The Good Indian Employee's Guide To Surviving A Lala Company

By Rajiv Gupta

Welcome to Lala Land

Here, Lalaji, the business owner, calls the shots. Here, every day is an event; every commitment may not really be a commitment; every promotion may not be a career ascent and every salary hike may not mean more money in your bank account. Lalaji's strategies are not based on the size of his business, its market share or the competition but often on the whims and guidance of sycophants, advisors and friends. For a 'good' employee, working in a Lala company is akin to swimming in crocodile infested waters-tread cautiously or become the next casualty. Drawing on his intimate study of several large and small family businesses, Rajiv Gupta provides a hilarious, no-holds-barred account of how things work in Indian family businesses. Here's a survival guide to help you navigate the tricky terrain of Lala Land.

• Language: English
• Publisher: HarperBusiness
• Release date: Jul 31, 2022
• ISBN: 9789356291256

Rajiv Gupta

Rajiv Gupta was born in a business family and is an alumnus of BITS Pilani, FMS Delhi, and Harvard Business School. In a career spanning thirty years, he has worked with both family-owned businesses and global multinational corporations. In his role as national head of sales, marketing and channel management across diverse industries, he appointed and worked closely with hundreds of dealers, each of which was a family run enterprise. The conversations at home, within his extended family, and with dealer- owners, exposed him to the world of family business intimately. He is passionate about the unfolding of human potential.

Book preview

Prologue

Welcome to Lala Land

THE REASON YOU’RE reading this book is because you liked its title while browsing through a bookshelf or perhaps you’re currently employed in a Lala company and are genuinely in need of a survival guide. In the common parlance of Indian employees, there are only two types of companies: a Lala company and an MNC (multinational company). Much like the haves and the have-nots, the Indian society judges the working class by the company they work for. ‘Oh, did you hear that Mr Sharma’s son got into an MNC?’ or ‘Well, see how miserable Mr Verma is working for a Lala company and losing all his hair,’ are some common phrases you will hear in the discussion forums of senior citizens of your residential society.

But what’s the big fuss about working for an Indian family business (we’ll call it a Lala company henceforth) as opposed to a flashy MNC? Aren’t you just supposed to do your job from nine to five in any set-up? And anyway, Lala companies make up for a majority of employers in India (contributing almost 70 per cent of the GDP)¹; so it’s natural that you’ll end up working for one of them. Furthermore, nowadays even most of the Lala companies are managed by professional managers, so what’s the difference?

Well, here’s the catch. As you’ll find out in this book, Lala companies, despite a battery of professional managers, can be crocodile-infested waters.

It would be preposterous to declare that every Lala company is the same and I would offer a disclaimer to this effect in the beginning itself. For the record, India is home to some of the most professionally managed family-run businesses. Companies such as Tata, Mahindra, Godrej, TVS, Aditya Birla, Wipro, Dabur, just to name a few, are highly respected both in and outside India. These organizations have created global benchmarks for being the best places to work. There are several other large and small family businesses that are run with good governance. But this book is not about those handful of organizations. This book is about the rest of them—the companies where every day is an event; every commitment may not really be a commitment; every promotion may not be a career ascent and every salary raise may not result in more money in your bank account. If you understand what I mean, welcome to Lala land.

Warning: Even though this book is meant to be a survival guide for a Lala enterprise, you need to read the title carefully. It’s a guide for the ‘good employee’!

1

Meet Bauji: The Founder

TYPICALLY, A FIRST-GENERATION founder and often addressed as ‘Bauji’, they exhibit the following characteristics.

They were born in the pre-Independence era, are patriotic, and take pride in all things swadeshi. Generally, Baujis are strict disciplinarians and follow a rigid timetable. They are not afraid to work hard and often put in twelve to fourteen hours of work in a day. They are ready to roll up their sleeves and do the work personally, if required. They may not be highly educated—maybe because of their modest backgrounds and/or siblings-related responsibilities. Baujis favour the Indian attire: a crisp, starched dhoti and kurta along with a coat, paired with sensible, no-nonsense, non-frilly black shoes. They often carry a cane, depending on their health at their advanced age. They wear headgear, like a Gandhi topi or a pagdi and an unpretentious watch of Indian make around their wrist or on a chain.

Their antecedents may have been moneylenders or grain merchants. They could have been traders of cloth, commodities, precious or semi-precious stones. Some might have been wholesalers or buyers operating in mandis (markets where farm produce is auctioned). They might have been shopkeepers at kirana shops (neighbourhood grocery store), jewellery stores, sweet shops or eateries. Typically, they are not skilled in terms of making things with their own hands. They are, of course, adept at skillfully using their hands to collect cash at the counter (known as galla or gaddi); or serving the occasional slap to an erring servant—a fitting synonym for anyone employed by them.

