Robin Banerjee is the author of Who Blunders and How: The Dumb Side of the Corporate World (see my book review here). Founders and business professionals can learn a lot about the failure landscape analysed in this book.
The author is MD of Caprihans India, and has 35 years of experience in MNCs in India and overseas. He was at Hindustan Unilever, Arcelor-Mittal, Thomas Cook, Essar Steel, and Suzlon India. He is also the author of Who Cheats and How: Scams, Frauds and the Dark Side of the Corporate World.
In a chat with YSWeekender, Robin talks about the importance of customer trust, business brand, and an open culture of discussing failure. Entrepreneurs in their scale-up journey should pay special heed to management issues, intercultural differences, and cash management.
Edited excerpts of the interview:
YSWeekender: In the time since your book was published, what are some notable new examples you have come across of business blunders and recovery?
Robin Banerjee: Mistakes and blunders keep flowing in and out of business coffers incessantly. For example, a major blunder happened recently in the Indian broking business domain, where one of the largest Indian stock-brokers, Karvy, borrowed against pledging clients’ shares held in trust for them.
Brokers are agents and they work on behalf of their principals. If they cannot be trusted, who should we trust? In business, ‘trust’ is the most important element.
Say, when you visit your doctor, you trust that the doctor is capable of diagnosing your illness. What if I now tell you that some registered doctors may not be professionally equipped to do so?! The CBI has recently hauled up a high court judge, alleging that he was hand-in-glove with a medical educational institute having poor facilities.
If that is so, just imagine the quality of doctors perhaps could be generated by some medical institutes! How do we trust every qualified doctor in future? Some recent faux pas in the business world on the lack of ethics are displaying disturbing drift.
YSW: How was your book received? What were some of the unusual responses and reactions you got?
RB: With the grace of the Almighty, the book has so far been received exceptionally well. Everyone who read it has liked it. Responses from readers range from utter amazement to downright shock as to how a book can be written only on ‘blunders’!
People expected sermons on ‘how to avoid mistakes’, only to find over 300 stories highlighting missteps encountered by numerous businesses.
YSW: What have been some of your findings with respect to blunders in the government and NGO sector?
RB: The government and NGOs are supposed to work for social uplift. The government collects tax to do its duty, while the NGOs muster contributions to carry out social good. And it is common knowledge that the trust reposed in these two institutions is often misplaced.
The biggest mistake any government can do is to be partial to any part of society. This blunder can occur easily if corruption is prevalent. Then, a section who can bribe gets preferred treatment. Unfortunately, this is yet rampant.
For many NGOs, doing social cause is a ‘business’. This is hara-kiri. Business entails ‘gain’. How can the practice of social good be standing on profit motive? Regrettably numerous instances exist where the money collected is not ‘all’ spent for the cause it was meant for. This is a huge social blunder!
YSW: What are the typical mistakes entrepreneurs make as they scale up their companies, and how can these challenges be addressed?
RB: Like any anything in our lives, when growth takes place, it needs extra inputs. As humans grow in age, they need more food; similarly, when a business augments, it would need more resources – financial and managerial.
However, in many instances, as entrepreneurs keeps expanding, they feel they can do everything – be it purchasing, making, selling, funding. This is impossible; no mortal can do everything. The mistake entrepreneurs often commit is not to seek professional help on time. This is an avoidable blunder!
YSW: What cultural variations have you noticed across different countries in dealing with mistakes and failure?
RB: There is a plethora of cultural differences between India and the developed world, which creates impediments from doing business together.
A German is stickler for time. A meeting at 8.15 am means it will commence not 20 minutes past! For many Indians, time means IST – Indian ‘stretchable’ time. This could create severe trust deficit.
Communicating the truth is very important. Many developed world businessmen assume that transparency is maintained. That may not be the case for many Indians; they could think – let the other ‘find out’.
Look at the instance when India’s pharma giant Ranbaxy Pharmaceutical was sold to the Japanese colossal, Daiichi Sankyo. The Ranbaxy management did not communicate about an investigation pending by the US drugs authorities against the quality of medicines produced. The result – Japanese companies have become reticent in believing their Indian counterparts to communicate truthfully.
YSW: How should businesses evaluate weak signals and anecdotal evidence which seem to contradict quantitative market trends?
RB: The first signals that things may not be going right are ‘sales’ figures faltering. It could either be that the pricing is too high, quality is inappropriate, or competition is doing something much better. Wavering sales numbers is the red flag for something going wrong.
YSW: How should businesses strike that delicate balance between ‘Stick to your vision’ and ‘Adapt to a changed world’?
RB: Adapting to the changing world of business is the only way to fulfil the vision of growth, profitability and market dominance. The two are complementary. Unless a business adapts to changing customer tastes and needs, how will the business generate surplus?
YSW: It’s one thing to fail with a product, and a bigger dimension to fail with a company. How should founders/CEOs regroup in these two situations?
RB: A particular product may not meet customer expectation. That is rather common. It does not mean that the business has failed. A particular dish in a restaurant may not be liked. That will not mean that all dishes are bad and the restaurant has failed.
If some product or service is not gelling, it’s relatively easy to fix. But if the business as a whole fail, it is tougher to take curative action.
YSW: Are there initiatives in India where business and academia are coming together to research business mistakes and share the learnings so that all can benefit?
RB: The unfortunate truth is mistakes are shoved under the carpets – though every business encounters it. Sharing mistakes committed helps to identify the learnings. It is a great measure to tread on to the stepping stone of success.
My book is perhaps the first step to make businesses aware that ‘blunder’ is not a dirty word. Everyone makes it. Hopefully, this book is a baby step encouraging open deliberation about business missteps.
YSW: What are some ways of overcoming the internal shame, guilt or disappointment felt when people realise they have committed a mistake?
RB: Joy shared is joy doubled; sorrow shared is sorrow halved. Business managers should remember this dictum – everyone commits errors. Sharing bloopers would only enable them to learn from it. More inexperience-sharing will lead to disappearance of the so-called inner diffidence.
YSW: What are some good online resources to track and read about corporate blunders and their learnings?
RB: There are hardly any avenues to know about corporate blunders. Press reports are the only way to find out what is happening elsewhere. The big problem is, businesses squeak about successes, but none on failures. Hence, it is not easy to learn about corporate bloopers and gain experience.
YSW: What is your parting message to startups and aspiring entrepreneurs in our audience?
RB: For aspiring entrepreneurial readers, my advice would include: start a business that has a USP (unique selling proposition), and concentrate on ‘all’ aspects of business and not just what you are good at. Fund the business properly with one year’s cash burn as your reserve capital, to plan for the worse.
Remember: to err is human. Forgive and forget slip-ups; get up and move on. Make no mistake: perfection is a myth.
(Edited by Teja Lele Desai)