DHIRUBHAI AMBANI - RAGS-TO-RICHES BUSINESS TYCOON
What do you call a man who hates to lose? A winner? That is too easy, too glib, and buries the story. All Dhirajlal Hirachand Ambani ever wanted to be is the biggest there ever is, the best there ever was. He wanted a piece of the action — preferably all of it. If others wouldn’t let him in, he would create his own turf and own it all.
And so the history of a corporate buccaneer will come to be written. If he allows an epitaph, as he must — the petrochemical complexes and refineries that bear the name of Reliance will tell it better — it could echo this line. A line he almost spat at me once, triggered by a provocation about competition: “Dekho,” he snarled, “I’m not a loser.”
Dhirajlal Hirachand Ambani , also known as Dhirubhai, 28 Dec- 6 July 2002, was an Indian rags-to-riches business tycoon who founded Reliance Industries in Mumbai with his cousin. Many people consider Ambani’s phenomenal rise to be an example of crony capitalism and the result of proximity to the ruling politicians because it was achieved through preferential treatment given to him in a highly repressive business environment (the License Raj stifled Indian business until the early 1990s and only those favored by the politicians were granted licenses leaving them with no competition). Ambani took his company (Reliance) public in 1977, and by 2007 the combined fortune of the family (sons Anil & Mukesh) was 100 billion dollars, making the Ambanis the richest family in the world.
In a way though what the facts do not reveal are even more extraordinary. For behind the creation of this story of dizzy corporate growth is also the story of a man, the son of a school teacher in rural Gujarat, who failed to pass his school exams in the first attempt and earned his first money as a child selling snacks to pilgrims over weekends. His early years were relatively unremarkable. A job with an Indian trading company took him to Aden and he moved on from there to work for Shell, as a petrol pump attendant. When he returned to India in 1957, polyester had just been invented and Ambani — with a vision which would remain until the very end — believed it represented the future of Indian textile business. He guessed correctly. His investment of Rs. 15,000 to set up a trading house paid off quickly and by the mid-1960s, he was the largest polyester trader in the country.
“His people skills were legendary. A former secretary reveals: “He was very helpful. He followed an ‘open-door’ policy. Employees could walk into his cabin and discuss their problems with him.” The chairman had a special way of dealing with different groups of people, be they employees, shareholders, journalists or government officials.
Ambani’s competitors allege that he bought off officials and had legislation re-written to suit him. They recall his earlier days and how he picked up the art of profiteering from the then-Byzantine system of controls of Indian officialdom.
He exported spices, often at a loss, and used replenishment licenses to import rayon. Later, when rayon started to be manufactured in India, he exported rayon, again at a loss, and imported nylon. Ambani was always a step ahead of the competitors. With the imported items being heavily in demand, his profit margins were rarely under 300 percent.”
Management lessons From Dhirubhaism
No 1: Roll up your sleeves and help.
You and your team share the same DNA. Reliance, during Vimal’s heady days had organized a fashion show at the Convention Hall, at Ashoka Hotel in New Delhi. As usual, every seat in the hall was taken, and there were an equal number of impatient guests outside, waiting to be seated. I was of course completely besieged, trying to handle the ensuing confusion, chaos and protests, when to my amazement and relief, I saw Dhirubhai at the door trying to pacify the guests.
Dhirubhai at that time was already a name to reckon with and a VIP himself, but that did not stop him from rolling up his sleeves and diving in to rescue a situation that had gone out of control. Most bosses in his place would have driven up in their swank cars at the last moment and given the manager a piece of their minds. Not Dhirubhai.When things went wrong, he was the first person to sense that the circumstances would have been beyond his team’s control, rather than it being a slip on their part, as he trusted their capabilities implicitly. His first instinct was always to join his men in putting out the fire and not crucifying them for it. Sounds too good a boss to be true, doesn’t he? But then, that was Dhirubhai.
Dhirubhaism No 2: Be a safety net for your team.
There used to be a time when our agency Mudra was the target of some extremely vicious propaganda by our peers, when on an almost daily basis my business ethics were put on trial. I, on my part, putting on a brave front, never raised this subject during any of my meetings with Dhirubhai. But one day, during a particularly nasty spell, he gently asked me if I needed any help in combating it. That did it.
