Pongal 1991 There was a sumptuous lunch today in our factory canteen. The menu comprised sweets, ice cream, curd vada, multiple vegetables, Sakkara Pongal and other dishes today to celebrate Pongal, followed by a packet of sweets for everyone to take home. The mood was festive. As I savoured the meal served in traditional banana leaf in the canteen, my mind went back to Pongal twenty four years ago. In January 2001, I took arguably the toughest and harshest decision of my entire personal and professional life. My company, TVS Suzuki Limited (now TVS Motor Company Limited) was then facing acute cash flow crisis. We were at the bottom of the cycle from which we were to achieve a spectacular turnaround, which has since become a staple business school case. We were hard pressed to pay our vendors and even meet payroll. However, I could not effectively communicate our difficulties to the work force. Every year, we had the practice of giving an advance to our workmen, before Pongal, which is the prime festival of rural Tamil Nadu. This helped them to go to their native places, buy gifts and celebrate the festival with family in style. As President, I decided that there would be no festival advance that year to the workmen, in view of the cash flow crisis. The work force was aghast at my stand. The Union leaders came and pleaded with me saying that Pongal was the single most important festival for the workmen and their families were looking forward to enjoying the festival. I stood firm, saying that as there were no funds available even for regular expenses, there was no question of any advance. I also wanted them to realize the gravity of our finances. If I had relented and paid the advance, people would again assume that we were not as badly off as made out. They appealed to the Managing Director. I stood firm, advising him that a clear message had to go to the workmen of the gravity of our situation. He reluctantly agreed pointing out that I would be hated for my decision. There was no festival advance that year. The mood in the company was glum. I reached the nadir of my unpopularity over the next few months. Twenty four years have passed. Our turnover has increased from rupees 1300 million to over 100,000 million. After a twenty to one split, our ten rupee original value share is quoting around Rs 320, a 640 fold increase. No one can believe today that TVS Motor had ever faced such a grim situation. I was talking at lunch today to an old timer, who was with us in 1971. He told me that he too was upset with my decision. But now he realized that I had to dish out harsh medicine at that time! The workmen have forgiven me and forgotten the incident. They are grateful that I was able to steer the ship successfully at a bad time.
Posted on: Sat, 17 Jan 2015 08:11:59 +0000
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