The late Aditya Birla started his career with Indian Rayon.After he took it over, the workers went on strike,a fire broke out and losses spiraled.
The great GD Birla whose favorite grandson was Aditya Birla incessantly grumbled:”You have mounted Aditya on a decrepit steed”
The late Aditya Birla was of course able to turn Indian Rayon into a success. (source:Gita Piramal’s Business Maharajas)
GD Birla’s comments however hold lot of wisdom.Promoters can be compared to horse jockeys.Sometimes the horse (business) is so fast and swift that they gallop all the way to success.Sometimes even the best jockey can’t do much with an old nag.
This resounds with WB’s famous saw ““When a management team with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.”
But there are some jockeys (promoters) who are capable of changing horses(businesses) mid-stream and achieving greater success.This is a true hallmark of an outstanding businessman.
For instance,WB started with the textile business and then later moved on to insurance which propelled Berkshire Hathaway to great success.
In the Indian context, Dhirubhai Ambani started with trading,moved to textiles, then to petrochemicals and then finally oil &gas.
Are there any current businessmen who are outstanding jockeys capable of changing horses midstream?
Such an extraordinary businessman is Deepak Parekh.He started with HDFC, launched a bank,life insurance, general insurance and other wealth creating companies.If one had bought HDFC shares when Deepak Parekh started his career, one would have had a very comfortable retirement indeed.
Amongst the younger lot, Jignesh Shah of FT comes to mind.He started with a software firm selling brokerage terminals , went on to launch India’s largest commodities and currency exchanges and now wants a crack in the equities business too.
On the other hand, there are jockeys who will run their horse into the ground.But that’s a story for another day !!