Saturday, September 26, 2020
 
 
Building an Institution – an entrepreneur’s journey
By Manish Padharia, MD – ARaymonds Fasteners, India, Pvt. Ltd

 

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The Journey > From Entrepreneur to Institution builder

 

1. What is an institution? How is it different from an organisation?

To my understanding, an Organization is a far more hierarchical structure than an Institution, where people come together to accomplish a common goal. Normally, this common goal is cascaded from top to bottom and it is top line or bottom line centric. In most cases, in an organization there is not much scope for tolerance of mistakes or empowerment due to the strong hierarchical layers in which power of control is held at a few places.

On the other hand, in an Institution power is distributed by creating and encouraging internal communities to work collaboratively to meet a goal, yet in their own way, unique to the team. They feel empowered to change the way their goal/target may be reached. Mistakes are not considered to be losses but rather assets or opportunities for learning. Far more focus is upon empowerment of teams and allowing them to freely work in a manner where they live the core values of the company.

In an Institution, people enjoy the experiences of learning collectively, while in an Organization most people come to work for a salary and not really to learn.

 

2. Young adult years

Born into a middle-class Gujarati family in the western peninsula of Saurashtra, India, Manish Padharia’s story may run common to many smalltime entrepreneur businessmen across this nation. It is in the manner his story charts an uncommon course, where the reader would find Gold at the end of a purpose-oriented rainbow endeavour.

 

3. First venture

Ever since he can remember Manish always wanted to be an entrepreneur. On completing an Engineering diploma, it was in 1993 that he joined an automobile component firm in Northern India.

 

4. Entrepreneurial Aspiration

After working in North India for three years Manish felt he was ready to launch out on his own. As a rookie, he took the plunge and bravely started his own business venture. Three years down the line, constraints in his personal life compelled him to close down his maiden venture.

Of necessity, he rejoined the company he had first worked for. They were glad to have him back. Within just a year he rose to become its youngest ever plant manager. “My success was built on healthy employee relations, besides hard work,” he humbly states. Over the next seven years, he moved from strength to strength in the company, being assigned to set up auxiliary plants in South India, in Bangalore and Pune. As a result, he reached the second highest position in the hierarchy and obtained a seat at the table with the promoters. Even at the pinnacle of success, the entrepreneurship bug resurfaced and Manish once again bit the bullet of his calling and quit his handsome job.

 

5. USP – “Relationships”

The company he had been working for was one of the customers to ARaymonds Fasteners, a French family owned professionally managed MNC, 150 plus years old. They came to know of his decision to move on and approached Manish with a proposal to join hands with them in setting- up a production plant for them in Pune. Manish’s response to ARaymonds conveyed, “Thank you very much, but I have decided to be an entrepreneur myself”. ARaymonds nevertheless stood firm in their desire to get him onboard. They assured Manish he would hold full freedom in decision-making that an entrepreneur of his caliber could expect. Such was the degree of trust in his capability which they held for him. His next response to them conveyed, “Please inform Mr. Raymond that I agree to work for him subject to the condition that I need to take permission from my current employer before next steps”. His current boss happened to be a friend of Mr. Raymond. “For me relationships are of the utmost importance”, says Manish to this interviewer. (*Valuing Openness with Integrity to build trust and respect in the relationship)

ARaymonds Fasteners the company, began 155 years ago in a small town in France as a micro venture, making press buttons for clothing. Today, they are known the world over as the leader in fastening and assembling solutions for the automobile industry. On an average, an automobile has 500 ARaymonds high precision parts for connecting, clipping and bonding together different components. The company’s market valuation was 1.2 B Euros in 2019.

 

6. Second Venutre

It was in the year 2007 that Manish commenced his entrepreneurial journey with ARaymonds Fasteners. He took on the responsibility to set up their first plant in Pune, India. From the very beginning, the company and Manish experienced a ‘made for each other’ relationship, based on shared values applied reciprocally and a respect for due process in compliance. His first two hires for the Pune plant, in 2007, were a business development manager and a company secretary. The three of them worked out of a single room with just one desk, on lease in the industrial area of Chinchwad, Pune. Very soon thereafter, they had to rent another room and then a small building, as operations developed and the team size started growing. Their first order was from Tata Motors Ltd. in Pune, for which they needed to acquire a vendor code. Rumour indicated ‘gifting’ was required for obtaining the vendor code, a practice neither he nor ARaymonds Fasteners subscribed to. Manish stuck to his conviction; the matter got delayed but ultimately everything went through without a hitch. This incident was for him a confidence booster in sticking to his principle-based conviction and the focusing on right process.

