by Sonu Bhasin
Forty-five
‘Kuldip Is the Most Relentless Person I Have Met in My Life’
‘Everyone says Kuldip is a good guy. Would you know of anyone who thinks he is not?’ I asked Jerry. I was in conversation with Jerry Adams, an associate and good friend of Kuldip’s. He is an American now based in Australia. I asked Jerry about his impressions of Kuldip.
I could almost hear the mental gears grinding over the phone. ‘Hmmmmm . . . ummm, let me think,’ said Jerry in his American-Australian accent. There was a long pause on the phone. ‘You know, actually I can’t,’ he said finally with a tone of wonder in his voice.
‘When you get to the level at which Kuldip is now, people will tell you that he is wonderful,’ explained Jerry. ‘I have known him for many years now and will say this—Kuldip is a good guy but he is not perfect. There are people who may find dealing with him a bit challenging or find some of his qualities a bit difficult to cope with. But I don’t know anyone who will say that he is a bad guy,’ he added.
Jerry elaborated, saying that everyone has their own style of working. In business dealings people have to accept that everyone has their own personalities and their own quirks. What is difficult to accept are people who have bad intentions or those who are corrupt or manipulative.
‘Pardon my language but people don’t like others who try to screw you,’ said Jerry. ‘Those who have dealt with Kuldip and those who know him, quickly understand that he is an honest guy. You can talk to him. But mind you, you will not always have an agreement, that’s for sure,’ laughed Jerry. ‘But you will not doubt or misjudge his intentions and his fundamental honesty. And therefore, people generally don’t say that he is a bad guy. Sure, you can find someone who will turn around and say, “Kuldip annoys me”, but that is because Kuldip is the most relentless person I have ever met in my life,’ continued Jerry.
‘Relentless?’ I asked. ‘As in unstoppable?’
Jerry is American but he made a very French pffff sound, blowing out air. If he were in front of me I am sure I would have seen him shrug his shoulders and throw up his hands out for emphasis. ‘Absolutely. Kuldip is without any doubt the most relentless person I have ever met in my entire business career across the whole wide world. Oh, totally relentless,’ said Jerry enunciating each syllable. ‘He will never give an inch! He will push you and push you hard to do better. No wonder there may be people who will say, “Oh Kuldip, he wears me out!,”’ said Jerry.
‘People also say that his temper also wears them out. Do you have . . .’ I started saying.
Jerry cut me mid-sentence and said, ‘Oh, his temper is legendary!’
Subir Bose agreed. ‘Kuldip can get angry and when he does, we all run for cover,’ he said.
‘We make sure that the mood of the boss is OK before we go to speak with him,’ laughed Abhijit Roy, the current MD and CEO, Berger Paints. ‘Sometimes, on a bad day, he loses his temper fast. We have learnt to defer our meetings then,’ he continued.
‘There were times we went to him for a particular approval and he threw us out of the room. But when we went back with the same proposal Kuldip cleared it without any questions,’ laughed Subir.
‘I remember that I sat home for three days once when Mr KS fired me for no fault of mine. I thought I will resign. But then I went back to work after three days. The first thing he told me was, “It takes you three days to get over your temper, Neelam? It took me only five minutes to get over mine,”’ said Neelam.
‘Oh, he is like a volcano. Temper up . . . Poof! And then peace and quiet,’ said Jerry throwing his hands up again.
Jerry remembered his first interactions with Kuldip started in 2000. ‘I was the CEO of Dulux in Australia and flew to Delhi to meet with Kuldip with a broad agenda in mind,’ said Jerry. He was looking at some kind of a collaboration between the two companies and though he knew that Berger was managed professionally, he thought the discussions were best had with the largest shareholder. ‘We had a good conversation and Kuldip and we hit it off as two individuals,’ remembered Jerry. The rapport between Kuldip and Jerry worked its way into a collaboration between the two companies. Berger, at that time, was looking for an industrial paint technology and Dulux in Australia had it.
