When CavinKare CMD CK Ranganathan’s father quit his job as a teacher to start a business, he had one thing to say to his children: that there was great joy to be had in creating employment. That led to all six siblings growing up with very clear intent to do something on their own.
“Today, all of us (siblings) have never worked elsewhere, and also independently settled well,” said Ranganathan, addressing a group of students from Bharath University and young professionals in Chennai, at an IAA Young Turks forum on 4 August 2015.
The entrepreneur credited with kicking off the sachet revolution was his candid self, offering some life-lessons for the business leaders in waiting.
The first ‘business’
The Chennai-headquartered FMCG major’s head honcho also made some candid confessions as the evening kicked off. Being the only child in the family to study in the Tamil medium, and being the only child in the family to have to go to tuitions ‘all the time’, Ranganathan grew up with an inferiority complex, he recalled. He failed in the fourth standard. “I grew up with a complex. How I came out of that has made my whole life different,” he revealed.
The transformation, for the many in the audience who had not heard the story before, proved to be a riveting tale laden with lessons.
By the time he had reached his fifth class, the boy from Cuddalore would develop a fascination for pigeons and other birds, and coloured fishes. What started as a hobby grew into an obsession. The numbers grew into hundreds, said the CEO. In the early stages, he received encouragement from his mother. But seeing him go overboard, she told him that either he would remain, or the birds and fishes. He chose to stay, selling all of them. That was his first ‘business’, recounted Ranganathan.
The power of dreams
The straight-talking entrepreneur underlined the power of dreams and visualising one’s dreams next. If a teacher in class did not impress him, that’s what the young Ranganathan used to do – dream. He dreamt of more birds, more fishes that he would acquire. The more you dream, and the more you visualize the dream, he stated, the closer you get to it. The birds and fishes gave way to other dreams for the boy who moved from school to college, admittedly with ‘a lot of difficulty’.
When his father quit teaching and started a business, he needed chemists. Being the mediocre student that he was, his future course (at the time) was chosen for him. He joined college to pursue a Bachelor’s in Chemistry. For the first time, he was studying in the English medium. Fortunately for the young man, he had a friend in college who was very good at studies, but had a peculiar ‘problem’: whatever he studies, he had to tell someone. And that someone was CKR. But even that didn’t help him pass with flying colours. He took two years to clear his arrears, but he did. He was determined to complete his graduation.
The turning point
During the time of his graduate studies, Ranganathan’s father succumbed to a heart attack.
“That was a turning point for me and my family. Till then, I never took any decision in life. I did what my father said. At that instant, I said anything to happen to me, let me decide. Not my mother, not my brother,” said the speaker, without the slightest trace of emotion as the audience listened in rapt attention.
Change was manifest in everything he did from there on. The highly orthodox vegetarian family was in for a shock, when their family member took to eating eggs and fish. His mother concluded that he was going nuts, but she was in for a bigger shock. When he said that he did not believe in god, she was furious. He was branded a rebel.
“I started challenging many things that I was conditioned to. I wanted to experience it for myself,” recalled the man who would go on to set up Chik India in 1983, a firm that marketed Chik Shampoo, marking the beginning of the much diversified CavinKare of today.
‘Close down the business’
At least that is what his brothers wanted to do after his father passed away – close down the business. But they had a loan of Rs 2 lakh from the State Bank of India and there was no money to repay it. Since the property was attached, his brothers decided to continue to the business, for fear of the property being auctioned.
But his brothers differed from his father on the way to go about the business.
“My father believed that if a product is good, it doesn’t need advertising. My brothers felt that quality is important, it is basic, but they also believed that advertising makes a big difference. That is how Velvette (shampoo) got popularised,” said the business leader.
When CKR joined the business, he was thrilled. The business was doing well, and the young man who until that point had been taking a train of 90 minutes (one way) to college, was given a car. But not everything remains forever, as he was about to discover.
“Production was dumped on me. I said that wouldn’t suit me, and told my mother I’d take care of the agricultural land instead,” said Ranganathan, who went ahead with the job anyway, and went on to soon learn his first management lesson.
When he found workers shirking work and chatting, reading and discussing Tamil magazines Ananda Vikatan and Kumudam, he was furious. The workers dodging work did not expect anyone to take tough action. They did not see the suspension of two days meted out by a driven young man. After that, the entrepreneur revealed, ‘there was no looking back’.
