J R D Tata Corporate Leadership Lecture: Leading Institutions and Thought Leadership

I have been privileged to do science in India and also lead science in India. It was a pleasant surprise and a rare honor to receive the J. R. D. Tata Corporate Leadership Award in 1998. A surprise, because the award is not for science leadership but for corporate leadership. An honor, because the individual who received this award just before me in 1997 was Narayana Murthy, and the one who received it in 1999 was Azim Premji. It was an honor to be sandwiched between these two icons!

All my life I have worked in the Indian national laboratory system. During the time (1989–1995), I led National Chemical Laboratory (NCL); it transformed itself into an International Chemical Laboratory. It did the seemingly impossible—exporting knowledge from an Indian laboratory to leading multinational companies. This was a first in Indian history. NCL had secured zero US patents in its entire history. From that, to become a leader in US patents in a span of just a decade was remarkable. I then led (1995–2006) the Council of Scientific and Industrial Research (CSIR) as its director general. Leading CSIR was not an easy task. Poor science–business linkages, bureaucracy, unionization (yes, believe me, that too by scientists), no “Team CSIR” spirit, low budgets with low morale, all these were preventing CSIR from reaching its truly high potential, when I assumed its leadership. From this state of affairs, CSIR was transformed to a user-focused performance-driven organization, and became a model for publicly funded R&D organizations. In what follows, I will provide a personal account of the leadership challenges and the lessons learnt during these transformations.

Leading Transformation of National Chemical Laboratory

I joined NCL as a scientist on November 15, 1976. I left an attractive faculty position abroad and returned to India in my early 30s on a salary of Rs 2,100 per month. On June 1, 1989, I became the director of NCL, which already had a high reputation in chemical research. The challenge was to convert NCL from a very good laboratory into a front ranking world class laboratory. In 1989, the Indian industry was protected by huge tariff barriers. Industry was in sellers’ market. NCL scientists responded by essentially doing import substitution, because that was what the Indian industry demanded.

Context decides the content. It was clear to me that if NCL continued to operate in this context, the content of the NCL research agenda would be just copy, copy, and copy. There was no way NCL could have changed the “national context” in those pre-1991 days, which was all centered around import substitution. So I said NCL will change its “own context.” NCL will become the International Chemical Laboratory by shifting its role from a seller of knowledge to Indian industry to a seller of knowledge to the whole world, even to the US and Europe. The very statement that “National Chemical Laboratory” will become an “International Chemical Laboratory” created an incredible aspiration, which, to me, is always the biggest driver of change. But here was the big challenge. Until 1989, that is, in 39 years of its existence, NCL had not been able to secure even one single patent in the US! How can a laboratory with such an abysmal record of US patenting even dream of being an exporter of its knowledge to USA? It looked impossible.

I challenged the laboratory by saying that there is no limit to human imagination, no limit to human achievement, excepting the limits we put on ourselves. In the import substitution era, we had put limits on our thinking. I said let us unshackle ourselves. Think boldly. Think ahead. Let’s lead and not follow. NCL was charged with a new “yes, we can” spirit! NCL learnt to read patents, write patents, break patents as it went into this tough game. When NCL licensed its hydrodewaxing technology patents to the multinational company, Akzo, in Europe in 1990, it was a historical event, since this was the first time a reverse transfer of technology from an Indian national laboratory to an advanced nation had taken place. This was followed by the licensing of patents on an innovative new process for an engineering plastic to the US multinational giant, General Electric. This success created great awareness about the value and rewards of patenting amongst the NCL scientists. Within less than five years, NCL developed a big client list, which included the top few global leaders from around the world, from General Electric to DuPont and from Cargil to Polaroid. And there was no looking back even after I left as the director. Two of Procter & Gamble’s very recent products in the market are based on NCL patents that it had recently licensed!

Achieving all this required a big cultural change at and by NCL. We said no more “publish or perish.” The new driver was “patent, publish and prosper.” We said Indian ideas must generate wealth for our nation, not for other nations, as used to be the case then. We incentivized the scientists. On NCL’s foundation day, we started giving a silver medal and a cash prize for anyone who had succeeded in acquiring a US patent. Initially, there were barely a couple of medal winners. But the number kept on swelling as the awareness grew. Finally the number became so large that NCL stopped giving this medal! After all, the purpose for which the initiative was started was fulfilled.

