ENTREPRENEURIAL LEADER AND NATIVE INTELLIGENT ACHIEVER WITH A VISION FOR FUTURE INDIA: YATRA OF SHANMUGAPPA

8/12/2011 International Conference on Entrepreneurship; IIM(B)

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ENTREPRENEURIAL LEADER AND NATIVE INTELLIGENT ACHIEVER WITH A VISION

FOR FUTURE INDIA: YATRA OF

SHANMUGAPPA Presentation by

S.Deenadayalan and Dr.K.Prabhakar


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Who is Shanmugappa?

• “I was happy and privileged to sit by his side to understand further about his dreams. India needs many leaders like Shanmugappa”- Dr.A.P.J.Abdul Kalam, Former President of India.


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The Yatra of an Indian Truck Man


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Present Status • CEO of group of organizations producing

world class products for HLL.

• His group turn over is more than 100 crores and grows at the rate of 15%.

• The products manufactured by his organization are exported to 40 different countries.


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Organization and CEO Practices…

• His factory has zero accident record. • He never removed any employee. • He follows parta system of accounting and never

goes through it. • His mangers receive 100 blank checks; They

can spend up to 1,00,000 for workers in case of emergency.

• Rent, education and medical care is taken care of by him.

• He trusts people radically and says no one has ever stolen from him as he trusted everyone.


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• A person can work as long as he wants. Tasks are given based on age.

• Never looks at balance sheet expect once in a year.

• All his expenses are also known to the employees as they are openly accounted for.

• Never pays bribe.


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• He has no vision statements, mission, objectives, targets, performance appraisals, balanced scorecard or employee engagement practices.

• Everyone works to his or her ability considering factory as temple and the customers as family members to be nurtured. That is his vision for business.


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Social Role

• President of All India Motor Transport Congress.

• It has 70,00,000 members, one of the largest transport unions in the world.

• Let us see the video of Charlie Chaplin; Do you find some commonalities?

• http://www.youtube.com/watch?v=WibmcsEGLKo&feature=share.

http://www.youtube.com/watch?v=WibmcsEGLKo&feature=share






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Purpose of Case study

• Profiling life journey of Shanmugappa from a small village in Tamilnadu and a working as a porter in Banglore Railway station to that of most respected citizen of India.

• Finding his entrepreneurial success factors and present status of truck industry.

• What factors made him to gain acceptance as leader of All India Motor Transport Congress, and his impact on policy making on both state and central governments.

• At the end of the case study there are a set of statements about which the readers are requested to deliberate; debate; question; discern some of the cultural artefacts; appreciate the different ways of doing world class business in India.


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Research Approach

• Research is a process of systematically collecting and analysing valid and reliable information in a given context.

• Qualitative Phenomenological method is adopted for the present study. It is based on individual perceptions and interpretations of the subjective reality vis-à-vis positivistic approach which believes in rock solid foundations. The post-positivistic approach amended this approach and adopted for present case study.


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Sindanai-Sinthippathu-Seyalpaduthuvathu

•[1] ( சி�ந்தனை� )thought, conception, recollection, imagination, reflection

• [2] (சி�ந்த�ப்பது )contemplation

• [3] (செசியல்படுத்துவது )execution


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Early beginning and Search of Identity

• His father is a small time betel nut merchant moving from one Santhai to another santhai earning ten rupees a day to take care of nine lives at home. Poverty, deprivation, lack of eco system made impact on his education and failed in his SSLC examinations.


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Dialogue with his father • “You provided us with health and education, it is time for me to not

to be burden on you. I will leave to take care of myself.” He took an oath not to return to his village without being successful.

• (ஆரோ��க்கி�யம்) salubrity, freedom from disease, wholesomeness • ( படிப்பனை� ) inculcation of Education • It is the duty of the father in Hindu culture to ensure good health

and education of the child, especially for male children. This is undertaken by his father as a most important duty ordained by culture.

• சிபதம் an asservation confirmed by oath or ordeal.• He left home in search of employment with two rupees in his pocket

to Banglore.


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Thoughts as a Porter

• Two aspects that will lead a person to do wrong things. Doing things that are not needed and not necessary.

• ரோதனைவய�ல்லா�தது not needed, not necessary, not wanted or non exigency

• அவசி�யமி�ல்லா�து non urgent


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Positive Turning Point

• Brook Bond lorries were loaded at Railway station.

• He joined Brook Bond factory as un loader after convincing the person in charge and sleeping at the watchman room.

• After some time he became a cleaner and a driver.

• He saved money and purchased a lorry and became an owner. He wanted to be an owner of a factory and purchased land for Rs 40,000/-.


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Travel Abroad

• Listening to the managers speaking that they have visited abroad, he went to Thomas Cook and asked for a ticket to go abroad.

• He was directed to go to Germany where he can see machinery exhibition. At the hot he was served hot water and power, which when mixed with hot water became coffee and he wanted to do the same in India.


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Interaction with Warriar

• Warriar gave his chance to blend tea.

• He proved himself by his honesty.


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His philosophy of business Practices

• எளி�னைமிய�� frugal methods economical in the use or appropriation of resources; not wasteful or lavish; wise in the expenditure or application of force, materials, time; characterized by frugality; sparing; economical; saving; as, a frugal housekeeper; frugal of time. Non ostentation.

