Prof. Jagdish Sheth is known for his economy with words. He once told us that business was essentially buying low, selling high and managing cash.
The process seems simple on PowerPoint presentations: have retailers buy your wares, bring these into contact with the consumer, and get the consumer to pay for them. Then make sure the retailers pay you. But with fast-moving consumer goods (FMCG), or indeed any business, the last-mile challenge is daunting.
Therefore, companies such as ITC, Hindustan Lever and Nestle would ensure that management trainees were exposed, in a structured manner, to the way the market worked. The system was rigid, and learning the grammar and nuances needed a lot of elbow grease.
During my stay in Benaras, Mani babu had the most popular halwai shop above the city’s famous Prayag ghat. His shop was busy, but he had not paid for tea bought the previous week. Naturally, I was livid—a standard operating policy on credit management had been flouted, and Shiv Poojan, my head loader and first direct reportee, had to answer some hard questions.
I told Shiv Poojan that we needed to deal with the situation firmly, and read out the riot act—my first attempt at officer-like qualities and behaviour (how inappropriate it was, in hindsight). The money, all of Rs180, came in by the evening.
The week after, Mani babu was at his charming best as I went through my farewell sales visit. He ordered hot jalebis, kachoris and some karak chai for me. And, like everyone in Benaras, he told me a story.
Down the lane lived Khan sahib. He had a large family and was perpetually broke. Household provisions were bought from a shop belonging to Mani babu’s nephew. Arrears had mounted over the years, but the supply line was kept open. One afternoon, Khan sahib came to the shop to request that the credit be rolled over. Mani babu, though chuffed, agreed because his son was to get married the next month—on such an occasion, one could not be nasty with a neighbour.
Khan sahib, of course, settled his dues as soon as he received his royalty cheques from HMV.
But what he at that time did was charming. When Mani babu’s son got married, Khan sahib led the baraat. India’s doyen of classical music, Ustad Bismillah Khan, Bharat Ratna awardee, played the shehnai all the way, walking down the wonderful lanes of Benaras, and settling all his overdue interest.
Mani babu gave me another cup of chai, and told me that in the by-lanes of Indian muhallas, people might delay payments but would never cheat you of your money—that relationships spanned generations in a 4,000-year-old city. It was a lesson in credit rating. He also suggested that instead of throwing the rulebook at him, I could have mentioned that a delayed payment would hurt my career, and he would have complied. That in Benaras, speaking courteously, irrespective of the provocation, was considered a sign of good breeding. I left feeling a bit foolish.
Ballia followed Benaras. I boarded an eight “berth” coach in the evening, and locked myself in: There were no lights, and I was the only passenger. Cooped up in that rake, I spent the night scared. When I emerged the next noon at Ballia, I was cold, hungry and shaken.
Economics and statistics were what I had read at university, and I had a theoretical understanding of the concepts about the poverty line. In Ballia, I shook hands with rural poverty, and sensed the curse of life below the line. I have vivid memories of it.
We sold inexpensive teas in village markets, melas and haats; stayed in the retiring room at the Ballia station; ate kachori, poori sabzi and chai for breakfast, lunch and dinner. The station master was my local guardian.
Across the country, from New Market to Crawford Market, Connaught Place to Mylapore, Leh to Margherita, tea, coffee, cigarettes, soaps and matchboxes were freshly and neatly available. Nestle from Moga, Surf and Lux from Garden Reach and Sewree, Wills and Gold Flake from Monghyr and Bangalore, Red Label from Kanhan and Tundla. Many depots, C&FAs (carrying and forwarding agents), transporters, kirana shops, salesmen, controllers and daily wage workers drove this giant distribution machine daily and seamlessly.
However, all this needed to be changed when I became the boss. We needed modern management techniques instead of these backward practices in supply chain, retailing and relationship building, even if they delivered flawlessly. We needed optimized route planners, complex algorithms, GPS trackers and satellite maps that would run vans in the wrong direction on one-way streets, tulip charts, score cards, KPIs (key performance indicators), KRAs (key result areas) and every tool and jargon invented to burden the system.
Needless to say, we have managed to change things. We don’t visit the bazaars of Tanjore, leave alone Gummanipondi, and share a cup of coffee with retailers. Instead, we take them to Bangkok for a weekend to build relationships.
In Nashik, a crusty sales controller, known for his plain speaking, would tell every management trainee: “We have been mismanaging rather nicely for many years; you have not been hired to supplement our efforts.” Ouch.
Subroto Chattopadhyay incubates new businesses as chairman of The Peninsula Foundation, and also advises companies and development agencies.
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