Opinion

The TTJ mantra for successful turnarounds

Vinay Kamath | Updated on June 17, 2018

TT JAGANNATHAN, Chairman, TTK Group

The twists and turns that the TTK Group took to emerge as one of the major consumer goods brands in the country

 

TTK Group Chairman TT Jagannathan has written a book on the growth saga of the group from being in the doldrums in the 1970s to its flagship company TTK Prestige becoming a blue-chip consumer goods company today. Grandson of former Union Finance Minister TT Krishnamachari, after whom the group is named, TTJ set out to be an academic. A gold medallist from IIT Madras, he was on the verge of graduating with a Master’s degree in operations research from Cornell University and had landed a great job, when his father, TT Narasimhan, came to Cornell in 1972 and told him to come back home and save the business as it was collapsing. He catalogues the twists and turns that life had in store for him in his book titled ‘Disrupt and conquer — how TTK Prestige became a billion dollar company’ (Penguin Random House India), co-authored with Sandhya Mendonca. In a conversation with BusinessLine, he talks about how he turned around the TTK group and made it one of the country’s best known brands in consumer goods.

What were the key inflection points in the turnaround of the TTK group?

The first was the turnaround of the TT Maps. My father warned me against going there first and I said that’s the place I need to go, I went to Maps and it took two years and at the end of it, we stopped the losses. My parents got confidence in me that I could do it, so the next option was TTK prestige.

Prestige was going to get into serious problems when I took over. But, turning it around was all common sense. There were no Eureka moments. After that we made those learnings as the basis for turning around other companies; but we sold many companies that we couldn’t turn around.

What were your worst moments in the running of the group?

Our worst moments were when we went back to square one in 2001. It was a triple whammy of sorts. Firstly, we had to recall over three lakh ‘smart’ pressure cookers that we had launched due to a product failure; the market itself was going down because of government taxes that went up to 50 per cent from 10 per cent, and my American company, Manttra Inc, went bankrupt; all three happened at the same time. So I had to again start from scratch. Then was when I said we can’t depend only on pressure cookers and we diversified after that into other kitchen products. And, we started our Smart Kitchen stores. Luckily, since then we have not failed again.

What have been the key lessons that you have learnt running a business since you are an accidental businessman?

Use your common sense, the most uncommon of all senses. Don’t go by jargon, that’s the most distracting thing to do. Secondly, don’t run away from your problems. Face them; problems will happen in everyone’s life. And, thirdly, most importantly, believe in yourself. If you don’t do that, you have no hope in hell. I have strong self-belief, which was inculcated by my mother, who always told me every day that you can do it, though she never told me how (laughing). But over a period of time, I internalised that I can do it. I have never run away from problems.

You say a key innovation which saved TTK Prestige is the gasket release system. How did you gain that insight?

I had to come up with a device that worked even with the use of spurious spare parts. The solution to this actually struck me while on a toilet in a hotel in Lucknow! Then it took me a month to come with the engineering. A cooker has a pressure weight and a safety valve. If the pressure weight gets stuck, which happens frequently, the safety valve is supposed to melt and let the pressure out. But if you put a spurious nut and bolt, it’s blocked. And it will burst. The best pressure cookers will burst at higher pressure which makes it worse, and we make very good cookers. Without the gasket release, there would be no company. We came up with a very good campaign for our cookers with the line: jho biwi se karey pyaar woh Prestige se kaise karey inkaar?’ We still use this line.

Your grandfather, TTK, set up the company, but you say in the book that after he became the Finance Minister in Nehru’s cabinet, his policies ended up hurting the very group he founded. Did that upset your father very much?

TTK set up the company to import goods from the UK and sell them in India. My father built on that. When TTK became FM, the first thing he did was stop import of consumer goods, saying India faced a foreign exchange problem. Finished! The company was gone. Then my father began manufacture of some goods like condoms, cookers and so on. TTK could have banned something else. He also banned my father from going to Delhi and talk to Secretaries of government. So from 1947 (when TTK became a member of the Constituent Assembly) to 1966, till TTK retired from government, my father didn’t go to Delhi. My father had also tied up with Amul in the 1960s to distribute Amul products in the south. My grandfather announced in Parliament that ‘my son should not have done it and if he has done it, I am cancelling the licence’. Why? Because the government had helped set up Amul. My father would listen to his father, but, if my father had told me something like that to me, I would have told him to mind his own business!

You also say that TTK put a spoke in the group’s plans to make cosmetics?

There was no need to ban consumer products, which consumers wanted. When my father wanted to set up a joint venture to make Pond’s cosmetics and distribute them in the country, my grandfather was the commerce minister. He did not want to decide on the application, so he sent it to Nehru, who, in turn, forwarded it to Rajaji (C. Rajagopalachari, former CM of Tamil Nadu). Rajaji wrote on our application that ‘Sita did not use cosmetics, and I don’t see why Indian women need it now!’ The government later approved a proposal by Pond’s to set up a factory and TTK & Co started contract manufacturing for them.

In the book, there are some fascinating anecdotes of your dad winning a big bet at the races and giving you the money for the business and also where you won a lot of money in blackjack. Did you also lose a lot of money ?

I was 8 when I first went with my father to the (horse) races and I lost a ton of money. But, he was a careful better, he would not put good money after bad money. In 1975, at the races, he backed two horses that won him ₹4 lakh, a huge sum, and gave it to me to buy a four colour printing machine for our press. This was a turning point for TT Maps and it started making profits. In 1987 in Nairobi I was robbed of my money at the airport. It was almost $ 1,000. I had no credit card either. So, I won a lot of money at blackjack at a casino and we made the trip. I enjoy playing blackjack and have had memorable wins. My final paper in Cornell in probability theory was on blackjack. I have made a lot of money in casinos abroad but lost a lot of money on horses in India!

In your book, you say you will retire when you are 70. What is your vision for TTK after you leave?

I offered my resignation to the board (TTJ turned 70 this year) but they said you aren’t going anywhere and you have to stay for another five years. By 2022 we are looking at ₹5,000 crore in sales from the ₹2,000 crore now. In terms of new products, we will come more into the home, but selectively. We won’t do fans or geysers as they have very low margins. We have launched cleaning solutions and also come into water purification. Once in five years we will add a category, it will take that much time to establish in one. We are good at making boxed products. We had got into making modular kitchens, but we didn’t have any control of that business. We had some bad mishaps so that’s not our core competency. If it’s made in our factory and boxed, we are good at it.

Published on June 17, 2018

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