Indian Corporate Lala... An oxymoron?
Corporate Lala... does it sound like an oxymoron? How can a Lala be corporate?
The way we differentiate companies in India is on the basis of whether it is a "professional" company or a "Lala" company? The moment we get an answer we immediately "assume" about the way that particular company would be running. Does it mean that Lala companies are NOT professional? Or a professional company CANNOT be a Lala company? What exactly comes to our mind when we think of a "Lala" company or a so-called "Professional" company? What are the myths & realities that reside in our minds when it comes to differentiating the two? Do we see any similarities or do we believe these are two extremities? Will the twain ever meet or will they continue to co-exist to complete the balance in the enterprise universe? Who exactly is a Lala or a Professional? Can a Lala be professional or can a professional have Lala traits?
LALA Vs THE PROFESSIONAL
So many questions... I am sure there are more which have cropped up in your mind already. Let's try to find answers...
LALA Vs THE PROFESSIONAL
What is the image that comes to your mind when you hear the word "Lala"? Do you see a potbellied Indian man wearing a white kurta & dhoti or pyjama, jooti in feet, thick long mustache and possibly a pagdi on his head, a folded shawl on one of the shoulders and maybe a stick in a hand. Well that's the image which comes to MY mind at least, maybe you would have
different versions with or without different props but more or less the imagery should be consistent, I believe. Lalaji, as we would like to call him reverently, owns the grocery shop / clothes shop / oil depot / wholesale mart.
He is basically a trader. We do not see him as any "service" provider i.e. we do not see him as a barber or a tailor or a teacher. We do not see him working for someone else. We always see him as someone who employs others. He is sharp, shrewd and stingy. He comes across as demanding and squeezes everyone beyond what they can give. He loans out money to the needy at obscene interest rates knowing well enough that the debtor will stay obliged to him forever. Think of the kind of characters played mostly by the likes of Jankidas or Kanhaiyalal or Om Prakash in the bygone era (Google them if you are not from that generation) and you will get the picture. Lalaji manages his "galla" (cash box) himself and he doesn't trust anyone with it. He is very hard working and has acquired affluence by using his brains and diligence in proportions much higher than the rest. Is he educated? Well, maybe. Maybe not. Mostly he would have acquired his skills on the job from his fore-fathers.
Now, lets visualize a so-called "Professional".
I am sure you see a clean shaven lean guy with short hair nicely gelled. He is wearing a dark suit with a tie and his black shoes are gleaming. He is most probably carrying a note-pad / diary / laptop. He doesn't have his own business and works for some large corporate or an MNC and speaks fluent English. He is a graduate / Engineer / MBA and you do not see him selling groceries or vegetables and definitely not providing a hair-cut. Think of some of the roles played by George Clooney or closer home Hritik Roshan in ZNMD.
So what am I talking about? A "Professional Lala"! Am I out of my mind? The above two images we visualised are not even remotely close to each other. In fact, the two seem to be from two different planets. So how on earth can they come together? Don't even try to visualize the Lalaji in the suit!!!
BLAME THE LIBERALIZATION
It was all OK till Manmohan Singh / PV Narsimha Rao decided to open up the Indian economy in 1991. It was only after that that all hell break lose.
Before 1991, it was all quite simple and straight forward. Most of the engineers who passed out of IITs either joined the Government or got into Administrative Services or went to the US of A to do MS while MBA as a concept was still in its infancy. The corporate sector was divided between state-run behemoths like IOC, EIL, CIL etc, Private sector was ruled by the trinity of Tata-Birla-Ambani although few MNCs existed like HLL and Colgate but most were inconspicuous by their absence after their unglamorous exit post the Emergency in 1977 while the IT & Finance sector had still to take root. Of course there were no private banks or private airlines to boot.
