Looking East

We intuitively “look West” for best practices. These days, international business schools are “looking East”.

They are trying to learn from success stories at the unlikeliest of places. This article intends to look at two such successes.

Both fly in the face of conventional management wisdom. The first is the Nutan Mumbai Tiffin Box Suppliers Charity Trust (the Dabbawallahs) in Mumbai.

The second is the Grameen Bank in Bangladesh.

Let’s first turn to the Dabbawallahs. The business schools at Harvard, Carnegie Mellon and Richard Ivey have all written case studies on their meal delivery system.

They have studied the flawless management of their supply chain and have marveled at their operational excellence.

This extraordinary business is run by ordinary people. They firmly believe that excellence is a state of mind that comes from passion — not from automation. Indeed, Raghunath Medge, president of the Dabbawallahs, has said, “If we were to use computers, we would be out of business.

It is not because we do not know how to use computers, but the system itself is not amenable to the use of technology in whatever form.” Instead, they use a unique manual code on each tiffin box. They deliver 170,000 meals everyday, engaging over 5,000 carriers. They have achieved Six Sigma, which translates to less than one mistake in six million deliveries, and have also found a place in the Guinness Book of World Records.

The organisation was founded in 1890. It was born out of the simple need of a customer wanting home cooked food at his workplace.

It is run by people with school education usually up to Class VIII. Every “dabbawallah” receives equal pay. There are no financial incentives or disincentives. Many theories abound about the reasons behind their success. A particularly amusing one was described in a recent article in The Economist. The writer of the article discovered that all “dabbawallahs” were direct descendants of the Mavla caste soldiers of Chhatrapati Shivaji. He believed this to be the root cause of their success.

The second one is the Grameen Bank, which was founded by an economist, Muhammad Yunus, in Bangladesh. Yunus won the Nobel Peace Prize in 2006.

The programme started in 1974 from a loan of $27. Since that modest beginning, Grameen Bank has disbursed loans worth $6 billion to 7.4 million Bangladeshis, mostly to poor women street vendors or for running micro-businesses.

The Grameen Bank works on some noble values and principles that are codified as “16 decisions”. Some of these “decisions” have nothing to do with the running of a bank. But these are values that lie at the core of the movement for social transformation. For instance, deci sion #11 is: “We shall not take any dowry at our sons’ weddings, neither shall we give any dowry at our daughters' weddings. We shall keep our centre free from the curse of dowry. We shall not practice child marriage.” Decision #14 says: “We shall always be ready to help each other. If anyone is in difficulty, we shall all help him or her.” In fact, 95 per cent of Grameen Bank owners are the poor borrowers and workers. The loans are disbursed without colaterals, legal instruments or group guarantees. The recovery rates exceed 98.5 per cent. The bank is profitable and finan cially sound. Both the organisations (Dabbawallahs and Grameen Bank) are run on similar principles. They are owned by the “workers”, who do not work for any “employer” .They are run by “bonsai” people — an imagery used by Yunus. People who have the potential to grow, but are stunted because of their environment. They have an enviable ethos of “one for all and all for one”. Their businesses are an integral part of a social movement for transforming the lives of its stakeholders.

And this where they become difficult to replicate.

The dabbawallahs do not represent a mere “meal delivery” business. Grameen is not just a “micro-bank”. They are both imbued with a missionary zeal and a unique cultural DNA. They represent a powerful phenomenon of social transformation.

In any modern organisation, strategy, technology, best practices, processes and systems are important. But there is no substitute for a dedicated team, fired with a passion for service and values. The Dabbawallahs and Grameen Bank represent such a category. While embracing corporate efficiency, they have at their heart the well-being of their stakeholders and an unwavering focus on customer service. To replicate them, it is not enough to copy the business models. For, it is far more complex to reproduce their culture, their environment, the organisational DNA, the passion, the value system and the motivation.

And such ingredients are precisely what make these two unique institutions in the East so successful.

The writer is the Managing Director of Deloitte & Touche Consulting India (P) Ltd.

The views are personal