‘Entrepreneurs should have a helicopter view of affairs’

There are nearly a thousand people in the hall. Typically, as in any event, this one too is kicked off with a lighting of the traditional lamp. Doing the honours are G.M. Rao, Chairman of the eponymous GMR group, Subroto Bagchi, Chairman and CEO of Mindtree, and a host of office bearers of TiE (The Indus Entrepreneurs) Chennai.

When Rao is asked to be the first one to light the lamp, typical of the man, he unobtrusively slips off his shoes before lighting one of the wicks. It was at the TiECon Chennai 2012 last week. “The entrepreneur’s journey” is the title for his keynote address. And, Rao did provide a fascinating insight, into his four-decade-long journey from his days in his father’s jute trading business to the present, where he heads a diversified infrastructure group that operates airports, power plants and builds and maintains roads, with an Rs 65,000-crore asset base.

He says his entry into infrastructure happened by accident. And, if you believe him, most of the developments happened by chance – he saw an opportunity, he grabbed it – be it him becoming a jute manufacturer from a trader or him getting into banking by becoming a major shareholder of Vysya Bank or his setting up a power plant or GMR getting into airports.

Before economic reforms, says Rao, all that he did in business was looking for opportunities, but after the reforms in the early 1990s, he switched to strategic mode.

Rao, 63, hailing from Rajam village, about 100 km from Visakhapatnam, in Srikakulam district of Andhra Pradesh, says he studied engineering because one of his teachers in school inspired him to go for higher education.

His father decided to divide his wealth among his sons and Rao got Rs 3 lakh, five acres and one truck. He found a job as a shift engineer in AP Paper Mills in Rajahmundry, but that did not last long. After three months, Rao quit his job and joined his father’s business.

It was a trip to Madras as Chennai was called then, that got Rao into manufacturing. He had come here at his father’s instance to meet a customer when he heard that a jute mill was up for sale. He bought it, dismantled it and set it up in Andhra Pradesh. So, from a jute trader, Rao got into manufacturing. Rao recalls his trips to Chennai. He says he used to stay in a Udupi hotel in Egmore, pay Rs 10 for a room, as that is what he could afford, share a bathroom with others in the hotel. He now has business interests in different countries, including Turkey and Singapore.

According to Rao, he has learnt things from each stage in his life – as an engineering student, when he was also a student leader; as a shift engineer in his first job; as a jute trader in his father’s business; when he set up the jute plant; as a banker; and, in the last two decades when the GMR took off to become what it is today. “Those learnings I cannot get anywhere else in life,” he says.

As a student leader, he was an aggressive person. But, then as a trader the jute farmers used to humiliate him saying he knew nothing about the commodity. “My arrogance came down and I started developing humility,” he recalls. His stint at Vysya Bank gave him a lot of corporate insight that has helped him build the GMR group.

Rao says he has started nearly 28 businesses, some of which he had to either sell or shut down. They have been painful decisions, but nevertheless he had to take them.

The turning point in his life came in the mid-1980s when the Reserve Bank changed rules regarding private banks. He belongs to the vysya community and thanks to the initiative of some well-meaning people, he joined the board of Vysya Bank. Over time, his stake increased and in the early 1990s he was a major shareholder in the private sector bank.

His tryst with the infrastructure happened, he says, purely by accident. A friend of his came up with a proposal to invest in a power plant in Tamil Nadu. The then State Government headed by Jayalalithaa was signing agreements with the private sector for power plants, and the proposal his friend brought him was for a 200 MW diesel-powered plant in Chennai. Rao says he was angry with his friend, as the power plant would cost him Rs 800 crore. He was finding it difficult to fund a Rs 30 crore brewery. Where was he going to raise the money for the power plant from?

But then, his friend told him that foreign investors were interested and he could rope in some as partners in the project. Plus, he also had his Vysya Bank shares. The plant came up and is running for the last 14 years. More power plants followed. Then the airport in Hyderabad followed by the airport in Delhi, for both of which he roped in global partners.

“I believed that whatever I build must be world-class technology,” Rao told the gathering, which included many aspiring entrepreneurs or those who have taken baby steps as one. There will not be any compromise on quality. In all the businesses he has started, he has got himself deeply involved, learning the nuts and bolts, and once the venture gets established, he prefers to take a backseat. In his initial years as an entrepreneur, he went by his gut, but then a tip for entrepreneurs – do not go by gut instinct while scaling up or growing.

Rao makes no bones of the fact that he has no formal management qualification, but has picked up things along the way – to manage one’s portfolio, professionalising his group’s management structure, drawing up a constitution for his family members to participate in the business, corporate governance practices, whistleblower policy, how to deal with sexual harassment and what not.

He has learnt to deal with failure and diversity. “We should celebrate failure,” he says.

The journey has not been easy, nor has it been without its challenges, failures and adversity. His learnings: Learn, change and adapt. The values that he and his group have imbibed – humility, team work, deliver on the promise, social responsibility, learning, respect for individuals and retain the entrepreneurial nature. GMR, Rao says, will always remain an entrepreneurial organisation.

As the founder of a family business, if he does not change, he will become a bottleneck.

Entrepreneurs, he says, should have a helicopter view of affairs. As the business grows, they should learn to delegate and trust employees, only then will the venture grow.

“We have entrepreneurship in our DNA,” he talks of India, as a nation. And, in future, a fourth of the global workforce will be Indians.

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