And then there were myriads of SMEs run by the Lalas who had acquired the businesses from their Grand Fathers or Fathers who had set up these businesses in the post-independence era (in the 1950s) or at the peak of the Licence Raj (in the 1970s) respectively. These companies had quite a uniform structure irrespective of the region or state they existed. The owner (or the Lala) was the one-man army running the company single handedly, managing all aspects & functions on his own. He was the investor, salesman, factory manager, accountant, recruiter, all rolled into one. The more evolved equivalent roles had not made their entry into the lingo yet viz Stakeholder, Sales Director, Plant Head, CFO, CHRO and so on. Lalaji had a couple of trust-with-life right-hand and left-hand men who had only one reason for their existence - "Do exactly what the Lalaji tells you to do". Their only role was to be the extra hands and legs for the Lalaji who could not be at all places at the same time. Yet the direction was crystal clear, these rightie & leftie were not allowed to use their brains, just follow the instructions of Lalaji to the tee and do exactly what they were told to do. Lalaji managed the money himself and for that even the rightie & leftie have no say. When it comes to money there is no one to be trusted. No one except Lalaji knew the exact financial status of the company. The market was small and the demand limited hence there was no real reason to scale hence Lalaji personally managed all employees directly including the factory workers, sales men, accountants and even office boys and security guards. All employees were not employees of the company but effectively the employees of Lalaji so in case Lalaji has a party at home and he needed a few extra hands to help his wife, pronto a few staff was dispatched to his home. If Lalaji's child need to be dropped at school because the school bus had a punctured tyre, the company's driver is summoned without thinking twice. This is what the Lalaji had witnessed right from his childhood when his forefathers managed the business and this is what he does when he takes the reins. This is what he really believes in how businesses are run. Maybe there is nothing wrong in that. Hasn't his family done quite well as compared to the rest of the world? The business might be small but there is nothing to complain about. It is the winning formula. Is there a need to think otherwise?
Not till the liberalization happened... Enter plethora of MNCs run by "professionals" who were NOT the owners but experienced highly paid management graduates using acquired & learnt management techniques organized in a hierarchical structure governed by clearly defined roles & responsibilities. These companies operated in multiple countries not by one owner but by a board of directors who always had the stakeholders best interest at fore. These were publicly listed companies governed by the company laws of respective countries with their financial numbers being available to all and sundry. Large industries like IT, Banking, Airlines, Insurance opened up to the private sector which quickly adopted the MNC working styles since most started off with FDI from already existing conglomerates from the developed world.
The economy grew over the decade that followed and by the mid 2000, due to rising income levels and higher disposable incomes, consumption increased and that had a direct and indirect effect on the Lalaji's companies. These mom-and-pop companies also started clocking in 50-100 cr annual business. Lalaji also got exposed to the operating style of multi-billion dollar MNCs and realized that if he wants to be in the big league then he also needs to adopt the way these MNCs were being run.
That's when the hammer fell...
Lalaji starts hiring the professionals but expects from them exactly what he has been getting from his earlier employees - subservience. So when, instead of taking instructions with head down and hands behind the back, this professional starts questioning Lalaji's decisions, the latter is taken aback. How can anyone who has been "given" the job defy the "master"? How can anyone who is just a "naukar" question the "maalik"? On the other hand, the professional awaits his "job description" only to realize after a long wait that there is no such thing that exists in Lalaji's lexicon for whom anyone who is an employee need to do what he or she is "told" to do. While the so-called "Marketing Manager" looks forward to assignments or tasks related to "Marketing", Lalaji tells him to go to the factory and check out on the production status. The "marketing manager" has absolutely no idea about the factory operations and while there he either fritters away his time or he is smart enough to understand the intricacies and starts questioning the Lalaji and in either case bears the wrath of Lalaji. Over a period of time, the marketing manager gets thoroughly confused on what he was doing there or what he should ask or not while the Lalaji is convinced that the former is no-good. So, either the manager quits or is fired. Another marketing manager is hired. The cycle begins all over again...
Not that this doesn't have exceptions. There are a few Lalas who have been able to walk the thin line with finesse. These Lalas while protecting their interests ensured enough role clarity along with giving sufficient empowerment and space to the professionals. Some of these Lalas have been able to scale up their operations to even challenge the might of the MNCs. But alas, the number of these can be counted on fingers.
The only way India can produce transnational, multi-billion dollar enterprise is when the risk-taking ability of Lalas is combined with the managerial capability of professionals and when the entrepreneurial skills of Lalas is backed with the functional skills of professionals. Lalaji will have to let go and trust the professionals. After all, not everyone was born on the planet to fleece them...
So what am I talking about? A "Professional Lala"! Am I out of my mind? The above two images we visualised are not even remotely close to each other. In fact, the two seem to be from two different planets. So how on earth can they come together? Don't even try to visualize the Lalaji in the suit!!!
BLAME THE LIBERALIZATION
It was all OK till Manmohan Singh / PV Narsimha Rao decided to open up the Indian economy in 1991. It was only after that that all hell break lose.
Before 1991, it was all quite simple and straight forward. Most of the engineers who passed out of IITs either joined the Government or got into Administrative Services or went to the US of A to do MS while MBA as a concept was still in its infancy. The corporate sector was divided between state-run behemoths like IOC, EIL, CIL etc, Private sector was ruled by the trinity of Tata-Birla-Ambani although few MNCs existed like HLL and Colgate but most were inconspicuous by their absence after their unglamorous exit post the Emergency in 1977 while the IT & Finance sector had still to take root. Of course there were no private banks or private airlines to boot.
