• leadership

How the journey began
My father was a gold merchant and trader in Rajam, a small village in Andhra Pradesh. My family used to buy jute and grain from local farmers and sell it to the mills. Soon after I completed my mechanical engineering degree from Andhra University in 1973, my father divided his property among his children and I inherited Rs.3 lakh, a truck and a plot of land.

However, being a qualified engineer, my father urged me not to enter the family business. So, I started my career with a paper mill in Rajahmundry as a shift engineer where I worked for a month, but did not like the job and left it to join the State Public Works Department as a junior engineer. Here too, I could not continue beyond two months.

My heart was not in working for a company. It was not exciting and challenging enough. So I joined my brothers in the family trading business. I used to buy black gram and gingerly seeds and sell in Chennai, Nagpur and other cities. Sometimes I used to travel by bicycle for 25–30 km to collect money. I remember that a lot of people used to say, being an engineer, I should not be doing all this. However, I was undeterred. In the meantime, a chance to acquire a scooter agency came up. In those times of shortages and long waiting periods, a scooter agency was a very lucrative and risk-free business. I worked hard, put in a lot of effort and time in getting it but unfortunately could not succeed. It was really disappointing.

However, this setback made me continue to pursue our family business with renewed energy. We used to supply to small traders as well as to large brokers in Chennai. I helped our business grow faster.

These initial experiences taught me the fundamentals of business and of life in general: focus, hard work and dedication, building relations and learning to handle disappointments. This is where my journey began. It sowed the seeds of entrepreneurship in my mind.

My mind was restless and I somehow knew that I could do more, much more. I was thinking of doing some business on the following lines: (i) aligned to our family business,
(ii) leverage locally available raw material, (iii) generate employment opportunities for the local youth and, finally, (iv) make a good impact on our district.

While I was thinking on these lines, I came to know that someone in Chennai wanted to sell his license for a jute mill that had turned sick and the factory was shut. Our district was suitable for jute and I already had prior experience in jute trading. I thought a jute mill in my village would provide employment to the local unemployed youth.

Challenges faced in first 2 years
I faced several challenges in my initial years:
• I was the first entrepreneur in the family
• I had no godfather
• I had no banking relationship
• It was the first industry in a backward district
• I was setting it up in my village with poor connectivity.

During construction, getting steel and cement was a major problem due to controls imposed by the government and chronic shortages. Getting machinery for the factory involved major delays as I had to wait for months in the queue. Attracting talent at the top levels in such a remote place, looking after them and managing to retain them was a very difficult task. Getting bank loan and finance was another challenge.

I was facing all these challenges for the first time, which made them all the more difficult. However, over time, I learnt that challenges and obstacles are a part of life and never cease to exist. They are opportunities for learning.

How they were overcome
To overcome the challenges of setting up my first jute mill, I ran around for 6–8 months to get all the permissions, including that from the Jute Commissioner in Kolkata and finally acquired the sick unit and the associated license. I shifted the machinery to Rajam, where (i) raw material was easily available, (ii) I already had good relationships with the farmers and (iii) I could acquire the land. I eventually set up the medium-scale industry with Rs.40 lakh capital and started production in 1978.

• In the first 20 years of my career, during the period of license raj and government control, I started 28 businesses. Obviously, there were many challenges to overcome.
• Positive attitude proved to be critical for me; I would never give up.
• I always moved ahead with Plan B and Plan C; flexibility was important in adversity.
• Firmness and consistency of purpose ensured that I would never compromise if I knew I was correct.
• I took good care of all my workers and they were very loyal; this prevented any labor unrest and loss in production.
• I always believed in win-win relationships with all our stakeholders: farmers, suppliers, transporters, employees, union leaders, bankers, government bodies, industry associations, dealers, brokers and customers.

Learnings for the road ahead
As we grew as a team, in the year 2001 we decided to invest some time in looking back and identifying what made us successful and what would enable us to continue to succeed in the future. After vigorous brainstorming over several sessions, we arrived at a set of values and beliefs. These have really been our beacons for the road ahead.

‘Humility’ is the source of enduring success and it is our first value. In case of most of our projects, they were the first for us and first for the country too. We started by telling ourselves that we did not know anything. This was the springboard for ‘learning’, which is our second value. ‘Teamwork & relationships’ and ‘respect for individuals’ are our third and fourth values, which have taken us this far. Our fifth value ‘deliver the promise’ drove us to execute projects with top class quality, ahead of time, every time. ‘Entrepreneurship’ is the sixth value that made us take calculated risks and grab opportunities early on. Our seventh value ‘social responsibility’ helped us remain grounded and be sensitive to the requirements of the community around us, earning us their good wishes and support.

Influences and my inspirations
During my initial years, first my parents, thereafter my brothers and sisters have been a source of constant inspiration and influence.

In the family trading business, my initial contribution to scaling it up, gave me a lot of confidence. What also encouraged me a great deal was when, in my very first venture of the jute mill, I could turn around the unit and make it profitable from the first year itself. This was a matter of immense satisfaction to me.

During 1985-’86, the Reserve Bank of India brought in a policy that prevented bank directors’ tenure to be more than 8 years. Vysya Bank, a small but old private bank, was suddenly faced with losing its directors and they were compelled to search for new directors. At the same time, they wanted to expand in coastal Andhra Pradesh, where I was one of the most active young industrialists.

Due to my good track record in business, I was invited to join the Board of Vysya Bank, as a young entrepreneur. It was a matter of great honor and joy for me. This inspired and motivated me a great deal.

It was then, during my banking days, that I came across many successful entrepreneurs, efficient bureaucrats, committed national leaders and effective senior executives who inspired me in many different ways.

There have been many other sources of inspiration for me during my journey, as the GMR Group won many awards and accolades. I attribute this to my family for their understanding and cooperation and Team GMR for their dedication and hard work.

Roadblocks along the way
There were many roadblocks but I saw each one as an opportunity to learn. As I set up a sugar factory and a ferro-alloy factory soon after, I had to contend with numerous litigations, each of which I overcame with determination. Litigations arose out of my winning the right to set up those industries through free and fair competition. The competitors who did not succeed would challenge the decision of the authorities in court.

I was not a lawyer but it was an important learning for me as I understood the significance of various statutes and regulations. There are many other instances when I have faced roadblocks, but I have managed to overcome them. My evolution from a student leader to a trader, a manufacturer, a banker and finally to an entrepreneur brought its own set of challenges at every stage; challenges of working in a different environment every time with its own excitement, learning and roadblocks.

After the economic reforms in the early ‘90s, the ease of doing business increased but it brought in a new set of roadblocks.

Infrastructure in India required huge fund allocation and global standards of execution. This could be achieved only if private participation was allowed. I decided to step into this new area as I thought that here was a wonderful opportunity for nation building.

The road was not smooth as the government was going through its learning curve and players like us were going through their own learning curve.

The mammoth Delhi airport modernization project under the Public Private Partnership model is a prime example.
During the execution of this project, we had to deal with 56 government departments and 3 governments, each of which could have been a potential roadblock. But all the stakeholders got together with a common objective to ensure successful completion of the new Terminal 3 on time, well before the Commonwealth Games in 2010.

G.M. Rao is Group Chairman, GMR Group

©Entrepreneur September 2011

Tags:
Andhra University, business, Entrepreneurship, GM rao, GMR Group, roadblock