Making money is not bad, but it must be done ethically, says Ratan Tata at YS Leadership Talk
Managers have to keep asking themselves if they're doing the right thing and making the right decisions, even if they are hard, Ratan Tata said in a conversation with YourStory's Shradha Sharma.
"Chasing profits is not a bad thing — the question is what do you do to get there, how much value you're adding to your customers and shareholders, and how ethical that journey has been," veteran industrialist Ratan Tata said at the YourStory Leadership Talk on Thursday, July 23.
In response to YourStory CEO and Founder Shradha Sharma's question on how companies should weigh profit and purpose, the Chairman Emeritus of Tata Sons - the holding firm of Tata Group, said,
"We're all looking for the spotlight whether we admit it or not; we want to be successful. The traditional means of gauging success is profits, and we want our story to be another success story which puts us in more money. Profits is not something someone can forget."
"But business is not just about making money — one has to do right by their customers and stakeholders, and they have to do that ethically," he added.
Tata said he always advises business leaders to evaluate themselves and their decisions at the end of the day, and question if they made sound choices, even if they were hard.
"We may make mistakes, and that's okay — you have to do the right thing at every point, and take the good with the bad, but you don't have to run away from difficult decisions," he advised.
At the YourStory Leadership Talk, the exclusive session focused on leadership, the conversation covered some ways business leaders can navigate the coronavirus pandemic, what the crisis could mean for industries and new ideas, as well as some life lessons Ratan Tata learned during his own journey that the rest of the country could assimilate.
Most admired for being a salt-of-the-earth kind of businessman who holds himself to the highest standards, and has weathered one too many upheavals as an entrepreneur, Tata says company leaders cannot crack the whip to keep employees motivated — they have to understand their situation, what's bothering them, and empathise with them.
"What stands out is: Are you proud of your company? Do you deal with your customers in a fair manner? Is the management brave enough to rise to the occasion?," he said.
"A company is traditionally viewed by the profits it makes, and that covers, shields, protects, and camouflages what's inside the company. It could be a happy, worthwhile environment, but it could also be a nasty environment. The financial and the business segment, unfortunately, more often than not look at the profit and the numbers and view a company on that basis, rather than take a holistic view of whether employees are happy to work for the company, if the managers are being fair to employees," Tata added.
Edited by Kanishk Singh