 

7. Navigating ethical minefields adroitly

Thereafter, the company did not face any ethical dilemmas on the customer front, but challenges arose on the government side of the equation. As was a fairly common business practice in those days, the company hired a consultant to handle ticklish matters with the excise department. But Manish soon saw through the means and the ways of the consultant’s functioning on behalf of the company.

To Manish, underhand dealings by the consultant with the excise department (outside the direct knowledge of his company) did not absolve him or the company of their responsibility to a values-based Brand. So, he stopped that channel of working and decided to deal directly with the excise department. The government officials soon realized the company’s approach had changed. Manish and his team encountered a lot of hardship initially; it was not an easy passage at first. His colleagues had to wait for hours and days at the Excise office premises to avail permissions or file returns. During these frustrating times, many instances surfaced when team members broke down due to mental harassment by the competing pressure of getting the necessary papers cleared by the excise department on the one hand, with the company expecting expeditious clearances/ approvals on an already delayed process route, on the other. Manish breathed confidence into his small team assuring them that, “if we have not done anything wrong, then why should we give up our values to promote a bribe/unethical practice. If we have to suffer delays but not compromise our values so be it”. Gladly enough, after incurring much delays and business opportunity loss, eventually everything came on the right track.

Another big challenge presented itself when Manish and his company chose to acquire land for the new plant in the industrial zone at Chakan, North of Pune. The local land records and revenue officer (talati) in charge subtly refused to pass the necessary order without being ‘looked after suitably’. Manish resisted the demand for a whole year, but eventually gave in, a decision he regrets to this day. He has firmly resolved to never again compromise his core values in the manner he recalls. (*when one does not listen to guidance from the “inner voice”, the decision weighs painfully and heavily on one’s conscience over a period of time, sometimes as long as one’s lifetime.)

“If we have not done anything wrong, then why should we give up our

values to promote a bribe/unethical practice. If we have to suffer delays

but not compromise our values so be it”

It has been 13 years since then. Today, ARaymond Fastener’s production plant located in the Chakan industrial area is a world class facility. It is a delight to visit in more ways than one. Manish has nurtured it according to his dream and led his people with great dedication. He takes great pride in working through long term trusting relationships with partners, which includes amongst others the CA, a labour contractor and a cab operator, who have stuck with him from the very beginning and have grown along with ARaymonds. “For me relationships are of the utmost importance”, Manish reiterates with a deep sense of conviction. He affords topmost priority to investing in Human Resources and Quality of services and products.

About five to six years ago Manish initiated an internal forum called ‘Management Communication Meeting’ (MCM). This process brings together all 200 employees at the plant every month to celebrate business and community news, share updates on financial KPI’s, welcome new members to the company and celebrate birthdays of his colleagues in that month. It is a time to bond informally so as to improve one’s sense of belonging, he states. At each MCM a guest speaker is invited to address the gathering on some subject connected with developing human potential. He recalls fondly that it was in 2015 at one of the first MCMs when Mr. Sudhir Gogate, Director, Keihin Fie was the speaker. Sudhir is a long-term Trustee of Initiatives of Change (IofC). Although Manish could not attend that MCM, he later heard from his colleagues that Sudhir had talked about a practice of “leading from the heart”, which he was introduced to in a program he had attended at Asia Plateau, the training centre of IofC, in Panchgani, India. To Manish this concept of “leading from the heart”, appealed very similarly to the approach of Servant Leadership of the kind he himself wanted to grow into and desired all his managers espouse. Servant Leadership approach was discussed at ARaymond Group and wanted to implement this approach in all locations, including India. As ARaymond Leadership team believed, apart from their Values, Servant Leadership is also a key approach to create sustainable work culture for current and future generations.

