Focus on markets ignored by others

‘Empowering people is the most effective way to create profitable companies’ says Mr. Thyagarajan, legendary founder of the Shriram Group of Companies in Chennai. He brought workers into management, 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 the 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 4 chit fund companies focusing on truck operators. Now, its volume of business is Rs.27,000 crores. They have 1,000 offices dealing with all areas of finance. Mr Thyagarajan proudly states ‘We have an emotional bond with 20 lakh customers over the years.’ When asked why he started with 4 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.