“That was my first leadership lesson. That sometimes, you need to be tougher. After three or four months, I realised that I was not all that bad. Even in a game of chess, I would lose in seven or eight moves. It was nice to see that I could contribute,” he said. But that was not for long. After a while, ‘hierarchy plays a role’.
“The next defining moment was when I started on my own. From the comfort zone of family business, I moved to an uncomfortable zone. From a car to a bicycle. I started off just 200 metres away from the family to a 150 square feet room, a residence-cum-office,” explained the CMD.
‘Studying for myself’
Realising that if he hung on to the family business he ‘would have been a pain’ to the family, and not become what he wished to become, he told them that he did not want a share of the business or the family property. That move, he said, gave him a ‘very strong drive’ to succeed.
“That’s when I started studying for myself. I started dreaming again,” he recounted. The burning desire was to go national. For which, he realised that he needed to ‘know English thoroughly’ and understand the nuances of business. The big breakthrough, noted the business leader, was in realising the need for and pursuing self-improvement.
“That’s the law of leadership – a leader has to evolve. I would have been a pain to my own company, a burden, if I had not reformed myself, if I had not grown. And my vision continuously fuelled my growth,” he reflected.
Part of the transformation was in the new learning. Among things to learn that he had enlisted was a command over English. And that came about, five words at a time. He gave up reading Tamil daily Dina Thanthi and started off with The Hindu.
The self-discipline he imposed on himself was quite rigorous, and Ranganathan admitted before the audience to it continuing till date. The lover of sweets wakes up in the morning each day and heads to the weighing scale. The intent is to ‘nip it in the bud’. Giving up something, he noted, helps focus.
On the subject of reading, while he urged the audience to read a lot, he also cautioned against taking that as ‘the knowledge’. He, for one, does not read one book at a time.
‘You are a copycat’
When he started off, Ranganathan admitted, he did not know the difference between sales and marketing. Retailers ridiculed him, he recalled, saying, ‘You are not innovative. You are a copycat.’
“I learnt that we needed to start selling something that is not easily available. It need not be vastly differentiated, but sufficiently, to make people come and ask for it again,” the speaker noted.
What helped along the way were small insight-driven promotions. Among those, one he cited was that for Chik shampoo. The brand that was selling Rs 35,000 in three months of starting the business, accounted for Rs 10 lakh in sales in nine months. What propelled this was a promotion. Retailers were made the offer that for every five empty sachets of any shampoo they would provide CavinKare’s distributor, they would get a new Chik sachet to sell consumers. What this allowed was sampling by consumers, who, if they liked the product, would then start buying it. And they did. After a few months the terms of the promotion changed, with the retailers getting a Chik sachet for five empty sachets of Chik shampoo. What also happened along the way was a loyalty, noted the speaker, making shopkeepers stock more Chik than they did.
‘Start when you are young’
Another piece of advice from the seasoned entrepreneur to the young audience was to start young. He quoted the example of his son, who is still in college pursuing under grad studies, and has embarked on a business venture. The focus was on differentiating the ‘bakery products’ outlet, explained Ranganathan, and the young man went on to invest Rs 6 lakh in 140 square feet on the ambience. While the business returned a profit (operating) of Rs 16,000 in the first month, the younger entrepreneur was expected to earn a PBT of Rs 51,000 in July, and was projecting Rs 1 lakh in profit by October, he noted.
“He’s now dreaming. He foresees by year end, 50 outlets, each turning in a profit of Rs 1 lakh. Till today, he has not spent a paisa on advertising. The differentiation is getting him the word-of-mouth,” said the speaker.
Mistakes and learnings
Along the journey from Chik India to CavinKare, which it rebranded into 15 years later, in 1998, and through to the present day when it straddles everything from dairy to beverages and foods, CK Ranganathan’s story has been that of a successful entrepreneur and visionary. But he has had the attendant failures. He shared with the audience one such experiment that didn’t take off.
After the success of Chik shampoo, the company saw an opportunity in the rapidly ecolving mineral water market. It ventured forth with a brand called Minerva. While it was easy to sell initially, there were ‘no sales numbers’ in a week to 10 days, recalled Ranganathan. The company realised that its distributors were the ones applying the brakes, not consumers. While the value of shampoo that could be handled by a distributor was far higher, expecting the same distributor to handle mineral water backfired, he explained, because it literally weighed them down.
He surmised, “We agreed that we had to hire a different distributor, a different sales force. We realised we can’t do that (at the time). So we agreed that it was a failure, and closed it.”
(This article first appeared in the 21 August 2015 issue of Campaign India)