The feeling of becoming an International Chemical Laboratory was heady. NCL raised its global ambitions. It started exploring unchartered territories. A new aspiration that NCL should also be a global knowledge-based services provider emerged. In 1990, NCL saw an invitation for a global bid for a World Bank consultancy contract for reforms of some leading Chinese chemical research institutions. NCL had never participated in a global bid before. But we said, let our past not be a burden on our future. We participated in the bid. NCL had to compete with the formidable US players, Arthur D Little, Chem Systems and International Development Planners. NCL beat them and won the consultancy contract. Later on, NCL learnt from the Indian embassy in Beijing that it happened to be the first ever consultancy offered from China to India! Interestingly, it had to come from a national laboratory that had got into the good habit of making impossible possible!

All this journey was not easy. There were some fundamental mindset issues. We dealt with them by challenging ourselves. For instance, for all these years, NCL was used to getting government grants, no loans. NCL went out and got a World Bank loan. The good thing about the World Bank loan was that it had to be returned; not by the government, but by NCL itself! How could it be returned, if NCL did not create surpluses or profits? That meant doing research as a business. That was not easy. When I created a new Business Development Group in NCL, I came under attack from some leading scientists. They said Mashelkar is bringing the word “business” in the organization. That is going to corrupt the minds of the scientists. But none of that happened. NCL grew its business both qualitatively and quantitatively, and so was the case with its scientific research output with some breakthroughs in science appearing in leading journals at the same time. NCL showed that high science and science-based business could indeed coexist.

Leading CSIR Transformation

I led CSIR, a 20,000-strong family of 40 laboratories for a record of eleven and half years (1995¬–2006). the CSIR is the largest publicly funded industrial research and development chain of laboratories in the world. CSIR was born in 1942. CSIR went through different phases. In the 1950s, CSIR was trying to get some respectability for Indian science. The 1960s was the time when CSIR started addressing the challenge of applying science for the good of the Indian people. The era of indigenous technology development for the Indian industry started then. The 1970s was the time, when CSIR started learning the real intricacies of the journey from the mind to market place. The lessons that CSIR learnt gave it the confidence in the 1980s to become more adventurous. Like entering high-technology areas, such as modern bio-technology, advanced materials, etc. The 1990s was the time when CSIR said, “Why should we be beggars and borrowers of technology from the rest of the world? Should we not have the dream of exporting our knowledge to the outside world, especially the developed world?” So, a transformation started, where CSIR’s client list expanded from Indian enterprises to global enterprises. In the ensuing years and beyond, an exciting thrust on excellence and relevance emerged; excellence in terms of being first to the world, whether in science or in technology. Relevance meant contributing to the national agenda of inclusive growth through science led inclusive innovation.

I was appointed the director general of CSIR on July 1, 1995. A month before I took the office, someone asked me about my dream for CSIR. I said, “CSIR incorporated.” Then what was the dream for myself? I said, “Chief Executive Officer of CSIR.” In fact, I remember a nice clipping in a newspaper referring to me as a corporate scientist, who thought the corporate way and talked the corporate language!

Within the first year of my taking over, I visited each of the 40 CSIR laboratories, which were spread from Kashmir to Kanyakumari. I addressed over 20,000 members of the CSIR family. I saw a big cultural divide between the CSIR institutions and the industry. The fact that science has to make an economic and social sense had not dawned on a large number of laboratories in CSIR, whereas demand on science from Indian industry was sadly missing. The CSIR laboratories worked on the basis of scientific novelties and perceived needs, whereas the business worked on the basis of attractiveness in the market and potential for profit. The products from the CSIR institutions invariably came out as packages containing knowledge and information, whereas the business was looking for only finished goods and services, which were saleable.

The main challenge was to see that industry viewed the CSIR laboratories as idea generators, providers of new concepts, and windows on knowledge on the rest of the world. I tried to persuade the Indian industry to assume the role of partners, who had the technical, financial, and marketing strengths to take the ideas to the market place. I tried to convince the industry that it should not look at the CSIR laboratories as super markets, where off the shelf technologies were sold, but in the true spirit of partnership, the Indian industry should willingly integrate CSIR R&D resources into their business strategy. I tried to create a climate of improved communication and understanding, faith in mutual growth, and development of healthy working relationships. But to build this trust and confidence in Indian industry, I had to show that CSIR itself was willing to change.

