RM Group, India
Core Business Values And Principles
Honesty and integrity
The RM Group is known for its staunch honesty and uprightness. From the earliest time, they have run their business strictly by the book, ensuring that no law is ever broken. This has been a hallmark of the group, with the current generation even now recalling the clarity with which Gomti Devi and Babulalji would never break or even bend the simplest of rules for any reason. Whether it was taxation or adhering to the formulae for production, no corners were ever cut. This uncompromising integrity has also given them the confidence to be completely transparent in all their dealings.
Dr. Anjali Jain recalls: “Once we had an income tax raid done on the house. It was around 1978. I was doing my BA then, I was quite self-confident and spoke English fluently. Someone had given the IT people a fake tip, and they landed up thinking they’d find cash in the mattress or gold bricks holed up somewhere. But we hardly lived lavishly at the time. We were a large family and though my father would spend everything he earned to make sure we had a good life, he also made sure he always paid his taxes. There was no extra cash to stash away.
Anyway, the income tax men didn’t know that. They hunted everywhere and at last found my grandmother’s locker. She was reluctant to give them the key, but I told them to go ahead and open it. I knew there wouldn’t be much inside, just some old things belonging to my grandfather, nothing of value. My mother and grandmother’s gold had already been gifted to my three sisters who were married. They opened the locker and found nothing. The officer in charge admitted he had expected to find cash or valuables, but we turned out to be a disappointing raid for them, because we lived a very simple life.”
Their reputation for being honest and upright in their dealings is so well-known that clients and customers never doubt that they will get anything but the best quality.
These ethics were evident in their manufacturing business as well. When buying materials in the market at Dhulia, payments were always made in cash. It would have been easy to create inflated bills and pocket the rest of the cash, or send manipulated budgets to the bank for loan approvals. But not only did this go against the family’s principles, it went against their desire to establish a culture for the company - for their accountants and staff. It was very important to set an example that their employees could follow.
Zafaruddin Syed agrees. “They would never cut corners or compromise on quality,” he says. “Material was always bought from Hindustan Lever’s designated suppliers and manufacturing guidelines were followed to a T. They never contrived to cut costs and make a little extra profit.” Rajesh Koul confirms this. “We’re in business, and of course, we’d like to save money, but in a legal way, not by cutting corners, or creating false bills, or not paying taxes. In fact, I’ve often told the late chairman Mahendra Kumar Jain that he was probably overpaying his taxes!”
Late Mr. Mahendra Jain always felt that ethics are an important part of business. “These uncompromising values are what we’ve carried over the years, and what we want to pass down to the newer generations,” he said during this documentation, “And so far, the younger lot have always risen to meet the family standards.”
Education and excellence
A key strength underlying the family’s work culture has been discipline. Babulalji’s accounting practices, Rakesh Jain’s work on the shop floor and Mahendra Jain’s balancing act of academics and business have all been the result of hard work and discipline. And coupled with discipline has been education. Merchant families down the years have often eschewed formal education for a hands-on approach. It is the norm for the next generation to join the family business and learn on the job rather than acquire a formal education. For the Jains however, education has been a distinguishing feature from the very beginning. From Jugtilal Jain, who spoke fluent English in the 1920s and Gomti Devi who sought an educated bride for Babulalji and arranged for them to have extra lessons, to Mahendra Jain’s Oklahoma University degree and Dr. Anjali Jain’s doctorate in Developmental Economics in the early nineties, the family has focused on education and academic pursuit, seeking the best education available without differentiating between genders.
This progressive approach has given them an edge over other business families in the sphere. At every opportunity, the group has pushed its own boundaries, striving for excellence instead of resting on its laurels. Whether it’s winning the Hindustan Lever award for contract manufacturer’s quality or ensuring that the best practices for governance are adopted by the family, the group keeps learning and improving. Their willingness to change, adapt and move out of their comfort zone to better the company has strengthened their position and placed them far ahead of their competitors.
Resilience and perseverance
The Jain family’s matriarch Gomti Devi had to surmount several obstacles very early in life, not least of which were premature widowhood, bringing up a young son singlehandedly and shouldering the responsibility of a business about which she knew very little. Despite these, she showed both courage and independence, values that have permeated the group and helped them through trying situations. Showing resilience and strength in the face of unforeseen events, business or personal losses and untimely deaths, the group has continued to find ways to move on and prosper, chasing opportunities and giving their best without merely focusing on profits. They have never taken their prosperity for granted, and have always shown great responsibility, both in sharing their wealth as well as empowering others along the way, whether it has been their employees, the business community, society or the nation. This willingness to go the extra mile has made sure that their clients and employees hold them in high regard.
