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RA Chandroo

Secret Diary 2019

"The oil drilling industry taught me how to think on my feet"
Secret Diary of Ajit Isaac — Part 2

Rajesh Padmashali

After my masters, I briefly joined Tube Investments as a trainee before moving to Godrej and Boyce in 1990, my first job in Bombay. With one suitcase, 1,500 and a haversack, I got off the train at Kalyan at 4 am. There was not much of a crowd but I had to figure out how to get to Vikhroli. But the first thing I was asked was whether I want to go east or west, I felt that was a rather odd question, since you are otherwise asked your destination. When I went native, I realised that had been in reference to the rail lines, the arteries that connect the north and south of the city.

By sheer luck, here I was managing one of the largest refrigerators plants in India. We had a great team that constantly looked for ways to increase productivity. But how do you convince the workers to build even more refrigerators?

I stumbled upon a fantastic, natural advantage. My knowledge of Hindi was poor and that of Marathi non-existent. So half the time, I really listened to the union guys without saying anything. Even when I had something to say, I just couldn’t translate fast enough. So the union leaders thought either he does not know anything or he knows everything and he’s playing the waiting game. But with some of them, I built a one-to-one rapport, and therefore during negotiations they began to trust what I said.

This bonding paid off when one morning the shop floor went all misty. Everyone’s eyes were itching and tearing up. We could not figure out what it was, so the plant was shut down. But we had to quickly figure out where the problem was and get the plant up and running. That is when the relationship helped. I called up these union leaders and said, “I want you on the shop floor now. Let’s together identify the cause”. The usual labour stance would be to take time off, not work for a couple of days and demand an inquiry. But, this time, everyone stepped up. We later figured the R&D lab was experimenting using a different set of specialised gases for refrigeration and some of the gas had leaked into a part of the plant. Tremendous quick thinking and a motivated workforce saved the day.

Another situation was when we found that two out of every 200 gas sealed compressors that we made developed leaks as they were not sealed properly. So it had to be gas cut, opened and then resealed. One day, the plant manager told me that the guys are just not doing enough of gas cutting and compressors are piling up. I went to the shop floor to talk to Tambe, one of the guys assigned the task. I asked, “aaj kya ho raha hai”, and he replied “mera haath dukhta hai, nahi kar sakta hai, bahut mushkil hai”. He said he could do maximum one a day when the target was seven to eight.  So I asked, “kaise karte hai dikhao,” gave it a try and managed to do it in 10% lesser time than the average. Word spread in the factory.

Tambe was now in a difficult situation as some kid came and did in minutes what he was unable to do. Next day on, he started hitting his numbers and the situation sorted itself out. But if I had screwed up doing that, I would have looked like an idiot. When I moved on from Godrej, the union guys came and gave me a farewell. They took me out for dinner and I was scared to be in the restaurant that day with them because they were getting sloshed. If Facebook existed then, those pictures would have been posted there for posterity.

***

I left Godrej in 1991 to work with the Essar Group. When I discussed this with my dad, he said, “Nobody leaves Godrej or Tatas, you live there for a lifetime. You have a colony, a house, a brand that is hundred-years old, products that are well-known. Why would you leave this and join somebody who I don’t even know is a sole proprietorship, partnership or even what they do?”

When I joined Essar, I took a huge chance since oil and gas business was absolutely new to me. I had to drill from scratch. Terms such as derrickman, roughnecks, drillers, tool pushers and mud pumps entered my vocabulary. Soon after would come my first high-seas adventure. While not exactly a mutiny at sea, the standoff was no less intimidating to a shipping novice like me.

Until I entered the industry, I could not differentiate a lifeboat from a ship, I only knew that they both sail. And now, I had to negotiate with seamen who were refusing to sail because they wanted a higher dry dock allowance. The Italian built MT Nand Shivchand was moored at Madras outer anchorage. It was a 65,000 DWT bulk/oil carrier. As our trawler lined up next to it, I realised the five-storey rope-ladder climb that I would have to make to get on board. Thoughts of misstepping and plunging into the Indian Ocean crossed my mind, but there was an even more important matter at hand that needed to be dealt with. The vessel had cargo to deliver and then continue on its voyage because it was on a committed charter. The standoff was resolved through a deferred payment programme.

