Arindam Chaudhuri
Passion at work
The theory behind the launch of GID Foundation
Happy Capitalism & Not for profit organisations :
The need of the hour for India

Driving an organisation by looking only into profits is like driving a car by looking only into the rearview mirror : it tells you about the road you have been through but not about the road ahead. Obviously I am not trying to say that entrepreneurs should not bother about profits. Todays entrepreneurs, leaders and businessmen are the people who carry the responsibility on their shoulders to take India into the new world order. This requires leaders with a vision. This requires leaders who understand the seriousness of the responsibilities they carry in the absence of dedicated and commited leadership at the top. For this they first need to understand their country well.
So that one understands the meaning of responsible entrepreneurship let me first give the readers an overview of the country they live in. (The following paragraphs in italics are also there as a part of the Great Indian Dream handout. For further details refer to it).
India is ranked 139th out of 174 countries in the world in the human development index. Today, 40% of the Indian population is living below the poverty line.  Cliched?  I will explain. The poverty line in India is defined at Rs. 1,667 for a family of five per month.  Only Indian politicians and economists with all their insincerity have the ability of calling this a poverty line.  The poverty line should be called the destitution line.  Imagine Rs. 375 per head per month is enough to be above poverty line!  No wonder in the red light district of Bombay, Kamathipura, women are bonded into prostitution today because years ago their grand parents took loans ranging from Rs. 12 to Rs. 50.  
Today we have 0.5% of world trade.  Compare it with China.  Their percentage might still be on the lower end because of the phenomenally competitive prices but to realise the Chinese impact one has to go through the shops of Europe and USA and pick up from the cheapest of products to the costliest of designer items, and discover that they are all Made in China.  
India alone accounts 30% of the total illiterate population of the world and we are excited of being the country with the most qualified educated human resource.  I will tell you what it means.  In India we have 1 Indian doctor per 2,400 Indians but we have 1 Indian doctor serving every 1,325 Americans in the United States!  
Today, 40% of Bombay is a slum and 35% of Delhi defecates in the open. Only 232 towns in India have sever system and that too partially including Delhi.  Five lakh people still carry human excreta on their heads.  Everyday and every night 300 million people go hungry to bed which is more than the combined population of USA & Canada.  We created such a lot of noise when just about 50 people died of plague because the rich sector of our economy was also under danger but when about 4,50,000 people die every year of T.B, about half a million people suffer from diarrhoea everyday no one raises a whisper.
The food production by China with about 60% arable land compared to India is 450 million tonnes as against the 200 million tones that we produce.  It is mainly due to bad irrigation facilities.  In the villages of West Bengal we need just Rs. 15 per person i.e Rs. 120 crores per year for the next 8 years but we don't have that money.  We do have Rs. 2,00,000 crores to be given away to the Indian middle class and the organised sector with the new pay commission in the next 5 years.
We have around 200 million people unemployed and compared to the fact that the downsizing processes in USA which have resulted into 2 million people being unemployed, has resulted into so many protests across the nation one wonders why Indians at least the educated class too fails to see the deprivation and sufferings around.
The leadership standards have been deteriorating at a pace which is faster than one can comprehend.  It was evident more than once clearly during the Orissa clamity. We saw leaders who just talked, corporate world which cannot go beyond seeking concessions from the Government, an NGO sector which has become an industry and the rest of us had little choice but to watch helplessly. It was the biggest national clamity in independent India. For political reasons the television did well to create a feeling of nationalism during the nuclear tests and the Kargil war but in this case the response was meek. After more than 14 days a task force was made headed by George Fernandes which should have been made in the first 24 hours.  With thousands dead, millions homeless, epidemic spreading and food riots breaking out Orissa surely deserved an address to the nation by the Prime Minister on Television. FICCI, CII and ASSOCHAM most probably did not even bother to write to their members asking for donations.
