From SME to MNC

The transformation of Conzerv offers important lessons on scaling up

My first glimpse of entrepreneurship at close quarters was when my husband’s father, H Vasanth Rao or HVR started a business to make electronic voltage stabilisers and digital energy meters in the late eighties. His retirement savings formed the seed capital. He had worked till he was 52 in senior leadership positions with the central government and has been a highly regarded inventor with several patents to his credit. At a time when state electricity utilities were encouraging industries to sign up for more electrical energy, HVR foresaw the inevitable demand-supply gap that would emerge creating the need for accurate digital energy metering so industries would know exactly how much was being consumed/wasted.

In the early years, the enterprise was small but successful. The stabilisers were of excellent quality and soon had the largest market share. In a few years, however, the company hit bad times when its exclusive selling agency (which had retained control of the brand name and customers) terminated the contract overnight and began to compete. I had some experience in marketing and sales and I found myself out in the field trying to fill the vacuum the agency had created, until we could hire a head of sales. I had to learn the basics of electrical engineering and energy management.

The end of the relationship with the selling agency led to the start of a new one – we were discovered by the late T Thomas, former chairman of Hindustan Lever Ltd (now Hindustan Unilever Ltd ), who had just then set up India’s first venture capital fund, Indus Venture Management Ltd. The company got the much-needed capital but in the form of equity. This unfortunately meant the family ownership went down to 26 per cent.

My husband Ashok took over as managing director when his father wished to take a step back from operations. Ashok, however, quickly grew tired of all that running the business entailed so he asked T Thomas or TT to make me the CEO.

My first mandate from TT was “Make the business professional and profitable”.

The business had accumulated losses. Its net worth was wiped out. Morale of the family and the employees was low. The venture capitalist investors were expecting a return after four years of waiting. It did not help that I was a non-engineer trying to run a tech company in the business-to-business space of digital energy meters and asking industrial customers to conserve energy!

Two things helped — the unflinching support of Ashok as head of R&D and of T Thomas as chairman. My determination was probably born out of nervous excitement: I had been handed the opportunity of a life-time... how could I make sure the business would prosper so everyone would win?

Dramatic changes were needed in almost every facet of the organisation. I also had to balance work with being a new mother (my son had just turned one when I became CEO). I took the following steps, some in series and some in parallel:

• Culture: A family business had to grow up and get professional. The focus had to shift to high-efficiency performance and at top speed. I had to find direct ways of telling people what would change and why.

• Finding my voice and my leadership style: As a first-time leader, I tried to be decisive and became obsessively interested in listening and learning from wiser, more experienced people. I learnt later I was called an "ink blotter". I was also demanding and impatient and it took many years before I realised I had become the biggest block to open communication.

• Building the senior team beyond just Ashok and me: This turned out to be the most difficult task and seemingly an endless one.
   
• Developing shared vision and values: We were all aligned that the business would be run ethically or not at all. This “sticking to principles” stance made for very interesting experiences not all of them savoury. The frontline teams in particular had to bear the brunt of the “no-bribe” policy.

• Crafting and executing a strategy for profitable growth.

• Establishing systems and processes, designing the organisation structure, setting up a proper production and delivery system, building the brand and setting up sales and distribution networks.

Our efforts paid off. We became profitable and dividend-paying from 1998 and the brand gained a presence in the marketplace, quickly achieving a 35 per cent market share. We started exporting to demanding original equipment manufacturers overseas and also set up our own distribution in South-East Asia, the Middle East and in the US.

Through this journey, we became known for some unique HR practices: If I found out that a sales manager’s highly qualified engineer wife was sitting at home I would go out of the way to enable her to come for an interview and to take a job with us. Fathers and sons, mothers and daughters, have all built careers with Conzerv.

Conzerv also became known for thought leadership and social responsibility. We were the first ever metering company to introduce and succeed in energy consulting services.

In 2009, we sold Conzerv to the global giant Schneider Electric and stayed for a year to help oversee integration.

Most mergers and acquisitions do not succeed. Conzerv’s integration into Schneider, however, has been seamless both for people and product. Today, we see the Conzerv range going global and the senior members of the management team taking their place at the table in India and beyond.

I have documented the story of transforming Conzerv in my recent book Lift Off, published by Westland Books.

The author has served as chief executive officer of Schneider Electric Conzerv India Pvt. Ltd. (formerly, Conzerv Systems Pvt. Ltd.)