Kurien: the man who redefined business3 min read . Updated: 09 Sep 2012, 10:11 PM IST
Kurien: the man who redefined business
It was only a couple of days ago that an audio book on Verghese Kurien was released in Mumbai and business leaders paid rich tributes for the work of the milkman of India. A statement by N.R. Narayana Murthy, co-founder of Infosys Ltd, asking the government of India to confer the Bharat Ratna, its highest civilian award, before time ran out, was somewhat prophetic as it indeed ran out of time.
It is a sad contradiction that in the year declared as the United Nations year of cooperatives, we have lost one of the most significant votaries of the cooperative form of business. Kurien showed the world that a farmer-owned and controlled business could be run as professionally as any transnational corporation.
A testimony for Kurien can be found in some numbers. The co-operative dairies on an average delivered more than 70% of the consumer rupee to the farmer. The co-operatives dictated the market structure. The competitors had to match this benchmark. Dairying has the best return that a primary producer can get from the value chain in any agricultural commodity. This happened by incorporating the value chain from farm-gate to food-plate into farmer owned structures. Today co-operatives own a significant chunk of the organized milk markets. If they do not commit hara-kiri as they did in Chittoor district of Andhra Pradesh—where private interests killed a vibrant co-operative—they could be a thorn in the flesh for the private firms. They have a network of milk procurement points through village level co-operatives that is so difficult to build, and usually difficult to break. No wonder the managing director of Amul recently said that his competition does not come from multinational brands that have deep pockets but from unorganized companies, local and regional brands—those who can potentially control the procurement rather than the marketing end of the value chain.
Kurien built insular systems around co-operatives that were difficult to penetrate and break. He ensured that co-operatives always had the technical edge. Setting up Kaira Can Company in the early days to manage the critical supply chain; using locally developed technologies for producing milk powder and cheese and condensed milk from buffalo milk; tying up with Tetra Pak for setting up a packaging company for selling long-shelf life milk. He used commodity aid to develop markets for milk and milk products to be occupied by local milk producers under the Operation Flood programme. All these had the interests of the farmer at their heart.
Today, Gujarat procures the most hygienic milk—directly stored in bulk milk coolers at the procurement point; moving in insulated tankers, to be processed in fully automated plants. While co-operative ideology was important for Kurien, it had to be backed with solid business principles. And these principles included all that is fair in business—obstructing private businesses using the power of lobbying and seeking extended protection through continuing the licensing regime when the entire country was swearing by liberalization. He also used the press to lash out at his detractors. He used tactic for tactic and penny for penny in paying back both competition and detractors alike but in a fair manner.
Kurien was a blend of ideology, business sense, integrity, professionalism, purpose and a symbol of wanting to lead a quality life without undue enrichment. He was a fine Syrian Christian living on his terms; accepted by orthodox Gujaratis by the sheer power of his conviction and what he stood for and what he delivered. If somebody had a straight spine and showed what it meant to stand up and still not lose the position and the moral authority it was him. A true Bharat Ratna. It is just as well that he was not decorated by the government: Governments did not deserve the honour of conferring this title on him.
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MS Sriram is a visiting faculty member at the Indian Institute of Management Bangalore.