That was all the help that I needed. Overwhelmed by his concern and compassion, I told him I could cope, but the knowledge that he knew and cared for what I was going through, and that he was there for me if I ever needed him, worked wonders for my confidence. I went back a much taller man fully armed to face whatever came my way. By letting us know that he was always aware of the trials we underwent and that he was by our side through it all, he gave us the courage we never knew we had.
Dhirubhaism No 3: The silent benefactor.
This was another of his remarkable traits. When he helped someone, he never ever breathed a word about it to anyone else. There have been none among us who haven’t known his kindness, yet he never went around broadcasting it. He never used charity as a platform to gain publicity. Sometimes, he would even go to the extent of not letting the recipient know who the donor was. Such was the extent of his generosity. “Expect the unexpected” just might have been coined for him.
Dhirubhaism No 4: Dream big, but dream with your eyes open.
His phenomenal achievement showed India that limitations were only in the mind. And that nothing was truly unattainable for those who dreamed big. Whenever I tried to point out to him that a task seemed too big to be accomplished, he would reply: ” No is no answer!” Not only did he dream big, he taught all of us to do so too.
His one-line brief to me when we began Mudra was: “Make Vimal’s advertising the benchmark for fashion advertising in the country.” At that time, we were just a tiny, fledgling agency, tucked away in Ahmedabad, struggling to put a team in place. When we presented the seemingly insurmountable to him, his favourite response was always: “It’s difficult but not impossible!”
And he was right. We did go on to achieve the impossible. Both in its size and scope Vimal’s fashion shows were unprecedented in the country. Grand showroom openings, stunning experiments in print and poster work all combined to give the brand a truly benchmark image. But way back in 1980, no one would have believed it could have ever been possible.
Except Dhirubhai. But though he dreamed big, he was able to clearly distinguish between perception and reality and his favourite phrase “dream with your eyes open” underlined this. He never let preset norms govern his vision, yet he worked night and day familiarizing himself with every little nitty-gritty that constituted his dreams constantly sifting the wheat from the chaff.
This is how, as he put it, even though he dreamed, none of his dreams turned into nightmares. And this is what gave him the courage to move from one orbit to the next despite tremendous odds. Dhirubhai was indeed a man of many parts, as is evident. I am sure there are many people who display some of the traits mentioned above, in their working styles as well, but Dhirubhai was one of those rare people who demonstrated all of them, all the time.
Dhirubhaism No 5: Leave the professional alone!
Much as people would like to believe, most owners (even managers and clients), though eager to hire the best professionals in the field, do so and then use them as extensions of their own personality. Every time I come across this, which is much too often, I am reminded of how Dhirubhai’s management techniques used to be (and still remain) so refreshingly different.
For instance, way back in the late 1970s when we decided to open an agency of our own, he asked me to name it. I carried a short list of three names, two Westernised and one Indian. It was a very different world back then. Everything Anglicised was considered “upmarket.”
There were hardly any agencies with Indian names barring my own ex-agency Shilpi and a few others like Ulka and Sistas. He looked at the list and asked me what my choice was. I said “Mudra”: it was the only name that suited my personality. And the spirit of the agency that I was to head. I was very Indian and an Anglicised name on my visiting card would seem pretentious and contrived.
No further questions were asked. No suggestions offered, just a plain and simple “Go ahead and do it.” That was just the beginning. He continued to give me total freedom — no supervision, no policing — in all my decisions thereafter. In fact, the only direction that he gave me, just once, was this: “Produce your best.” His utter trust in me was what pushed me to never, ever let him down. I guess the simplest strategies are often the hardest to adopt. That was the secret of the Dhirubhai legend. It was not out of a book. It was a skillful blend of head and heart.
Dhirubhaism No 6: Change your orbit, constantly!
To understand this statement, let me explain Dhirubhai’s “orbit theory.” He would often explain that we are all born into an orbit. It is up to us to progress to the next. We could choose to live and die in the orbit that we are born in. But that would be a criminal waste of potential. When we push ourselves into the next orbit, we benefit not only ourselves but everyone connected with us.
Take India‘s push for development. There was once a time our country’s growth rate was just 4 per cent, sarcastically referred to as the “Hindu growth rate.” Look at us today, galloping along at a healthy 7-8 per cent. This is no miracle. It is the product of a handful of determined orbit changers like Dhirubhai, all of whose efforts have benefited a larger sphere in their respective fields. In a small way, I too have experienced the thrill of changing orbits with Mudra.
