Patanjali believes its staff does ‘seva’: Ex-CEO S.K. Patra
Patanjali Ayurved does not care very much about profits, Baba Ramdev only wants to sell, says former CEO S.K. Patra
New Delhi: S.K. Patra, an alumnus of the Indian Institute of Technology (IIT)-Kharagpur and Indian Institute of Management Ahmedabad (IIMA), was the chief executive officer of yoga guru Baba Ramdev’s Patanjali Ayurved Ltd and president of Patanjali Food Park from 2011-2014. Under his watch, the company’s sales grew from Rs317 crore to Rs2,500 crore. In an interview at his Pune office, Patra spoke about the blueprint he followed to fuel the rapid growth of Patanjali Ayurved which, according to Ramdev, had sales of Rs10,561 crore in the last financial year. Edited excerpts:
You are an IIT-IIM graduate. How did you go on to work for Patanjali Ayurved?
After working at MMTC Ltd, National Fertilizers Ltd, Chambal Fertilizers and Chemicals Ltd and ACME Tele Power, I was helping the establishment of Bangur Food Park when I got a call from Patanjali that Baba Ramdev would like to meet me.
This was in the heyday of his anti-corruption and black money movement against the UPA (United Progressive Alliance) government in April 2011. My wife urged me to go meet him.
At that time, the core management team of Patanjali Ayurved and Patanjali Food Park, led by another IIM graduate (C.L. Kamal) had suddenly left. So there was a vacuum and Babaji needed replacement immediately for both of them.
Within minutes of our meeting, he asked, “Toh Patraji, aap kab join kar rahe hain? (so when are you joining us?)” He (charmingly) ignored my protests that I had to finish my work at Bangur, saying, “Woh to aap yahan se bhi kar sakte hain (you could that do that from here too).” He even paid for my wife so she could be there to help me decide. I found it hard to refuse.
What was the situation at Patanjali Ayurved when you joined?
Well, the previous management team had begun some operations and was still in the process of establishing things when they suddenly just resigned and left. A lot of the new machinery was not even opened. What had been opened and working was hugely inefficient. For instance, a flour mill capable of producing 100 tonnes a day was actually doing only two tonnes a day.
The staff was not trained, there were no standard operating procedures in place and the manufacturing unit was producing goods for two different companies. It was chaotic.
What happened when Baba Ramdev’s anti-corruption campaign failed?
In just weeks after agreeing to work at this chaotic place, Baba Ramdev and (his associate) Acharya Balkrishna were at war with the government. We began getting notices, banks refused to release money, the officialdom began threatening to shut the company down. It was chaos.
The promoters were missing in action and I was holding their baby. The months after that were very difficult. I had to go around convincing babus (bureaucrats) in Delhi... I also told them that the food park (in Haridwar) was their (government’s) initiative and a good one—no point shutting it down... since I’d worked in government organizations before, they decided to trust me.
You say the place was in chaos. How did you bring order to it?
It was not easy. It took a lot of chartered accountants to separate the entangled mess of companies, construction workers to put a wall in the food park to establish it as a separate entity, hiring experts to draft standard operating procedures for all the fancy machines that Baba had imported but which his workers were unable to use efficiently. But more than everything else, the challenge was to convince Baba Ramdev—who was already railing against the multinational companies even back then—that he could say whatever he liked about them, but if he wanted to succeed, he would have to adopt their best practices.
How did that go? Did he understand it?
Oh yes. Baba Ramdev is a very keen listener, very fast learner and he is very sharp. It’s one of his strongest qualities. He may not know things himself, but he listens carefully.
At that time he used to think advertising is a waste of money. I had to fight hard for even a small budget of Rs20 crore with him. But when he understood that I really believed in the importance of advertising, he went and struck his own kind of deal—a sort of ‘barter’ where he gave chyawanprash worth Rs2 crore to a media house owner in exchange for Rs4 crore of advertising in their newspaper!
I was amazed at his imaginative style of doing business.
Under your watch, Patanjali Ayurved went from a Rs300 crore to a Rs2,500 crore company. How did you make this happen? What, according to you, really worked?
Many things were already in place. Baba had the infrastructure and machines already. The bulk of the capital investment was already made.
My role was to take all the ingredients and put them into a seamless unit that functioned efficiently. After that I turned my attention to advertising and distribution. Up until then, Baba used to rely on his network of chikitsalayas—you know, pharmacies where doctors diagnosed patients for free and recommended buying medicines from their store next door?
I told Baba that we must have a regular distribution network of super distributor, distributor and retailer. We went on a hiring spree, acquiring a sales force to rival any multinational company. For the first few months, they had no targets, except to acquire new distributors and establish the network.
The third layer of distribution was the freelance retailers. I took the volunteers of the Bharat Swabhiman Andolan (Ramdev’s anti-graft campaigners), who had sort of lost purpose after the political debacle. Baba infused them with a new cause to rally around—promoting swadeshi products. He put them on salaries and sent them around the country to the small mom-and-pop stores that would offer Patanjali products on an exclusive shelf in their stores. The regular distribution chain did not mind because we gave them a 1% commission on all sales done by the freelance retailers. It was free money for them, so they let us do it.
So, this sounds like more distribution innovation than product innovation.
Absolutely. It was also an innovative approach to business. They first got this entire infrastructure together, imported top-of-the-line machines and then asked themselves —what do we do with it?
How is decision-making in Patanjali different from multinational companies?
Baba Ramdev largely drives the company. He is involved in all the most important decisions—what to make, how much to make, when to make, how much to sell for. He personally tries out every single product and approves it.
The company also does not care very much about profits. Babaji only wants to sell.
According to you, what was your most lasting contribution to the growth of this company?
I’d learned a certain style of administration during my stint working at K.K. Birla Enterprises. We made a summary of how an organization has to be managed…by cross-functional committees.
What are fights about in an organization? The fights usually are about production guys saying the ingredients are not there, sales guy yelling the inventory is not ready, quality control guy then stops production somewhere… it was chaos.
So I created 30 cross-functional committees. Inventory planning, procurement and marketing, market research, quality control, finance and purchase…you name it. Those committees would meet every days as per my schedule —which day and which time.
I was the chairman on important committees and made a mandatory schedule of meetings. They’d submit a one-page report. My job becomes very simple—I will take instant decisions: approve, disapprove, whatever the case may be. This enabled day-to-day functioning for such a huge conglomerate. It is not possible to scale something as vast, as mammoth without the skeleton, the bones in place to allow it to function seamlessly.
I could visualize it and execute it. Otherwise there was a kitchen cabinet behind the Baba. In organizations like these, there are the Baba’s sycophants who only create confusion and do not have either vision or skill to see the organization as a whole.
The company was doing well and you had helped bring it there. Why did you leave?
They pay very little to the people who work for them. He calls it ‘seva’ (voluntary work). For instance, I was doing two jobs there—at Patanjali Ayurved and Patanjali Food Park. They had promised to pay for both.
But he would announce to everyone that “Patraji has come to do seva. Right now he is drawing salary, but soon, he won’t even take that…”
I used to respond, “No, I want my money.”... I said I don’t need it for myself. I have a family. I need money for my family, to support them and my relatives. Then Babaji relented and gave me a salary for one of the two jobs that I was performing. But basically his argument was—I have to offer free seva to his host of companies.
I was also seeing the distance between their words and their actions and it troubled me. Eventually, it became too much. So I left.
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