‘So, we got into a licensing deal between our companies,’ said Jerry. He clarified that Dulux in Australia had no connection with the Dulux in India as the ownership of the two companies was different. ‘It was just a cold call, if you want to put it this way, but now that I know Kuldip better, I know that he had a natural curiosity and is always ready to have a chat with people who may have something to tell him,’ said Jerry.
‘Kuldip is also the most focused man I know. Not only is he focused on business but he is also focused on the paints business. However, he is not a unidimensional person. He has an interest in everything. He can tell you about the trees in his garden and the birds that live in the trees,’ added Jerry.
‘The thing about Kuldip is that he is always thinking of the business,’ said Subir Bose. He worked with Kuldip for more than twenty-five years, mostly as the CEO of Berger Paints. ‘And he follows his gut, his instinct is very good,’ he continued.
It was this instinct of Kuldip’s that made him walk out of a deal that was almost signed. In the early 1990s, Subir had just become the CEO of the company. Berger Paints was on its path of recovery under the guidance of the new owners. The management team was exploring a joint venture with a leading automotive refinish paint company in Europe.
‘The automotive refinish paint is different from the one used on cars when they are being made at the factory. This refinish paint is the one used when your car or vehicle goes in to the workshop for a touch up or repainting of a small area due to a scratch or an accident,’ explained Subir. The management team had visited the European paint giant a few times and had invited their senior management to Calcutta. ‘We even took the foreigners to meet with Kuldip in Delhi,’ said Subir.
After the discussions and the draft agreements were finalized, the Berger Paints team went to Europe so that the joint venture deal could be signed. ‘I had personally spent more than six months on this deal and we were all very excited about the meeting in Europe,’ said Subir. Kuldip and Gurbachan, along with a couple of directors of the board, accompanied the senior management of Berger Paints for the deal signing.
The table in the boardroom of the foreign company was prepared. The agreements and other papers were kept on the table in front of the two seats that Kuldip and the head of the foreign company were to occupy. New designer fountain pens were laid out on velvet cloth for the signatories to use.
The Berger team reached the office of the foreign company half an hour earlier than the meeting time. While the rest of the team waited in the anteroom, Kuldip went into the boardroom.
‘I thought he had gone to inspect the room and generally get an idea of the lay of the space,’ said Subir. He was surprised to see Kuldip walking out almost immediately with a grim look.
‘I am not going to sign the agreement for this deal,’ said Kuldip. As Subir’s jaw dropped to the ground in total surprise, Kuldip added, ‘I don’t have a good feel about it. I think it is not right.’
‘You can imagine how embarrassing it was for all of us, and especially me,’ said Subir, still sounding rattled. The chagrin he felt at that time was evident in his voice decades later. ‘But Kuldip said that the joint venture was not good for Berger as we were not prepared for it at that time,’ continued Subir sombrely. ‘And that was the last we saw of that European company,’ he said, finishing the story.
However, with hindsight, Subir agreed that the instinct of Kuldip was absolutely spot on. ‘We would have made losses for many years if we had gone ahead with the deal. Though we would have recouped our losses, it would have bled the company for quite some time. It took an enormous amount of guts for Kuldip to walk away from an almost-done deal. Berger was a very small company then and this European company was the world number two
or three. But he did not care. He followed what he believed was right for the company,’ said Subir with grudging admiration in his voice.
‘Mr Dhingra is always open for any kind of joint venture, any kind of partnership with anyone so long as it brings value to Berger,’ said Sunil Sharma. ‘One of the examples I can quote is our joint venture with Nippon Paints,’ he continued. Berger and Nippon are fierce competitors in the Indian market for a variety of products. However, for automotive coatings, a fast-growing market in India, Kuldip sought out Nippon for a joint venture for the manufacture of coatings for plastic substrates. These substrates are used in cars and these are top-coated as part of the coating system. ‘Mr Dhingra knew that Berger alone would find it difficult to enter the Japanese companies like Maruti or Honda. So why not get into a joint venture?’ said Sunil. ‘Once he decides on a course of action, he does not yield an inch. He will push everyone to get to where he wants to go,’ he added.
