Published on: 27 August, 2019
The Marwari community serves as a case study of durable and extensive collaboration without the need for a dominant leader to oversee such an endeavour. This sort of community-based collaboration provides richer insights than B-School paradigms into why some teams succeed and others fail.
“…read the sub-text and you will find that it spells ‘family’. It is the tie that has underpinned these businesses and is, often self-admittedly, the force that powers the risk-takers to…take risks….the Marwaris take the family in ‘family-owned business’ seriously. The most powerful industrialist will, even in the boardroom, rush to touch an elder relative’s feet as a greeting. Deferring to the older generation may be an archaic notion, but it is also a sign of respect that prevents the delicate balance of commerce and emotion from unravelling…”–Abhilasha Khaitan in the 17th March 2014 edition of Forbes India
Looking at collaboration from a different angle
Usually when the question “Why do some teams collaborate whilst others don’t?” is asked, the reflexive answer which pops into most of our minds is “It must be because some teams have great leaders and other don’t.” This tendency to see the world through the prism of the individual, her abilities and her greatness is a by-product of the liberal values which have been hammered into our heads courtesy the westernised education systems which most of us (in India and elsewhere) have grown up in.
However, seeing successful collaboration amongst teams, within companies/societies/countries, through the prism of leadership doesn’t get us very far. Yes, Abraham Lincoln was a great leader and he steered America through the dark days of the Civil War by building a brilliant team (as described memorably by Doris Kearns Goodwin in her book “Team of Rivals” and as enacted by Daniel Day Lewis in the Oscar winning movie). However, a lesser man than Lincoln would have struggled to hold together the team that Lincoln built. The average CEO is likely to be in deep trouble if he followed Lincoln and built a team of rivals.
So, what are the broader societal values/qualities which lead to some teams/companies/societies pulling together so cohesively so that end result is much greater than the sum of the parts? We look for answers in the rich literature that has sprung up around India’s small (there are fewer than 9 million Marwaris in India) but spectacularly successful Marwari business community (for a table of prominent listed Marwari firms, see http://www.forbesindia.com/article/marwari-power/top-100-listed-marwariowned-companies/37407/1).
Understanding collaboration as an incentive co-ordination game
The leader’s key roles in the context of a collaborative endeavour revolve around the creation, implementation and governance of the carrots & sticks highlighted above. In her book ‘Business Maharajas’ (2000) Gita Piramal quotes the late Aditya Birla making a specific reference to Ratan Tata but one which is more generally applicable: “If you don’t have systems, any individual will fail, and if you have systems but if don’t have a leader to lead the system, it will fail…I’m sure the Tatas have very good systems…I think there is a need to take some hard decisions which doesn’t come from guidance alone…Success is knocking confidence into Ratan.”
That being said, complex collaborative endeavours cannot sustain just because of the leader. As elaborated above, the Marwaris are a supremely successful business community with proven ability to collaborate with each other within India and across national borders. And yet the Marwari community does NOT have a leader per se.
The most interesting aspect of meeting the management team of a company is NOT the meeting with the promoter. They are in fact the meetings, first with the layer of management which has direct contact with the promoter (usually the CEO and CFO) and then the meetings with the 4-5 people who report into the CEO. What we try to assess is whether the collective works together just because of the dominant leader or because they are bound together by a common purpose & values, by complimentary skills and by a clearly laid out system of carrots & sticks.
Like most useful things in life, this construct is simple enough for us to explain it to you but as most company’s the world over have discovered, it is hard to successfully sustain this construct over long periods of time.
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Saurabh Mukherjea is the author of “The Unusual Billionaires” and “Coffee Can Investing: the Low Risk Route to Stupendous Wealth”.
Note: the above material is neither investment research, nor investment advice. Marcellus does not seek payment for or business from this publication in any shape or form. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services and as an Investment Advisor.
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