In the 1980s, we leapt from the orbit of a small Ahmedabad ad agency to become the country’s third largest ad agency — in just under a decade. However, when you change orbits, you will create friction. The good news is that your enemies from your previous orbit will never be able to reach you in your new one. By the time resentment builds up in your new orbit, you should move to the next level. And so on. Changing orbits is the key to our progress as a nation.
Dhirubhaism No 7:The arm-around-the-shoulder leader
I have never seen any other empire builder nor the CEO of any big organisation do this (why, I never adopted this myself!). It was Dhirubhai’s very own signature style. Whenever I went to meet him and if on that day, all the time that he could spare me was a short walk up to his car, he would instantly put his arm around me and proceed to discuss the issues at hand as we walked.
With that one simple gesture, he managed to achieve many things. I was put at ease instantaneously. I was made to feel like an equal who was loved and important enough to be considered close to him. And I would walk away from that meeting feeling so good about myself and the work I was doing! This tendency that he had, to draw people towards him, manifested itself in countless ways. This was just one of them.
He would never, ever exude an air of aloofness and exclusivity. He was always inviting people into sharing their thoughts and ideas, rather than shutting them out. On hindsight I think, it must have required phenomenal generosity of spirit to be that inclusive. Yes, this was one of the things that was uniquely Dhirubhai — that warm arm around my shoulder that did much more than words in letting me know that I belonged, that I had his trust, and that I had him on my side!
Dhirubhaism No 8:The Dhirubhai theory of Supply creating Demand
He was not an MBA. Nor an economist. But yet he took traditional market theory and stood it on its head. And succeeded. Yes, at a time when everyone in India would build capacities only after a careful study of market expectations, he went full steam ahead and created giants of manufacturing plants with unbelievable capacites. (Initial cap of Reliance Patalganga was 10,000 tonnes of PFY way back in 1980, while the market in India for it was approx. 6000 tonnes).
No doubt his instinct was backed by years and years of reading, studying market trends, careful listening and his own honed capacity to forecast, but yet despite all this preparation, it required undeniable guts to pioneer such a revolutionary move. The consequence was that the market blossomed to absorb supply, the consumer benefited with prices crashing down, the players increased and our economic landscape changed for the better.
The Patalganga plant was in no time humming at maximum capacity and as a result of the plant’s economies of scale, Dhirubhai’s conversion cost of the yarn in 1994 came down to 18 cents per pound, as compared to Western Europe’s 34 cents, North America’s 29 cents and the Far East’s 23 cents and Reliance was exporting the yarn back to the US! A more recent example was that of Mukesh Ambani taking this vision forward with Reliance Infocomm (which is now handled by Anil Ambani).
In India‘s mobile telephony timeline there will always be a very clear ‘before Infocomm and after Infocomm’ segmentation. The numbers say it all. In Jan 2003, the mobile subscriber base was 13 million, about 16 months later, shortly after the launch, it had reached 30 million. In March 2006, it has touched 90 million ! Yes, this was yet another unusual skill of Dhirubhai’s — his uncanny knack of knowing exactly how the market is going to behave
Dhirubhaism No 9:Money is not a product by itself, it is a by-product, so don’t chase it
This was a belief by which Dhirubhai lived all his life. For instance when he briefed me about setting up Mudra, his instruction was clear: ‘Produce the best textile advertising in the country,’ he said. He did not breathe a word about profits, nor about becoming the richest ad agency in the country. Great advertising was the goal that he set for me. A by-product is something that you don’t set out to produce.
It is the spin off when you create something larger. When you turn logs into lumber, sawdust is your by-product and a pretty lucrative one it can be too! It is a very simple analogy but extremely effective in driving the point home. Work toward a goal beyond your bank balance. Success in attaining that goal will eventually ring in the cash.
For instance, if you work towards creating a name for yourself and earning a good reputation, then money is a logical outcome. People will pay for your product or service if it is good. But if you get your priorities slightly mixed up, not only will the money you make remain just a quick buck it would in all likelihood blacklist you for good. Sounds too simplistic for belief? Well, look around you and you will know exactly how true it is.
