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A New Paradigm

Comments by Ravi Venkatesan

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Welcome to a discussion about how the business and social sectors can work together – we invite you to participate. Here, Ravi Venkatesan, the dynamic 37-year-old executive who ten months ago was made chairman of all India and Asia operations for the world's leading diesel engine manufacturer, Cummins Engine Company, leads off the discussion. In his short time as chairman of Cummins India, Ltd., Venkatesan is credited with bringing a new dynamism and vision to his company, the cornerstones of which are information technology and total solutions.

Venkatesan's initial contribution to this interactive discussion is another exciting vision: how to more effectively bridge the work of the business and social sectors. With astonishing candor, he opens by launching a radical critique of past attempts by his own company (which is a leader in corporate philanthropy in India) to make contributions to society.

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Ravi Venkatesan

Ravi Venkatesan became CEO of Tata Cummins Ltd (TCL) in 1996 at age 33. In the intervening four years, TCL's revenues have zoomed from approximately $23.5 million to $103 million and the bottom line has gone from an $11,000 loss to $9 million profit. Recognizing his achievements, Cummins Inc. named him CEO of all its Indian operations and Chairman of Cummins India in October, 1999.

Cummins India is a 51 percent subsidiary of Cummins Engine Co, Inc. USA, which was established in 1919. Cummins India is India's largest manufacturer of diesel engines, serving the non-automotive segment with market share in excess of 65 percent.

In ten months since becoming CEO of Cummins India, Venkatesan has contributed "a revolutionary growth-oriented business model," according to Business Today magazine. He has used "a combination of engineering skills, out-of-the box thinking, and team work to forge a radical change in the organizational fabric of both companies."

Business Today describes Venkatesan as a "quiet" man who confesses that he often keeps awake at nights, dreaming of how to "achieve audacious goals for Cummins." Analysts have credited him with the vision and ambition needed to transform Cummins from a strong engineering company to an IT-enabled, market-savvy marketing company that has a big role to play in the global scheme of Cummins Engine, including serving the group's worldwide software requirements.

Venkatesan "devours two books a week (on everything but business; he considers business books 'junk')," according to Business Today. He encourages his employees to engage in lifelong learning and training and to participate in hiring decisions. He has eliminated punch clocks, allowing employees to manage their own time.

Venkatesan made his comments during a panel discussion about how to bridge the business and social sectors, held in New Delhi, India on April 29 (excerpts from two other panel members' remarks, Jeroo Billimoria and Anand Bordia, are presented on the introduction page). The companies represented by Venkatesan (Cummins Engine Co. and Tata Cummins Ltd.) have an admirable 80-year tradition of giving back to communities throughout the world.

"We don't have any effective ways of connecting . . . with the needs of our society. . . . That's the brilliance of the social entrepreneur . . . he/she is the connector."

Venkatesan's comments:

"When we take a look at how we have spent our money and our resources, there is no focus. We don't know whether the modest amount of money that we have been giving has really made a difference or not. Most of what we have funded tends to address the symptoms of the problem, rather than the root cause.

"Recently, when we undertook somewhat clinical examinations of how we are really making a difference, the honest conclusion was, 'not really'." Fundamentally we are not certain that we producing any sustainable change. That is why we have decided that our approach – which is the same approach as many many companies – is not really very effective, and it's time for a new paradigm.

"We call it a paradigm shift – and a move away from charity to a real partnership – partnership, in the truest sense, with the needy, with NGOs, with the not-for-profit sector, and certainly with the government.

"We realize we need partnerships in order to make a difference. We can't do it alone because we don't know how to do it. So we are trying to tie up with [citizen sector groups and government agencies] in order to accomplish that.

"Now, from where I sit, money is not the problem . . . "

"Writing the check is the easy part. [But] making sure that it is well spent is part of it.

"We've realized the importance of looking at the track record of the people we partner with. We are trying to make sure that we are actually solving some problem at the root cause level. We are no longer writing checks to agencies. We are interested in funding specific projects and making sure they deliver the goods.

"Now, from where I sit, money is not the problem. We do have an endowment at Cummins, and we are not able to give away all of the money that we have – modest as it is.

"The industry, I think, does want to make a difference, or at least a large part of it – both at the institutional level, and at the individual level. There are a lot of people at the 'dot.coms' who want to make a difference, but none of us knows really how to.

"It's not easy to give away money and make sure it is spent effectively. We have the desire. We have the resources to make a difference. But we don't have any effective ways of connecting this with the needs of our society. And I think that's the brilliance of the social entrepreneur idea – because he/she is the connector.

"So we are off on a very, very different trajectory than the one we've been on for the past 40 years in India. We think we are on the right track. And that's part of my excitement in coming here – I want some feedback on it."

Next Page: Fruits of Partnership

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