Two of India’s best known entrepreneurs have found contrasting ways to help young, ambitious businessmen scale up
More than four decades ago, Harsh Mariwala moved out of his family’s oil trading business to create Marico, a more than Rs 4,000-crore consumer packaged goods firm spread across 25 countries in Asia and Africa. A decade-and-a-half later, Kishore Biyani cast aside his family’s clothing business in Kolkata and went on to create Future Group, the country’s biggest retail empire.
Sensing the need to create many more entrepreneurs in India, the two stalwarts are now doing their bit to help stitch together India’s entrepreneurial ecosystem. In conversation with Forbes India’s Indrajit Gupta and Charles Assisi, Mariwala and Biyani share their perspective on what it takes to create entrepreneurs.
Forbes India: How easy or difficult was it to find mentors when you started your entrepreneurial journey?
Harsh Mariwala: My experience may be different from Kishore’s. When I started out in 1971, after passing out of college, I joined an organisation [initially called Bombay Oil Mills Ltd] that was completely family-managed: No professionals, some supervisors, and a few family friends doing work for the family.
When I started my journey in building a consumer product business, one had to start recruiting talent. My biggest issue in those days was how to attract talent and how to retain it. In a family organisation, we had situations where someone was sitting on the floor in a dhoti writing down books. We had an office located in the crowded Masjid Bandar locality in Mumbai.
On the other hand, you’re looking for qualified talent: How to attract them without an image of the organisation? I didn’t even have the basics in place, a process to give out formal appointment letters. I had to start by getting one designed.
I quickly realised that the only way out was to work with consultants, ideally individual consultants. The large management consultants were simply too expensive. I had to manage skill gaps.
I remember working with Professor Labdhi Bhandari at IIM-A. I would go to Ahmedabad by the evening flight, work with him overnight, and come back by the morning flight.
Whenever I hired fresh talent, I met them at a club, sold them the story, got them excited, and then brought them to the office. Otherwise, they would never have joined if they saw our office in Masjid Bandar. I had to mentally prepare all of them. This is exactly how entrepreneurs get things done. They simply find creative ways to deal with issues.
Kishore Biyani: For me, it was an adventure. Our family had a traditional clothing purchase business. I didn’t want to join that business. I was fascinated by communication, marketing and advertising. I said, “Let’s create some new products and supply to the garment industry. My only mentoring, advice came from reading. I didn’t go to management school, but read every book on management. I read about entrepreneurs. I even attended a talk by Mr Mariwala on family-managed business. All the solutions were in the books. For me, it was learning while doing: Learning from mistakes.
Mariwala: I’m still a voracious reader, and that has been essential learning. If not read, I meet knowledge leaders. I’m constantly searching for answers—entrepreneurs must keep meeting people—what can I do better? The answers can come from anybody. Any human being can add value to you. If you go to a factory, you must ask the workmen, not have an ego, have a learning mindset. If a person sees that, they open up to you.
FI: Today’s entrepreneurs have well-formed networks. So what prompted the two of you to get into this space of building new enterprises?
Biyani: You have to create your own networks. In the retail business, because it’s the last leg of economic activity, you need to find vendors, suppliers, manufacturers, brand owners, etc. In other words, you’ve got to create the entire ecosystem of retail. In India, there are no benchmarks the first time round, it’s a blind game. You have to build people for your own ecosystem. I even had to build a logistics system of my own, and a brand business of my own. I still believe, even today, that “nothing exists”. If someone has to start a new business, you have to create a lot. Take, for instance, the digital business: The ecosystem is getting created while things are happening. In India, we are in the early stages, there are gaps, and we have a responsibility to fill them. So, you invest in entrepreneurs.
Mariwala: I wanted to give back something to society through active involvement, not passive donation. I wanted to give 20 to 30 percent of my time to the cause. Initially, I started with mentoring. Then I realised that each case was different, and I had to spend a lot of time for very little scale. It simply didn’t have the desired impact. I wanted to cover a large number. So I felt that I should handle entrepreneurs who have a proven business model, but had problems of scaling. The objective of Ascent is creating an ecosystem of entrepreneurs through the formation of trust groups. We started on August 15 this year with 10 groups of 10 entrepreneurs. And the focus is on peer learning. So the group discusses issues that are brought to the table. If I have a strike, how do I handle this? You get perspective of nine other smart entrepreneurs with a similar sized turnover.
Biyani: Our whole idea was to ensure that entrepreneurs don’t repeat the mistakes we made. We identified entrepreneurs in categories we knew well and invested in them. For instance, Biba and Anita Dongre were Rs 20 crore to Rs 30 crore. Now, they are in excess of Rs 200 crore. We have contributed by telling them what not to do.
FI: How do you find these entrepreneurs?
Mariwala: Getting the outside-in thinking to the organisation is the most important role of the CEO. You bring it in through your interactions, and by searching. Regardless of size, it has to occupy your mind. If you are small, you are looking at the short term. The business model isn’t clear yet. There is a huge learning curve, and high uncertainty. But once you reach a certain scale, issues start to change. In the medium term, you need to look at beefing up the organisation structure, building specialist functions, building orgsanisational culture, bringing in systems and processes, leadership team building, image building. As you become large, you need to start looking at the long term: Managing shareholders, the board of directors, CSR, sustainability, succession planning, M&A capabilities, the next two layers of management, etc. Also, the key question is, how do you retain the culture of entrepreneurship and agility when you become large and bureaucratic.
(This story appears in the 02 November, 2012 issue of Forbes India. To visit our Archives, click here.)