In January 1996, we released CSIR 2001: Vision & Strategy, a white paper, which was an announcement of CSIR’s will to change. It was an explicit agenda for CSIR with a detailed road map for attaining the true potential of the organization. We defined a new product and a new process in CSIR. The new product was research as a business. The new process was doing research in a businesslike manner. We were enthused when the corporate world appreciated the vision paper. I remember Mr Ratan Tata, in a private conversation with me, called it a unique corporate like document from a publicly funded organization.

The CSIR 2001 Vision document was an important milestone. I brought this out after a wide consultation with our stakeholders, both internal as well as external. I remember Dr A. P. J. Abdul Kalam, our former president, was a member of the Advisory Board. He was a great friend and a guide for CSIR. When I spoke about Vision 2001, he said, “Why don’t you have Vision 2020?” I said, “I retire in 2002. I will like to be judged before I retire.”

There was yet another challenge. CSIR had 40 laboratories, and they had always behaved like 40 separate laboratories. The sense of belonging to a family of CSIR was missing. Amazingly, that alignment began to happen with the creation of the vision document for CSIR 2001. So following CSIR 2001, came NCL 2001, CMRI 2001, CFRI 2001; all individual laboratories aligning themselves to the vision of CSIR 2001. The CSIR laboratories were like disoriented magnetic needles placed on a paper. It was like bringing a magnet near the paper, by which all these randomly placed needles started orienting and aligning by responding to the magnetic power of the CSIR 2001 vision!

My fulfilling moment was on May 11, 1998, when we had CSIR Directors’ Conference in Bangalore. The theme of that conference was TEAM CSIR. I was deeply touched when in a charged closing ceremony, all the 40 directors spontaneously signed on a Bangalore declaration saying, “India matters to us. It is our endeavor that we shall matter to India, more.” This was a perfect alignment of all the leaders to a common goal.

We made conscious efforts to ensure that the power was not centered in Delhi at the headquarters; it was where the action was. We, thus, empowered the directors in the laboratories allowing them freedom in decision-making. Autonomy goes with accountability. We built performance-based budget allocation systems for the laboratories. Each laboratory was asked to develop a business plan, not just a research plan. We set targets not only on the external earnings but also on the new production to be catalyzed in industry, new jobs to be created, etc. The tangible impact of CSIR on industry and society had to be assessed and measured not just for CSIR’s sake, but for the sake of the nation.

I kept on making a conscious effort to awaken the scientist in an entrepreneur and an entrepreneur in a scientist. If a scientist created wealth for the nation through the technologies developed by him, then we felt that he should also get a share of this wealth. So we created incentive schemes for these scientists, both at the individual and institutional level. At an individual scientist level, we said the salary does not have to be equal to the income. In fact, the income can be much higher than the salary. We gave a handsome share to the scientists from the royalties and licensing fees that were earned. At the institutional level, we allowed the laboratories to build a corpus through the net surpluses that they generated by offering their knowledge products to industry. The laboratories were allowed full freedom to use the surpluses in the way they wanted. This meant autonomy and freedom, but only to the performers, who generated surpluses. No surplus, no freedom! We allowed our laboratories to set up commercial arms. The CSIR scientists were allowed to be on the boards of directors of both public sector and private sector companies. Similarly our Research Councils of all individual laboratories drew up to 50 percent of its members from the corporate world. This brought that much needed corporate culture and thinking in the laboratories. We could see the visible difference that was brought about when Subroto Ganguly of IPCL chaired the Research Council of NCL or Jamshed Irani of (then) TISCO, chaired the Research Council of National Metallurgical Laboratory.

Progress through partnership at all levels—local, national, and global—was CSIR’s goal. For this, we had to build strong internal knowledge networks within CSIR by building a TEAM CSIR spirit. We launched such major TEAM CSIR efforts in areas, where India could emerge as a global leader. For instance, India is described as a rich country, where poor people live. Our richness, among other things, is due to our rich biodiversity and our rich traditional medicinal systems. India had so far not been able to exploit this advantage. For this purpose, CSIR launched a program on discovery and development of bioactives based on plant and other sources by bringing traditional medicine, modern medicine and modern science together. Twenty of the CSIR laboratories were networked together in this exciting endeavor. Other similar networks followed. This was the first time in the history of CSIR that such massive networking and synergy were built.

