The Ultimate Family Business Survival Guide

By Priyanka Gupta Zielinski

Family businesses are vital to the health of a nation’s economy, but distresses such as economic downturns and the Covid-19 pandemic can put them at grave existential risk.

Drawing from her dynamic experience working with her family-owned company MPIL Steel Structures Ltd, Priyanka Gupta Zielinski presents a unique manual to help family businesses thrive, even in times of crisis. Central to it is a survival toolkit – featuring a metaphorical multipurpose hat, a flashlight, a superhero cape, a Swiss Army knife and a parachute – which prepares business owners to face any challenge head on. The book also reveals how the improvisational style of family enterprises can be leveraged better for sustainability, while identifying in their close-knit structure and community-driven approach avenues for meaningful social change.

Replete with anecdotes and effective strategies – with an occasional Haryanvi idiom thrown into the mix – The Ultimate Family Business Survival Guide is a must-read for family business and MSME owners everywhere.

• Language: English
• Publisher: Pan Macmillan
• Release date: Apr 26, 2021
• ISBN: 9789390742011

Priyanka Gupta Zielinski

Priyanka Gupta Zielinski is a business leader and entrepreneur. Through her writings, she addresses the biggest pressure points facing the next generation of India: career, love, and marriage. By exploring the role of Indian traditions and repositioning them with a beneficial, modern twist, Priyanka seeks to empower India’s next generation in their pursuit of new opportunities and fulfilment in their lives and careers. As the executive director of MPIL Steel Structures Ltd, Priyanka has led her family business to exponential growth and diversification. She has previously worked with financial institutions such as the Women’s World Banking and the Fund for the City of New York. In 2012, she was named Woman Entrepreneur of the Year by ET Now.

Book preview

1

WHY MY FAMILY BUSINESS MATTERS

When I Needed a Flashlight in Daylight

HE SAID WITHOUT PREAMBLE, ‘SHEENU BETA, IT’S TIME TO come home.’

It had been six years since I left home to study in the US in 2002. All those years, my father would call me every day, sometimes with a joke, but always with an update on our family business MPIL Steel Structures Ltd, a steel building manufacturing company headquartered in Mumbai. In the fall of 2007, however, he had begun to sound particularly tired during our conversations. When he asked me to return and join him in running the business, it was not a plea, but a long-drawn-out sigh, as if his efforts had failed but he wanted to try one last time.

I was due to graduate from my master’s programme at New York University in May 2008, but I didn’t hesitate. I instantly said yes to him, noticing the sense of urgency in his voice. With support from the NYU faculty, I moved my classes and exams into an accelerated schedule. I compressed a semester’s worth of reading lists into days and changed submission dates to suit my flight schedules. I made time between November and May to shuttle between New York and Mumbai, until I moved back permanently in June. This back and forth between my international finance classes in New York and my 600-square-foot office in Mumbai marked the beginning of a personal exploration of my position at the nexus of my family life and our business amidst a largely conservative Indian setting.

This was a time of great anxiety. I was tormented by several questions. What would I do in Mumbai? What would I do in my father’s office? Would my parents even let me go to work? Would I be allowed any independence? Would I be able to take decisions on my own? Would I be allowed to return to the US if I felt dissatisfied in Mumbai? These questions kept haunting me and I was a nervous wreck by the end of it.

For the first few months back in Mumbai, I simply observed everything around me – mostly listening to my father recount his business stories and watching him in action when the opportunity presented itself. My father, Ashwani Gupta, lightens a tense situation with his Haryanvi jokes and idioms, as he confidently applies his do-or-die spirit to every venture he undertakes. On rare occasions, he allowed me to attend meetings outside the office with him, instilling both excitement and pride within me. It was as though I was walking about with a figurative flashlight, seeing and understanding better, capturing, and processing, asking questions as I tried to make sense of it all. At that time in India, there was an acute emphasis on ‘building’ in every sense of the word: building infrastructure, enterprise, technology, even skills. Today, I realize that those early months, after I had just moved back to India, was the coming-of-age for our business. It was a time when the personal and the professional were fully integrated, and as my father and I dove deeper into the Indian manufacturing ecosystem, we found ourselves being pushed around by the big fish in the industry. We lost some self-esteem, but we also developed a thicker skin, and my father and I re-emerged as an unstoppable duo. We discovered our strengths through our interactions in the office, the factory, during long car rides and with other stakeholders within the steel industry. But we did continue to struggle with channelling our newly acquired knowledge and experiences into the creation of useful, implementable tools to grow our business.

