Hailing from the Marwari community that has its origins in Rajasthan, Balakrishna Goenka, chairman, Welspun Group, tells Hindustan Times that home-grown lessons - gleaned from everyday conversations in the family - in business do not necessarily translate into leadership skills, as those are some things one can only be born with, and not acquired. Excerpts:
Marwaris and business always seem to go hand-in-hand - what's the connection?
For Marwaris, business is in their blood, it is in the DNA. This is so as 90% of the families are in business. You live in a business environment all your life. Since childhood, you see your father, grandfather, talking about business most of the time. You get maximum values and learning from your family and friends. Your mind is tuned to do business and generation to generation it goes on.
So, what's the most valuable lesson you have learnt?
One of my elders told me when I was nine; you have to be in the top three in whatever you do. If you are fourth or fifth, you will be considered an 'also-ran', and it's not worth the effort it. So, we like to be among top three in every business we do.
Did your education help you acquire leadership skills?
I believe leading is a natural instinct. You are a born leader. You cannot make someone a leader by education and cannot change certain character traits. A leader should be bold and able to take decisions, for which one need to have guts. In a family, all four brothers cannot be a leader.
So if leadership can't be taught, does that mean B-schools are a waste of money?
What does this MBA give? MBA is one course which gives you a 360 degree perspective about business. MBA is a big help. Given a chance, I myself would like to do it. But that doesn't mean that it is the only way to succeed. It's not necessary to have an MBA. I think one should have common sense, which is more important.
And who do think have more common-sense - MBAs or non-MBAs?
Well, in my experience, non-MBAs have demonstrated more common sense, but that doesn't discount the value an MBA degree and in fact, most of our new recruits are MBAs.
The perception about Marwari businessmen is that they are control freaks and don't empower their executives. Would you agree?
When you start something, your leadership style will be more directive. But when you diversify and have multiple businesses, your style will become participatory. It is more of participatory in today's time.
So as a leader, have you learnt to let go?
Leadership is all about extracting the best out of the people you work with. You have to give a lot of power down the line. You cannot be a leader if you want to do everything yourself. All the credit should go down the line and all the blame should rest with the management. It is very easy to blame others. But if there is any failure, it is the management's responsibility. It is a natural leadership style for me. If you cannot build a team but still tell them 'this is your baby', you cannot grow. We have leaders who have grown within the company. Giving power to people, trusting someone it all involves risk and a leader needs to take that risk.
Which means that some risks would have backfired - any notable mistakes that you can instantly recall?
Plenty. When we started with textiles, we decided we should not only manufacture, but market and distribute of our products as well. We wanted to be an end-to-end player. We made Welspun Global brand, we built facilities in the UK, Germany, Portugal, Mexico and started retail in India in a big way.
After four years of struggle, we realised it was a mistake on our part. On one hand we wanted to manufacture and on the other hand wanted to be a retailer as well. A retailer can buy only whatever is in demand, leaving your capacity as manufacturer lying idle. You cannot have two things together. It was a mistake and we corrected it.
We sold our Portugal and Mexico units and cut down production in the UK. We reduced our retail outlets to 50 from 300 in India. We were pouring money at the front-end while our capacity wasn't getting utilised at the back-end. We learned from our mistakes, corrected it, booked the losses and moved on.