Going further, while building strong linkages with the corporate world in India, CSIR built global partnerships by realizing that the chain of concept to commercialization necessarily crosses transnational boundaries. As a part of the global innovation strategy, several companies world over were scouting for new ideas and patents. Taking advantage of this strategic shift, CSIR forged global partnerships. Thus Mobil and Indian Institute of Petroleum (IIP) joined hands to jointly develop and market the Mobil–IIP technologies worldwide. Stone & Webster of the US partnered for implementing IIP’s technologies on visbreaking. SmithKline Beacham joined hands with Indian Institute of Chemical Technology (IICT) in some exciting projects on drugs. Boeing partnered with National Aerospace Laboratories (NAL) for some crucial fatigue research. NAL’s software supplied to Civil Aviation Authority in the UK started determining the landing frequency of aircrafts at the Heathrow airport. NCL’s partnerships with giants, such as General Electric, became a model for external R&D alliances. On March 4, 1995, I had delivered the Thapar Memorial Lecture. Dr Manmohan Singh, who was then the finance minister of India, chaired this lecture. It was titled “India’s Emergence as a Global R&D Platform: The Challenges and Opportunities.” No one had believed me then. But they believe it now. Today, over 760 companies from abroad have set up their R&D centers in India, from GE to GM, from IBM to CISCO, from Dow to DuPont, and from Nokia to Shell.

While CSIR was forging global corporate level partnerships, not for a moment it forgot its basic charter in terms of doing what was good for India. CSIR created jobs for the poor in India. Central Institute of Medicinal and Aromatic Plants (CIMAP) had a breakthrough on menthol mint, on which 70 percent of menthol production in India was based. More than five million man-days of jobs were created, essentially for the poor. India also displaced China to the second position as an exporting nation. CSIR breakthrough on the E-MAL, which is an anti-malaria drug for cerebral malaria, was another breakthrough. These affordable drugs were supplied not only to the Indians, but to 48 countries in the world, many of them from sub-Saharan Africa. Central Leather Research Institute (CLRI) was the saviour of Indian leather industry. CLRI brought back tanneries that were closed due to pollution by developing green technology. This saved several thousands of jobs for the underprivileged poor. CSIR demonstrated by action that India mattered to it and it wanted to matter to India, more.

This CSIR transformation in the 1990s has been held as one of the top 10 achievements of Indian science and technology in the 20th century in the book titled as Scientific Edge by India’s celebrated scientist, Jayant Narlikar. A cover story has been written by Business India on the CSIR transformation. It was the first time such a cover story on Indian science and technology appeared in any business magazine. A chapter on CSIR transformation appeared in a book titled World Class in India published by Penguin for management students. The book was all about how Indian entities managed radical change in the post-liberalized India. Among the editors of the book, was the global management guru, Sumantra Ghoshal. CSIR’s case study featured along with the case studies for Reliance, Wipro, Infosys, etc. The World Bank has used the CSIR transformation as a model for institutional transformation. In fact, I remember Jim Wolfensohn, the president of World Bank, inviting me to come to Moscow and share the experience of CSIR transformation with a presentation to the prime minister of Russia, so that Russian institutions could learn from the experience of CSIR transformation!

I received an invitation to speak about the CSIR transformation in the series “Ideas That Have Worked” set up by Mr Arun Shourie, when he was the minister in the Indian cabinet in the year 2000. In that series, Dr A. P. J.Abdul Kalam spoke about his Vision 2020. Chandrababu Naidu spoke about converting Hyderabad into Cyberabad. M. S. Swaminathan spoke about the Green Revolution. Verghese Kurien spoke about the White Revolution. Ratan Tata spoke about the making of Indica. Mukesh Ambani spoke about the making of the giant Indian enterprise, Reliance. To rank CSIR transformation along with these epochal Indian achievements was something very special for me.

How do I look back on my leadership? John Adams had famously said, “If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” I earnestly hope that when others judge my leadership, I will be able to clear this acid test of leadership at least with passing marks, if not with flying colours.

