29 Jul 2020 21:51 IST

Ethics, an integral part of managerial excellence: Sanjay Kirloskar

CMD of Kirloskar Brothers emphasises importance of acting with morality, especially during a crisis

Speaking at the annual general body meeting of Madras Management Association (MMA), Sanjay Kirloskar, CMD of Kirloskar Brothers Ltd, said, “Ethics forms an integral part of managerial excellence. Sticking to values, we lost many opportunities, but our company became strong as a result.”

On SL Kirloskar becoming the persona non-grata in 1980s

Recalling the Business Leadership Award conferred by MMA on his grandfather SL Kirloskar in 1981 and the controversy his acceptance speech had created then, he remarked, “Educated at MIT in the 1920s, working in pre-Independent India, my grandfather was a firm believer in free enterprise and was well-known for calling a spade a spade. During his speech in MMA, amidst a degenerating economy, he proposed a 14-point programme for successfully meeting the challenges of the 1980s which included doing away with the Planning Commission.” All hell broke loose, according to Kirloskar, and his grandfather became persona non-grata in certain parts of the national capital. “That is why I remember MMA more than anything else,” he said, in a lighter vein.

Kirloskar reminisces about his grandfather, 87 at that time, thrilled when PV Narasimha Rao and Manmohan Singh started the process of economic liberalisation, wishing he was 60 years younger to be a part of this process.

On starting from ground zero

Underlining the importance of leaders being down to earth and learning the basics, he narrated that after he returned from the US with a degree, much like his elders and siblings before him, he joined the family business. Sweeping the floors of the factory was his first job, followed by operating almost every kind of machine the company owned. This, he acknowledged, gave him an education in what it feels like, to be on the other side of the table.

On sticking to your values

Kirloskar said that when he was 30, his father passed away. The times were changing and there were expectations from him which clashed with his family values. He said, “A few years prior to my father’s death, he invited my brother and I and asked us to choose between joining the bandwagon to grow quickly or be known as a group that stopped growing because it did not alter our business ethics with the changing times. My father’s question has always been at the back of my mind since then.”

Kirloskar explained how, as a result of sticking to values when the company grew over time, many opportunities were missed and as a result, turnover stagnated, growth dipped with hardships, but gradually rose again to earlier levels. He contended that they became a stronger company because of sticking to their values and not following the bandwagon.

On facing crises

“Quite often, we fail to realise that our behaviour during a crisis can make or break the public perception of our businesses and us as individuals forever.”

Adding to that, he highlighted some of the unethical practices he found during the Covid-19, such as gouging of medical supplies, questionable practices in ICUs and ventilator allocations in some of the hospitals, and fudging of data. “A crisis of this magnitude exposes the frauds of a business, causing a jolt to the system, rattling the skeletons in the cupboard; and dodgy deals in business practices become hard to cover up,” he remarked.

On scams

The last couple of decades have seen business scandals that are becoming increasingly frequent and bigger with time, not only in India but in many countries around the world too. He predicted that we will see an interconnected but possibly less globalised environment after Covid-19, and if we desire to grow and be respected around the world, our businesses desperately need to re-establish our credentials for ethical behaviour and practices. The companies that demonstrate high standards of ethics tend to have more stable businesses and deliver greatest shareholder value over time, he said.

Scams, he agreed, have led to stricter regulation leading to largely improved corporate governance but regulation seems to have introduced a box-ticking approach to business values. “Regulations are an expensive substitute for ethics, and the industry suffers when there is over-regulation,” he pointed out.

On thinking beyond oneself

At the end of this pandemic, there would be a shift towards a minimalistic lifestyle and the competition to claim status through power will become less severe, said Kirloskar. “Respect, success, wealth and power are to be earned and not to be demanded,” he concluded.

(The author is a freelance writer based in Chennai, a corporate trainer and a visiting faculty for various B-Schools.)