If we were to keep the above in mind then we would realise that entrepreneurs and leaders of today have this tremendous responsibility of taking this country of poor, uneducated, unemployed and illfed ahead towards a new begining. For this they need to realise the importance of utilizing the various lobbies that they control like CII, FICCI etc. to pressurise the government to comeout with pro people and anti poverty policies to help this country grow. They need to come out of the petty and short sighted vision of theirs and focus upon larger interests of the country instead of using their powers haggling for a few tax consessions and subsidies. This should be left upon the various specific industrial associations to negotiate, while the larger and more powerful associations need to talk about the interests of the country. They need to realise that in the countries interest lies their interest.
Greater corporate participation through organisations like FICCI, CII etc. presurrising the Government to eliminate poverty is the need of the hour, if not for the sake of humanity, then for the sake of their own selfish gains.  No amount of management and marketing techniques can enable corporates to have a more than 10 to 15% growth in their market but the market can be expanded by more than 1000% by increasing the purchasing power of the people.   As I have already stated before, then, instead of the middle class being an approximate 50 million would become more than 500 million. This common sence economics is something that should be clear to everybody. If you need to grow you need a bigger market and bigger market is possible only if the people get purchasing power otherwise we will keep standing and watch all the FDI flow into China and just a fraction of it come into India. The reason is obvious, China has been able to manage to provide a large market base to the FDI's because of better income distribution and low poverty levels.
If the purchasing power levels in this country increase tomorrow these same entrepreneurs who command no respect in the international arena today are the people who will walk with their heads held high.
I would further go up to the extent of suggesting the terrific advantages of not for profit entrepreneurship for countries like ours. The moment we take out the profit motive from any private busienss plan the growth becomes endless. I clearly remember the case of an organisation which was floated a couple of years back in Delhi trying to provide medical ambulance service door to door. They were charging an astronomical amount of Rs. 9000/- per family as membership fees. Inspite of their tall claims then, they have become history today. Last year in the villages of Bengal we were thinking of launching an ambulance service in memory of my brother. We worked out all the costings and today the ambulance service is a reality and people pay Rs. 300/- to become a member and 66% of the market price of taxi service everytime they avail of the ambulance facility after the first time. The first time we provide it free of cost. Its one of the most popular activities that we undertake in rural Bengal as a part of Aurobindo Memorial Manav Sewa Kendra that we operate. Now, we plan to launch similar services all across Bengal and also in the large Metros. The point that I am trying to make is that I charge Rs. 9000/- and cater to a 100 people and remain in business for two years but if I were to charge Rs. 500/- I could cater to thousands of people and remain in business for years. Not that I don't cover my costs or don't make enough money out of this to satisfy the needs of the people managing it. That's why in the very begining I made it clear that the call of the day is private not for profit organsiations. The problem as we have experienced with the government not for profit organisations is that they have no account of the costs and are run irresponsibly making them loss making ventures. A private person would never be able to run a loss making organisation.
The Grameen Bank in Bangladesh provides credit to over two million poor residing in 36,000 out of the 68,000 villages of Bangladesh. It gives 94% of its loans to women and has given till date more than $2 billion of cumulative loans of an average $160. Yes thats what the power of the social sector is and that is how little a loan on an average is required to make the poor self sufficient.  It has a record of more than 98% recovery mainly due to the fact that the beneficiaries are women. And it is a revolution in its own right. Unlike Indian NGO's its a not for profit private entrepreneurial initiative taken by a visionary named Md. Younus. He single handedly today is responsible for removal of poverty from thousands of families only because he worked at break even. Today, Grameen Bank is not only a poor man's organisation but also an organisation which runs cellular business in Bangladesh. It has shown that the most technical and advanced of all businesses can also be run through private initiative successfully with a social objective.
Since, 1994 we have been also working out various schemes with similar objective in the villages of West Bengal. Surprisingly, we have found out that a loan of Rs. 125/- can change a family's calorie intake dramatically. A family of four can buy 5 chikens with the help of this money. In a months time when its starts getting about 10 eggs a day, the family is able to pay back the loan in 25 days time from 50% of those eggs and consume the rest for months to come thereby changing their food habbits. By the time these chicken die they have saved enough money through the extra eggs that they get daily to buy new ones.