 

8. Delving deep into his inner Consciousness: Humanising the Culture

Reflecting on the message conveyed by his colleagues about what Sudhir had spoken about at the MCM, Manish commenced sending small batches of his employees regularly to the three-day residential Heart of Effective Leadership (HEL) program at Panchgani. Manish recalls that they would all return from Panchgani motivated and positively charged up and report the program as an experience of a lifetime. Many of them who participated in the HEL program admitted to where they had been in the wrong in personal relationships at home or at work, and had committed to themselves to change for the better. Manish noticed that in their work roles, these managers started taking greater care of their team members by empowering them and investing in their growth. He saw the impact of the HEL training as a positive cultural shift in the making of a more humanised organization, while at the same time remaining a very professional brand, which ARaymonds has always demonstrated.

Early in 2019, Manish visited Asia Plateau at Panchgani to experience the HEL program himself. He was accompanied by his wife; his India HR head and the company’s global HR head. “It was a life-awakening experience, for me, he cheerfully recalls”. He reflected on two earlier failed marriages and realized he had lacked empathy at that time. He had taken to drinking a lot in those days. His attention was fully on his job focusing constantly on targets and delivery. He contemplated deep within and realized he had to work on changing himself a lot. The HEL practice of spending what he calls ‘me time’, a practice spent in silence to listen deeply within, has helped him improve his relationships with people significantly. His managers too report they have observed a change in him.

The heightened and expanded state of self-awareness and consciousness Manish now experiences when he practices ‘me times’ have made him more sensitive to seeing the need for change in certain other business practices. He recognizes that the contract employees (non-regular) who work for his company are not treated on par with the company’s regular full-time employees, ‘as family’. He wants to initiate steps to stem this discriminatory trend and bring about a positive balance in the working relationships so as to include this stakeholder community, more wholesomely.

He has also become more sensitive to the practice of what he terms, ‘outsourcing corruption’ to business partners. He has decided to renegotiate contracts with all his business partners to eliminate the evils of bribing on behalf of ARaymonds. All except two partners refused to sign on the new terms. They were dropped. A partner who used to negotiate electrical connections said it is impossible to get power connections in the region without paying facilitation funds under the table. Manish found that this partner’s own paperwork was not alright. He let go of that partnership. After renegotiating the contract directly with a customs-clearing house, the company is saving Rs.30 to 40 lakhs (Rs.3 – 4 million annually) on shipments.

Connection, Direction & Self Correction: Delving deeper into his inner consciousness, ‘me time’ is helping Manish recognize some ‘wrong’ thoughts and practices he had been blind to in the past. On certain occasions, his wife used to accompany him on his official tours. The hotel bills received would include the cost of stay of his wife, which the company had been faithfully reimbursing. He decided he should correct the error of his past by segregating the expenses attributable to his wife’s stay, and only claim what was the company’s spend on him alone. “As a leader, I have to be a benchmark in ethics for my team”, is what he told this writer in an interview.

 

9. Leading people in a Crisis

The times we live in: The COVID-19 pandemic crisis.  

“I believe quite a few companies have done a commendable job in this situation. We too have fared well; however, I do not feel we are the best. Having said this, my team in India and myself have maintained our priority that all decisions will be made keeping the safety of people upper-most while supporting the business, in these never before, uncertain, unpredictable times.”

“Proactively, we started to work on various scenarios almost 15 days before the lock-down was ordered in the fourth week of March 2020, In India. Somehow, quite intuitively I had a feeling/sense something big was going to happen. We prepared processes to work from home. Before the lock-down, as part of a business continuity plan, we experimented with a few colleagues to work from home in a phased manner (particularly non-operation staff).

We put a task-force in place to handle the imminent crisis before the official lock-down. This team was fully empowered to decide on any change/new process linked to health and hygiene such as a sanitary crisis. They had already implemented preventive measures such as mandatory wearing of a face-mask, sanitization of various areas, physical distancing, no use of meeting rooms, various changes in office layout to minimise hand touch, social distancing in the canteen area etc. Happy to report that all these measures were put in place before the official lock-down. Many of the workforce left for their hometown 2-3 days before the official lock-down due to family pressure, fear or anxiety. To stay connected while apart, we created a WhatsApp group for both the non-operations team and operations team.”

