the ego

Times of India, Dec 12, 2004

Dhirubhai Ambani’s dreams were born in a one-room chawl in Mumbai’s Kabutarkhana, but they mesmerized the Indian nation for a generation as Reliance Industries went from nothing to become an Rs 100,000 crore petrochemical, energy, and communications giant. The nation watched with awe as Reliance skillfully negotiated the minefields of the License Raj, beat its competitors in the marketplace, and became one of India’s largest and best performing companies. For the past three weeks, however, the same nation has been fearfully worried as this empire threatened to unravel in a soap opera of sibling rivalry.

The first thing to say about this affair is that it is not another failure of corporate governance like Enron. Even though the media has been clamoring on behalf of the small shareholder, there is no case for government intervention. Shareholders have always known that this was a family run company and they ought to have discounted the risk of family trouble in the share price. Besides, Reliance has always treated its shareholders well. There are, however, issues about the opacity in the family’s shareholding, but these are a separate matter, and the bureaucrats at SEBI and Company Affairs ought to relax for the time being.

What then is the problem? I think it is a simple matter of the human ego. Let’s face it--sibling rivalry is the soft underbelly of familial capitalism. Even though Reliance affects millions of lives, there is very little we can do but watch the awesome drama unfold, with horror and pity, like spectators in a Greek tragedy, and learn once again the lesson of the Mahabharata—that it is difficult to be good in this world!

Anil Ambani wrote on December 4th about nishkama karma and the virtue of humility. For two thousand years Indians have been trying to figure out if it is possible for ordinary people to act from a sense of duty, without wanting to take the credit. Self-forgetting is not easy. Most of us can do it for short periods, I think, when we are absorbed in something we like, and then we forget our egos. Artists and athletes in this state talk about losing themselves in the ‘zone’, as indeed Mukesh and Anil must feel when they are absorbed in their work. But what happens after the work is done? Then the nasty little ego asserts itself, and asks, why is my office two inches smaller than his?

I generally don’t read business books, but the Economist recommended Jim Collins’, Good to Great, which has sold 1.5 million copies in hardback, breaking the record set by the 1982 classic, In Search of Excellence, by Tom Peters and Robert Waterman. Collins has identified outstanding companies—defined as those who generated cumulative share returns 7 times better than the general stock market over a 15-year period. One of the secrets of the success of these companies is that their leaders were all self-effacing, modest, and wilful. They sacrificed their personal goals to those of their organization and they did it for love. So, nishkama karma may well be the right way to go for Anil and Mukesh Ambani.

Two weeks ago I raised Draupadi’s dharma question in relation to the bad state of our public governance. The subtext of Draupadi’s question was: in what sense does a wife belong to a husband? In the Ambani’s case, the dharma question is: if you are so proud of Reliance’s professionalism and its ability to compete internationally, then why don’t you control your egos and collaborate? A prolonged legal battle will damage your rightful claim to professionalism.


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For the past three weeks, however, the same nation has been fearfully worried as this empire threatened to unravel in a soap opera of sibling rivalry.

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