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Putting in place a plan for perpetuity

Prabhu Kishore | Updated on January 02, 2019 Published on January 02, 2019

V Prabhu Kishore, Chairman, Varun Group

He credits discipline in 360 degrees as the reason for his success. Andhra businessman V Prabhu Kishore, chairman of the ₹4,100-crore Varun Group, started working at the age of 19 in the family venture, Padmaja Commercials, set up by his father. But within no time, he decided to strike out on his own and set up two companies — Lakshmi Finance and Varun Builders. Today, from automobiles, financing, infrastructure to hospitality & entertainment, the group is into a lot of areas. Kishore shares his take on:

His management style

It’s my fundamental belief for the last 30 years that every business — like the palm of your hand — has five fingers. If a business house manages these five fingers well, it will have an infinite journey. The first finger is employees, without whom you cannot run a business; the second is the customer, who is the reason for your business’s being, the third is your principals on whom you depend — in my case Maruti Suzuki or Accor with whom I have to manage relationships; the fourth is bankers, and lastly the government to whom you need to remit taxes diligently. These are five key touchpoints you have to manage. Today, many mid-level business houses are tripping in this. I am a disciplinarian and I work with focus and passion. And it is discipline in 360 degrees — physical discipline, eating discipline, sleeping discipline, financial discipline. This has been my mantra.

Risk taking ability

Before you take a risk, you should self-examine your body whether you have the wherewithal to withstand shocks. Before starting projects you need to examine whether you have the wherewithal to cross fund and weather any storms. Can I afford to lose, say, ₹30 lakh every month, and yet pay back to banks and wait for the good day? In my case, I am ambitious but not greedy. I am willing to take a risk but not at the cost of the whole empire crumbling down or people not being paid their salaries.

Growth ambitions and scaling up

I don’t set long-term targets. I set two to three-year targets. I am looking at 10 to 13 per cent year-on-year growth in turnover. I will be satisfied and happy with that.

Challenges of a family business when it comes to succession planning

This is where I am going to be a game changer at the mid level. I am not looking at my wife, children or grandchildren as inheritors. I have already established a trust called Prabhu Sons on the lines of Tata Sons. KPMG is my advisor. They have been given the mandate to prepare a family trust and business trust in which 13 or 14 members will be there. Four of us will be from family. We started in June 2017 and have already journeyed half way in this plan. KPMG has interviewed my wife and family members to prepare some ground rules, and processes for the way forward, creating a bible of sorts. I am not looking at giving the entire business to my children (son Varun and daughter Varsha). Each one of them will get a solid property and assets that should fetch them ₹10 lakh per month. Beyond that, everything is being swept into a trust. No single person can sell any asset. It has to be a unanimous decision. In case there is no unanimity then experts in the domain will be invited to advise. I have seen how mid-level companies have fallen by the wayside and don’t want that to happen to Varun Group. So I have done this for the perpetuity of Varun Group.

Managing multiple businesses without getting stressed

I am a great believer in delegation with empowerment. Nothing happens without teamwork. I act as the enabler, facilitator and planner. Execution I leave to the team. That is why I am so relaxed. I also take minimum two months’ holidays a year — across three or four slots.

Destinations he likes travelling to

I like to go on cruises or trips organised by auto companies twice in a year — not so much for the free travel but to bond with other dealers. During summers, I go to Ooty where I have a house.

Dealing with millennials – especially now that his own children are in the business

My son has entered the business like a knife enters butter — very smoothly. Luckily, he has gelled well with my top management. That’s where friction typically happens in family businesses. My daughter has done her training in hospitality and has worked with Accor’s loyalty business and she has made a lot of difference with her ideas for our Vijayawada hotel. I do take good inputs from my children though we argue over it.

Published on January 02, 2019
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