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Created to Last:Lessons in Diversification

Lessons in swift diversification

By Roopen Roy Jul 03 2012

Tags: Op-ed
Lessons in swift diversification
BUILT TO LAST: The Jesuits created hundreds of excellent educational institutions around the world. The number of Jesuit colleges and universities in the world has now reached 114, including 31 in India


In an earlier article, I had written about how important it is for global organisations to st­rike deep roots locally and imbibe the culture of the countries in which global organisations operate. The Jesuit “company” established in 1540 demonstrated just that. The Jesuit organisation has also demonstrated that you ought to be entrepreneurial and nimble when market opportunities cha­nge. Their success came fr­om a combination of swift strategic shifts with an unwavering faith in their core values. While values constitute the DNA of the organisation, the business strategy is dictated by opportunities and realities on the ground.

It is no different for global organisations. Toyota Motor (TMC) is the largest automobile manufacturer in the world. It is part of the Toyota Group conglomerate in Japan. The company traces its history back to 1890 when the fou­nder of the group invented the wooden Toyoda handloom. It established an automotive division in 1933 as a division of the Toyoda Automatic Loom Works. And the rest is history.

Toyota’s core values are enshrined in their five principles:

Challenge yourself and set bold goals

Kaizen (continuous improvement)

Genchi genbutsu (Go and see for yourself and kick the tyres). Do not be an armchair leader

Respect

Teamwork

These five principles constitute the Toyota DNA. They opened shop by producing wooden looms. They produce automobiles now. They were the first to go into large-scale production of hybrid cars. In the future, they may produce aircraft or robots or amphibious vehicles and cars that do not burn hydrocarbon. But, their core values are firmly etched in their DNA.

What about Nokia? It is the second largest player in mobile telephone handsets. It is on a journey of reinventing itself and has some tough challenges ahead. Technologies have shifted and transformed the landscape. But, it did not begin as a telephone handset company. It is headquartered in Keilaniemi, Es­poo in Finland. The companies that became Nokia started life by manufacturing pu­lp, paper, rubber and cable. It later made footwear, tyres, military and communication equipment. The first mobile handset was manufactured by Nokia as late as in 1987.

These two global corporations saw opportunities and relentlessly pursued them wi­th focus and determination and became market leaders. Their mission, history and business plan, if they had one, did not have a hint of what they would become. Th­us, while being faithful to their core values, they pursued market opportunities with agility and passion. They were not prisoners of their business plans. They tore th­em up as soon as the plans became irrelevant or obsolete.

The Jesuits did exactly the same. Their motto was lofty: ‘Ad Maiorem Dei Gloriam’ (For the greater glory of god). The Jesuit order, which Pope Paul III had approved in 1540, had no mention of education as one of the principal activities of the Jesuits. But, they ended up dominating the field of education.
 
The Jesuits created hundreds of excellent educational institutions around the world. The number of Jesuit colleges and universities in the world has now reached 114, including 28 in the United States. In India, the Jesuits manage not less than 31 university colleges, five institutes of business administration and 155 high schools spread throughout the country.
 
In an article titled, Jesuit Education, Father J Felix Raj, who is the principal of St Xavier’s College, Kolkata, reaffirms how the Jesuits strayed from their “objects clause” with great impact on society. He says, “Though nowhere in the order’s constitution is it stated that education is to be given special importance, the Jesuits have come to be particularly known in the public mind for their educational work and have acquired the reputation of being among the world’s best educators; in every country a Jesuit school or college is synonymous with quality secular education gi­ven in an atmosphere conducive to character formation with emphasis laid on spiritual and moral values and the development of an integrated human personality.”

Once the Jesuits decided to pursue education as a core area of service to fulfil an unmet market need, they had an audacious vision of scale and growth without sacrificing quality. In the Autobiography of St Ignatius, edited by JFX O’Connor SJ, I came across the following passage that is a telling evidence of this bold vision, “ If Oxford spends annually a revenue of $2.5 million to supply facilities for higher education to 2,000 of the nobility and gentry, how much would be required to educate a quarter of a million students — not 2,000 but 250,000.” Apart from scale, the importance of vertical integration was not underestimated. Jesuits did not want to play only at the tip of the pyramid. In order to make a real impact and dominate the entire value chain of education, they had to start at the base of the pyramid. In Loyola’s own words, “It was useless to begin at the top, as the edifice without a good foundation would never stand.” The base of the pyramid would be a network of excellent schools.

While much of their success emanated from entrepreneurship, agility and ability to think big and execute, one must remember that the DNA was selfless service with a missionary zeal. They were not motivated by stock options, greed or maximisation of sh­areholder value. Malachi Martin in his book, The Jesuits, probably summed it up best when he wrote, “For all time, this society will be an example to every society that feels an organic longing for infinite extension and eternal duration.” Such yearnings with the right mission make an organisation “created to last”.

(The writer is the Managing Director of Deloitte Consulting, India. These are his personal views)
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