Secret Diary of Pawan Goenka, MD, Mahindra & Mahindra's | Biography Part-3 | Outlook Business
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Photograph Soumik Kar

Secret Diary Of A CEO 2017

"Never put on a facade. If you are always what you are then you don't have to remember what you were the last time"
Secret Diary of Pawan Goenka Part-3

N Mahalakshmi

Pawan Goenka, MD, Mahindra & Mahindra

As a boss, Durante was very aggressive, bossy, impatient. No one could tell him: that something cannot be done. He would easily lose his cool and be extremely blunt, which was not easy to deal with. In the initial days of reporting to him — I think it was 1998 — we were in a meeting with five others and he said something like, “Have you left your brains at home?” As soon as the meeting ended, I went up to his cabin and told him that he could say anything to me in private, but could not ridicule me in public. He never did that again. 

harvad business school Durante could get people on his side despite his aggression only because he himself was so committed. When the Scorpio prototype was ready, he drove it himself from Mumbai to Goa to get a first-hand feel of what the product was like. The day he came back he called three of us —Jayanta Deb, Ravi Deshmukh and me — home that very evening. He was curt. The car was not handling well. We had to go back to the drawing board and fix a few things — only those “few” things were actually a long list. It would be an understatement to say he drove us hard. On the other hand, but for him, we would have overlooked quite some flaws, thinking it would be  acceptable. 

In June 2003, Anand  announced I would take over as COO, with the intention of making me CEO when Durante retired two years later. It’s rare for an R&D person to get into the general management role, especially in India but Durante made the transition remarkably smooth — he made the entire team report to me, except international operations and HR. Transition usually brings two problems — you leave your comfort zone and have to deal with something new; and you are suddenly lonely because you no longer have your peers around. Neither of those became issues for me because Durante was there to see me through the entire exercise. 

Parthasarathy had prepared me for R&D and Durante coached me to be a well-rounded business leader. He took it upon himself to mentor me and make me a better leader. He was a very effective leader himself, yet he had the wisdom to tell me: each one has his own style of working and what worked for him may not work for me, so I should stick to my own style. That advice from someone who had put in 43 years in the company to rise right to the top reinstated my faith in my own ways.

What also helped was Anand’s decision to send me to Harvard for an AMP. It  may not have made much difference except Durante insisted that I would not attend any office work during the nine weeks of the course. That period allowed me to think how I’d like to change the way the business is managed. My aim was to try and make the organisation better than it was — one simple but effective lesson I learnt was to make a three-year promise statement, which then becomes the blueprint on how the business will move forward.

The 2004 blue chip conference at JW Marriott was inarguably the lowest point of my career. Anand Mahindra had gotten this film made without our knowledge about how customers react to Mahindra products. It reflected poorly on us, to put it mildly. That year we were at the bottom of the customer satisfaction index and especially after the glorious launch of Scorpio, this was a huge setback. At the customary photo shoot, after the conference, I stood in the last row, thinking to myself I had to earn my right to be in the first row. 

From the hotel, I headed back to my home and shot out a very emotional mail to the officers of the automotive business. I was feeling terrible. But we worked harder than ever. We gained positions in customer satisfaction slowly but steadily. And 11 years later we were rated first in sales satisfaction. This was one of the proudest moments of my career.  Anand Mahindra often recalls the episode, appreciating the team on how we determinedly clawed back. 

Jejurikar’s suggestion of making our customer service commitment more authentic by projecting a Mahindra face worked wonders. Of course, he conned me into bearing the brunt of shooting an entire day for a 30-second commercial. And later, I had to handle a phone call from the lady who called in to correct my pronunciation from sa to sha in the word Koshish — many Marwaris can’t pronounce sh and I am no exception; she spent several minutes asking me to repeat it again and again, and then she gave up. I still don’t know who that mystery woman was.

 ***

Xylo was a painful lesson. We launched it after an eight-year gap as a people mover — a sturdy car that was roomy and comfortable. Sure, it would not win any beauty contests but we were confident that was not what people wanted in a people mover, anyway. We were so wrong — design expectations of Indians were just soaring and Xylo didn’t make the cut. 

XUV LookSometimes, logic and analytical abilities just do not help. Many years ago, Anand Mahindra told me that it’s good to be analytical but in the process one should not lose out on the big picture. He has always felt I needed to bring in more intuition into my analytical thinking. But he never makes you feel he is pointing out a shortcoming. “Pawan, whenever I have seen you using your strong intuition, it has worked very well. You should use it more often.” I could relate to that. Mamta, too, complains that I analyse everything a bit too much, which takes away the charm. Thanks to Mamta and Anand, my right brain has began to contribute more.

