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HindustanTimes Mon,20 Oct 2014

‘I do not get involved on a daily basis’

Manu P Toms and Rachit Vats, Hindustan Times   September 05, 2012
First Published: 23:39 IST(5/9/2012) | Last Updated: 23:43 IST(5/9/2012)

Harsh Goenka, who took over as chairman of his family-run RPG group in his early 30s, is now spearheading its global expansion. The Rs. 15,000-crore group with interests in tyre, software, power infrastructure and plantations is in a transition phase towards becoming a “task-oriented tough group to work in,” says Goenka in an interview to HT. Excerpts.

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How do you view your role as a leader of a diversified group?
As the chairman of the group, my responsibility is to define the core values of the group and see that we do not deviate from those values. There are sometimes difficult choices to make. I was recently accosted by a competent manager. He did not adhere to the values of the group. If the manager is incompetent and does not adhere to our values, the answer is easy. But if he’s competent and still does not adhere to the values, I have come to the conclusion that he should not be with the group.


What is your style of leadership?
My style of leadership is a soft touch non-threatening, non-controlling, directional leadership. I let my colleagues alone. I have a review mechanism — business review meeting typically once in two months for a whole day — where I engage in critical decision-making. Otherwise if there is something critical where my intervention is needed, I get involved. I do not get involved on a day-to-day basis.


Can you recall an instance where your intervention was required?
Some years ago, in our financial services company, we had unbridled growth. We had built up a large portfolio of customers that was not robust. In fact we took a lot of wrong decisions based on the information that was placed before us, which we took at face value. Somehow, I trusted the team a lot and one fine day realised the company was near collapse. It did create a lot of losses for the group and in hindsight I believe I should have gone deeper into the rationale of the decisions and not taken decisions based on figures that were presented to me.


Was there an instance where you felt vindicated by your own decision?
Around 2007-08 we started building our organisation for the future.  It also happened to be a time of great uncertainty globally and India was somewhat successful in remaining unaffected, particularly the manufacturing sector. The easy and more obvious choice would have been to develop an India-centric strategy. But I took the decision to globalise our operations. As a result we expanded geographically and also began acquiring companies. Given the economic scenario, we were able to do the deals at favourable valuations. In hindsight, I believe the decision to think global at that time of uncertainty paid off. Now over 40% of our revenues come from global businesses and we are well on track  towards achieving our objective of garnering 50% of our revenue from international operations.

 
Your son Anant Goenka has now taken over as the managing director of the group’s flagship company Ceat. Is it fair to assume he will succeed you as group chairman?
He has a chance as much as anybody else. Merit is the foremost priority. Perhaps, he may have the first chance if all things are equal but the seat is not necessarily his.


Do top executives feel their growth prospect is limited in the promoter-run family set up?
The freedom you have in RPG is much greater than many other workplaces. The freedom you have in Indian business groups are greater than MNCs. Look at the Tatas, the Aditya Birla Group, the freedom that senior managers get is tremendous. You will find this in most business groups, which are not first-generation entrepreneurs. Most second or third-generation business groups have evolved in terms of their management practice and style.


Who inspires you as a leader?
I have no role model. But among several people who inspired me, if it is strategic vision, it is Dhirubhai Ambani. If it is ethics and values, it is JRD or Ratan Tata. If you look at the globaliSation strategy, something which we are now working very seriously on, it is Aditya Birla because he started the globalisation wave. 


Is it easy for chairmen who belong to business dynasties to run businesses?
It depends on the person. But yes, in the Indian context people are more obedient to a so-called master, may be the mindset comes from being ruled by the British. People tend to be more loyal to promoters. But again... if a manager finds me not fair and transparent, he may look outside.


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