Transparency and governance
Despite being a single-family enterprise, the group has always been extremely careful about keeping their personal spending and business accounts separate, much like professionally-run companies and large corporations. Sunil Jain recalls how, at one time, the family owned more than forty houses in Bhopal.
“The ownership always remained with the business, and my father did not favour using business assets for any sort of personal use, so the question of using them as we wanted just never arose. Likewise, though some of the cash was used for daily household expenses, it would be properly accounted for and kept clearly separate from business expenses.”
Surendra Kumar credits Hindustan Lever with teaching the group how to take personal values and build them into the group’s industrial DNA. If a value was good enough for the family, it was good enough for the company. The family’s culture of discipline and respect was particularly influenced by two officers from Hindustan Lever that the group employed to help them expand their manufacturing business.
Rakesh Jain recalls: “While personally all of us valued time, in a family-run business, you could get away with coming in late, by 10 or 11 am, because you were the owner. But Mr. Koul and Mr. Kundal would comment every time I came in beyond 9:30 am. Their tone was never sarcastic, but it would remind me of my responsibility to lead by example, and that motivated me to be better. Things like discipline and punctuality really build a company’s culture. Mr. Kundal was a true shop floor person and went on to work with us even after he retired.” Down the years, everyone, from Mahendra to Rakesh to Animesh have continued to add to this continuously expanding bank of good governance practices, sometimes adopting those of others and at other times, creating their own.
Rakesh also shares how very impressed he was by Mahendra Jain’s policy of ensuring overheads were low by spending resources only where they were required. From using auto rickshaws and only travelling via sleeper class wherever possible, to eschewing fancy restaurants and eating homecooked meals, he advocated spending less on themselves and considering necessary only those expenses that were needed to run the company well.
Even overnight stays would be at hotels where Hindustan Lever would get a discount. “We were well-to-do,” Rakesh says, “But we were encouraged to never waste money.”
There is also an element of democracy. In the days when Babulalji handled the business entirely on his own, he would still seek advice from his wife Badami Devi, his mother Gomti Devi, or sometimes from extended family when taking major decisions. This hasn’t changed. Even today, no business decision is taken unilaterally, and power and responsibility are shared evenly within the family.
From 2002 onwards, more family members joined the business, and though all four families were equal stakeholders, it was important to decide on salaries and remuneration, and what kinds of company privileges each family should get. There were deliberations on acceptable perks like cars, phones, laptops and travel expenses. To the family, it was important to put guidelines in place in the interest of transparency. “In most family-run businesses, as they begin to scale and more generations come in, good governance often takes a back seat,” says Rakesh Jain. “But we like a certain level of discipline and transparency, so that everyone has a chance to grow within the company.”
Approachability is another feature that sets the company apart. “In Dhulia, one of my phone numbers is displayed on the factory gate, so any person can call me at any time. If I’m in a meeting, I make sure I call back. That’s the kind of culture we encourage. We don’t sit in ivory towers – we are accessible, and that goes a long way towards boosting everyone’s confidence in the system.”
Loyalty and generosity
Even though the RM Group is over a hundred years old, the family has stayed together, finding a balance between personal ambitions and family providence. It is one of the reasons why Hindustan Lever placed their trust in them.
Surendra Kumar recalls the pivotal meeting in 1994: “When the management were considering us for the Dhulia project, they laid stress on a cohesive relationship between partners. When we assured them the partners would be the three Jain brothers and my son, Rakesh, they were satisfied. They insisted on the partnership being within the family, no outsiders, because to them, this signified consistency. It’s been twenty-five years since then, and we’re still the same partnership. That says a lot.”
Recently however, with their growth as a corporate entity, this ‘family first’ stance has faced somewhat of a challenge, with loyalty to family at odds with a more meritocratic approach.
The Jains have encouraged potential wherever possible. Employees are well taken care of.
Rakesh Jain recalls how his father always said, “Mazdoor ke pet par laat mat maarna” – never let your worker go hungry. “Workers and staff need to be paid even when we are not doing well,” he says, “Because unless those who work for you are content, you will achieve neither loyalty nor success.”