“Once the official lock-down was announced by the Prime Minister of our country and then the Chief Minister of the state of Maharashtra, I must confess I never anticipated this phase so early, although I was working towards preparing for this eventuality. My task-force team retained touch with all members on WhatsApp, to connect with them and update them regularly of the evolving situation. I personally made calls to 3-5 members every day to understand their state of mind and to help them with any difficulty, while away from the plant (different colleagues each day). Each member of the designated task-force took responsibility to be in touch with all our people outside the plant, once every two days.”

“In support of the local community at Chakan, with support of some members in my team, we provided 350 families with daily food ration during the period of lock-down. This helped those in need to tide over the difficult situation. This support for a social cause was executed in concert with a group of volunteers at AR India and with help of the local police at Chakan.”

"My team in India and myself have maintained our priority that

all decisions will be made keeping the safety of people upper-most while

supporting the business, in these never before,

uncertain, unpredictable times.”

 

“A few months later, a challenge of a different nature emerged. The government cleared the way for industry to re-commence work in their respective premises. Anxious and fearful of the Covid-19 virus, a lot of families of our colleagues were uncomfortable and discouraged their family members from returning to the factory. In order to reach out to them at their homes, I started a program of regular communication, to convey about what is happening in and around the plant and within the factory as well. I do believe this communication provided many of them with the confidence to return to the factory and resume work. Several of them have since returned to work as we scale up to resume pre-Covid capacity.”

“In the areas proximal to the plant we had a number of our workforce, who lived alone in rented accommodation. It was difficult for them to rejoin due to the challenge of regular meals. They were largely dependent on the use of local tiffin suppliers, small restaurants or hotel facility. To cater to them, we created a dormitory within the factory premises for boarding and lodging for 50 people. We cared for them in terms of accommodation, food and water on a daily basis.”

“Due to the lock-down we were challenged by a severe lack of financial inflows. We collectively decided to accept a cut in salary till such time the business climate returned to ensure full salary for all. We were very clear that this decision required the consensus of all employees before implementing the same. I took on the responsibility of personally communicating with each member, where I shared the reality of the current situation and its impact on company finances. I then shared my thoughts about imposing a salary cut starting with myself, for a limited period for all and how this process needed to be rolled out. In my approach, I ensured that employees earning lower than a particular amount are not affected. I encouraged them that they could also contribute “in a way” by working hard through the period of this pandemic situation for the good of the organization. We all agreed to sail through this crisis together. More importantly, we held firm on not reducing the head count of our workforce. Am pleased to report that we have not laid off a single employee during this time. In addition, we also reached out to colleagues who had earlier resigned and were leaving to join other companies. We invited them to reconsider their resignation and stay on with us in case their new organization was not willing to take them on. This step helped two such employees as they were in real dilemma due to their future company having decided to cancel their appointment letters due to the downturn in their business.”

“Since the number of operators on the shop-floor were less once we re-commenced work, we included these operators in our decision-making process. All of them willingly agreed to work on a 12-hour shift to meet the production schedule and this act also helped them to earn extra wages. To meet the shortfall, the team chose to work with a smaller number of known colleagues rather than recruit new people.”

“I feel happy to recount that we were able to amicably resolve many complex issues because we shared matters transparently, included more people in decision-making and encouraged our team members to take decisions at a more granular level. “

“One such complex situation which I recall was an audit by VW for one of our new products. Our client relationship manager was in touch with VW and she gave us the go ahead for the audit. As a process check-step, our task-force denied entry to the plant of any visitor without appropriate medical certificate. The Customer audit team was confused as getting a medical certificate at that time was not easy. Without intervention from any of my managers, I am happy to recall how our task-force team effectively resolved the situation while ensuring no deviation from our laid down process to preserve the health and safety of our people.”

“The risk of the pandemic persists. We have to cope, adapt and learn to live with this new normal every single day. I am happy to experience the way my colleagues are evolving in their roles handling their processes and taking ownership of their decisions at all levels. The primary target I have laid down for my team is to ensure “Safety of People”. During my last monthly communication meeting, I told my team that for 2020 there is only one KPI for all of us and that is not one of us should get infected by COVID. For this to happen we need to take care of ourselves first and our family second.”

And so, the journey in building an Institution continues for Manish Padharia ….

 

Story Captured & Written by

Kiran Gandhi

 

 

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