Focus for October 2022

EMPOWERING HUMAN POTENTIAL AS A CORPORATE PHILOSOPHY: THE KP RAMASWAMY SAGA Speaking on “A PHILOSOPHY WITHOUT FACE”, as eminent management expert of Yesteryears, Mr. Shanu Rangnakar had observed “Two grabbing hands are all that the private enterprise could present before the people. There is a crisis of image in this sector”. This was in early 1975, that is close to half a century ago. How has this image undergone transformation during this past, close to fifty years? It’s a question with profoundly mixed answers in this era of World Trade Organization and consequent globalization. “People must come to accept private enterprise not as a necessary evil but as an affirmative good” was a dictum attributed to late Eugene Robert Black, the third president of the World Bank. He was president during 1949 to 1962, probably the longest served president of World Bank. They were truly the transformative years of World Bank also known as International Bank of Reconstruction and Development. The above dictum has lot of depth and meaning relevant to the time we live in. Private enterprise, if it so desires has tremendous potential for good in general and for societal good in particular. Of course, Eugene Black was an American and product of American society. Long time ago, an American enterprise, Green Giant Co. had made a corporate policy. It had stated “we agree Green Giant Company to be making the greatest possible profit over the long term, consistent with being a corporate citizen”. While it is true that there isn’t any dictionary meaning of the term ‘corporate citizen’, by this and similar terms society meant that companies have an obligation to wider world to further their quest for profits within the socially acceptable channels and that ‘profit above all’ is anti-social and immoral. Such a view was long held by Harward Business Review, which in a survey established that 94% businessmen respondents adopted the view that spiritual, ethical, moral and social consideration should and do play a role of utmost importance in profit making. Thus, the object of social responsibility has been there in the western world, which their counterparts in India have been rather slow in adapting to these laudable objectives in their search for greater financial attainments. Many years ago, ECONOMIC TIMES, carried a news item “HLL pays Rs. 5 Dividend”, in its front page. The thought that Rs. 5/- dividend per share for a share of Rs. 10/- which works to 50% was very good, crossed the mind. But reading it further was an incredible revelation. The share price was just Re. 1/- per share. So the Rs. 5/- per share amounted to 500% dividend, clearly mind boggling! The following year the company HLL that is Hindustan Lever Ltd., paid Rs. 5.50 per share, which amounted to 550% dividend. Nowhere in the world there could have been such huge payout to share-holders. Before that, Colgate Palmolive India, the Indian subsidiary of US giant, was the first to pay 100% dividend to their shareholders. Thus the potential for huge profit among private sector companies was very much there. The question was how these companies make their profits and what they do with it. In a huge market like India for consumer goods, the demand is equally huge for FMCG or Fast Moving Consumer Goods, like that of HLL, who are into FMCG. There are many companies who owe their existence to consuming public. These companies make their huge profits from the consumers. When it comes to giving back to consumers, they are generally tight fisted. They could give scheme like buy two take one free, so that consumer gets 33% discount. But no, instead they give huge salaries and perks to the top management and similarly huge dividend to its shareholders. When a company pays 500% or 550% as dividend, the ROI (Return on Investment), or on the paid-up capital of the company can be from 4 to 10 times. This surplus in the P&L a/c of any company is only after charging huge financial packages and perks in kind paid to senior executive staff of the company. Of course the payment to CEO or MD or executive Chairman can be only in terms of crores, which to is chargeable to P&L a/c besides staff at all level are paid very well with mouth watering perks and facilities. All these adds up to a huge sum in all successful corporate entities. These corporate private sector companies, all of them in fact, have made huge profit within the socio-economic environment within the country and prima facie they have a huge responsibility of being a good corporate citizen to be responsive to the need and aspirations of the milieu within which their corporate houses operate. It is true that economic theory makes a fundamental assumption that maximizing profit is the basic objective of every business activity. Hence for decades economists have insisted that businessmen try to maximize profits. Its appallingly true of this country, where mammon worshipping has reached such an enormous proportion and things have come to this sorry pass, that law makers, law protectors and law enforcers are on the pay roll of these money spinners. The result has been an unremitting exploitation of the common man, the ordinary citizen. Our business leaders have been apathetic to varieties of blatant malpractices. In this muddled scenario emerges a refreshingly different icon of hope. Mr. K P Ramaswamy, born into an agricultural family in the village Kalliampudur near Erode in Tamil Nadu is essentially a humanist entrepreneur, in simple straight forward terms. Although, there are some information available on the internet on his persona and his evolution from a faceless existence in Kalliampudur village, to being recognized as a successful industrialist of Coimbatore, media has not truly spent time on writing about the larger than life personality of this little known great man. It was a chance reading of a WhatsApp post that truly inspired us to pen this tribute to an inspiring soul. Sujith Kumar, Head of Human Resource at Infosys, was invited to a convocation ceremony as a Guest of Honour, to hand-out degree certificates to graduates at KPR college premises. He had expected it to be a routine affair like most convocation ceremonies. He wasn’t clearly prepared for the extremely pleasant surprise that was waiting to overtake him. “We keep reading about brilliant case studies across the globe but nothing comes close to what KPR Mills is doing for its employees”, he wrote in a social media post. It was an ultimate tribute to the exemplary vision that the promoter of KPR Mills, Mr. KP Ramaswamy envisioned for his employees as his company’s CORPORATE SOCIAL RESPONSIBILITY. “I have witnessed many welfare programs, higher education assistance for employees from some big brands across the world. In all these programs, there will be an underlying statement. What will the employee give back to the company? We keep reading about some brilliant