Culture is an infinite term, and lays the foundation of an organisation, builds and nurtures it, defines its purpose, guides its strategies, behaviour of its people and ultimately delivers results. In this context, we need to understand the key cultural drivers in the evolution of Infrastructure Leasing & Financial Services Limited (IL&FS).

Today, 60% of the employees of the Group were either not born or were in school when IL&FS began in 1988, and this article is dedicated to this group of people who may not be fully conversant with the Cultural threads which have seen the Group build a brand and reputation, manage turbulent times and exploit opportunities over the years. It will also serve as a tool for all of us to mould businesses and teams for effective results, and an enjoyable journey ahead.

 IL&FS opened its innings to create a mark in the development of infrastructure and financial services with a paid up capital of USD 1 million and had only 20 employees. Twenty seven years ago, the landscape was very different in terms of the prevalent regulatory frameworks, competitive forces and scale of operations.  To give a perspective, there were no clear laws which defined public private participation in infrastructure as the concept was alien to most. The financial markets were underdeveloped with a few dominant financial institutions and public banks & cartelised players in the capital market and advisory space. The average lending deal in IL&FS was Rs 10 million.

Today IL&FS has become a large and diversified Group which operates across various businesses in over 12 countries, has around 2000 family members and invested more than USD 15 billion. This journey of creating a brand, scale and profitable growth was tough but fun and enriching for stakeholders. The one thing which drove this was a unique Culture- which has weaved each part of the Group.

So, the key questions are, (1) What is the unique Culture and DNA of IL&FS which has helped transcend various business cycles and helped build the Group into what is truly unique and valuable (2) In the current context do we need to fine tune this Culture to ensure consistency and growth in value and performance.

The Culture has and will outlive the various people who have been part of this journey. The beauty of this culture is that it is unique to IL&FS and lives with you even after you have left the family. This permanent indoctrination is corroborated not only by ex-family members, but even by competitors and associates alike. Go to a party and you can feel it. Of the various elements of culture the 5 most dominant ones are Camaraderie, Entrepreneurship, Trust & Relationships, Risk Taking and Innovation.

 These traits are displayed in multiple situations in everyday life in the Group and become second nature. Each one of us would have heard of or experienced them without feeling or realising the underlying strategic cultural trait behind the project, deal or behaviour. It is further not visible to us because it is never overtly communicated to anybody. This may be our folly. Let me take the liberty of narrating two specific real life instances demonstrating an amalgam of these traits and the impacts, one which was told to me by an external associate and one which I have experienced myself.


A few years after being born in 1988, IL&FS wanted to enter into the Stock Broking business and sought a Broking License with the Bombay Stock Exchange (BSE), a monopoly which was run by traditional broking houses. Broking licenses traded at a premium. There was no institutional member in the BSE, and after a long wait for 1 year, the application was de facto rejected. Over a drink one friend of IL&FS jocularly said “IL&FS will never get a license, it is better you guys should start your own exchange”. The comment stuck, and a stray conversation was converted into a business proposition. This was radical entrepreneurial innovation. Obviously being a midget in the financial industry, IL&FS could not pull this off alone on the strength of its own limited financial capital. IL&FS drew upon its Trust &Relationship card and put together a Consortium of Banks and Financial Institutions who also had similar idealogies on the subject and pooled in capital to start the National Stock Exchange (NSE). IL&FS led the initiative and wrapped it around with a strong management team and an advanced technology platform. The rest was history. As you know today NSE is the dominant exchange, and created enormous value for all the investors. Further, even after the creation of NSE, quite a few attempts were made to start exchanges, but none have scaled the heights of the NSE.

Leading Questions : What would you have done in place of IL&FS? Was the journey easy? Why is it that there is nobody else who could replicate NSE? How you develop and sustain these cultural traits to exploit opportunities? How would a similar initiative work in today’s environment?


Taking sabbaticals is a healthy practice for self- discovery and exploring the world. I took an 18 month one with a multinational NBFC in 2004. It helped me learn and unlearn a few things. Like most multinationals it was a very siloed and target driven company with great international strengths and products. Over a period of time, it had assimilated 6-7 IL&FS guys in various capacities. Three of us were business leaders chasing similar deals, and at times the same deal! Funny but real. It confused teams as well as customers, and many a times we were fighting internally than externally leading to sub-optimal results. My team (Corporate Finance) and the Financial Institutions Group (FIG) were at loggerheads on an aircraft finance deal. FIG was headed by an IL&FS guy. We both were behind our respective budgets, just like everybody always was! The teams were undercutting each other and was turning ugly. This went on for over a month and our teams tried to play me with the other guy. Little did they know that we were bound together through a common culture of selfless Camraderie which was well beyond territories and targets. A three word conversation between us saying “aare let it go yaar” was enough to end the crisis. This approach to conflict resolution was alien to the prevalent culture.My team congratulated me, and the other team said my colleague was too soft. We both knew what it meant. One thing happened though, we were labelled as “The IL&FS Gang” and nobody ever tried to play us till the end of our sabbaticals. Anybody who has spent at least 5 years in IL&FS will always be an IL&FS guy, wherever he is and will be bound together for life.

Leading Questions : Would you have experienced this with any of your ex-colleagues? Do you experience the same with your colleagues in IFIN? What stance would you have taken in a conflict situation of personal goal vs personal friendship?

The above Cases provide an outline of the key traits of the IL&FS culture and also points to certain leading questions. I am sure each one of us has experienced similar business or personal situations at work. Many of us may feel that the above traits are just theoretical as we have not experienced and realised the benefits. Some of us feel that these cultural traits may not work in all situations. There is no right or wrong. The solution has worked in the past, may need to be modified for each situation in the present environment, but surely is a very potent strategic tool to create opportunities and fun in our working and personal lives. We should create metrics to measure how these cultural traits help us consistently create more wins than losses, more profits than losses and more pride than shame.

In summation, Culture is the soul of any organisation. The purpose of its existence, its direction, activities; all are based on its culture. Ultimately it is reflected in performance and builds the image of the organisation. So, organisational culture sets foundation of the organisation, builds its pillars, act as compass and finally act as barometer which detects the organisation's achievements. Incremental change in organisational culture is a positive sign of successful organisations but in some cases its sudden change is required, if the performance of the organisations starts decreasing due to inability of organisation's culture to cope up with external environment. Lastly, a study of organisational culture, gives solutions to most of the organisational problems, on the other hand can be used as a strategic tool to improve effectiveness.


Milind Patel

Milind Patel is Joint Managing Director of IL&FS Financial Services (IFIN) and driving the people’s agenda of the organization is very close to his heart.


Opinions expressed by the Contributors are their own and do not reflect any opinion of IL&FS Financial Services on the said subject

© Copyright 2015-16. All rights reserved.