Thought Leadership

Thought and action are both important in leadership. The power of thoughts can transform nations, if the thoughts are converted into action. Such thought leadership, if pursued with passion and patience (yes, in India, one does require that), it can yield phenomenal results.

From my personal experience, I would like to highlight three areas: first, the thought that Indian ideas must be patented by Indians so that the wealth can be created in India. The second is the thought that the “I” in India must stand for innovation, and not imitation, and therefore, like a freedom movement, there should be an Indian innovation movement. And the third facet is that if the thoughts are powerful enough then the top political leadership owns them, champions them, and that can make a huge difference. Let us begin with my experience of the third facet first.

I had given a talk “Mind vs Mindset: The Grand Indian Challenge” on August 9, 2008, in Lucknow in an event organized by the All India Management Association (AIMA). I had then said,
India has three things, which will stand for it in good stead. They all have to do with innovation and creativity because only those nations will survive and succeed in the 21st century which are great in innovation and creativity. So, what are those three things? They are three Ds: Democracy, Diversity, and Demography.

Our Prime Minister released the First Report to the People of National Innovation Council on November, 15, 2011. In his address, he said, “There are some advantages that we have an achieving the task that we have set for ourselves. Our democracy, our diversity and our demography are all facilitating factors which encourage innovation in our country.” It was so wonderful to see the prime minister himself championing these thoughts.

And here is yet another example of the thought leadership. The Government of India had created an oversight committee under the chairmanship of Veerappa Moily in the year 2005 to consider the implementation of the government’s reservation policy in the higher educational institutions (such as the Indian Institute of Technologies [IITs]). In my very first meeting with the chairman, I suggested to him a guiding principle for the committee. That was about balancing “expansion, inclusion, and excellence.” He saw the merit in it immediately. I am very happy that the entire Moily committee report was built around this theme. The National Knowledge Commission report (2009) championed this thought further by stating that “converting India into a knowledge society shall require, inter alia, addressing the issue of expansion, excellence and inclusion in education.” The President of India, in her address to the Parliament on June 4, 2009, endorsed this thought too by emphasizing “Government’s strategy for higher education will be formulated around a threefold objective of expansion, inclusion and excellence.”

But it is not the political leadership accepting the thoughts that matter. Action matters. And I will provide now examples, where thoughts and action went together. Our intellectual property rights (IPR) journey began in a small way in NCL, but then it spread to CSIR, which was a chain of 40 NCL like national laboratories. In 1996, CSIR was the first one to announce a formal institutional IPR policy in India. And the results started showing. The list of the top 50 patent filers under Patent Cooperations Treaty (PCT) used to be published annually by World Intellectual Property Organization (WIPO) in Geneva. India hardly figured in this list. But then there came a time, when CSIR rose to the number one position, even ahead of companies like Samsung and LG. CSIR, for quite a while, held the leadership position with almost half to two-thirds of the share of US patents granted to India.

And as the IPR message spread; it attracted the attention of national leaders in science, technology, and business. Let me give just two examples. In the early 1990s, Dr A. P. J. Abdul Kalam was heading the Defence Research and Development Organization (DRDO). He asked me to address the directors of DRDO in a meeting that was held in Pune. I gave a hard talk about the need for the research laboratories to be patent literate. In an after-lunch conversation, I remember Dr Kalam saying to me, in all his characteristic humility, that he did not know enough about patents. And he asked me as to what role patenting would play in DRDO. I explained to him the difference that patents could make to DRDO. Dr Kalam was a highly action-oriented man. I remember his immediately calling some senior DRDO scientists and asking them to introduce systems on IPR protection in the DRDO on the lines of CSIR. And today, DRDO is doing so well in protecting its own IPR.

The power of this thought went beyond the government-funded institutions. In the mid-1990s, I remember an air journey from Jamshedpur to Pune with Dr Jamshed Irani, who was then the managing director of TISCO, which is now Tata Steel. He wondered about the importance of patenting in steel industry, which was, after all, such a mature industry. I convinced him about the role of patenting even in steel industry. And then I remember Dr Irani requesting me to send the head of Intellectual Property Management Division of CSIR to interact with the TISCO R&D staff. Dr Irani then galvanized his people to an extent that Tata Steel has become a frontrunner in IP creation and protection in steel industry now.