case studies across the globe, but trust me, nothing will come close to what KPR Mills is doing for its employees. It’s a silent revolution that their chairman KP Ramaswamy has taken upon. It was a chance encounter several years back when he was interacting with his women employees on what they want as a welfare program (way back in 1990). A young girl said “Appa (that’s how the girls call him), I want to study. My parents pulled me out of school to join this Mill due to poverty, but I want to study further”. This request left a lasting impression upon him and he decided to provide higher education assistance completely free of cost. The girls work on 8 hour shift and those interested can study further for 4 hours every day. Classroom facilities, full time teachers, an exclusive principal for this programme, computer lab, yoga course all provided to run this programme effectively. Having started the programme in 2005, with 15-20 students, from Ooty, Trichy and Vellore districts of Tamil Nadu, the programme has educated 24,356 girls(in 2019), with 58 full time teachers on the rolls of the KPR Mills. Girls have finished their 10th, 12th, UG & PG courses. They have their alumni in almost all hospitals, where the girls are working as nurses. Many have become school teachers, some have joined police force and the list goes on and on. Yesterday in the convocation over 350 girls received their degrees and out of which 20 of these girls are Tamil Nadu Open University Gold Medalists. They received their degrees and Gold Medals few days back from the Tamil Nadu Governor. Now the natural question kicks in right! When companies are battling attrition issues, if we provide free higher education won’t the girls quit and that will result in high employee turnover! KPR has an answer. He says “I don’t intend to keep them in the mill and waste their human potential. Many of these girls are smart and have landed here due to poverty. My job is to ensure that they get a good degree, get required skill and settle well in life. When these girls leave the mill they also refer girls from their village and the cycle continues. Human resource is precious and we need to leverage it effectively”. What profound thoughts and he simply nailed it! This is what true Human Resource Development is all about. As I finished my address and took my seat, the chairman KPR held my hand and said “Sir, I normally don’t ask for favours and have never asked anything for my students studying in my college but these girls are special. There are girls, who have completed BCA, B.Com, MBA, M.Com and several other courses. If you and your friends can hire them, it will give other girls a lot of hope to study further. Can you please help?” I was like dumbstruck! Here is a man who runs a Multi-crore turnover successful business and he is asking help to place his own employees! Have you heard something like this?? Friends, these are stories that world needs to know. These are case studies that the B School needs to learn. If you are looking for potential hiring, then you might want to consider KPR Mills and I am sure you will not be disappointed. Some of the most inspiring stories come from unknown quarters and KPR Mills and their social revolution through education is a story that needs to spread like wild fire. It was a Sunday when I came back inspired. Very few posts that I request my friends to share”, Sujit Kumar wrote in a social media post. The event took place in October 2019. So its going to be completing 3 years in a month. In the meanwhile, the benefeciaries of this social revolution would have crossed 30,000 in all probulities. Hats off to the pioneer of another kind, Chairman KP Ramaswamy ! Born on 8th March 1946, Septagenarian KPR could only study up to high school. He started his working life as a teenager, in a small garment factory in Tirupur, the well known textile city of South India. But he was always enterprising and wanted to go independent. According to the information in public space, he started selling firewood at 19 years of age. When he turned 20, he started his Best Knitting Company, a power-loom fabric manufacturing unit, with an investment of some 10,000 rupees from one of his uncles, rest, as the cliché goes is history. In 1984, with his brothers having joined his enterprise, they established KPR Mills Ltd. and grew into a fully integrated knitwear garment business. In early 2007 they went public and have not looked back since then. Public space informs “KPR Mills is a vertically integrated apparel company with international accreditations for quality control, environment standard and social accountability with manufacturing facility in Coimbatore, Satyamangalam and Tirupur, Tamil Nadu. It has a turnover of over 4000 crores per annum at present. However, it was way back in 1990s when a young mill worker asked KPR if he could help her complete her education, transporting him back 25 years, to when he had to quit college to return to his village because his farmer father could not afford to educate all four sons. “Why shouldn’t we educate the young women in our factories, interested in studying”, KPR asked his brothers who are part of his enterprise. A correspondence programme was arranged for around 50 women employees at the mill. Reportedly, girls took the initiative of the management with all seriousness and came out with flying colours in their examinations. Inspired by the performance of his female staff in clearing the examination, he reacted “Let’s do it every year”. And it’s been going on for all these years. Dedicated staff of KPR Mills did not disappoint the owners, and close to 30,000 have cleared different levels of educational attainments including MBA & M.Com. Many have left for better pasture with the blessings of KPR and some remained back with KPR Mills. “Satisfied employees are better performers. It’s a win-win situation for all” KPR had reportedly remarked. This exercise in empowering the human potential of these employees has stood in good stead for the company even through the pandemic Covid-19. When factories across the country sent away their labourers during the nationwide lockdown in 2020, KPR Mills gave its workers a choice. ‘If you stay, we will provide you food, shelter, full salary and entertainment’. Each of their factories has a cinema hall, sports facilities and an auditorium. 100% of the people said they ‘will stay here only’ KPR was reported to have reacted. The company has around 25,000 employees. KPR has been an ideal master. His younger brother, P. Nataraj, who is the Managing Director, is a Chartered Accountant. He calls KPR as the HR Head, who has really built the company’s culture. “He meets all the employees directly. There is no separate lunch for Chairman, MD or staff. Whoever visits our factories, we will have lunch together with the staff”, was his beaming response as the proud brother of Chairman K P Ramaswamy.