The management at Berger Paints discovered his relentlessly pushing side. Kuldip continually pushed the team hard to perform better. It was Kuldip’s credibility that allowed him to be relentless in his demands from his team. From selling paints in Amritsar, to being the co-owner of one of the oldest paints company, Kuldip demanded better performance from his teams. The teams too responded as they realized that they now had a promoter who understood the paints business, in some cases, even better than they did.
Kuldip and Gurbachan understood the paints business as they had learnt on the job, selling at the shop and working in the factory. They had not had any formal education in either higher chemistry or manufacturing. The gen-next was different. Kanwardip, Gurbachan’s son, had studied chemical engineering. ‘I grew up knowing that I will join the family business. My dad would tell me stories about their struggle, the factory and their business all through my childhood. After I was ten years old he even started taking me to the factory,’ said Kanwar.
The love of chemistry and for paints helped him in getting a job, after he finished his chemical engineering studies in the US, with Sherwin Williams Company and Rohm and Haas, a speciality chemicals company, in Houston. He knew that he would eventually come back to Berger Paints but he wanted to understand how the other big companies worked. He credits his own maturity at work today to the years he worked at Sherwin Williams and Rohm and Haas.
‘I learnt about dealing with people, especially people on the shop floor who may be junior in rank but know more about production than any of us. I also learnt about working with structured processes and systems. I used to take notes for everything and I still check them,’ he said.
Gurbachan and Vinu were proud of their son and followed his progress keenly. ‘He had stopped taking any money from us once he started earning. We wanted him to come back home but he kept saying, “thodi aur der, thodi aur der [some more time, some more time]. I want to complete my projects in hand,”’ said Vinu.
Once back, Kanwar joined Berger Paints and spent a couple of years learning on the job through a rotational programme. Rishma joined Berger Paints in the marketing division and the two inheritors started working under the guidance of their fathers. The youngest Dhingra in the gen-next, Kanwar, was under pressure to get married. The Dhingra family soon welcomed Sneha as a daughter-in-law.
At Berger, both Rishma and Kanwar chose to spend time in building their own credibility. It took time, no doubt, but both believe that it is for the better. ‘You can’t force people to respect you. You have to earn it by your own work. My father and my chachaji have earned it over years. I can’t expect people to start respecting me overnight,’ Rishma analysed.
‘I worked with people and made sure that I listened to them. We discussed and debated each matter. If there was a good suggestion I made sure that everyone knew where it came from. Showing my colleagues respect was key to earning respect myself, which in turn helped propel my productivity and level of engagement. I also wanted to get a buy-in from everyone as I realized that it was a way of letting them see my abilities,’ explained Kanwar.
‘My son Kanwar has been instrumental in helping out Berger in automation in all old factories as required as well as setting up of most modern automated factories requiring minimum labour. This has helped in quality production and huge cost savings for Berger’, said Gurbachan. ‘The next generation is being groomed and it is they who will decide what to do after I am gone,’ said Kuldip.
However, he was clear about the manner in which the business should be run. ‘I want the business to grow even more. But it has to be profitable growth. If business does not make profits, it will stagnate. It has to keep making money,’ he concluded.
Forty-six
‘Berger Has Been Turned Around with Almost the Same Team Kuldip Inherited’
The initial infusion of capital and increase in capacity had given an early fillip to the Berger business. The colour-tinting machines added to the momentum. From a struggling company in 1990, Berger became the number two company in India in less than a decade.
People have asked Kuldip and Gurbachan about the key to their success. The owners of Berger Paints maintain that God has been kind to them and the teams did the job. A deeper discussion and analysis indicates that while luck indeed played a major part, the Dhingra touch led to the business turnaround. Kuldip focused on some key areas to take Berger Paints on the growth path.
‘I understand only one business and it is the paints business,’ said Kuldip with confidence. ‘We will therefore focus on paint and grow only in paint. Whatever capital is available with us, we will use it for our paints business and not anywhere else. We will not go for diversification,’ he added.
This relentless focus on paints, and only paints, yielded rich dividends for Berger and the Dhingras.
