Michael Smith writing from Pune, India

Asia Plateau (Photo: Leslie Nazareth )We are in the mountain resort of Panchgani, south of Pune, in western India. The Asia Plateau conference centre is playing host to a four-day “Heart of Effective Leadership” (HEL) conference, 4 to 7 February. Some 30 leading business managers, including a distinguished faculty, take part. They have come from the private and public sectors in Pune, Mumbai, Bangalore and Hyderabad.

Asia Plateau, the Initiatives of Change centre, has run five such leadership conferences each year for the past five years. One in January brought together some 35 senior Indian Administrative Service (IAS) managers from public services. The numbers are kept deliberately low to allow for heart to heart interaction.

How do the latest participants see the global economic crisis? A CNN broadcast, just before the conference, says India is the world’s most optimist country in meeting the challenges of the global economic downturn. Her huge domestic market means she is less likely to be affected than China, which has been far more dependent on exports to the USA. Nonetheless the downturn is biting in India. The annual growth rate for 2008-09 is forecast to be 7.1 per cent, well down from the 8.52 per cent it has averaged over the past five years.

In the industrial city of Pune (population 3.8 million), employees at Tata Motors are feeling the pinch; they have lost their production bonuses, effectively cutting their incomes by a third. And some 22,000 construction workers have been laid off, says Vinita Deshmukh, editor of the weekly paper Intelligent Pune.

The emphasis of the HEL conference is on honesty and integrity in business and management decision-making, all the more significant in the light of the Satyam scandal, which sits like an invisible elephant in the corner of the discussions. Ramalinga Raju, founder and Chief Executive of Satyam, one of India’s leading information technology companies, had given lectures on business ethics—only to reveal that he had committed a gigantic fraud by inflating the company’s balances by a billion dollars. How many people did he bribe to cover up the scam? Two employees of Satyam’s auditors, Price Waterhouse, which he had paid well over the odds, have since been suspended. The scandal at Satyam—which means truth in Sanskrit—has been dubbed as India’s Enron, and the company is now up for sale.

In contrast, the HEL participants at Asia Plateau witness to a personal commitment to honesty as an essential ingredient of leadership. A senior manager from a leading Pune engineering company tells how he dealt with corrupt customs officials. He had once paid a bribe in order to release imported machines from the warehouse, rather than see the company’s stock go to rust. He had justified this to himself, he says, for the sake of the good of the company. But he had also felt uncomfortable about it. Then he had attended an earlier course at Asia Plateau in 2004 where the emphasis had been on doing the right thing, as prompted by the Gandhian concept of the “inner voice”—the force of truth or Satyagraha acquired in silent reflection.

This had led him to reflect that “you can be honest and non-corrupt. You have to be upfront in paying taxes. Guidance will come when you start observing silence.” Since then, he says, he has refused to pay any bribes to customs officers. Instead, he has offered the honest import tax payment. When a customs officer wanted to charge 15 per cent import duty plus a bribe, the manager had told the officer that he would pay the honest import duty of 20 per cent—but no bribe. The customs officer could hardly refuse. The HEL participants are amused and delighted by this story.

C L Kaw, the former chairman of the Indian Railways Board—the world’s largest employer with over two million employees—highlights courage as a component of leadership. This includes a willingness to go against seniors if one believes they are wrong. He had disagreed with an executive decision of his former boss, and had told him so to his face. His boss had refused to reconsider and so Kaw found himself having to carry out his wishes to the letter despite disagreeing with them. His boss had had Kaw’s phone calls monitored for the next three days. His boss came to realise his error and praised Kaw for his integrity—and for the fact that Kaw was right and he was wrong. The executive decision was subsequently rescinded.

Sarosh GhandySarosh Ghandy, former executive director of the giant Tata Engineering company in Jamshedpur, says that humankind is endowed with three unique characteristics: “We are created in the image of God; we have been given free will; and we have the power to create.” He stresses the difference between leadership and management: “You can manage resources and systems but people have to be led.” This can either be through fear or love, he says. There is no question as to which he advocates.

The Bangalore group consist mostly of public officials from the state electricity supply company, BESCOM, including the managing director, a senior IAS officer. But this poses a problem for Gurudutt Rao, a training manager from the major IT company Wipro Technologies in Bangalore. During a workshop discussion he declares, in a broken voice, that he has held a deep anger against the electricity company. He had been repeatedly harassed by false and exaggerated invoices which had left him drained. Now he wanted to get rid of his bitterness and put the issue behind him—and apologise for his previous anger. This note of personal honesty and forgiveness leaves a deep impression on the conference participants.

John Carlisle, a leading business consultant from Sheffield, England, conducts a brainstorm on ethical decision-making. He contrasts authoritarian and hierarchical management structures with inspirational leadership that draws the best out of people.

Sudhir GogateSudhir Gogate, Director of Keinin Fie carburettor company in Pune, draws a large box on the whiteboard and divide it into four segments. One is marked “legal and ethical”, the second “legal but unethical”, the third “illegal but ethical”, and the fourth “illegal and unethical”. The participants are encouraged to shout out what examples they would put into each box. It leads to a lively discussion, not least on the difference between what is allowed under law but may be totally unethical in practice—and the other way round.

Professor R Rajagopalan from Bangalore, the author of 20 books on the environment, gives a fascinating presentation on the moral challenges of the global environmental crisis. It concludes with a list of what each individual can do to reduce their “carbon footprint”—the amount of resources each person uses per hectare according to various lifestyles, currently growing at an unsustainable rate and in urgent need of reversal.

At the concluding session, Gurudutt Rao admits that he had come to Asia Plateau sceptical as to its usefulness, even though he had persuaded his line manager that the HEL course had potential to be beneficial to Wipro. Now, he says, he feels he has “come through a dark tunnel into the light”, such has been the impact of the four-day conference on his thinking. He is particularly captured by the notion of taking time for “silent reflection” that can be a source of inner wisdom.

Dr John Brinkman, the dean of business studies at Liverpool Hope University, urges the participants to take five minutes out during the course of the working day to “collect ones thoughts”, to avoid stress at the workplace. As he says farewell, he shakes the hand of each participant in turn. It is a touching gesture.

C L Kaw, former Chairman of the Indian Railways Board (Centre) with Kiran Gandhi, course facilitator from Pune, and Mike Smith from LondonParticipants have had the chance to experience early morning meditation and silent reflection for themselves, in the setting of the glorious mountain views over the Krishna River valley, a thousand metres below. Most have also purchased a new edition of my book of stories of integrity in business applied in action, newly published by the St Paul Press in Mumbai. It has been ceremonially unwrapped and presented to the conference by Mr Kaw.

In recent years some 500 to 600 business managers and IAS officers from across India have passed through the HEL courses. I look forward to compiling more case studies of business ethics at its best.

Michael Smith is the author of “Trust and Integrity in the Global Economy” and a co-ordinator in the UK of Caux Initiatives for Business.