Leading By Learning

Being the first among equals, and believing in the idea too, Subbiah uses that status to pick up lessons in managing from his relatives with specialised abilities. The two-fold objective: acquire a new ability, and establish within the family that skills should be exchanged without any consideration for age or hierarchy. His mentor, from whom he learns how to give patience precedence over impetuousness, is his nephew M.M. Venkatachalam, 38--all of 20 years younger--who is the executive director of the Rs 56-crore Parry Agro Industries.

Venky, as Subbiah calls him, coached his uncle in the art of overcoming opposition smoothly, rather than belligerently, just before the CEO was about to visit the Rs 750-crore eid Parry's sugar factory at Nellikuppam in south Tamil Nadu. Anticipating bitter resistance from the factory's employees to some of the cane-crushing schedules, Subbiah rehearsed a scene with Venkatachalam, who taught him to use the technique of asking questions and inviting answers, thus getting workers to arrive at their own solution which they would have to implement. The once-aggressive Subbiah succeeded splendidly, drawing forth a contingency plan from the staff. Says Venkatachalam: "He demonstrates a humility that has had a sobering effect on all of us in the group."

Nor are Subbiah's teachers limited to the ranks of his family. Since he does not conduct reviews any longer, he has offered to travel around the group's units, coaching employees on any aspect of management that needs attention. For his session on the importance of succession-planning at all levels at eid Parry's Manapakkam unit, he brainstormed with S.M. Datta, the former chairman of the Rs 6,600-crore Hindustan Lever Ltd (hll) who is a member of the group's board of directors, and dipped into the notes on the subject that he had jotted down years ago when interacting with another former hll chairman, Prakash Tandon. His message: for the family to stay in control of its business, it must give up no opportunity for learning and acquiring more knowledge.

Leading By Consensus

Subbiah's leadership has smoothly subsumed the spirit of collective governance that has been the ruling ethos of the Murugappa Group. In fact, instead of diluting the role of ritual meetings and discussions within the family, he has actually strengthened them. Thus, Sunday morning gatherings, rotated between the homes of the brothers and cousins, are actually key strategy meetings, where Subbiah encourages a consensus--if not a unanimous solution--on every problem. There is no issue, be it acquisition, divestment, or financing, that isn't thrashed out at these gatherings.

The CEO's role? Primarily that of raising the critical issues, moderating the flow of ideas, and catalysing a consensus if one eludes the gathering. That's not all; Subbiah has also taken it upon himself to ensure that there is no opposition to this notion of collective management. Although he could have transferred the setting of the conclaves to a more formal board-room, or a conference room, Subbiah has chosen to adhere to the informal air precisely to retain the feeling of a family versus that of a group of professionals. Adds M.M. Murugappan, 42, joint managing director, Carborundum Universal Industries: "Consensual management is sought to be inculcated by instilling motivation amongst all members of the family through a non-hierarchical and non-formal reporting relationship. Everything is done by simply calling each other, or just having the CEO drop in when needed."

The ultimate objective, of course, is to keep the family together--not just now, but also in the future. For the same reason, Subbiah ensures that the younger members of the family--the next generation of CEOs in the group--develop the same sense of camaraderie among themselves. That is why he has created the tradition of the youngsters meeting regularly at the nearby Boat Club to share a snack, a meal, or a game of badminton. Says A. Vellayan, 44, the managing director of the Rs 600-crore Tube Investments of India: "The family ethos is very different. We are brought up very differently. What we try to do is to create a joint institution. That way, individuals are guarded against corrupting influences. (sic!)"

Leading By Crisis

To cement the collective ethos, Subbiah has made it a rule that crises must be tackled jointly, pooling together the resources and wisdom at the disposal of every member of the family. The idea is to create a sense of distributed ownership and responsibility even if specific individuals are entrusted with the custodianship of specific companies. In fact, Subbiah gives the fire-fighting conclaves a formal stamp even if the strategy sessions are more informal. Says M.M. Murugappan, 42, the joint managing director of the Rs 150-crore Carborundam Universal Industries: "Unity in personal crises is mirrored when the group is in trouble in business matters."

Two years ago, for instance, the Rs 350-crore Coromandel Fertilisers--which is managed by M.V. Murugappan--ran into a severe financial crunch. Subbiah promptly convened a formal two-day week-end retreat for the family to address the problem and hammer out a rescue plan. Says Alagappan: "Such a situation is never a problem of just the one person who runs the company. It is treated as a family problem, and everyone chips in to formulate the solution." Indeed, the salvage operations, which involved a three-member family team, would not have been possible unless they had been a pan-family effort. Likewise, the haemorrhaging of the packaged tea division (which has since been sold) of the Rs 25-crore Ambadi Enterprises--whose CEO was the 36-year-old A. Venkatachalam--was stemmed only by investments from a central resource pool.

Personal and personality problems are also solved through cross-family inputs, cutting through barriers in the vertical lineages between fathers and their children. Under Subbiah's system, no son discusses a problem, personal or professional, directly with his father; he consults an uncle instead. When one of the younger members of the family was thrust into a post he didn't fancy, he went to his uncle, rather than his father, to get the situation rectified. Says Parry Agro's Venkatachalam: "There was a lot more introspection that was needed. There is complete trust now. I do not feel that I am talking to an older member of the family." Explains Subbiah: "There is nothing rigid about this system. It is not a hard-and-fast rule. But it cuts down on friction in the family. And treating a nephew like a son strengthens the family bonds."

Leading By Unity

To preserve the sense of unity, Subbiah fosters the traditions that kept the family together even as other dynasties succumbed to centripetal forces. True, he hasn't been able to continue every age-old practice: for instance, 10 years ago, the family stopped living together as one family in the compound of the Chennai palace of the Maharajah of Mysore, as they had for over 30 years. However, he has maintained the sense of common identity through a strict protocol of behaviour.

He ensures, for instance, that at least one male member of the family visits Pallathur, their ancestral village in Chettinar, about 250 km from Chennai, every month. All family weddings are also held in Pallathur. And cousins continue to address each other as "brother" while youngsters still don't sit down in front of elders. Adds M.M. Murugappan: "By telling the outside world that you are very close, you develop stronger bonds internally." To Subbiah, these are not demonstrations of meaningless rituals, but tactics for ensuring a continuation of the closeness among the members of the family, which is so crucial to the group's business future.

Says A. Vellayan: "It is small things like these that add up to the big whole of family unity. Most family splits happen over insignificant issues. That is what we are trying to avoid." As a commercial symbol of the collective identity, Subbiah has also ensured that the investments made by members of the family--except those in their personal businesses--are made jointly. Says Vellayan: "We work on the concept of trusteeship. I look at myself as a sort of trustee of family interests. Basically, you have to trust the fact that everyone is acting in the interest of the group." Adds Subbiah: "I do not see myself as the chairman or managing director, but as a trustee of the family in the group." His solution to further that notion: fixing the compensation levels for the members of the family on the basis of which generation they belong to--not their responsibilities.

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