And this thought leadership on intellectual property influenced the Indian intellectual property policies too. By January 1, 2005, India had to meet an international obligation. It had to introduce the changes in the IPR legislation to make the Indian laws compatible with TRIPS, that is, Trade Related Aspects of Intellectual Property Rights. But this had to be done while ensuring that the Indian interests were fully protected. I remember my intense involvement in this national challenge.

Pubic awakening across the length and the breadth of India was very important, so complex were the issues and so important were the consequences of the changes. The Department of Industrial Policy and Promotion of Ministry of Industry and Commerce held around 20–25 public meetings across the country, inviting 200–300 participants in each of these meetings from all walks of life. This series of meetings of public awakening began in New Delhi with a one-hour opening talk by me. Again, I repeated my message in the J. R. D. Tata Corporate Leadership Award Lecture (1998) there. I said, “Erase the impression of India as a country that is ducking and avoiding to one where it is willing to aggressively face the global competition by leading with a positive intellectual property policy.” It went so well that there was a demand that this lecture be repeated in all the remaining meetings across India! Well, I could not have done this physically by moving to 20–25 locations in India! So Rajeev Ratan Shah, who was then the secretary, made an innovative suggestion. His idea was to make a 30-minute video of my address on the need to change and play it in all those nationwide meetings. I would like to believe that at least in some small way, this influenced the national thinking. And I was so happy when the Patent Amendments Bill was finally passed by the Parliament.

Let me move to a second powerful thought. “Innovation” has become a buzz word now. But the title of my J. R. D. Tata Corporate Leadership award lecture way back in 1998 was “On launching a National Innovation Movement.” I had proposed,

Finally, 1999 should be the year, where we should launch a powerful national innovation movement to propel us into the next millennium. The “I” in India, should not stand for imitation and inhibition, it must stand for innovation. The “I” in every individual Indian must stand for innovation. It is only this innovative India that will signal to the rest of the world, that we are not a hesitant nation, unsure of our place in the new global order, but a confident one, that is raring to go and be a leader in the comity of nations.

Again I repeated this message in the January 2000 in my Science Congress Presidential address, when I proposed the New Panchsheel for the New Millennium, a five-point national agenda, which comprised child-centered India, woman-centered family, human-centered development, knowledge-centered society, and innovation-centered India. And yet again, speaking during the lecture series “Ideas That Have Worked” in New Delhi in April 2000, I repeated the message in the J. R. D. Tata lecture practically verbatim. And I kept on repeating it persistently and relentlessly throughout the nation for almost a decade and almost month after month!

I was delighted when the prime minister, in his inaugural speech at the Science Congress in 2010, formally declared the decade 2010–2020 as the Indian Decade of Innovation. And I was further delighted, when this announcement was followed by the formation of Prime Minister’s National Innovation Council (NInC) under the leadership of one of India’s most visionary innovation leaders, Sam Pitroda. And I was even more delighted when the idea of an Indian inclusive innovation fund at a national level (that was proposed by me) was accepted and the Indian Inclusive Innovation Fund was formally announced by the then Finance Minister Pranab Mukherjee on November 15, 2011, in New Delhi in the presence of the prime minister.

And here is a final thought on thought leadership. As reflected earlier, it is true that great thoughts and great action must go together. But thought leadership is an essential part of great leadership. Thought leaders look at the future. They are often ahead of their time. They set a courageous course that others are compelled to follow, sooner or later. True thought leaders think of the “next practices”—not just the “best practices.” They ferment a disruptive change, a radical transformation. John F. Kennedy said, “Man on the Moon.” The US was stirred as a nation. Lal Bhadur Shastri said, “Jai Jawan-Jai Kisan.” India was stirred as a nation. Bill Gates dreamt “Desktop in every home.” It shook the business. Dhirubhai Ambani said, “Phone call at the cost of a post-card.” There are 800 million mobiles in India today. We need more thought leaders in our industry, in our society, in our nation and, at this time, in our history, more than ever before, especially since the doubts are lingering in recent times as to whether India can do it. It is these thought leaders alone, who can bring back that much needed spirit—yes, we can!