Shared Value Creation as CSR : Interview with Ajit Pattnaik

Interview with Ajit Pattnaik for India CSR Leadership Series with Nayan Mitra

By Nayan Mitra

MUMBAI: There are leaders who strategize, and there are leaders who implement and there are also some leaders who do both – bring about strategic and executable transformations from both levels and create differences at the grassroots echelon. Ajit Pattnaik is one such leader. Enjoy!

What is your concept of creating shared value?

Answer: Shared value creation to me is creating value for the community/environment as well as value for the business, not in isolation but in consonance. The businesses need to identify the social, economic and environmental dimensions in their competitive context and create value for them so that it has an indirect positive impact on the business leading to value creation for the shareholders too.

Is the Indian corporate sector geared to explore and experiment with this concept?

The corporate sector in India is fairly matured now and evolved organisations have started looking at Corporate Social Responsibility from the lenses of Shared Value Creation. Let’s not get confused with the terminology they use, let’s look at the sum and substance of their social and environmental interventions to determine their approach to Shared Value Creation. I will give three examples here-the Essilor’s 2.5NVG (Improving Lives by Improving Sight), Tata Housing’s Construction Workers training initiative and Raymond Ltd’s Tailoring Initiatives, all come under Shared Value Creation for the communities.

The recent statute does not acknowledge shared value as CSR. What is your opinion regarding this?

In my view, the Indian Companies Act 2013, acknowledges shared value creation as CSR, there is no absolute confusion on that. The confusion comes in what you understand by Shared Value Creation, because the Act defines CSR and does not use the term “shared value creation”. But if you look at the spirit of the CSR rules, it clearly encourages shared value creation – it encourages corporates to do CSR in and around their localities and core competencies.

That is the essence of shared value creation. A soft-drink bottling company should ideally invest their CSR kitty or even beyond the kitty to regenerate ground water, a construction Company should ideally invest in ground water re-generation or construction skill development, both are critical for their business survival and growth, a fabrics manufacturer should ideally focus on the well-being and skill enhancement of the Tailors Community; so where is dissonance?

If a Company like Essilor invests in training villagers as Eye Mitra, which is an Optician program and addresses triple objectives: to provide livelihood opportunities to rural youth, to cater to the vision care needs of the rural communities of the country and creation of a rural optician market opportunity, why should not it come under Corporate Social Responsibility? Similarly the skilling and up-gradation of socio-economically deprived Tailors Community comes under CSR, as long as the tailors are not directly employed by the Company.

Do you think there is fortune at the bottom of the pyramid?

Obviously, Look at Narayana Hrudalay, (Narayan Health), 2 milion+ patients every year with 24 state of the art hospitals and cardiac care at a very reasonable cost has truly democratised the cardiac health care in India. Dr. Devi Shetty has made quality health care accessible and affordable by using economies of scale.  Patients at these hospitals get cardiac care at a very low cost through process innovation. This is an excellent example of tapping the fortune at the bottom of the pyramid at the same time serving thousands of poor Indians, who are deprived of quality cardiac care.

You have many years of experience in the social developmental sector. What are its main challenges in India?

The real challenge in India is at the ground-level implementation. While we develop sound strategies and programmes, many of the programmes slow down or even get completely stuck at the stage of implementation. This is because of two reasons:

  1. a) We still believe people working in developmental sector are residual manpower and they need not be paid sufficiently. this mind-set has to change; they are social engineers and they need to be compensated financially well to drive motivation and results.
  2. b) Our commitment to social and environmental projects are still shaky, we still work on adhocism. Considering the nature of the initiatives, they need long-term commitment, which is sadly often missing.

As we move towards more and more shared value creation, these problems will not be there. Shared value creation initiatives will have direct bearing on the sustainability of the business itself and therefore they will be supported and compensated keeping the long-term interest of the business in mind.

What to you is important – quantity or quality manpower? Why?

Quantity and quality both are important. I will twist your question and bring another analogy to it. It is said a single mishap or death is a disaster and an incident involving a large number is a statistics. Coming back to your question, looking at the magnitude of problems we are facing, quantity matters and we cannot ignore that aspect.  But quantity ignoring quality is a strict NO. One need not spread its net without having a realistic assessment of its ability to deliver. Corporates always look for trusted partners to implement their CSR programmes. Sometimes NGOs make the mistake of signing partnerships first and then look for quality manpower to implement. There they fail, getting quality human resource and sharpening their skill-set is the biggest challenge in any industry, more so in developmental sector. Therefore one needs to be careful to bite as much he can chew.

Is it natural for a CSR intervention to graduate into a social enterprise?

No, it is not natural. But one can consciously take it to the level of a social enterprise. But my counter question to you, what is a social enterprise? To me, all social enterprises are for- profit organisations, like any other corporates, but they are not greedy for profits and they do not get into businesses which are not conducive for social betterment. In that sense, I will wish all the corporates of the world to become social enterprises.

About Ajit Pattnaik: Ajit Pattnaik is currently the General Manager & Head of Tailoring in Raymond Ltd. Pattnaik is a Post Graduate in Management from Jamnalal Bajaj Institute of Management Studies Mumbai He has more than 30 years of experience in shared value creation, CSR, sustainability and development sector. As head of Tailoring in Raymond he drives sustainable value creation for communities and consumers through skill development and entrepreneurship development. The 4 C programme (Capability, Capacity, Community Connection and Consumers) under his leadership at Raymond has gained considerable national attention as a unique Shared Value Creation/Sustainability Initiative. In the past he has served as the head of CSR & Sustainability in Tata Housing and, Tata Communications Ltd.

About Nayan Mitra: Nayan Mitra comes with a rich mix of diverse professional experience, in which she straddles seamlessly between academics, social and corporate sectors. As a Developmental Consultant and Researcher, she works closely with some of the eminent Corporations and not-for profits of India as well as being in their Advisory and Board level capacity. She has conducted several social researches for multi-lateral agencies; the findings of which have become important bases for sustainable action. She has been a resource person in eminent Institutions of higher learning in the areas of CSR and Corporate Governance and has important peer reviewed research publications to her credit in double blind peer reviewed national and international Academic journals and books as well as delivered at key Conferences. Her book, ‘Corporate Social Responsibility in India: Cases and Development after the Legal Mandate’ alongwith co-editor Dr. Rene Schmidpeter is a first book of its kind that charters the development of mandated Indian CSR from a multi-stakeholder perspective, that has recently received the coveted India CSR Author Award, 2017. She spearheads the India CSR Leadership Series. She was a finalist of the prestigious Chevening Gurukul Scholarship for Leadership and Excellence – 2013, as conferred by the Foreign and Commonwealth Office (FCO) of the British Deputy High Commission.

Interview was conducted by Nayan Mitra.

Disclaimer: The thoughts captured in the interview is solely that of the interviewee. The views expressed by the author in this feature are entirely his own and do not necessarily reflect the views of India CSR.

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