A book enumerating the qualities of a winning company reads rather one-sided

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New Delhi | Published: February 12, 2017 6:15:03 AM

The missing link in all the stories is that they don’t capture the deficiencies of the organisations. A work of this kind, therefore, tends to eulogise the subject, sometimes even reading like sponsored coverage

The Taj Mahal Palace Hotel during the 2008 Mumbai terror attacks. All the victims of 26/11 were compensated by the Tata group The Taj Mahal Palace Hotel during the 2008 Mumbai terror attacks. All the victims of 26/11 were compensated by the Tata group

It’s almost a cliché today to talk about what great companies do to stay on top. There are several authors who look at companies they regard to be the crème de la crème of the corporate world and detail how they have grown and stayed on top. Shashank Shah, in his book Win-Win Corporations, follows a similar path while putting forward a template of what these companies stand for. He identifies six firms he thinks are clear winners and details everything that has taken them to where they are today. The six companies chosen are HUL, L&T, Indian Hotels, TVS Motors, HDFC Bank and Bharat Petroleum. Some of these have been covered extensively by other authors and, therefore, the novelty factor is missing. Bharat Petroleum, however, is an exception and hence makes for interesting reading, especially because it’s in the public sector. The author looks at these companies’ different features, classifying them into commonalities, practices and structure.

Shah draws some stylised facets of winning companies based on how they operate. Let us look at seven of them. First, the focus on the customer is a given because no business can run without the customer in mind. But the way a customer is wooed, whether by a bank or an FMCG company, depends on innovation and adaptation. In this context, the story of how Wheel Powder came in to counter Nirma is quite interesting. L&T’s water pipeline for Tirupati, Andhra Pradesh, is another good example.

The second is human resources, a very important facet of any organisation. After all, it’s the people who finally deliver the strategy and so keeping them in good spirits is critical. Here, HUL’s commitment to staff families in case someone dies or Taj Hotels’ decision to pay for every 26/11 victim resonates. In these firms, there is a lot of pride in the brand one works for. However, one wishes the author had also spoken to staff that has left to present the other side of the story.

The third factor is commitment to shareholders, which has been the cornerstone of every listed company. The way the management goes about this issue is important: should they choose growth or short-term gains? Winners look at the former. So one must judge the management of any company based on the kind of vision they have. Those who look for short-term gains compromise on several governance tenets and could destroy value.

The fourth factor pertains to supply chain and how companies treat vendors in terms of building a relationship, helping build their business, timely payments, etc. Winning companies don’t take the supply chain for granted, squeezing it to enhance profits.

Next, Shah emphasises that the way companies align their goals to those of the government’s is also important. The example of L&T stands out here, as it has worked with the government in strategic areas and not been guided by sheer profit.

The next two tenets pertain to community and environment, which are self-explanatory. The important aspect, however, is whether or not these are followed in spirit.

The missing link, however, in all these stories is that they don’t capture the deficiencies of the firms. A major challenge when writing in detail about any company is that you run the risk of being one-sided, quoting only those who have positive things to say about it. A work of this kind, therefore, tends to eulogise the subject, sometimes even reading like sponsored coverage. Also, while internal stories are interesting, names of unknown people within the organisation—even those who play a pivotal role—sound out of place to the reader. This could have been avoided to make the book more interesting.

On the whole, Win-Win Corporations is quite satisfactory in enumerating the qualities of a winning company, but falls short in keeping the narrative engaging. An approach which should be considered in such books is to highlight a trait and then juxtapose these winners on what they have done in that domain. This way, the story would have been tighter and less eulogistic.

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