The paints industry is a complex one. It is a ruthless industry, with limited scope for product innovation and low involvement for the end customers. Added to this is the voluminous nature of the product itself and the ever-increasing number of variants of paints, leading to slim margins for distributors and dealers. This is, however, an industry that Kuldip understands well. He also understands optimal use of capital. He had been through a time when capital for their business was a constraint. Melding together a knowledge and understanding of both aspects, Kuldip laid down his vision for the team.
The Dhingras provided the capital to the business, but Kuldip insisted on a disciplined approach towards the allocation of the capital. The laid-back approach of a multinational was replaced by a hard-nosed one by the new owners. The Dhingras did not micromanage, but the guidance was clear. The factories had to produce more and the supply to the dealers from the depots had to be faster.
The supply chain assumes importance in the paints business due to the nature of the product itself. Dealer shops are not very large but the paints come in packs that take up a lot of space. The number of variants, shades and sizes add to the problem.
‘Imagine a customer walks into our dealer store and asks for ten drums of crimson enamel paints,’ explained Subir. No dealer would keep ten drums of a particular colour in his stock. One, it would involve working capital tied up and, two, he would not have the space for drums of all shades. ‘Thus, the dealer would call our depot and ask for the drums,’ he added.
The quicker the depot of Berger Paints was able to deliver the material the happier the customer was. ‘But it was not as simple as that. How would the depot know that ten drums of crimson enamel paints would be required?’ he asked.
The answer to the problem lay in the ability to predict the demand in the market to some extent. The ability to predict is a result from the order history of the dealers. ‘Berger was a very small player in the market and the dealers would give us orders, say, once in a month,’ said Subir. By contrast, the leader—Asian Paints—would get orders many times in a month. ‘This gave Asian an ability to analyse the order history of their dealers and predict, to some extent, the nature of demand,’ explained Subir. Berger in the mid-
1990s did not have that ability.
‘Slowly, as the orders from the dealers started increasing, we also started building our own order analysis and started to understand demand patterns,’ said Subir. As the orders started building up, manufacturing kept pace with it. Gurbachan took the lead in expanding the manufacturing base, and from 1996 onwards factories were set up in Pondicherry, Jammu and Gujarat.
‘In fact, the decision to set up a factory in Jammu was a very bold one,’ said Sunil Sharma. The industry, in general, was keeping away from the troubled Jammu and Kashmir area. However, the government wanted industrial development as it believed that with industry would come some stability in the region. Kuldip had studied the concessions given by the state and discussed with Gurbachan the prospect of setting up a factory in Jammu. ‘Some of us were worried about the location, but Mr Dhingra waved aside our concerns. He said that the general public stayed there so why couldn’t we put up a factory there?’ remembered Sunil Sharma.
The factory was set up and the state government rolled out the red carpet for Berger Paints. The company was granted fiscal concessions such as relief in sales tax and excise duty and income tax refund. The factory in Jammu helped Berger as the production for northern India went up dramatically.
This helped the teams on the ground to go forth and aggressively push sales. As the sales teams were able to predict the demand better, the inventory costs at the depots went down. The Dhingras were able to understand very quickly that every additional rupee in manufacturing yielded a non-linear positive result. The better results were manifested through a generous dividend pay-out to the shareholders. In the initial years, when the business was still finding its feet, Kuldip ploughed back their share of the dividend into the company.
The second key area of focus for Kuldip was innovation in the market. The innovation did not limit itself to innovative products but extended into other areas as well. One of the early decisions made by Kuldip was to merge Rajdoot Paints into Berger and operate it as a division of Berger Paints. ‘Rajdoot had a tie-up with Glidden Paints since 1988 and we were selling our products under the joint brand name,’ said Sunil Sharma. The business plan had included a listing of the Rajdoot Paints business, which would help the company gain national stature. ‘Unfortunately for us, before we could go for a public listing Glidden got bought over by ICI,’ said Sunil. Rajdoot, therefore, could not use the brand of Glidden in India any longer as ICI was a competitor company here. ‘We had to shelve many of our expansion plans as they were incumbent on the Glidden brand. Rajdoot would have been difficult to sell nationally. We were all quite upset at this,’ he added.