The point that I am trying to highlight is less can be more. Today, the ordinary man needs to become an entrepreneur to take this country out of its perils. And ordinary men can become entrepreneurs only when their ambitions are not irrational and have a social commitment. A social vision can work wonders. Its the best motivator. It can bring out the best leader within you. It teaches you team work and everything else that is required for success.
Not for profit activities have an unlimited market specially in a poor country like India. Not for profit activities don't curb your possible markets. Not for profit organisations bring out the best in capitalism. They are the organisations which can have all the positives of professionalism, creativity and initiative. The more such organisations the less the problem of unemployment etc. This is what I call 'Happy Capitalism'.
In one small market place in the locality of Defence Colony in Delhi is a Restaurant called Flavours being run by an Italian by the name of Tarsillo Nataloni. Its a small place. Its a clean place. Its a very aesthetically done up place. The food is excellent and the service phenomenal. At least I like it, I guess I love it. One day while dining out there I was thinking how nice it would be if it would have branches all over Delhi. Then suddenly, I realised that would actually bring about an end to all that I like in this place. When I am about to take a seat on an empty table with the left overs of the last group of people still lying on it, and I am looking around for help unable to locate any free waiter from no where comes Tarsillo, picks up all the dirty plates in a jiffy and disappears. Before you realise he is back with a cloth to clean the table and after that he comes over to take the order too ! That evening suddenly I realised that Tarsillo who most probably has never done a course in management actually was implementing all that we teach in our business school with utter perfection. He was leading from the front, he was providing great service, giving quality product at an affordable price and an international ambience.
I realised something more and that was more important. He symbilised capitalism and private initiative at its happiest peak. I wish he never diversifies. He surely is making enough money and looks satisfaction to the power infinity when at around 12 in the night he finally comes and stands below the air conditioner in his restaurant sweating so heavily that one would imagine that he has just walked in through heavy rains. But then I do wish such restaurants in every corner of this country initiated by thousands of different people in each case and entrepreneurial initiative, in each case a limited ambition project symbolizing happy capitalism. The speciality of such initiatives is always the charm of total commitment and involvement of the entrepreneur himself. Its never the same when the owner is not personally involved. A thousand small individual initiatives is a much more easily achievable target than 10 huge initiatives with 100 branches.
If one sticks to the basic principles of management then he could be a great entrepreneur provided he is not looking at huge profit margins.
My students often ask me about the use of being a small individual change agent in a world where everyone else doesn't care. My answer is always the same. I tell them if they could lead by example 10 people in their organisation and convince them about their ideas my class of 60 students at the very first stage would have produced 600 more people with new ideas. Tomorrow these 600 people will have 10 employees each under them and that makes it 6000 in the second stage. Ofcourse, I have never have had the need to elaborate further.
One needs to know that all organisations which are successful in the long run are organisations which give quality reasonably priced. In the small towns of Europe one finds a vast number of such examples. Small family run entreprises doing so well because of what I call happy capitalism. In our institute we started compulsory course on Global Opportunities & Threat Analysis for our students which is taught over a period of 14 days in Geneva. When people ask me why we thought of this idea at the first place, what I say shocks them. The students undertake programmes in association with organisations like UN, WTO, World Bank, Nestle, Insead, IMD Lausanne etc. I say this is all incidental. We take them there because of simple incidents like I saw one day early in the morning one of the shop owners from whom I had made some purchases the last evening, standing outside his shop and cleaning the shop name plate which hung above his shop, himself. Compared to the normal case of Indians who hardly ever bother to do such a thing even once in 50 years after the start their business, we felt this was something our students needed to come and see for themselves. I might always be talking about Theory 'i' Management which is about India Centric principles but then it is also about appreciating and adopting the best from the rest of the world. And there is no denying the fact that the west is a story of success through hard work and the east is a story of success through patriotism. We could do well by becoming hard working patriots.