• ( உறுத�ய�� மி�ப்ப�ன்னைமி) categorical and unwavering strong will.

• (மிரோ��ப�வம்) real state of mind.• (எண்ணம்) thought; supposition; imagination;

conception.• ( ப��த�பலிப்பு )reflection. • வ�டா�முயற்சி� perseverance and endurance


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Design of Machinery

• The machinery was designed by him with his workmen who have not crossed school final.

• ரோபசுரோவன் Talk or communicate. He says after some time of working with machine, he communicates with the machine and in the process he gets insights of the machine design.


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Native Intelligence Achiever

• Anthropologist Jeremy Narby(2005), who interviewed scientists investigating smart slime, brilliant bees, perceptive plants and other living wonders gave a clear articulation in his work.

• All of nature teems with intelligence and all life is interconnected.

• As an anthropologist who has studied both Western scientists and Amazonian shamans, Narby is bringing together these two knowledge systems. To Narby's way of thinking, rationalism has been the sole driver of the pursuit of knowledge for far too long, with devastating consequences and in the opinion of researchers it will be same for management.


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Narby (2005)

• "The emphasis on technology, commodities and fragmented rational knowledge has bled the world of meaning."


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Intelligence need or should not be Western only

• Narby says scientists lack adequate language to describe and deepen their discoveries about the intelligence and the unity of life on Earth. Indigenous people's knowledge systems and cultures, on the other hand, tend to view all beings as sentient and related in a world with no separation between humans and nature. Such understanding, combined with western science, could inform the urgent search for more sane and sustainable ways to live, according to Narby.


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Shanmugappa’s Entrepreneurial Success Factors…

• He created a strong base in the form of five organizations that provide livelihood for 1200 people, which was his dream.

• He is not number driven or profit driven and never thinks that he will make loss. His view is if his focus is on being honest to himself and to the society it will reward him with profits.

• He does not believe that as CEO he need not be frugal. He spends what is required for him. Rest he says it is for his workers and for the society.

• Organization strongly believes in intuition rather than in systems or processes. There is no hierarchies and everyone is treated the same.

• He radically believes people and never on the wrong side of the law.


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Shanmugappa’s Entrepreneurial Success Factors…

• He has no belief in the Jack Welch’s cutting cost by sending away people and creating wealth for few.

• The organization has no written mission and vision statements, but achieved world class manufacturing practices and designed machinery with the help of workers who had little formal education.

• He is deeply religious and not apologetic about it and has employees from all religions.

• Strongest belief in ethics and values and commitment to anti corruption.

• Every employee is made to feel strong sense of identity with the organization as well as works with great pride, which is visible from the security staff to the senior managers.


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Truck Industry

• The road goods Transport Industry ( trucking and truck industry is used interchangeably in this case study) with 87.1% of the goods transport is through road and 12.9% is by Railways.

• 85% of the trucks are owned by single truck owners.

• It is the economists dream of free market.• The total finance in this sector per year is

1,60,000 crores.


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No Access to Formal Finance

• It is considered as unorganized sector by mainstream economists.

• Unorganised sector and Informal sector refers to those enterprises whose activities or collection of data is not regulated under any legal provision or do not maintain any regular accounts. In the unorganised sector, in addition to the unincorporated proprieties or partnership enterprises or partnership enterprises, enterprises run by cooperative societies, trust, private and limited companies are also covered. The informal sector can therefore, be considered as a sub-set of the unorganised sector.


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The Legal Framework

• The CARRIERS ACT, 1865 is 145 years old.

• The new act with its amendments is yet to come to force.

• For every 40 km we see either police or government officials collecting bribes and it is to the tune of 35,000 crores ( Estimated).


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It is not informal Sector

• It is a self organizing mechanism that works more precisely than a regular system.

• The seminal work by Batten (2000) on Discovering Artificial Economics an analogy is provided to that of a sand piles.

• The sand piles they do not flatten, in fact they develop friction and pile.

• The price mechanism is not continuous, in reality it takes time to react.


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Is It Possible For A Few People To Create Change?

• A pile after adding some sand at an equilibrium point may produce an avalanche.

• The answer is Yes. The Arab spring, the Occupy Wall street Movement, Anna Hazare Movement are all examples this phenomena.

• It requires an Invisible Choreographer


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I leave rest of analysis to readers

• Reading from Taoism and Confucianism on Shanmugappa’s Leadership

• If no one were to praise actions that of worthy of praise, then there would be no competition between people.

• If no one were to value precious treasures, then there would be no stealing.

• If no one desired that which is desirable, then people’s mind would be tranquil and serene.

• So if the wise person were ruler, he would empty the people’s minds, full their bellies, weaken their desires, and strengthen their bodies. He would strive to ensure people knew nothing and wanted nothing. And if certain people get to know something, he would prevent them from acting on their knowledge.

• When you never seek to be honoured for what you do, then honour can never desert you.


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Role of Invisible Choreographer

• Economic literature is replete with the invisible hand and it failed to explain the true economic dynamics. Do you think the role of invisible choreographer explains the truck industry and likely effect of leadership style of Shanmugappa to change the state of truck industry?


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Thank you

Business

ENTREPRENEURIAL LEADER AND NATIVE INTELLIGENT ACHIEVER WITH A VISION FOR FUTURE INDIA: YATRA OF SHANMUGAPPA