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January 5, 2000

BUDGET 1999-2000

The Rediff Business Interview/Vijay Sankar

'A business should be run only by professionals'

Vijay Sankar, heir-apparent to the Sanmar group Vijay Sankar's designation is executive assistant to managing director, Sanmar Engineering, the Rs 2.75 billion company. He is no lowly confidant of a top corporate exec. Vijay, 27, is the son of N Sankar, chairman and managing director of the Rs 4.66 billion Sanmar group.

It was expected of Vijay to join his father's business one day. His education was geared toward the inevitable. A qualified chartered accountant, he did his MBA at the Kellogg's Graduate School of Management in the US, and then joined the family business. He is reckoned as a future corporate star, heir to the Sanmar legacy, but Vijay himself believes that empowerment at corporations will have to be matched by professionalism.

Email this interview to a friend His office, the Sanmar Engineering factory, is far away from Madras. When Shobha Warrier and lensman Sanjay Ghosh materialised at the factory gate at the appointed hour for this interview, and asked for Vijay Sankar the group MD's son, the guard counter-questioned them, "Are you sure he works here?"

An instance of the boss-to-be not throwing his weight around and keeping a low profile? Perhaps. The amiable and unassuming executive spoke on the course Corporate India could, should, take in the new millennium. Excerpts.

Vijay Sankar of the Chemplast Sanmar group. Click for a bigger image. Were you preparing yourself to join the family business even when you were studying?

I think from the time I finished my high school, I knew I was to get into the business at some stage or the other. Everything was focussed towards that.

Were you interested in the business or did your family force you into it?

It was mutual. I shouldn't say that only they were interested in me joining the business. I'd also focussed my thinking towards that direction. The truth is I never ever thought of working outside, and at the back of my mind, it had always been our business only.

Does the thought that there is something to bank on after the studies make a person complacent?

I think, maybe once in a while, yes, it makes one complacent. When you see others striving hard to achieve something in life, you get a feeling that you are complacent. But such a thought will only lead to disaster. If you are complacent, there is no future for you. That was one of the reasons why I went to the US to do MBA after doing chartered accountancy. Yes, I feel the acceptance of me in the family business would have been very hard if I did not have certain educational qualifications. If you are not a professional, it is very difficult to command respect from people.

Most business houses seem to prefer professionals to heirs. What is your opinion? Should a business be run by family members (promoters) or by professionals?

Of course, a business should be run only by professionals. First of all, there has to be a clear difference between the management and the ownership. At least in our business, apart from my father and uncle, there is only me in our business. There is no other relative in the business and we have as many as thirty businesses. All these are run by professionals and the decisions are also taken by professionals. I strongly believe that a business should be run only by professionals. Family involvement should only be in providing a certain direction. You cannot have family members at every level of the organisation.

A classmate of mine owned a winery in California and her name was associated with the winery itself. They had a totally different system. Every member is brought up in the farm and all of them know everything about wines. To some extent, they were wine experts. May be in a business like that where the business and the family are intertwined, it may make some sense if the family members play a very active role in the business. But again this is an exception than a rule.

Vijay Sankar of the Chemplast Sanmar group Were you nervous on your first day at work? Is it a different experience working in your own business house?

I was extremely nervous on the first day. Only when you start working, you realise that educational qualifications are not enough. Then there was this expectation from everyone. You didn't want to impose your will on anyone and you have to play a balancing act. (He also loves playing cricket and tennis). I had to be very careful not to tread on anybody's toes. That was the most important part. Secondly, I had to gain acceptance of the people in the organisation. So, it is tough 'working' in one's own business.

Are you pampered in the organisation or are you treated just as any other employee?

It is not right on my part to say that I am treated as any other employee. To tell you the truth, I would like it to be that way but it doesn't happen that way. So, I am not treated the same way as any other employee. But at the same time, I try to behave as if I am part of the organisation like any other employee.

You represent the second-generation of your family. Is there any difference in your attitude and your father's toward business?

I guess this varies from one business to another, from one group to another. I'd say my father was quite pragmatic in his business outlook. He always adapts to reality. After he did his engineering, my father also went to the US to do the Masters. I would say, after having studied in the US and interacted with the business people over there, his business thinking is different from many others. I will say, it is not very different from a US business organisation. There is no room for sentimentality and he runs the business like a true professional.

Do you have ideas that are different from your father's?

Yes, what he was exposed to then was different from what I am exposed to now. Everything is different. He had to build everything from scratch thirty years ago. So, he probably would have had a different perspective. Having brought up to the fact that one day, I would be joining the family business, naturally my perspective will be different. In fact, I think family business is a wrong phrase to use.

Because I studied in a good business school, I was exposed to the latest concepts in management and I was taught what a good manager should do and what he shouldn't do in the present globalised environment. So, I guess there would be some difference in my thinking.

What are the differences? Focus, for instance, on man management. Is your perspective different from his?

In fact, human management is one area where our company is extremely focussed on. My father spends half of his time on people and developing human resources. So, I wouldn't say, there is too much difference as far as human management is concerned.

Yes, there is one difference. The older generation in India was brought up in a protected atmosphere. They had to face a lot of competition after 1991 and all of a sudden they had to live up to global realities. So, the businesses which are doing well right now have better quality management and only they have adapted to competition.

But they had to live through this. But people who belong to my age are brought up in an environment where only the global scenario exists. We know that if we have to be successful, we have to be successful on a global scale where there is no tariff protection and where there is competition from companies all over the world. So, our background and thinking are different from the previous generation.

Liberalisation is an opportunity as well as a threat. It is an opportunity for you to make your organisation globally competitive and if you are competitive, you will emerge successful.

Recently, a management consultant commented that out of the ten billionaires of Corporate India, six are first-generation entrepreneurs. As a member of a family-owned business, what do you have to say? Do first-generation entrepreneurs work harder than the second- or third-generation businessmen?

I am sure most of these people are working in the software sector.

You are right.

The market has given very high valuation to the companies in the software sector and whether it is justified or not, no one knows. Yes, a lot of entrepreneurs from India have done well in this sector. It is nothing but fair reward to these people. But if six out of ten billionaires are first-generation entrepreneurs, it does not mean that the second-generation businessmen are doing badly.

It could simply be that the market is not giving high valuations to companies that are non-pharma, non-IT and non-consumer goods sector industry. If you look at the second- or third-generation business people in the software sector, they are doing very well. Take, for instance, Wipro. Azim Hasham Premji is the richest Indian probably because software gets a very high valuation in the Indian market. And it is not because others are doing badly.

As a businessman, are you optimistic about a revival of the Indian economy?

Last few years have been definitely very slow for many sectors. It is a short-term phenomenon, I am sure. Once we have political stability, it is just a matter of time for our economy to boom. Investors all over the world now realise that we have a huge market. Everybody wants to be here if they are not already here.

We have already seen signs of picking up in the automotive sector. See we have so many advantages over many other countries. Our level of education and knowledge of English are unmatched. Indians are educationally oriented and they want to give good education to their children. Qualified manpower is going to be our biggest strength. Yes, our biggest resource is our people.

You did your business management course in an American university. How different was the atmosphere there?

The education level at Kellogg's is fantastic. The advantage you have there is that they teach you various principles in management through a lot of case studies and analysis. You hear a lot of businessmen speak to you. You also gain experience by sharing ideas with your friends.

It is not fair or right to compare the universities in the US with the Indian universities. It is a fact that in India it is more text-oriented. Change is a little slower here but our academics are the brightest in the world. In my business school, 20 per cent of the professors were Indians. The advantage that they have is in infrastructure, which is a little more advanced and there is not much bureaucracy.



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