Then, Essar had bagged a directional drilling project in Oman from PDO. That was my first exposure to international staffing. At the time, with Omanisation, 45% of the total workforce had to be Omani. To begin with, it was a very complicated rig. Second, because it was deep desert, we could get only locals, who were camel shepherds. So, in order to show headcount, through a local procurer, we got 20 Omanis. But there was one thing that we didn’t bargain for – they came to work on their camels. These ‘ship of the desert’ would float all over the drilling site, and it was near impossible to keep them off the wellhead. We then decided to get the Omanis to clock attendance and sent them back home to shepherd their camels. If we had kept them at the site, we would have had LTA - lost time accidents. That one site later on grew to seven and became a very successful operation for Essar.

Similarly in Medan in Indonesia, there was geothermal drilling to be done and we had a liquidated damages (LD) date, the deadline by which the wellhead had to be active, to avoid paying compensation. Two weeks before the LD date, we had equipment that had to be transported to the site from Philippines. So part of it had to go by boat, because it was an island and part by helicopter. And we didn’t know vendors who would transport all this. The only guy I could get to help at that point was the president of Petroleum Suppliers Society of Manila. He said, “Let’s meet for breakfast”. At the table, he asked me, “Do you golf?” I said, “No”. He was also the president of Golfing Club of Manila. Out of interest, I asked him, “What’s your handicap?” Straight-faced, he replied, “My wife”. Needless to say, we spurted the well in time.

Something was always happening in the oil drilling industry. It was episodic, life was never done. What it taught me was to think on my feet. My stint in the shipping business moved my meticulousness up a notch. In shipping, you always need to have a plan. You had to be on top of everything – with respect to crew, certification, cargo and compliance with IMO regulation.

But after five years of operations, I decided that I want to work in the corporate office, and learn business at a governance level. That’s when I came back to the corporate office in Bombay from Madras, where I had been deputed to oversee the integration of South India Shipping with Essar Shipping.

*** 

At the corporate office, for the first time in my life I got to see entrepreneurial ability up close. The Essar brothers – Shashi and Ravi – seemed in a different league, inveterate risk takers with the ability to combine vision, projects and execution. It was remarkable how two outsiders from Madras came and built such scale, whether it’s with balance sheet, production capacity or technology. I was at the steel plant when a visiting European remarked, “This plant is a Rolls Royce”.

Every discussion internally was scale driven. Shashi Ruia would never get caught up with the small things in life. If there were 10 things on the agenda, he would tackle the three big issues and leave the rest to lesser mortals. There was an incident when molten liquid iron from the furnace overflowed onto the shop floor. In liquid form, it is very high temperature but once it cools down, it solidifies and is difficult to move. We were all thinking that this is going to shut the plant down for six months. At the meeting, he said there was no point discussing it here, that we have to go there.

He immediately hopped on a train. Once there, Shashi gathered key maintenance personnel to figure out which parts of the plant were unaffected. Then, he found service providers to fix the rest and incentivised the clearing process. It was a rare situation, there was no case study of how to deal with such an incident, but he had it done and dusted in three weeks.

Eighty per cent of my interaction was with Shashi’s son Prashant. We were of similar age and shared views on different aspects of life. He was very hard working, trusted my judgment in many matters and delegated a lot of work to me. It was enough to make any youngster feel important and good.

When I left the Essar Group in 1996, they were only in shipping and oil. In about six years, they would have shipping, oil, steel, refinery and telecom projects. To grow five core sectors in six years was incredible. They set up a 2-mtpa electric arc furnace to make hot-rolled coil which was almost the size of Tata Steel, which was 90 years old. They built it in just five years. And then they created a telecom network, got into a JV in Delhi and competed with Bharti and sold it to Vodafone. Then their refinery plan was ambitious, but it got delayed due to many reasons.

In retrospect, it may seem that they bit more than they could chew, but their entrepreneurial ability was incredible. The success or failure of their business is a separate issue but I consider them good people to associate with.

***

Around 1996, I got chosen as a Chevening Scholar to go and study at Leeds University. I returned a year later to join IDFC, when it was just starting up and I was among the first three employees. This is where I would meet Deepak Parekh, who was closely involved with nurturing IDFC, and it was my first brush working with a professional manager of his stature. If the Ruias showed me what entrepreneurial gumption is about, Parekh taught me to nurture relationships and build for the long-term. He was terrific to work with and our paths would cross again. After being with IDFC till 2000, I decided to strike out on my own.