In the late nineties, my father had identified a business opportunity within logistics to shift raw materials inside large integrated steel plants. This was the beginning of our legacy company Pratham Transport Logistics. We used earth-moving machinery such as excavators, wheel loaders, dumper trucks, trailers, and cranes to transport iron ore, limestone, manganese, steel pellets, steel coils, and various minerals associated with raw steel manufacturing. But soon I realized that our business was a string of disconnected work contracts tied together by my father’s innate inclination for jugaad, a popular Hindi word that ‘roughly translates as an innovative fix; an improvised solution born from ingenuity and cleverness’.¹ With his sharp instincts and business acumen, he had transformed his logistics business into a successful profit-making venture, but one still rough around the edges. Despite that, my father’s success had gradually lifted our family into the upper middle class within a few years.

Leveraging the success of his logistics business, my father set out to delve into another opportunity in the steel value-addition space. He conceptualized a manufacturing business that had the potential to scale up for decades in the future. He founded MPIL Steel Structures Ltd, a manufacturing house for engineered metal structures, such as factories, warehouses, airports, high-rise and low-rise buildings, power plants, bridges, and metro rails, in 2005. When my father asked me to return to Mumbai, in 2007, the company was a three-machine manufacturing set-up, producing seventy-five tonnes of steel structures every month. By 2017, we had grown to ship 3,000 tonnes of finished, complex steel structures every fortnight.

This book is the story of a family and its business coming of age together, a story of how everything we had once thought impossible for our family business became possible.

2008: The Year I Found My Multipurpose Hat

The year 2008 was a rather (in)famous year for most of us around the world. For me, it was also to be the year of relocation and rediscovery: I had moved to India and joined the family business. Our steel structure business manufactured Lego-style steel components, shipped them to the project construction site, where they would be bolted together as per design. It was the way most construction happened in developed countries and was relatively new to India at the time. For those familiar with the industry, it is called pre-engineered metal construction, because all aspects are pre-planned such that there is an efficient flow in on-site work.

In mid-2008, India began to feel the first jolts of the global economic recession. By October, the country’s benchmark indices had fallen 50 percent from January-levels that year, while the Indian rupee had slumped to a six-year low.² This financial strain caused the infrastructure sector to decelerate.³ India has long suffered from an infrastructure gap, and its transport and energy networks have been unable to meet its rapid rate of urbanization. At the time, India’s infrastructure ranked 72nd out of 133 countries in the World Economic Forum’s Global Competitiveness Report for 2008–2009.⁴ The steel industry’s attempts to address the infrastructural gap were rendered insufficient in the face of the economic crisis. An acute shortage of cash for capital expansion projects hit us. Furthermore, since large importers such as Europe and the US could not commission their own projects as planned, the recession also caused a slowdown in exports of value-added steel products from India. Then in November 2008, Mumbai – India’s commercial capital – was hit by a devastating terror attack. Besides the tragic loss of life, the attack marred India’s image as an attractive investor destination.

The recession drove down the prices of steel drastically; with demand slowdown, infrastructure projects that consumed the most steel structures began to stall. Payments from creditors were delayed and the cash-flow crunch began to close in, making daily operations challenging for us. Apart from the recession’s impacts on our business, our small team of employees had neither specific job descriptions nor designations, and were mostly jacks of all trades and, unfortunately, masters of none. As the year progressed and its catastrophic effects continued to manifest themselves in various ways, I was reminded of a Hindi proverb – kangali mein aata geela – which means that everything takes a bad turn during adversity – a desi version of Murphy’s Law. But there was also a glimmer of hope. Since we were a dwindling business, there was no other way we could go but up.

