The World Runs on Powwa/Guanxi

Firstly, I am thankful to a recent blog posting on a related matter that set me thinking on this subject. I had not heard of the word Guanxi before. We have so many words that mean this in India, in the different languages of India, including its own versions of Ind-glish! We call it 'Sifaarish', 'approach', 'influence', 'connection', 'pull', 'power' and my favourite one from the north-eastern part of India called "Powwa (pronounced Pow-wah)."

Thinking about it, I realise from times immemorial, Powwa is what makes the world go around. The world runs on it!

While the motive for most human enterprise (including commercial) is a certain amount of self-interest, it is more truly a measure of special favouritism to people who are close to us or those we like or love. Ultimately, when we have a choice in a capitalistic system, we most often choose to assign the benefits of our work to who we want to, whether they are really worthy of it or not, in other people's eyes. We can hire who we want, not who someone else tells us we should. It is one cornerstone of individual freedom in any society.

Historically, and even now, when people start on a potentially successful or promising business, until it gets to the point that they can afford or need to hire the best and brightest, they involve their near and dear or give them positions that they may not be the best qualified for in the long run. They just need to be capable enough to perform the job acceptably, sometimes barely. Of course, it is obvious that it is downright foolish to hire someone who cannot do the job acceptably, no matter what the situation. Such decisions can make or break a company.

Often the 'best' person to do the job, is determined by more than one or two criteria that are not specific to the job at hand. These criteria can be personal loyalty, chemistry and relationships. Sadly, in such instances another candidate with more educational qualifications or better score will miss out. Such is life. The fortunate family or friend who supported the company in the early days performing not just a narrow job description but anything needed and anything they can help with from accounting to cleaning the premises, will receive the benefits of the company's value in the long run.

　

In the next stage of growing a flourishing company, there will be hiring of people more strictly on merit of their job skills. Only after the business has become viable, and can stand on its own in some measure, will they confidently give the job to a better qualified stranger who has to work to a narrower job description and gets paid only as long as they are able to perform. Then the goal is to grow the company to such a scale that the benefits to the family/friend in the long run outweighs a near term sacrifice. Even at this stage of a company Guanxi/Powwa determine strategic decisions and hiring at the top level, while strictly merit is for operational efficiency and hiring for lower levels in the company.

Almost all famous and successful European or American companies I have known about have started and grown on the basis of Guanxi/Powwa for hundreds of years. They even now do so, even in the famous capitalistic countries or anywhere else. Even in advanced countries, there is usually an order of factors that are not specific to the job and that Powwa/Guanxi preference flows to in the following order - family (near/extended), friends, people of same region, faith, nationality, and race. In many instances, race takes preference over nationality.

Unless we live in Utopia - without borders or discrimination the world over, it does not make always make sense to hire people strictly on the basis of their merit which is based solely on the job. The best we can hope for in our imperfect world is to strike a natural balance where everyone applies Powwa/Guanxi sensibly and it achieves some measure of fairness because everyone has equal opportunity to use Powwa/Guanxi.

Remember, great empires - commercial or political are built and based on Powwa/Guanxi! If that is gone, the empires will crumble - maybe not a bad thing, but not likely or realistic. Having been at the painful receiving end of Powwa/Guanxi and seen it practised around me, I cannot believe I am writing this today. I used to be blindly against it and rant and rave when younger. Age does teach us a few things - to look at things from a different angle and in a larger context.


Copyright  (c) Kannan Narayanamurthy 2013

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