Both individually and as a family, they have often been known to help deserving people, providing them with the means to realise their ambitions. Most people who joined them as employees have never quit. From accountants to drivers, and now managers, supervisors and labour at factory plants, successive generations have been employed, because the family has ensured that their employees’ children are given opportunities that suit their abilities. Loyalty is both expected and rewarded.
Down the years, they have shared their learning and insights generously with the companies they have worked with, training thousands of interns and new recruits. They have trained more than eight hundred staff and have even offered support when some of them have branched off to become entrepreneurs themselves.
Zafaruddin Syed recalls his time at the Dhulia factory. “R. M. Chemicals allows employees to grow. All those who have been recruited by me, trained by me at Dhulia way back in 1996 have grown to assume higher positions. Mr.Chaturvedi for instance, who joined the quality control department in 1996 is now General Manager, Operations of the Dhulia factory. They don’t keep rewards to themselves; they keep growing, sharing and allowing employees to grow as well. They see success in their employees’ success; employees are a part of the organisation and a part of them. And it’s vice versa - there’s no better motivation for an employee than when he feels that he is part of the company, that its growth is his growth, and their staff has always known that.
They also share all their successes. Right from the beginning, if there was a reward for quality or production, it was shared with all the employees. Every week there would be sweets distributed at the plant for exceeding targets. These weren’t just workers, they were part of the family.”
Rajesh Koul feels the employees’ growth had a larger effect in improving their lives overall. “Both sons of one of the office drivers are today working in IT companies like TCS and Infosys. The next generation no longer see themselves as labourers, drivers, technicians. They see that they can achieve better things, that better things are possible.”
Evolving practices
From a time when all their food was cooked at home and even the children had homemade lunches delivered to them at school, the RM family has grown to include not just newer generations, but also newer ways to adapt to work environments. With expansion and an increased labour and managerial staff, the group has also evolved to a more egalitarian and inclusive culture.
A major change brought in by the Hindustan Lever managers was the canteen that was started in Dhulia. Rakesh Jain recalls: “In the beginning, when I was setting up the plant, I would have my driver go home to fetch a homecooked lunch for me every day. The other staff, including the Lever managers’ lunches used to arrive too, and we would eat together. In 1997, I got married, and my wife would send a homecooked meal not just for me, but for everyone, which was about four or five people. Mr. Koul and the others felt it wasn’t fair to have her cook such a large meal for everyone every day, and besides, they had been at Lever’s and knew this wouldn’t work in the long term. Right away, they got hold of a few guys who could cook and got a canteen organised, something I would never have thought of. I protested at first, but they would not hear of it. Eventually, I began eating in the canteen myself and stopped the homecooked meals.”
“He was very reluctant to switch to eating in the canteen,” recalls Rajesh Koul. “It was only when I refused to share in his homemade meals any longer that he relented. I wanted him to join the employees at lunchtime, make them feel included, that he was a part of the team with them. I must have made an impression because one day, his mother landed up at the factory and insisted on teaching a few of the labourer ladies there to how to cook the way they did at home. She wanted to ensure that even if her son wasn’t eating homecooked meals, he was still eating well.”
The canteen is one area where the group has never controlled budgets. “My accountant balked at the extra expense,” Rakesh says, “But I was clear that even if we had to spend an extra ten or twenty grand a month, people would eat whatever and however much they wanted. Even today, at all our plants, the canteens are run by the company and not on contract. Meals are laid out buffet style, and there’s no limitation on how much you eat, or how many helpings you have. We want our people to eat well. Our only request is that they don’t waste food. There is plenty made each day, so it’s not as though they’ll run out. We did plate food in the beginning, but we were wasting about twenty to thirty kilos of food. With the buffet arrangement, the wastage came down to just two or three kilos. As a reminder to employees not to be wasteful and to refrain from serving themselves anything they’re not going to eat, the amount of food wasted each day is put up on the board.”
The food up till then had been a pure vegetarian cuisine, cooked without compromising on Jain values. However, when the group took over the Hetauda plant in Nepal in 2015, the brownfield project already had a canteen, and it served non-vegetarian food. “As Jains, it wasn’t very easy for our workers to accept non-vegetarian food being made on the premises, but our manager, Mr.J.B.Kharat, who worked at the Dhulia plant was kind enough to convince them to be tolerant without our even mentioning the issue to him,” says Rakesh, smiling. “In Sri Lanka too, food habits are very different, so we allow them to bring their own non-vegetarian meals. One has to learn to adapt.”