EXCELLENCE IN INDUSTRY THROUGH LEADERSHIP

Summary

Excellence in Industry Through Leadership is the text of the 35th A. D. Shroff Memorial Lecture, delivered by Dr. J. J. Irani — then a Director of Tata Sons and former Managing Director of Tata Iron & Steel Co. (TISCO) — at the Forum of Free Enterprise in Mumbai on 1 November 2001. Irani uses the occasion to argue against the orthodoxy, most famously expressed by Milton Friedman, that “the business of business is business.” He concedes the importance of profit as a motive but rejects single-minded profit maximisation as a long-term recipe for disaster, insisting that the legitimate purpose of industry is to serve customers, employees, the community and the nation — with profit and wealth as the natural by-product of excellence pursued in that spirit.

The lecture is organised around five tenets Irani says he has lived by: serve stakeholders first; recycle wealth back into the community; protect and enhance the environment; lead by example; and treat Change as the only constant. He illustrates each through the biography and heritage of the Tata Group, especially founder Jamshetjee Nusserwanjee Tata — “a nationalist long before this word had any significance” — whose insistence on importing the latest science, building Jamshedpur as a city rather than a colliery, instituting provident funds and pensions decades ahead of the West, and treating business as a trustee for society anticipated by a century what the West now calls Corporate Social Responsibility and Sustainable Development. He cites successors R. D. Tata, JRD Tata, and current chairman Ratan Tata as keeping that tradition alive, and points to global counterparts (Shell, BP, Du Pont, Unilever, Hewlett-Packard, Ford) and the World Business Council for Sustainable Development as evidence that the ethical model is finally converging with the Tata view.

The second half turns outward. Irani argues that liberalisation, the WTO, and China’s accession have raised the stakes for Indian industry, and that the new leadership task is Anticipation, Communication, Motivation and Action. Looking ahead, he is unfashionably optimistic about India’s young: in an age when wealth depends on what “lies between the ears,” Indian individualism — long treated as a cultural defect against Confucian discipline — could become an advantage in a world that rewards betting correctly on the unknown; and global investors, customers and talent will increasingly reward companies whose values, sustainability and social responsibility distinguish them. The mantra he leaves with Indian business is to “Go Global in every respect” — in ambition, ethics, governance, benchmarks and communication — closing with Longfellow’s lines on footprints on the sands of time and the Forum’s customary Eugene Black epigraph that private enterprise must be accepted not as a necessary evil but as an affirmative good.

Key points

• Frames the lecture against the Friedman doctrine that “the business of business is business,” arguing that single-minded profit maximisation is short-termist and ultimately self-destructive.

• Articulates five tenets of business leadership: serve stakeholders (profit follows), reinvest wealth in community and nation, protect and enhance the environment, lead by example, and master Change as the only constant.

• Treats Jamshetjee Tata as the proto-theorist of Corporate Social Responsibility, anticipating by a century what Western business has only recently embraced — provident funds and pensions for workers, Jamshedpur built as a planned city, and an early insistence on Pittsburgh-grade technology for Indian industry.

• Quotes JRD Tata to argue that the Tatas have deliberately sacrificed up to “100 per cent growth” rather than abandon ethical standards, and that this restraint is itself a competitive virtue.

• Cites Stephan Schmidheiny’s World Business Council for Sustainable Development, Carly Fiorina’s H-P, Shell, BP, Du Pont, Norsk Hydro, Unilever, Hewlett-Packard, Ford, and Indian exemplars Godrej and Infosys as evidence the global mainstream is converging on the Tata model.

• Reads liberalisation, the imminent extension of WTO coverage to services and agriculture, and China’s WTO entry as raising competitive stakes for Indian manufacturing in the next two to three years.

• Reframes Indian “sub-anarchic” individualism — usually contrasted unfavourably with Confucian discipline — as a comparative advantage in a knowledge economy that rewards betting on the unknown.

• Distills today’s leadership task into four verbs — Anticipation, Communication, Motivation, Action — and closes by urging Indian business to “Go Global in every respect”: ambition, ethics, governance, benchmarks, communication.