We underwent a period of difficult introspection, something that my father had not previously conducted, to arrive at a significant breakthrough that shook the foundations on which our business was being conducted. We had to take a long hard look at the status quo to figure out what would make us more cost-competitive and how we could manufacture with better accuracy and quality. Our set-up, then, was small with limited machines and technical expertise. A key component of our business, design, and engineering, which determines how much load a structure can bear with the most optimal use of steel, was outsourced to an external firm.

We needed to evolve, retain our strengths, and quickly catch up with the modern manufacturing techniques of the steel industry. We spoke to several experts and veterans in the industry to do our research, since hiring a consultant for help was not an option, given that cost-cutting was our prime focus at the time. The industry had progressed, but we still operated according to old-school rules. My father had correctly sensed that the business would be unsustainable if we did not adapt to the changes. Trusting his instincts, he took the tough decision for a complete overhaul. In hindsight, I now know that his phone call asking me to return was a do-or-die moment for our family and our business.

We decided to create our in-house design team so that we had better control over optimizing the use of steel in a building. This also gave us an edge when it came to bagging orders since many smaller contractors who needed our steel didn’t have design capabilities of their own. Similarly, we switched to smaller-capacity machines and focused on acquiring a wider range of machines. Prior to this, we had fewer machines, which were rather heavy-duty and expensive. Earlier, the name of the company was Multicolor Projects, but this name did not immediately indicate what our actual product was. So we tweaked our company’s name and re-branded it as MPIL Steel Structures Ltd to present a new version of ourselves to our clients.

There were many firsts in that year of 2008: our first functional company website, our first recruitment drive and our first articulation of a hazy strategy to achieve a nebulous target. To keep the business going, we needed to keep the factory running with a regular stream of orders. This was easy enough to understand, but the question was how to do so in the face of challenging economic times? On the factory floor, I wore a hard hat (helmet) for safety, while continuing to rely on my figurative multipurpose hat as I switched from one role to another, at the factory, at the office and at home – sometimes watcher and at times doer.

My own induction into the business began with staff recruitment, weekly trips to our factory in Tarapur (110 kilometres north of Mumbai) and assuming control of the operational finances of our company. Just the process of conducting interviews helped me learn a lot as candidates shared insights into the market scenario, upcoming demand and hot areas to get orders from. Using our existing relationships with the clients of my father’s logistics business Pratham Transport Logistics, we began to offer our steel structure services to plants where we were already a logistics contractor. This helped us use available resources, lean more on our existing employees, and coordinate the progress of the construction closely.

Every little task and every new endeavour had a tremendous impact on our growth. I realized just how many different hats I had to wear in the span of one day, from manager to subordinate, or from artist to writer. After just a couple of months of completing our new website, we began to receive leads via emails. With an in-house design team, we were better positioned to respond to those leads with detailed technical proposals. Each new hire added significantly to our productivity. It was rewarding to experience such hyper-productivity with positive and visible results.

During the week, my father and I would be swamped with operational work. Every Sunday, we would drive to a quiet office to work on business development, to brainstorm, research, and write down plans. During those months, I learned about each aspect of our business in great detail. Even today, people in the steel industry are often surprised by my technical knowledge of our products. I had learned from my father that the savings were in those tiny technical details. Why use 0.65 mm thick steel when 0.49 mm thick steel can be perfectly suited for the job (that’s more than 30 percent savings in the material used right there). I also learned the value of persistence, in showing up every day every week to work, and in being a tad patient. In December 2008, we had bagged our first sizeable order that would keep our factory busy for the next two years. Since then, we have never looked back.

Using a Swiss Army Knife to Run a Steel Factory

My father has been my idol all my life. I have sought out opportunities to spend time with him, and the fact that he now trusted me with the business he had worked hard to build said volumes about his belief in me. The thrill of living independently in a different country is different from the exhilaration that comes from being perceived as dependable at home. Here, my father was entrusting me with the MPIL platform – a proud moment for me. But then, I was also afraid I would let him down. In the beginning, I sought his approval for all my decisions. Our business had entered phase 2.0 as a father-and-daughter partnership. I was ready with my Swiss Army knife, a set of tools to help me adapt and course-correct as we geared up for the next stage. We needed to strategically invest in our collective ability to own and manage a business. Now that we were back on our feet,