I was now thirty-seven and sitting at the top of the heap. I had become CEO of Richardson Hindustan Ltd, the company where I had started at the bottom. I was happy to be among old colleagues, but everyone didn’t seem pleased. Envy, I suppose, is the side effect of success. I’ve known envy since kindergarten, when I grabbed the rich kid’s pencil box and got poor Ayan into trouble. The Greeks exiled their heroes, allowing them to return only after the public’s envy had cooled; Chinese heroes coped with envy by self-deprecation; Indian heroes, by renouncing the world.
I may have got to the top, but I wasn’t sitting pretty. The company was in serious trouble, a real mess. I didn’t know to which port we were sailing; no wind was favourable. The socialist government had instituted severe price controls on medicines, threatening to bankrupt us. Our labour force was hostile, coming out of a seventy-seven-day strike. The chemists’ association had just announced a boycott of our products to force higher trade margins. With sales plunging to zero, we might go bust. I called a meeting of the management committee. Although I hated meetings, this was a dire moment. Some in the Mancom had long memories—they had still not forgiven me over executive toilets and white-gloved waiters. Nevertheless, sharing our difficulties might help to lift us out of a bottomless pit.
Gloom filled the room when I finished outlining our ominous situation. I suggested a free-flowing ‘brainstorming’, a novel idea that left my colleagues cold. They were suspicious. I might have a hidden agenda before I plunged in the knife. There were long silences, lengthy intervals.
One person felt that since I was the boss, I should be giving orders, not asking for help. Another feared that I was trying to steal their ideas and call them my own. Normally talkative, they were tight-lipped at the meeting.
Soon, they began to fidget, grow restless, visit the toilet. No one spoke. Someone had a sensible idea: As we weren’t getting anywhere, why not end the meeting and the pain? I was confused and didn’t know what to do. The uneasy quiet rolled on until, one by one, making excuses, they all left.
The brainstorming was a disaster. I chalked it to our differing mindsets. Theirs was more traditional, hierarchical style; mine was consultative, participative, maybe because I had grown up in democratic America.
Nevertheless, I wasn’t deterred and called for a second brainstorming session. This time, I did a better job. They had also begun to trust me a bit more. I guided the discussion more confidently, focusing sharply on the key issues. Ideas began to flow. At one point in the flowing stream, the Gujarati head of marketing said almost absent-mindedly, ‘What if Vicks Vaporub had been an Ayurvedic medicine, not a Western drug?’
Someone snickered, thinking it a joke. But behind the ‘what-if’ was a hope—Ayurvedic products did not fall under price control. Then, the Tamil head of R&D spoke, as though he was speaking to himself: ‘Vaporub’s ingredients are natural. I wonder if they’re in the Ayurvedic formulary.’ The Marwari company secretary thought it worth confirming if Ayurvedic products were indeed free from price control. The Punjabi sales manager wanted to check if Ayurvedic products were limited to pharmacies or sold by general merchants. The Bengali finance manager, ever cautious, felt that even if Vaporub’s ingredients were in the formulary, it would be illegal to make the switch. Would the government ever allow it? The wishful Gujarati, who had started all this, confessed that the idea had been put into his head by an official of the Gujarat government.
Someone announced a headline from the Times of India: ‘100-Year-Old American Product Becomes a 2000-Year-Old Indian Medicine!’ Everyone laughed. The ice had been broken.
Everyone seemed to know what to do. The R&D man rushed to the Bombay University library to check if Vaporub’s ingredients were in the ancient formulary. The finance manager went off to the lawyers’ office to confirm if Ayurvedic products were indeed free of price control. The company secretary called our government-relations man in Delhi to check if Vaporub’s registration could be changed. The sales manager was off to the bazaar to ascertain which sort of stores sold Ayurvedic products. We met in the evening. There were smiling faces. It was a ‘yes’ on all counts.
All of Vaporub’s ingredients were in the formulary; Ayurvedic products were not price-controlled. We looked at each other in disbelief. The advice from Delhi was not to ask for a change in registration but to make an application for a new product and make the switch only after the approval.
Over the next few days, we worked day and night, preparing a dossier, backed by endorsements from Ayurvedic experts.
When the application landed on his desk, the regulator practically fell off his chair. He had guessed what we were up to, but he couldn’t stop us—it was all perfectly legal. After weeks of prodding daily, the authorities handed us the prized licence to manufacture an Ayurvedic rub. From that day onwards, the factory stopped manufacturing the old Vaporub. Our Maharashtrian purchase manager ordered labels for the new Vaporub. The sales manager recalled the entire inventory from the market for relabelling.
Two weeks later, shiny bottles of ‘All Natural Ayurvedic Vicks Vaporub’ were sitting proudly on store shelves. Nothing had changed, except our profits. They soared. The sales force began to expand distribution to the non-drug trade. Within six months, outlets carrying Vicks jumped from 60,000 pharmacies to 7,50,000 general stores. The trade boycott collapsed. Consumers were happy, finding Vicks now at every street corner.
We received the new registration and set up a plant for Ayurvedic Vicks in a tax-advantaged area of Hyderabad, with lower costs and higher productivity. Thus, we escaped the clutches of a hostile union in Mumbai.
Since it was impossible to close the old factory in those days of the Licence Raj, we merely stopped production. Workers came to the factory; they were paid full wages but did not work. Soon, we offered them a generous voluntary retirement plan. Most of them found it attractive and accepted it. The few who were left lodged a complaint via the union. The authorities tried to stop us. But they were helpless—we had not broken any law.
With higher prices and better costs, we invested aggressively in marketing. Our after-tax profits rose from 1 per cent to 14 per cent of sales. Soon, we were a blue chip on the Bombay Stock Exchange as the share price zoomed from Rs 30 to Rs 400 over the next eighteen months. (We were owned only 40 per cent by the American company; the balance 60 per cent was widely spread among the Indian public.)
Having anticipated this outcome, we had offered shares of the company to all 1248 employees, including factory workers, secretaries and cleaning staff. All shared in the company’s prosperity and many ended up buying a home from their capital gains. This had not been easy, since no one had heard of stock options in those socialist days. The controller of capital issues thought it a scam—employees trying to steal the company’s money.
However, we prevailed in the end and were allowed to offer 5 per cent of the share capital to employees. The story doesn’t end there. We proposed to create an R&D centre in Mumbai to prove the efficacy of all-natural Ayurvedic therapies for common ailments. There were many sceptics at the headquarters. But it helped that we were now flush with funds, having become one of the most profitable subsidiaries in the world. After much debate about Ayurveda’s efficacy, the headquarters agreed, and a cheque for $2 million arrived one morning.
Excerpted from Another Sort of Freedom by Gurcharan Das, with permission from Penguin Random House.
Another Sort of Freedom
By Gurcharan Das
Published by Penguin Random House
Pages 275; Price Rs699