Focus On Markets Ignored By Others

"Empowering people is the most effective way to create profitable companies", says Mr. Thyagarajan, founder of the Shriram Group of Companies in Chennai. He brought workers into management and spent a lot of face time with them. "They made it happen", he says. His methods are simple.

• Cut out all non - value - added activities.
• Engage each one of the workers, including contract labour, by uniting them for a common cause.

"How can you solve the problem with the same tools that caused them?" He brought in a good CEO and made him accountable. The strategy worked and profits began to flow in. "I always found people who could do things. Then I empowered them and left them alone!"

Shriram Chit Funds was started in 1974 with four chit fund companies focusing on truck operators. Now, its volume of business is Rs. 27, 000 crores. When asked why he started with four companies at a time when Small Business Units (SBUs) were not popular, he explains, "Each area had a CEO who had total freedom. Growth was faster, because each CEO felt more energized. We South Indians are suspicious of anyone who grows too fast. This strategy also kept the company out of envy's radar. I was able to call forth a 'Start - Up' attitude. Once I was sure of the leadership, I maintained an attitude of tolerance towards mistakes." The SBUs worked very well and grew quickly.

He recalls how Mr. B.K. Shah, CEO of New India Assurance transformed it into a giant insurance company by appointing 500 inspectors all over India. "In a single stroke of genius, he was able to create a giant - a successful giant. People said he was crazy, the company would be cheated. This motley group, 70% were matriculates and 15 non - matriculates, were given a month's training and the authority to handle and issue policies , premium receipts and issue bank cheques. The market was aghast. But it worked. People performed. They delivered. They lived up to the challenge of high expectations. This is what inspired me to create the Shriram Group's army of agents, over 60, 000 of them. We give them respect and rewards. They create wealth for the company. Our attrition rate is almost zero!" The company considers the truck operator a financial partner. They collect no collateral. "We help them develop the business, because we are co - creators of value. We give truck operators a vision of themselves. We treat them with respect. We support schools for drivers. We support AIDS prevention with the Melinda and Bill Gates Foundation. We try to deal with their total credit needs. We are rewarded with total loyalty! The best credit risk, in my view, is a truck operator."