Where China is often compared to the “dragon,” India is the “elephant” and there is currently a great deal of debate over which will dominate the economic world in the future. While it has been many decades since Westerners first began to learn the management and leadership wisdom encapsulated in the strategies of Sun Tzu and in ancient Chinese traditions, it is only comparatively recently that they began to look to the spiritual wisdom in the ancient Indian traditions and apply it to business and leadership. In 2006, BusinessWeek reported the movement of “Karma Capitalism,”¹ since when Indian wisdom, along with its economic development, has attracted increasing attention.

Debashis Chatterjee, a long-time advocate of the need for a new model of leadership, is well positioned to ride this wave of enthusiasm for timeless leadership wisdom. He spoke to me about his ideas on leadership over the phone from Kozhikode, India, in December 2009.

Then I thought an MBA degree might help me make better sense of organizations. But when I went for an MBA in the Indian Institute of Management, I realized that they were teaching pretty much what Harvard and MIT would be teaching. There was hardly anything “Indian” about the Indian Institute of Management.

So I decided to try my luck at MIT and Harvard. Luckily I got a Fulbright Fellowship twice, one pre-doctoral and the other postdoctoral, which landed me both in MIT and Harvard.

In that book, I argue for looking at the huge amount of wisdom in the Indian tradition and applying it in management and leadership. Like in most countries which were colonized before, in India once an idea is endorsed by America or England it gets more accepted. Since I got the endorsement from Harvard and MIT and I was also doing programs for Motorola when I was in the United States, the book began to circulate not just around the world but also in India. People began to understand that Indian wisdom can be explored to find solutions to our corporate problems. I am proud that I could influence my own people in a way that I hadn’t thought I could.

The phrase “Karma Capitalism” seems to me simply another very popular Western way of classifying a very complex civilization like India. You can’t have one label for China called “Red Book Management.” It doesn’t say much about China. “Karma Capitalism” says only a little bit about India. The word “karma” is not even properly understood by the Western psyche: it means much more than just fate or whatever import that the Western world has given it.

When you talk about purpose, the Indian orientation is essentially the evolution of the person—that is the ultimate purpose. Why should I work for an organization? Because it helps me evolve as a person. This is a very different orientation. When I say I am a person, my boundary between the person and the community is not as strong as it would be in the Western sense. So for me the person and the community are pretty much inclusive concepts. For instance, our surnames are actually based on gotras. In Vedic Sanskrit, the word gotra originally meant “cow-pen.” Cows were at the time the most valuable possession of a family group, so with time, the term gotra began to refer to the family group who owned a particular pen of cows. The term was associated eventually with just the family group and its lineage. Gotras are also named after ancient Indian sages or rishis. In Maharashtra, Western India, you will find people who have got their surnames from the names of the villages they come from.

So the orientation toward community has been part of the Indian psyche. When we talk of “karma,” we talk about the collective, the larger aspect, not just the individual’s personal trajectory in life. When we talk about the individual, we talk about the individual as indivisible from the community.

For instance, the role models of leadership in India have been people like Mahatma Gandhi, J. R. D. Tata of the Tata Group and Narayana Murthy of Infosys. These people have had sacrifice and renunciation as a common streak in their character. They follow the same paradigm, which means that the leader is the trustee of wealth and he is a trustee because he stands in trust with the rest of the community. He holds in trust the wealth which is not his personal property. What does he get out of holding wealth in trust? Well, he evolves as a person vertically, and the community trusts him more for it. So sacrifice does not necessarily mean giving up; it means taking something higher and that the lower appetites for personal possession and all of that fall off by themselves.

“Renunciation” is a very important word for India. It means not sacrificing alone but evolving to a higher plane of living and perception. Therefore a typical Indian leader will be half sage and half king. He’s got a kingdom but it will not be his personal wealth, but the community wealth that he holds in trust. All our major role models in India have more or less followed that dimension. So I would add one more aspect to what Prahalad said and call it an inclusive and vertical orientation toward capitalism.

In India a leader is viewed not just as a social entity. He is viewed from his internal orientation and his commitment to the truth. If you look at our prime minister, he is respected primarily because of his personal conduct. He is a very qualified economist, with degrees from Cambridge and Oxford, yet India adores him for his simplicity. He is not very socially savvy, not a great orator or anything. But he is somebody whose integrity is deep and beyond question.

