Why do some organisations survive and grow beyond their founders, while others burn bright for a brief while and fade away; why do some remain institutes, while others grow into institutions? What separates institutions from organisations? The reasons are not difficult to identify.
Institutions have a purpose beyond profit. It is no coincidence that most long-standing institutions we see across the world are educational, and not-for-profit by design and legislation.
An institution exists so long as it remains socially useful. Society does not let useful organisations die. Organisations that chase the ‘bigger, faster, grander’ kind of dream -- the biggest factory, the fastest car, the tallest building, etc., do not survive beyond a time. They get eclipsed by other organisations or offerings that are ‘bigger, faster, grander’. However, institutions created with a purpose that serves a genuine social need stay. We are reminded of this by M S Valiathan who when appointed the first Director of the Sree Chitra Tirunal Institute of Medical Sciences and Technology in Thiruvananthapuram in 1976, charted a unique path for the institute, combining medicine and technology with sociology, likening it to the triple helix. To him, medical research needed to be rooted in social realities. Here are eight characteristics institution builders display.
They believe what they are building will survive them
Ralph Waldo Emerson said, “Every great institution is the lengthened shadow of a single person. The person’s character determines the character of the organisation.” A good example is Narayana Murthy who has said the founders of Infosys had resolved to build a company that is going to be multigenerational.
They take the blame but share accolades
In 1979, when the Satellite Launch Vehicle -3 (SLV-3) failed, Satish Dhawan was the Chairman of the Indian Space Research Organisation (ISRO) and A P J Abdul Kalam the Project Director. The country was livid and demanded accountability for the Rs.20 crore spent on the mission. Dhawan addressed a press conference, took the blame upon himself, and told the country that he had full faith in his team. In July 1980, the launch cycle was repeated, and the satellite Rohini was successfully put into near-earth orbit, making India a member of the exclusive space club. This time, Dhawan asked Kalam to lead the press conference. Dhawan had taken the bullet when the mission failed and given full credit to his team when it succeeded.
They take responsibility for attracting top talent
Indian Institute of Science, Bangalore, founded in 1909 consistently tops the university rankings today but it was not always so. It was Satish Dhawan as Director in the sixties, who persuaded C N R Rao (solid state chemistry), G N Ramachandran (molecular biology), and ECG Sudarshan (theoretical physics) to join IISc and gave them a free hand to develop these departments and the rest is history.
Similarly, Homi Bhabha, as Founder-Director, used his personal credibility and considerable charm to attract brilliant Indian scientists, Govind Swarup (radio astronomy), Obaid Siddiqui (genetics), and B V Sreekantan (astrophysics) to Tata Institute Fundamental Research (TIFR), Mumbai. Founded in 1945, it is still going strong. While Bhabha had an intuitive sense of spotting talented people and allowed departments to grow around them, the other ‘Rocket Boy’, Vikram Sarabhai defined the organisation structure first and then went about recruiting for those roles. Both approaches work!
They recognise the value of organisation-building
They value financials, structure, systems, and succession, always placing the organisation before the individual. They are often conservative about money, will not over-leverage the organisation and will always plough the surpluses back into the institution.
In 1997, when the Champaklal Choksey family, one of the four promoters of Asian Paints intended to sell its stake to ICI, the British multinational, many employees were distraught. K Rajagopalachari, who had risen the ranks to become a director repeatedly told the employees that they work for the company, not a family. Asian Paints weathered the storm and continues to be a glowing example of Indian entrepreneurship.
Similarly, Verghese Kurien, undisputedly among the most consequential institution builders of modern India and who was considered next only to ‘God’ by thousands of dairy farmers, was asked if he would run for political office. He replied that it would be unethical to transfer the loyalty of the farmers to himself when it should rightfully belong to Amul. Regrettably, while Amul is an exception, not many social sector organisations have acquired institutional status and have remained founder-centric.
They infuse a soul into the institution
They care about the architecture of the place blend tradition and modernity and are also often connoisseurs of art, music, and culture. For instance, the M F Hussain mural right at the entrance to the library in TIFR reminds us that scientific institutions need to be mindful of humanities too.
They welcome criticism
Jawaharlal Nehru who had embraced Harold Laski’s economic theories and followed the Soviet socialist model of development would insist that the Indian Planning papers be sent to economists across the world for their critique. When members of the Planning Commission told him that the papers had been received well by everyone, Nehru insisted on knowing what Milton Friedman, author of Capitalism and Freedom and from the Chicago School had said. Nehru not only cared to listen but also greatly valued the opinions of his critics.
Satish Dhawan was the Chairman of ISRO, and the first Indian satellite Aryabhata was being designed, he called a meeting of two hundred of his team members, including senior leaders (like A P J Abdul Kalam, U R Rao, and Roddam Narasimha) and the junior most engineer, and opened Aryabhata’s design for critique. When Kalam was presenting, a young engineer questioned an element of the design of the rocket’s propulsion, and Kalam ignored him. Dhawan who was in the meeting, stopped Kalam and insisted that the question deserves a serious response. Kalam recounted this story in the lessons he learnt on culture building!
Institution builders believe in firm, consistent action to uphold a principle.
Several decades ago, at Wipro, an employee had fudged a travel bill. The employee was suspended pending an enquiry. While many would have thought it was too small a matter, Azim Premji, the young Chairman of the company believed that there could be no compromise in this matter of integrity. The resulting impasse for a few months and crippled operations led to losses of a few crores and a significant loss in market share too. Premji did not relent and a few months later, the Employees Union accepted the principle. Even today, this incident is part of Wipro folklore. A few crores lost in the seventies is nothing when compared to the culture Wipro has built over the following five decades. On matters like corruption or crime, ethics, or law, institution builders are fair and firm. They are willing to sacrifice the short term for the long.
They can manage externalities
The ability to sell a vision to the funders, negotiate the ever-changing political landscape, and fruitfully engage multiple interest groups, are critical elements institution builders display. In an uncertain world, when the external environment is increasingly more challenging, institution builders take intelligent risks and demonstrate the resilience to stay the course despite the rough and tumble and the inevitable criticism of their work. Perhaps they cultivate a stoic calm.
Institution building cannot be left to chance. It needs design and work. And every one of us is an architect of the institutions we are fortunate to be part of.