Dhirubhai Ambani is credited with shaping India‘s equity culture, attracting millions of retail investors in a market till then dominated by financial institutions. Dhirubhai revolutionised capital markets. From nothing, he generated billions of rupees in wealth for those who put their trust in his companies. His efforts helped create an ‘equity cult’ in the Indian capital market. With innovative instruments like the convertible debenture, Reliance quickly became a favorite of the stock market in the 1980s
Awards and recognitions
November 2000 – Conferred ‘Man of the Century’ award by Chemtech Foundation and Chemical Engineering World in recognition of his outstanding contribution to the growth and development of the chemical industry in India
2000, 1998 and 1996 – Featured among ‘Power 50 – the most powerful people in Asia by Asiaweek magazine.
June 1998 – Dean’s Medal by The Wharton School, University of Pennsylvania, for setting an outstanding example of leadership. Dhirubhai Ambani has the rare distinction of being the first Indian to get Wharton School Dean’s Medal
August 2001 – The Economic Times Award for Corporate Excellence for Lifetime Achievement
Dhirubhai Ambani was named the Man of 20th Century by the Federation of Indian Chambers of Commerce and Industry (FICCI).
A poll conducted by The Times of India in 2000 voted Him “Greatest Creator of Wealth In The Centuries”. He is the true son of India’
From beginning Dhirubhai was seen in high-regard. His success in the petro-chemical business and his story of rags to riches made him a cult figure in the minds of Indian people. As a quality of business leader he was also a motivator. He gave few public speeches but the words he spoke are still remembered for their value.
” With the force of 3million investors RIL will reap the title “World’s Biggest Company”
“I am deaf to the word “no”.”
“Growth has no limit at Reliance. I keep revising my vision. Only when you dream it you can do it.”
“Think big, think fast, think ahead. Ideas are no one’s monopoly”
“Our dreams have to be bigger. Our ambitions higher. Our commitment deeper. And our efforts greater. This is my dream for Reliance and for India.”
“You do not require an invitation to make profits.”
“If you work with determination and with perfection, success will follow.”
“Pursue your goals even in the face of difficulties, and convert adversities into opportunities.”
“Give the youth a proper environment. Motivate them. Extend them the support they need. Each one of them has infinite source of energy. They will deliver.”
“Between my past, the present and the future, there is one common factor: Relationship and Trust. This is the foundation of our growth”
“We bet on people.”
“Meeting the deadlines is not good enough, beating the deadlines is my expectation.”
“Don’t give up, courage is my conviction.”
“We cannot change our Rulers, but we can change the way they Rule Us.”
“Dhirubhai will go one day. But Reliance’s employees and shareholders will keep it afloat. Reliance is now a concept in which the Ambanis have become irrelevant.”
LAST STANDING SALUTE TO DEPARTED SOUL
Dhirubhai Ambani was admitted to the Breach Candy Hospital in Mumbai on June 24, 2002 after he suffered a major stroke. This was his second stroke, the first one had occurred in February 1986 and had kept his right hand paralyzed. He was in a state of coma for more than a week. A battery of doctors were unable to save his life. He breathed his last on July 6, 2002, at around 11:50 P.M. (Indian Standard Time).
His funeral procession was not only attended by business people, politicians and celebrities but also by thousands of ordinary people. His elder son, Mukesh Ambani, performed the last rites as per Hindu traditions. He was cremated at the Chandanwadi Crematorium in Mumbai at around 4:30 PM (Indian Standard Time) on July 7, 2002
He is survived by Kokilaben Ambani, his wife, two sons, Mukesh Ambani and Anil Ambani, and two daughters, Nina Kothari and Deepti Salgaonkar.
Dhirubhai Ambani started his long journey in Bombay from the Mulji-Jetha Textile Market, where he started as a small-trader. As a mark of respect to this great businessman, The Mumbai Textile Merchants’ decided to keep the market closed on July 8, 2002. At the time of Dhirubhai’s death, Reliance Group had a gross turnover of Rs. 75,000 Crore or USD $ 15 Billion. In 1976-77, the Reliance group had an annual turnover of Rs 70 crore and it is to be remembered that Dhirubhai had started the business with just Rs.15,000(US$350)
Life After Dhirubhai Ambani
The Reliance empire was split between the Ambani brothers, Mukesh Ambani getting RIL and IPCL & his younger sibling Anil Ambani heading Reliance Capital, Reliance Energy and Reliance Infocomm. The entity headed by Mukesh Ambani is referred to as the Reliance Industries Limited whereas Anil’s Group has been renamed Anil Dhirubhai Ambani Group (ADAG)
Source - Internet (Dreamworks - Dirubhai Ambani - Rags to Riches Story)