But all through this period, I was steeling time from myself to go back and work on the big picture. I withdrew myself even more from micro management. It was like starting out again from B-school. Back to Peter Drucker. Jim Collins. And every other management book that caught my fancy. The one question that has always stumped me is how value is created. The Outsiders by William Thorndike gave me a great insight into how value was created by a diverse set of American businessmen but I am yet to figure how do you know when value is getting created — is it capital allocation? Inspiring leadership? Right place, right time?
When we started out, we could not see beyond a couple of years. Actually not even that sometimes. I remember the days when I was running from I-Sec office to GIC office trying to do the HPCL transaction. The warrants were available for an abysmal 3 and not even traded when I figured the intrinsic value was about 35. I convinced Nischal Maheshwari to sell the shares and buy the warrants. I sourced the lot from I-Sec and sold it to GIC but we didn’t even have the resources to buy the entire lot at one go. I had to do it in tranches — get the payment for one tranche, and then go take delivery of the next lot on payment…But I was thrilled as it paid for our office expense. That’s all I thought about initially — profitable trades and taking it one step at a time.
Even in 2000, we couldn’t see beyond three to five years. Now, we are 21 years old, and yes, I can see and plan for the next 20 years. Most people — and organisations — can only see as long as they have lived. As I vet my quest for the right ingredients of value creation, the best advice I ever got about organisation building — an important part of that equation — was from the head of investment banking at Goldman Sachs when I met him in New York. He told me something very basic but very important. The rules of building a good organisation, he said, are known to everyone — it’s like everyone knows that to lose weight, you have to eat carefully and exercise regularly. Similarly, everyone knows what constitutes a good organisation, every book talks about the same stuff in some version or the other - invest for the long term, invest in people, listen to your customers etc, all of that is no secret but following it day in and day out is real work and requires a lot of discipline. That’s what makes organisations great. And great organisations have the mindset to adapt — it all starts with great leadership.
Hindustan Motors is still fresh in my memory. I would never allow Edelweiss face that fate. The four days that I spent in Uttarpara with the McKinsey guys was an eye-opener. It was sad to see a company, with such a glorious past, struggling for survival with the onslaught of a new business model. During its time, HM’s shop floor was state-of-the-art, cars much coveted. Then, came Maruti and changed the whole game. HM struggled to transition. Whoever said what got you here won’t get you there was so bang on!
Maybe, if Santhanakrishnan was spearheading it rather than running the subsidiary, things could have been different — at least he could have given it a shot with his amazing leadership. How could someone speak the least in a meeting and still inspire people? I always thought a leader should speak the most, give direction, pep talk — until I saw Santhanakrishnan in action. He was a total antithesis of what I thought a leader should be. His demeanour in meetings was a new lesson. No wonder despite being a subsidiary of Hindustan Motors, it remained an island of excellence — cutting-edge, profitable, partnership with Caterpillar... I wanted to be Santhanakrishnan, but not at Hindustan Motors.
HM reminds me of my stupidity when we launched icleo — what a disaster it was despite having all the right ingredients. It was a novel idea — no one was thinking of a hangout place for women online back in 1999. It was stupid on my part to assume that if I put together a bunch of smart people, they’ll automatically work well together. You need a leader to bind people to a common goal, to build trust among them. I could give up anything today but that role of cementing people…Ultimately, it boils down to how much people trust each other’s capabilities.
It’s never easy to trust people anyway. Taking a leap of faith is even more difficult — I could not have thought of doing things someone else’s way when we started out. When you are an entrepreneur building your own business, that’s a tough ask. I could not have let Deepak go ahead with his hiring first-strategy for our insurance business when I thought it had to be the other way round. No way! But I did. I went his way. How can I forget the debate about our strategy for global wealth management — I wanted to spend money and grow the business, Deepak and Nitin argued we should focus on productivity, backend and technology instead and shrink the business — scale down, cut people…I went with their decision and it turned out to be a better call. Now, I trust Rujan, Deepak, Nitin, Vikas and Ravi more than myself on hiring calls — they are so much better at reading people. It’s taken some years. But now I know, I can trust. I genuinely believe I have a number of people who are smarter than what I was at their age, and actually better than me even now!
Ram Charan’s exercise has really helped. There is so much talent around, so many people who can do things that I can never do, but the daily routine just makes me look at things that are going wrong, things that are lacking…and at the receiving end are always the people who work with me closely, my immediate reportees. Sitting with a pen and paper and putting down their strengths, once every three months, makes me realise how wonderful it is to have these people. I never wanted only star performers in my team, or those who can make fancy power-point presentations or speak flawless English. As long as they have a good dhandha sense and are diligent, it’s great. Not a single time that I have done Ram’s exercise over the past five years have I felt any differently, I just feel lucky to have my team. Hopefully, this gives people a breather at least for a few days when their goodness is still at the top of my mind or tip of my tongue! Even if I don’t thank Ram, I bet my people are!
I wish we could do Manford sessions with family members too. So many small things one may have said and done inadvertently, which ended up hurting people and bothering them for years. It’s good to flush it out every once in a while. What a hell of a session Venkat and I had when we did it for the first time! We were chatting every day for nine years since we started Edelweiss… every single day… but never had an intimate conversation like what we had that day. I never knew what hit me when he said so many things I had said and done many, many years ago that was still rankling him so much. I felt miserable. I am glad we talked it all out — we were awake and talking, arguing, and getting all emotional till five in the morning. After all that, we were back at the breakfast table all refreshed. I have never missed a feedback session till date — sometimes, I go to Fountainhead to attend just the feedback session and get back — so much to say, so much to hear.
The Hotseat session sometimes makes me wonder if people are fair in their assessment. I know I am a bit of a micromanager, but am I aggressive and harsh with people? That was true many years ago, but now? Vidya still says I am a man in a hurry, impatient and unthoughtful. I surely want to be less hurried, more patient…but can we manage to grow at the same speed we have grown over the past 21 years? I bet not. I guess at this stage, endurance is more important than speed. The two require totally different approaches — people are astonished when I tell them I have three coaches for swimming — one each for speed, strength and endurance. But it’s required — to be the fastest to get to the other side of the pool and enduring a two-kilometer swim in the sea are entirely different things.
I dread to think of those early days when I started learning swimming. I knew it was a bad idea to learn any sport at 49, but I wanted to give it a shot. Every time I was in the pool, I kept thinking that maybe I was 1% of the population who can’t swim however hard they try. But I had the grit — I always did.
I wish Neel and Avanti inherit that — it will be their most valuable inheritance. Have grit and be fearless, I was telling them when we were in Las Vegas last week on our annual holiday; Vidya added thoughtfulness, I couldn’t agree more. Avanti asked if I was keeping my promise. Yes, I have stopped biting my nails. The act has stopped but the anxiety will take a while…I still have a long way to go.