The Xylo jolt drove us to focus all our energies on the design for the XUV. So much so, that we began thinking perhaps the aggressive design would backfire. But when I saw the first physical model in 2009, my first thought was, why should we not strive for it to be the highest selling  SUV in the world? It had all the features a customer would look for. Anand Mahindra said the same. That didn’t happen. But what a hit it became when it was launched in 2011. When we displayed the prototype at the Johannesburg Motor Show, no one believed it was Indian made. That was a high point. 

It’s amazing how we made such a huge success out of a model we started developing from dingy sheds! The Scorpio started with just about 5,000 sq ft of space in the western suburb  of Kandivali in Mumbai; even the XUV started in a small shed in Chennai because we wanted to have the team in Chennai, rather than make them work in Kandivali and then move them to MVR where the R&D center was to be built. 

mahindra,with you hamesh We had a great run, with three hits within a span of 10 years, but we have had our share of testing times as well. Q4 2009 was truly a wake-up call — the automotive business suffered a 1-crore loss. In the 92 quarters that I have been at Mahindra, that was the only quarter when we had a loss. But it was good we had that loss because it was a bigger jolt than turning in a profit, however small,  would have been; everyone was shaken up. All I could think of was not to let the slowdown go to waste. We trimmed the fat but continued with our product development and did not cut any cost. The four-year investment cycle invariably plays out, and in 2013 we were back with a bang! When the rest of the industry was still under pressure, we had our best years — the highest marketshare and the highest margins.

 ***

The SsangYong acquisition happened so quickly, it was impossible to believe we cut such a perfect deal. We first heard about the offer in June 2010; by November we had wrapped up the deal; and by March we had acquired the shares. Abhinav Grover was just so phenomenal in tabling the winning bid — by creating scenarios of possible competing bids and putting in just the right offer. 

xyloIn any organisation, people are truly the centrepiece in your success. Unless we had got the aspirations of people of SsangYong aligned with ours, there was no way we could have succeeded with the acquisition. That was our experience even with Satyam and Swaraj. SsangYong was almost bankrupt; the feeling was that the earlier owner, a Chinese company, was interested only in the technology, which they took away and made no effort to turnaround the company. Obviously, the company was in poor shape, and the union did not want the same story to repeat. It wanted the acquirer to be morally and legally bound to act in the interest of SsangYong. After several rounds of discussions with the union, and many sleepless nights later, Ketan Doshi and Rajeshwar Tripathi negotiated a tripartite agreement between SsangYong, its management and Mahindra with no end date – never in history have such agreements been signed and that too with no end date! That landmark document is referred to even today, six years later. It’s amazing how SsangYong had not had a single labour strike in all these years — it’s unheard of in the automotive industry in Korea.

 ***

Beat that slowdownIn the farm sector we were a market leader, but not seen as a technology leader. Building tractors is far more tricky — in passenger cars, the expectations of customers are broadly the same: reliability, comfort, design, mileage. In tractors, every customer wants something different because the soil, crops and farming practices vary across the country and each place would require a different deliverable. We nailed it with the Yuvo, which became a big hit. Our approach was simple. The starting point was to make a list of 10 rational reasons why a customer will choose Yuvo over any other tractor. And that became our mission statement. Yuvo was tested for 50 different applications making it the most versatile tractor. 

 ***

What a journey it has been. From my reaction initially of shock and surprise at the size of the R&D centre, to seeing it as an opportunity, to making it an accomplishment. I’m happy we took the decision to move to India with my heart and not my head.

mahindra yuvoMy life has been largely shaped by chance happenings; I am glad that the happy coincidences weighed in. I have also been lucky enough to survive several potentially life-threatening incidents — getting thrown off the cliff in a car accident during my Cornell days; lost in the snow for six hours while skiing the mountains in Colorado; getting pulled in by the current in the Cayuga Lake. That, and lastly, Mamta’s battle with cancer. All of these have given me a healthy respect for life and a desire to make the most of it. 

What has always worked for me is that I don’t pretend to be someone I am not; never put on a façade, a mask. If you are always what you are, then, you don’t have to try and remember what you were last time.

This is the third of a three-part series. You can read part one here and part two here.

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