A Corporate Approach to Development: Interview with Manoj Kumar

Posted By: Rise Team|Dated: October 18, 2012

Manoj Kumar, the CEO of Naandi Foundation, explains how and why the corporate sector should play a role in the development sphere, a theme that was at the fore in the three-day Livelihoods Camp in Araku Valley.

Manoj Kumar - CEO of Naandi Foundation

Caption: Manoj Kumar, CEO of Naandi Foundation

Naandi has accomplished so much, in part due to your focus on engaging corporate leaders and corporate partners in your work.  Can you explain why this is important for Naandi?

Let us understand social sector organizations in India. We must have at least 2 million NGOs registered in India.  All of them put together in terms of scale, turnover, efficiency, volume and impact of any services delivered will be smaller than any one corporate.  This is because NGOs in India go predominantly into activism or opposing governments or policy change.  If we choose not to worry about advocacy and policy and instead focus on service delivery such as providing water to the poor, solving malnutrition, and ensuring that kids learn, we must follow a different model.

Today, the large scale delivery of any product or service in India has only been done by corporates such as HDFC Bank, ICICI Bank, Tata, Mahindra, Reliance–you name it.  So in order for us to have length and breadth in terms of service, it was very important that we imbibe the efficiencies that corporates bring into their operations.  The centuries of management wisdom that they have in optimally using resources are derived from a profit motive which NGOs don’t have, so inherently NGOs don’t have the same efficiency built in.  So it was very important that we needed to work in a corporate style and bring that thought leadership into the way we looked at every problem and the way we function.  To embed this into our DNA and core culture, Naandi ensured that its board comprised of only corporate business leaders such as Anand Mahindra and Dr. Reddy.  It was not that we worked as an NGO and then decided to include the corporate style; Naandi was created by design to follow the corporate style of operations.

On top of that, I absolutely needed contemporary young talent and bright minds to solve the problems that had apparently been unsolved for centuries.  So if all the best minds in the world are busy selling soaps and shampoos, I cannot solve these problems with just social workers.  What is interesting is that I have a hard-nosed, efficiency-based management approach which only the business groups bring in so I wanted that to be the guiding force.  But the moral compass was rooted in the social sector, so we ended up creating an organization which has the passion of the social sector but the professionalism of the business sector.  And therefore even my team is almost 50-50 in that respect.

It seems that you have an effective approach to solving the problem of inefficiency in the social sector.  But what do corporations have to gain from these interactions?

There are three points I would like to highlight.  Number one, India’s problem is that civil society and the government do not engage the corporate sector in solving social sector and political issues,  and the corporate sector is very happy to be left in isolation because they can keep busy with their profits.  But it’s not just about the globalized world that we live in, but also the very heterogeneous and unequal society that we all live in.  If the corporations think that they can function in isolation, there is nothing more foolish than that.  And if the government and civil society are not going to include the corporate sector in the change process, it is very sad, but it is more damaging for the corporations.

Increasingly, we live in a society where everyone thinks the corporate sector is bad. They are seen as people who only plunder resources, be it the mining company, an automobile company which is into pollution or uses harmful fuels, or be it food companies which are selling junk food and not nutrition, or even all of the other companies which are alleged to be promoting consumerism.  Whatever you say, the world of the corporation is the world of logos and the world of logos is about creating exclusivity.  I wear a logo and you want to get a better logo.  So consumerism and logos are the new caste system that the corporate world has created.  We are trying to create a more equal society and your logos are creating an unequal society.  As someone who is leading an organization that is trying to dream of eradicating poverty and creating an equal society, I feel that the key innovative thing that I bring to the table is to proactively draw corporate leaders, the best minds in the country, and to get them on board and get them to engage.  If you are into nation-building then you need to take on the challenges of inequality and the challenges of deprivation faced by two-thirds of the population.  So ours is an effort to show the world how business leaders are engaged in the polity, engaged in thought leadership, and engaged in development.  This is one very theoretical argument.

The other is very practical: Where will you sell?  Where will companies expand in India after a point in time?  They need to think of innovative ways to reach the lower income segments at the base of the pyramid.  It makes absolute business sense for corporates to see the lower income segments and to understand how to include them into the markets in which they want to sell.  Why is everybody now talking about coming to India and lots of others talk of going to Africa?  Because we have finished with America and Europe in terms of having the maximum consumers.  So it’s a logical extension that they go beyond the middle class and engage with people who are not yet your consumers but will get there.  And by the time they get there, corporations will need to understand their psyche.  So that’s the second most important reason.

And the third important reason is that I think we are living in an era where the greatest deficit is a deficit of value-based leadership.  And it’s a two-way process for inviting corporate employees and corporate leaders to get more engaged with the whole discussion of development.  Engaging in this discussion and solving social problems will develop value-based leadership.  You can probably increase your balance sheet, at least in the short term, by just by conquering markets or having mergers and acquisitions, but this is not sustainable.  So we need to spread, or broad-base, that one metric as well.

You mentioned the idea of learning as a two-way street and the importance of directly engaging with these communities.  What does this look like in your experience with Naandi in Araku Valley?

So first of all, Naandi doesn’t start working with a community from day one; we spend at least a year listening to the community to know what they want.  So in Araku Valley we were talking with the communities for two to three years before we planted coffee.  It was very clear that they wanted coffee and it made sense from an income point of view and a nature point of view.  Then, after working with them for 10 years, when we wanted biodiversity, we had a plan to plant at least 18-20 varieties of fruit trees per acre and we have actually done that.  We have 19 varieties per acre now.  To decide on these varieties we went through a nine-month process with every village to decide what would be the 19 varieties from the potential 100.  The variables to consider were: 1) the community desire 2) the trade-off between nutritional security versus cash crop, and 3) the tree should give enough carbon for the project to be financially viable for investors.  So it was a complex inner programming exercise, if you please, which resulted in the selection, but one non-negotiable was that in the final selection there was not a single tree that the adivasi did not want.

In all of the development initiatives I have done in the last 12 years with Naandi, one of the few things I have learned with humility is that all of the changes start with how can you create aspirational goals for the communities.  If you don’t create aspirational goals, you will not be able to change them.

For example, the Naandi and the Araku model is now being replicated in Mozambique and South Africa. If I were to go and plant a million mango trees there, it would not work.  One has to spend considerable time inspiring them to do hard work.  A farmer’s job is a complex job—it involves a lot of hard work.  Most developing democracies will try to solve this problem with patronage and freebies.  But nobody has had the gumption to calibrate the system properly and ensure that there is some hard work put into it.  Also, keep in mind that all of these small holding farmers, especially adivasis, live for the day.  They have never had the cash nor the security to plan long term.  If you tell them to grow coffee of mango straight away, it will fail because they cannot be working for four or five years until the mangoes yield some income and they can’t remain hungry.  So understand that we got into these crops by ensuring that the adivasis grew vegetables from day one.  And for the first two years, I paid the farmers in Araku wage income from grants so that they would look after the coffee until there was a yield.  So it is a very pragmatic approach that you must take.  You are dealing with someone’s livelihood, it is not another business.

 

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