Vardhman Group today has the largest yarn manufacturing capacity in the country with over 1 million spindles. The group achieved a turnover of around USD 1 billion in the financial year 2018-19 and employs around 30,000 people at its various plants spread across five states in India. Vardhman Textiles Ltd., the flagship company of the group, is ranked amongst Fortune 500 companies. The company has grown under the stewardship of S.P. Oswal. However, success seems to sit lightly on his shoulders. For someone who has charted out such an extraordinary business story in one of the most competitive industries, he remains humble to the core.
Ask him what has motivated him on this journey in the textile industry and he says: “Sometimes people tend to make heroes out of ordinary men. I have always believed in doing things sincerely and purposefully. The rest also depends on luck. As mentioned in the Bhagawad Gita, a lot of times a person will not be the ‘doer’. The almighty will be creating incidents for you to face. He will be the one who creates certain challenges for you and then also gives you the courage to face the situations. Those tough situations become your training ground. As Lord Krishna said to Arjuna, don’t shirk from your responsibility of fighting the war simply because the opponents are your relatives. Do your duty.”
So, what does the industry doyen consider his biggest achievement since he joined the company in 1966? “To my mind, any achievement is relative to the situation you face. At that point in time, lack of discipline and work culture was the biggest challenge. In such an environment we wanted to build a professional organisation. That became my driving force. My inspiration came from reading a lot. I read quite a good number of authors. I was also a good student. I wanted to build a professional organisation in Ludhiana when the concept was non-existent there. There were no set benchmarks and no examples to emulate. Thus, we had to start from scratch. We also had to develop our own talent. We succeeded on both these fronts. Some of our senior managers have been part of our organisation since 1973,” he says.
Oswal’s foresight can be gauged by the fact that when it came to hiring talent, he went in for bright management graduates way back in the 1970s when even the term ‘B-school’ was unheard of. “Hiring them was something that did not get everyone’s approval in the family. I had to struggle internally in the family to have my way,” he recalls. But the dividends of that decision were particularly noteworthy. Today, the Vardhman Group is counted among the top corporates. When asked to list down a few key reasons for this growth curve, Oswal says: “The first thing is the work culture that we have. We have always been driven towards perfection. Now, attaining perfection is an ongoing process. Even today I feel that every day is not perfect. There are days when we struggle.”
“The second thing is communication. We believe in developing our people. For this the right kind of work environment has to be there. We don’t expect everyone to be perfect. We must also be able to coach people. My staff members learn from me. I also learn from them and we all move forward. The third factor is that we develop a relationship with our workforce. We have learned certain things on that front over time. Once there was an accident in our factory in Ludhiana in the early 1980s. Some people were injured and the mill was closed for about six months. Despite pressure from various quarters I refused to reopen the mill till such time I restored discipline. We cannot compromise on that front. We stood our ground and succeeded. That is when we realised that we were training our people to use their hands, i.e., skills, but what about behavioural training?”, he continues.
“I said these people are so committed to their families and they are so god-fearing. Then why can’t they have the same kind of commitment towards the organisation? It was our mistake. We had not trained them for it. The sense of belonging was not there. That is when we started our Manav Vikas Kendra, a human development centre, in 1982. That’s how we started behavioural training. In a family, you can always complain about the father to the mother, or about your mother to your grandmother. We wanted the same case in our organisation. If any worker has a complaint he or she should be able to approach the superiors and get it sorted out,” Oswal adds.
Strategic planning
Elaborating on how the company’s growth curve can be attributed to strategic planning, Oswal says: “We use brainstorming sessions for strategic planning. Earlier, we used to meet at any popular tourist destination once a year but now it has been changed to once every two years on account of my wife’s illness. We discuss about things such as what kind of policies we need to implement, what are the changes that we need to make, what are the innovations to be brought in, etc.” As someone who has so successfully managed a family business, what is the advice that Oswal would like to share with other similar businesses?
Elaborating on the key points that need to be taken care of, he observes: “The first thing that you need to have is professional management. It should be the ingrained philosophy of any entrepreneur. If you say that I will have professional management but I will behave arbitrarily, then things won’t work. People first of all need to understand what professionalism is and act with restraint. People do make mistakes, but you need not become wild with anger.”
“Instead, focus your energies on finding a solution. I will give you an example: Once we had a store manager who had misappropriated some funds. I got angry and told my manager to file a criminal case against him. My manager suggested that instead of making it a public affair, it would be better to arrange for a meeting with the store manager. We did that and the worker felt humbled. He admitted to his crime and assured us that he would not indulge in any such thing ever after. This incident was therefore handled professionally. The other workers were convinced that if they took their grievance to the chairman, they would be given a patient hearing. Taking decision on the basis of sudden emotional reactions is unwise. This is what I meant when I said earlier that we should learn from our experiences,” he recounts.
“A true leader uses such experiences to the benefit of the organisation,” he adds. One of the cornerstones of any business’ success is quality. At VTL too it is no different. Providing details about the group’s focus on the area, Oswal states: “Quality has always been of paramount importance to us. To be on the top you need quality. We are a very customer-centric company. Honestly, I never disbelieve a customer. Our products are not commodities. So, you need to create differentiation. You need to create your own USP. We are supplying to internationally reputed, very discerning customers. Internally we have a much organised quality assurance system.”
Words of wisdom
Oswal reiterates the importance of strategic planning for the next generation running the group to take it forward. “I will continue to guide the next generation. What is important is that they focus on strategic planning. I had read a book in the UK wherein a strategic planning model means that the top management is well informed of each business than a hands off approach and understands the business thoroughly, and is willing to listen to the employees. This kind of an approach is likely to drive growth momentum.” Oswal feels confident that the group is in good hands. “The next generation with Suchita Jain taking over is already there. I am confident that she will do better than me. She is an intellectual person. She is more than a competent leader,” he says. As someone who has seen several ups and downs and successfully weathered many a storm, what is his advice on crisis management?
Replies Oswal: “What I would like to tell families who run businesses is that they first try and keep the debt at manageable levels. Secondly, try to be very involved in the business. There is nothing to beat a hands-on approach to succeed in any business. Remember, each day is a new struggle. You should have all the details. Where is the raw material? What about technology? What is the overall strategy? You must have a hold on these things. Finally, keep an eagle eye on competition. When you don’t study competition you may need to face consequences for which you may not be prepared. To put it in a nutshell, you need to be an expert at both the micro and macro level.”