And then there were myriads of SMEs run by the Lalas who had acquired the businesses from their Grand Fathers or Fathers who had set up these businesses in the post-independence era (in the 1950s) or at the peak of the Licence Raj (in the 1970s) respectively. These companies had quite a uniform structure irrespective of the region or state they existed. The owner (or the Lala) was the one-man army running the company single handedly, managing all aspects & functions on his own. He was the investor, salesman, factory manager, accountant, recruiter, all rolled into one. The more evolved equivalent roles had not made their entry into the lingo yet viz Stakeholder, Sales Director, Plant Head, CFO, CHRO and so on. Lalaji had a couple of trust-with-life right-hand and left-hand men who had only one reason for their existence - "Do exactly what the Lalaji tells you to do". Their only role was to be the extra hands and legs for the Lalaji who could not be at all places at the same time. Yet the direction was crystal clear, these rightie & leftie were not allowed to use their brains, just follow the instructions of Lalaji to the tee and do exactly what they were told to do. Lalaji managed the money himself and for that even the rightie & leftie have no say. When it comes to money there is no one to be trusted. No one except Lalaji knew the exact financial status of the company. The market was small and the demand limited hence there was no real reason to scale hence Lalaji personally managed all employees directly including the factory workers, sales men, accountants and even office boys and security guards. All employees were not employees of the company but effectively the employees of Lalaji so in case Lalaji has a party at home and he needed a few extra hands to help his wife, pronto a few staff was dispatched to his home. If Lalaji's child need to be dropped at school because the school bus had a punctured tyre, the company's driver is summoned without thinking twice. This is what the Lalaji had witnessed right from his childhood when his forefathers managed the business and this is what he does when he takes the reins. This is what he really believes in how businesses are run. Maybe there is nothing wrong in that. Hasn't his family done quite well as compared to the rest of the world? The business might be small but there is nothing to complain about. It is the winning formula. Is there a need to think otherwise?
Not till the liberalization happened... Enter plethora of MNCs run by "professionals" who were NOT the owners but experienced highly paid management graduates using acquired & learnt management techniques organized in a hierarchical structure governed by clearly defined roles & responsibilities. These companies operated in multiple countries not by one owner but by a board of directors who always had the stakeholders best interest at fore. These were publicly listed companies governed by the company laws of respective countries with their financial numbers being available to all and sundry. Large industries like IT, Banking, Airlines, Insurance opened up to the private sector which quickly adopted the MNC working styles since most started off with FDI from already existing conglomerates from the developed world.
The economy grew over the decade that followed and by the mid 2000, due to rising income levels and higher disposable incomes, consumption increased and that had a direct and indirect effect on the Lalaji's companies. These mom-and-pop companies also started clocking in 50-100 cr annual business. Lalaji also got exposed to the operating style of multi-billion dollar MNCs and realized that if he wants to be in the big league then he also needs to adopt the way these MNCs were being run.
That's when the hammer fell...
Lalaji starts hiring the professionals but expects from them exactly what he has been getting from his earlier employees - subservience. So when, instead of taking instructions with head down and hands behind the back, this professional starts questioning Lalaji's decisions, the latter is taken aback. How can anyone who has been "given" the job defy the "master"? How can anyone who is just a "naukar" question the "maalik"? On the other hand, the professional awaits his "job description" only to realize after a long wait that there is no such thing that exists in Lalaji's lexicon for whom anyone who is an employee need to do what he or she is "told" to do. While the so-called "Marketing Manager" looks forward to assignments or tasks related to "Marketing", Lalaji tells him to go to the factory and check out on the production status. The "marketing manager" has absolutely no idea about the factory operations and while there he either fritters away his time or he is smart enough to understand the intricacies and starts questioning the Lalaji and in either case bears the wrath of Lalaji. Over a period of time, the marketing manager gets thoroughly confused on what he was doing there or what he should ask or not while the Lalaji is convinced that the former is no-good. So, either the manager quits or is fired. Another marketing manager is hired. The cycle begins all over again...
Not that this doesn't have exceptions. There are a few Lalas who have been able to walk the thin line with finesse. These Lalas while protecting their interests ensured enough role clarity along with giving sufficient empowerment and space to the professionals. Some of these Lalas have been able to scale up their operations to even challenge the might of the MNCs. But alas, the number of these can be counted on fingers.
The only way India can produce transnational, multi-billion dollar enterprise is when the risk-taking ability of Lalas is combined with the managerial capability of professionals and when the entrepreneurial skills of Lalas is backed with the functional skills of professionals. Lalaji will have to let go and trust the professionals. After all, not everyone was born on the planet to fleece them...
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