With its freshly found financial footing, Ceat, part of the RPG Group, set up by Anant’s grandfather Rama Prasad Goenka in 1979, would seem an odd candidate for a dramatic cultural overhaul. Yet, that is exactly what the third generation scion did.
Or take the case of Nalli, the nine-decade-old, privately held business synonymous with Kanjeevaram silk sarees. “We’ve always had a culture of operational excellence and entrepreneurship,” says Lavanya Nalli, 34, the founder’s great-great granddaughter. After spending six years away from the business—at Harvard University, McKinsey, and Myntra—she was able to see the hurdles that were holding Nalli back from exponential growth.
In the case of Arvind Ltd too, Sanjay Lalbhai’s sons Punit, 36, and Kulin, 32, entered the business about a decade ago and wanted to move from “being a traditional textiles company to a technology company”, which would require certain processes to be put in place. “It wasn’t so much of a departure from the old way of working,” clarifies Kulin, the fifth generation at the company. “My father grew the business from a denim mill to a textiles conglomerate. So that culture of innovation and creativity has always been there. We’re just enhancing and building on it.”
You need to have a clearly communicated vision when looking to change a company’s culture, and then you need to ensure the vision trickles down to all employees,” says Paul Dupuis, CEO of staffing firm Randstad India.
Anant, for one, vouches for this approach. Although the company stood on firmer ground when he took over, employees’ mindsets were still geared towards quarterly results. “We had perpetuated a making-sure-we-don’t-make-losses kind of mindset, but that was not ambitious enough,” he says. “So we asked ourselves, ‘What can we do over a five-year period that will make us proud?’”
Ceat’s TQM effort started in 2010 and only picked up steam in 2012. The company’s vision—that of putting the customer at the core—was clearly communicated to employees and ‘quality’ was made the job of every employee, not just the ‘quality controller’ at the end of a production line. This was done by making ‘kaizens’ or small continuous improvements mandatory for everyone, like improving niggles on the manufacturing front or bettering responses to consumer complaints. “There was resistance initially because it required a lot of documentation,” admits Anant. “We really had to spend time educating people to change their mindsets,” he says, adding that he has taken on the task of improving patent-filing at Ceat. Already 25 were filed last year, up from five that had been filed over the last 50 years. In recognition of its changing ways, Ceat snapped up the globally recognised Deming Prize for quality management, last year.
The youngsters at Arvind Ltd, too, are leading from the front. After all, culture change is driven by leadership, points out Tulsi Jayakumar, head of the Family Managed Business programme at SPJIMR.
“You have to establish a need for any kind of innovation, and then create a shared vision to bring it to life,” says Punit, referring to the slew of new areas Arvind has branched into, including ‘technical textiles’ such as fire-protection gear and combat clothing, an ecommerce arm that will draw on machine learning to understand consumer preferences, and a cotton growing venture. To foster innovative, “outside-in” thinking, as Kulin puts it, the brothers set up an innovation cell. Clear communication, clear responsibilities and the ownership of projects is stressed on, says Kulin. “We also have a tolerance for failure. Without that you cannot innovate.” Currently, in-house innovations such as water-free dyeing of fabrics, making clothing from recycled waste, and using man-made fibres in blends are underway.
Instead, slowly yet deliberately—without trampling on the staff’s innate entrepreneurial spirit—she ensured they had access to the right information, at the right time so that they could take the right decisions. Today, whether it’s about optimising marketing spends or opening a new store, data-based analyses drive all decision-making at the ₹700-crore Nalli.
Lavanya credits this change for the three-fold growth Nalli’s ecommerce division has seen, despite no heavy discounts or marketing spends. Private labels have grown too, including a clothing line for ‘modern women’ to which Lavanya lent her name. “We still have a finger on the pulse of the consumer, and draw on our gut,” she says, “but data helps us identify bottlenecks in the business and quickly work around them.”
Among Marwaris and Gujaratis, in particular, where the sons marry early and enter the family business at a young age, the age difference between fathers and sons is not much. So it’s not as though the skills and experience of the older generation are redundant or irrelevant,” says Jayakumar, highlighting the need for pilot projects in such cases.
When explaining this to franchise owners proved difficult, Srinivas set up Naturals’s own parlours (there was only one at the time in Mumbai, compared to 30 franchised outlets). He wanted to create a more aggressive sales and marketing mindset, yet one that kept the customer at the core. But he knew the company’s older employees who had a more “manufacturing and accounting mindset” would not be his torchbearers. So he spun off a separate entity, Kamaths Natural Retail Pvt Ltd, under the parent company, set up a second owned store in Mumbai’s Vile Parle and hired fresh talent from McDonald’s and other QSR chains to learn from their best practices. “We kept the two entities separate so that employees don’t clash and feel threatened by one another,” he says.
First Published: Jun 26, 2018, 11:41
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