So India has always looked at the inner side of leadership a lot more. Our role models are not very impressive to look at from the social context, but some of them are extremely impressive in terms of their personal integrity, their commitment to the sync between beliefs and actions, the inner work of purification of personal greed, and all of that.

For example, democracy has functioned for such a long time in India. The value of democracy is very deeply entrenched in the Indian psyche. I think democracy in India is understood very differently from the understanding in the Western context. India has got a different orientation toward democracy and leaders have to understand it. Democracy means that we are all of the one same spirit. So at the human level we are all one, but not necessarily at the social and economic levels. That’s where the Indian definition of democracy is unique and leaders have to understand and pay due attention to that.

I think the real job of a leader is to address human suffering in terms of people not being able to reach their full potential. If the leader did not address the human suffering he would not be a leader for long because, eventually, it is in the human context that I look at the leadership largely. I don’t look at leadership from the point of view of business performance, because performance comes when human beings within the organization reach their full potential. So, it is the leader’s job to enable people to arrive at their ultimate potential, to remove their sufferings and those blocks for them to actualize their full potential.

In the West, they say “I think therefore I am;” in India we say “I am therefore I think.” So my being, my being alive, and my being human, is a primary condition for me to be a member of an organization. If I am a member of an organization, it is the organization’s job to create for me a job profile which is natural and spontaneously aligned with my talents and my gifts. So if I don’t change the organization to suit the individuals’ natural capabilities, then I am doing disservice to the individuals. That’s where consciousness is very critical: am I conscious of the person I am dealing with in the context of the organization? Business grows because people grow the business. We often say “the customer comes first.” Indians would tend to believe that the human being comes first—the customer is merely a nomenclature.

On another occasion, some employees were on strike and demonstrating with slogans and flags outside. He looked at them and talked personally to the HR manager: “Look,” he said, “they have the right to demonstrate, but they should not demonstrate like that under the hot sun. Why don’t you give them a cold drink and ask them to stand in the shade? I am not taking over their right to protest, but making them a little more comfortable so that they are treated as human beings, not just as protesting laborers.”

This is the Indian orientation: a state of consciousness. We are talking about being conscious of a human being behind the action, not just a designation or a role. That’s very important for the Indian context.

Our environment is who we are. When we change, our environment also changes. So, it looks very difficult on the face of it, but it might not be that difficult when we have transformed ourselves. Let me give you a metaphor. There is a room that is dark and you are thinking about how to deal with the darkness. All of a sudden you realize that all you need is a flash of light, because the darkness is never there, it is only a perception. Darkness is the absence of light. At the moment I have the illumination of that light, immediately what seems dark is no longer dark.

So, what prevents them from actually believing in it in the working organization is the lack of the right knowledge in the right context. When they experiment with this idea, as many of the managers and my students do, then they realize it works, not just in personal life, but also in organizational life. You need to try it out.

Because the way organizations are constructed is not based on this truth, we have to reconstruct these organizations. Organizations will be very different in the next 100 years. There is a movement now in corporate America called “Conscious Capitalism.” John Mackey of Whole Foods, Ray Anderson of Interface, and several others are involved in it. Some people are now changing the way organizations will be. The history of organizations is not finished yet. You and I are in the process of creating a new story for them.

The caste structure means that human potential is multiple and varied and expresses itself in multiple ways. Someone can be good at cognitive processing, someone can be good at manual dexterity, and someone can be good at trade and service. So the four castes are actually four different human capabilities, but it has become an ossified social structure, with all its negativities.

Originally the caste was about your own potential and the way to maximize your own potential. But the original intent got destroyed and perverted by people who wanted to hold onto the system although they did not have the potential. If you do not have the potential to be a Brahmin, which is the highest caste, you still want to be a Brahmin because of the privileges that go with it. The original intent was very clear. It was about the four different ways that human beings expressed their potential in a collective system.

Look at 9/11. Those behind 9/11 were very competent and educated people. Most of the world’s problems today are created by very competent people. When you have competence without wisdom it is very, very difficult to remain competent.

