'We choose people who are entrepreneurial'

Last Updated 31 March 2013, 16:01 IST

Nitin Nohria, a Mumbai native, is the first Asian dean of Harvard Business School. He spoke in Hong Kong about globalisation, culture shock, the importance of teaching business ethics and why “bank” need not be a four-letter word.

Several major US universities are opening campuses in the Middle East and Asia. Are there similar plans at your school?

Harvard Business School made a decision – and only time will tell whether it is a good or bad one – that investing globally in full-scale campuses is not the most sensible way to promote globalisation. We have a hard time being convinced that we could offer the same educational experiences abroad. Replicating the hardware of a campus is easy; but it takes a long time to build the software.

How do you stay in touch with an increasingly globalised world?

Our approach is to have the biggest global intellectual footprint with the smallest physical footprint. We have seven international research centres – the one here in Hong Kong was our first. Well, actually one is in Silicon Valley. But when you are in Boston, that sometimes feels like a foreign country.  In January, we opened a very lean centre in Istanbul, which is a great meeting point between the East and West, a place where one can easily reach the Middle East, Eastern Europe and former Soviet states. We write 250 to 300 case studies a year, and more than half of these are international. So our students are reading about China and India, Brazil and Africa.

When you started your job in 2010, you said that you would send all your students overseas. How has that worked?

Two years ago, we introduced the “field method” of teaching. All 900 of our first-year students must travel abroad as a requirement. At the time, a lot of people told us we were crazy because of the logistics of it. They spend 10 weeks in Boston coming up with a business idea, and then they take it overseas for a one-week experience with a company. Very quickly, they realise the profound difference between their imaginations and reality. Most of them say that this was one of their most powerful experiences at our school.

There’s a belief today that children must stay on a narrow academic path to succeed, and that any failure could doom them later in life. But you were initially rejected from your alma mater, the Indian Institute of Technology, Bombay.

When I was a student in India, you could apply to university twice – the first time in 11th grade. When I didn’t get in, I felt like my life was over. But I tried again the next year. People did not wait for admission letters then, as the postal system was unreliable. The universities would post lists of names on campus. So everyone would show up. The names were arranged not alphabetically but by rank, with a line drawn under the last student admitted. I’d never been happier to be No 600 on a list. It’s quite sad that we put children through this extraordinary stress. It takes a long time to discover what you are really good at.

When did you figure out what you wanted to do?

When I went to MIT for my PhD, I started by studying finance, which I felt was closer to my engineering background. But I knew that there were other engineering students, and finance students, who were great at doing math in their heads. I was not. I couldn’t do it.
But I started studying sociology, psychology and behaviour, which I’d never had the chance to experience. These were natural subjects for me. If I told my parents as a 16-year-old that I wanted to study sociology, my dad would say, “What? You want to live on the streets?”

This is why I deeply appreciate the liberal arts education in the United States. MIT is known as an engineering school, but it has a great humanities department. I worry that, in a system that puts so much pressure on performance and testing, that we squeeze out the intellectual discovery.

Did you have culture shock going to America as a 21-year-old?

My culture shock was that I felt like I’d arrived at a village from the big city of Bombay. Boston felt like a small town – you couldn’t even go out for dinner after 10 pm, which we did all the time back home. I’d have to go to New York once a month just to feel like I was in a big city again.

I had to learn how to get through the sandwich line. The lady would ask, “What bread?” And I wouldn’t know. In India, we only had one kind of bread. I thought my ordeal was over, but then she’d ask, “What cheese? What condiment?”

But, to be serious, my real adaptation was to the new education system. I called my professors “sir.” And my professor said, “Call me Don.” It took me a month to call him “Don.”

I could say anything on my mind. I didn’t have to self-censor. I could tell someone that I thought he was wrong. It was so liberating. I had the right to be anyone’s intellectual equal. I took my first class with a Nobel winner, Franco Modigliani. I thought I’d have to bow and scrape, but it was just a regular class.

Do overseas students today have to make these same adjustments?

Well, we have the same sandwiches in India now as in America.

Most Harvard Business School students have already worked a few years. Their experiences tend to be tied to the global economy, even if they are working for domestic companies. So their companies have already given them a certain amount of exposure. We choose people who are already entrepreneurial.

On your first day at Harvard Business School, you have to participate. As you probably know, we teach by the case-study method. There are no lectures.

In the beginning, some students only say what they’ve prepared to say before class; they are not discussing things in real time.

But what’s remarkable is how educationally pliable people still are. I’m constantly amazed. You’d think that 20 years of education would make you incapable of learning in another way.

When you were appointed, much was made of your research in the field of ethics – not something usually associated with modern-day business.

It used to be the case that the definition of a good business was one that was as good as its word. In small-town America, the local banker was the most respectable man in town. Now, “bank” is a four-letter word.

There is nothing inherently unethical about business. They’ve always had to earn the trust of their constituency. If you’re trusted, good things happen. Customers come back.

Do you teach business ethics?

We have a full required course called “Leadership and Corporate Accountability”. Here’s one case: A company sells something called “100 per cent apple juice”, but it’s actually flavoured water. You can be put into prison for that.

Your students are among the top in the world. Is it necessary to teach intelligent people that they can’t sell fake apple juice?

They should be reminded of their responsibilities. Just as most people overestimate how smart they are, many may overestimate how good they are.

It’s easy for people to believe in their own sense of moral responsibility; but what happens when they are put under pressure by bosses or tempted by large short-term gains?

Speaking of fake apple juice, there have been problems with product safety, labour practices, nepotism and bribery in major Asian nations. While these problems exist everywhere, they seem more prominent in developing countries. What advice do you have for people operating in these markets?

There is this sense of “When in Rome, do as the Romans do. When in Asia. ...” And there is a different accepted level of corruption in each nation. So, if you try to adopt a different standard, are you foolish? Are you penalised for operating in a way that is morally better?
Look at Infosys and Tata. I’m not saying they’re lily white. But relatively speaking, they operate closer to how a global company does in the West.

You do have a choice. You can make shoddy products, or you can make high-quality ones that people want.

I was speaking with Azim Premji of Wipro. I asked, “How did you have the courage to remain ethical?”

He said, “Those people who are corrupt need to allocate resources to that: They kept being asked to pay more and more bribes. But they gave up on asking me for bribes. Now I can work freely.”

Do you think some cultures lead to worse behaviour than others?

Some cultures are corrupt, like Enron’s. This is the biggest mistake people make when they think about ethical failings: They think it’s (just) one bad apple.

But much of the time it’s good people who have found themselves in circumstances in which they’ve lost their moral compass. We tell our students to be truthful – to recognise when they’ve had a moral lapse.

We ask them to admit to things they’ve done in the past, like cheated or taken bribes. And then we say, “Why did that happen?”

(Published 31 March 2013, 16:01 IST)

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