The dotcom boom had seen private equity taking shape in India. The first few funds were ChrysCapital, JP Morgan and a couple of others. I was thinking about, doing something in the online space as WWW 1.0 had caught the fancy of almost everyone my age. I had a human resources background and knew that finding jobs was a matter of combining supply and demand, aggregating availability of jobs with supply of skills. There was reason enough to look at the internet as a medium to do that and I set out to create my first business, an online job portal. I met three investors to raise cash and all three agreed to invest between $2 million-$5 million into the business that I wanted to build.

This happened in the space of two weeks and as all three agreed to invest, that worried me. I wondered – if it’s so easy to raise cash to build a business it may also be easy for investors to pull the plug if one doesn’t deliver. It put me in a quandary – I had my wife and a two-year old daughter to support, not to mention my parents back home in Madras (by then Chennai). I could not afford to be rash.

At my last job, I was very well paid. I had my own house, a car. Those days, as a 33-year professional, I was very comfortable. I thought about it for a good two weeks and went back to the biggest among the three – JP Morgan. I thought they would perhaps give me a longer rope and would be the last to pull the plug if things did not go as per plan.

I met the India partners and, in an hour, we signed a business understanding note, two white sheets of paper which would later transform into a share purchase agreement. Unknown to me, I had inadvertently taken a life-altering step. I would very soon end up in a new city, with fortuitous timing.

JP Morgan was then seeding a portal called go4i on the lines of Yahoo, Rediff and Indiatimes. They wanted it to be multi-vertical with ticketing, sports, jobs etc. For ticketing, they tied up with Ashish Hemrajani who now runs BookMyShow. For careers, I was the spearhead; hence my company was called Go4careers. JP Morgan had tasked a leading IT services company in Bangalore with developing the portal and they suggested that I also use the same firm to build Go4careers. That’s how I landed up in Bangalore.

I hardly knew the city but quickly figured that software was a growing industry here, having just cashed on the Y2K opportunity, and it seemed set to become a much bigger technological ecosystem. This, I thought, was an emerging city to watch out for. That punt has paid off in spades.

When I moved to Bangalore in 2000, its population was 4 million, today it is 10 million. It has been the fastest-growing city in India for a long time, highest by office space absorption and highest by career creation – number of jobs. If you are in the careers space and if you are in the city that’s creating the most number of jobs, obviously you are there at the right time. Over the years, the city has not let me down though its municipal council might just have.

Sometimes, luck plays a big role. I only moved to Bangalore because my investor asked me to, so that I could be close to my site developer.  But as luck would also have it, the careers site that they developed for us did not work out. If you searched for a doctor in Ahmedabad you would end up getting an engineer in Madras, the algorithm was just not functioning well enough. In June 2000, we inaugurated the site and by August we shut it down and took the placement company offline.

We had drawn down $500,000 from the agreed amount and capped it at that as we did not need any more money, now that we had gone offline. I decided we were not getting into the valuation game and would generate our own cash to fund ourselves. From very early on, I was tuned to generating cash.

Go4careers transformed into PeopleOne Consulting and grew to become a reasonably healthy recruiting company. Then something fortuitous happened. One of our clients those days was the Sterlite Group which in 2001 was looking to go international. They had just bought a mine in Australia and were setting up an optic fiber cable factory at Atlanta, Georgia. Optic fiber cable was at that time very big because the internet was going all over the world. They wanted help in hiring.

So when I landed in Atlanta in January 2001, I realised there is a concept called flexible staffing where you hire non-core employees from a third-party supplier. The Sterlite promoters decided to adopt it as it would provide enormous leeway with respect to costs. I shortlisted Adecco, Randstad, Volt, Manpower and so on, and met the representatives. We hired staff on contract basis and that was a blessing in disguise since 9/11 happened soon after and the plant had to be scaled down.

By now, I had figured out how flexible staffing worked and PeopleOne entered that space. We bagged Airtel as a client and I realised that post liberalisation; telecom, banking, insurance, retail and IT were the ones adding jobs rapidly. They would embrace this concept because they were growing gangbusters. We grew too, fairly quickly from 2001 to 2004, and became almost 40,000 people in size.

 

This is part two of Ajit Isaac's diary. Read part one  and part three here.

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