So I look at wisdom as the primary driver. When India says that spiritual illumination is very important, we are essentially talking about competence which is evolutionary, which makes the world grow as we grow, rather than that we destroy the world and grow at the expense of the universe and planetary system. That’s not competence at all; that’s inefficiency.

Much of what goes out as efficiency is not efficiency at all, including the GDP figures that we have. That’s not a measure of efficiency, but a measure of immense depletion of the world’s natural resources. In India, it raises the question: “Are we getting the competence on sustainable bases or is the competence becoming incompetence in the long run?” That’s the question we have to ask about the way businesses have moved in the last 1,500 years.

So there is an evolutionary urge in all of them, although their material conditions are very poor. What keeps them alive is the spiritual strength. This is the basis of Indian resilience and democracy. You see, whether we fight with each other, whether we kill each other, whatever happens, we have also to honor the fact that we are spiritual beings first and material beings later. So that identification with spiritual strength has given us the resilience that we have as a country and as a culture. That is our greatest strength.

But it can also be our weakness if we do not develop the spiritual values into material wealth for the large number of people. When we hold wealth and do not share, that’s not spiritual. There are still companies where, before they start work in the morning, people worship their machines like they worship a god or a goddess. Everywhere you go in India, you’ll see the impact of spiritual values which are very deeply embedded in the Indian psyche.

In the United States, very often religion is for Sundays, when one goes to church. It is divorced from work and life. In India, religion is integrated with work and life, and that’s what makes India spiritual in the true sense. Spirituality means that at every moment of my living I will live that religion. Religion lives not just in the church, not just in the temple, not just in the mosque. Only when it lives in my everyday activity, when it lives within me as a state of the consciousness of the whole, can I say I am spiritual. So in the United States and Western Europe, spirituality is not quite there in everyday life. There is only a codified form, which is what religion is. Spirituality is free from codes and dogmas. Religion is codified and breeds dogmas.

We are all spiritual but we might not be religious. For instance, I am not religious, but I am spiritual. I don’t go to the temple every day, but I attend to my consciousness on an every-moment basis.

Arjuna is lost in the middle of a battle. He thinks that he cannot kill somebody else as he sees these adversaries as different from himself and therefore he is paralyzed in action. His consciousness is limited to his mind, which divides. Krishna is his charioteer and counselor, a divine being in disguise. Krishna is telling him, “Look, those people that you see as adversaries are neither adversaries nor friends. They are you, yourself. Killing, war, destruction, and devastation also happen in nature. But when they happen for the larger purpose, then this is the right thing to happen at that point in time.” Say, when an earthquake happens, you can’t say, “Why did this earthquake happen?” You know it is a happening. It’s a reality.

So the Gita is a book about being real. It says, “Anything that prevents me from being real is my acquired nature.” Arjuna represents the acquired nature: he has become a fighter; he has some ideas; he has some educated guesses about reality. But Krishna is saying, “Be spontaneous. Be absolutely natural. Be your own self. When you are your own self, you’ll see that fighting the battle is not going to be that difficult because through this battle you are going to evolve as a person, and you are going to evolve into your natural self.”

That’s the message of the Gita. The fight is happening in the mind, where there are a million mutinies and those mutinies have to be sorted out before we become an integrated being. That would align us with the whole of the cosmos, and when we become that, all the conflicts within us would have been resolved. The real war in the Gita is a war in the human mind. That’s where the solution to the world’s problems has to be found. The Gita is a hugely contemporary text although it was written thousands of years ago. It is as contemporary as you can imagine.

India is more thought-driven and China is more action-oriented. You see our businesses: their global imprint is largely through leadership in the intellectual-property sector and all of that. For China, manufacturing is the leading thing.

Let me tell you, the reason for India’s growth spurt is China. We asked, “If China can do it, why can’t we?” China spurs us on. We never said “If America can do it, why can’t we?” We chose China because China is so close to us. However, our growth trajectory will be different from China; we will grow more slowly and perhaps more steadily than China has.

Looking into the future, people often say either India or China will dominate. That doesn’t surprise me at all. What surprises me is why they were asleep for so long. We have actually poked each other into some kind of reselection. We have been complementary, nudging each other to evolve. I think that’s the great part.