Over generations, some may have graduated to a more respectable businesses, like running a flour mill or setting up a small factory. This may have marked their graduation from a trader to a manufacturer. At which point, they may have started using titles such as ‘industrialist’ to distinguish themselves from others of their clan, and to claim their upward movement on the social ladder. Some, of course, become true industrialists, doing backward integration from trading to wholesale to manufacturing. No matter the scale of their business, their next generation will often be induced to take over the business after them.

2

Meet the Characters of the

Lala Enteprise

Lalaji: the owner

THE TERM ‘LALA’ in this book refers to the owner of the Indian family business. They are typically the second generation—someone who inherited what their fathers built.

The second generation is usually born in post-Independence India. They have more exposure to the modern lifestyle and wear a shirt and trousers. Most have moved from the safari suit to a blazer or a coat, and some even choose to sport a tie. The material is more refined than cotton and more colourful compared to the earlier generation of whites and greys. Stylish shoes seal the deal. Trendy haircuts replace the caps and pagdis. Sunglasses or a fancy pair of spectacles are typical additions. A luxury watch and pen are other essentials. Lalajis are more educated than their earlier generation, who tried to give them the best they could. They also tend not to be as shy to flaunt their wealth. They live in affluent neighbourhoods, wear the best of clothes, acquire the latest automobiles and gadgets. They have a lot of respect for their founder fathers, having seen them overcome the struggles of setting up the business. They give a lot of freedom and money to their own children and strive to give them the best of everything to compensate for what they lacked while growing up.

The muneem: the accountant

Muneem is the Hindi word for an accountant. In family businesses, they keep a ‘record’ of and track all the money inflows and outflows. Their job is to ‘maintain’ books creatively and innovatively so that the taxman cannot ‘snatch away’ the wealth to which the family is solely entitled. They manage the transactions that need to be formally recorded, as well as those that must be written on loose bits of paper. The business owner, his money, and his muneem have always shared a deep relationship.

In the olden days, a muneem was someone who maintained the large-sized, red-covered accounts register called ‘bahi khaata’ for the Lalaji, and zealously guarded it with the utmost care. Muneems were typically short- or medium-heighted, who kept hair well-oiled, despite receding hairlines. They wore a waistcoats and shoes or slippers. They wore spectacles, perched somewhat comically on their noses, and carried account ledgers under their arms. They sat behind low desks or tables piled with files. They were always seen tallying figures and discussing bills and receipts. Personality-wise, they were obsessive, exacting, almost monomaniacal, and concerned with only order and control.

The modern accountants are different. They have professional qualifications, are tech-savvy, and geared to keep an auditable track of every transaction. They are better-groomed, have decent communication skills, wear western clothes, and carry a laptop.

In the contemporary family business, we often find the accountant’s role to have retained elements of the traditional muneem, despite their modern education. Their involvement is not limited to accounts, finance and cash flow management. They have built on the legacy of their predecessors, the trusted lieutenants. They continue to act as custodians of family wealth and as gatekeepers, preventing the greedy vultures (employees, vendors, and suppliers) from fleecing the Lalaji of his money. They remain loyal and spend most of their working lives in the same organization. Their custom of guarding family secrets from the outside world and even those of one family member from another, while working for them both, has prevailed. Their advice and opinion are sought on important decisions that the company takes—whether it is a new product launch, marketing spends, HR or production. They virtually ratify what the functional head of any other department wants to do. They have powerful veto rights and can frustrate any financial proposal. Anyone who thinks that the accountant’s job in a family businesses is limited to accounts and finance, does so at his own peril.

The chamchaa: the sycophant, information gatherer and informer

No man is worth his weight, unless he has a big enough coterie of people. Foremost among these are admirers, who besides giving the pleasure of flattery, double as informers, scavenging information from among rumours, and creating rumours where none exist. They are called ‘chamchaas’ in Hindi, which means a crony or a flatterer.

They are generally found as a part of groups, listening to conversations intently. They are smooth talkers, adept at coaxing a person into voluntarily parting with confidential information or information that can be used against him. They are generally seen in corners, near the water cooler or coffee machine or in cafeterias, slinking about, keeping an eye out for potentially explosive information. They are adept at creating crisis or sensation. They strive to maintain their position in the good books of the Lalaji by feeding him information he wants to hear. Thus, in the eyes of the Lalaji, he becomes an asset who is not only loyal but also looks out for the organization.

The professional: the employees, including those in leadership positions

A professional is a hired employee of the company.

In a Lala company, one is likely to find two types of employees. Traditional employees, who are typically middle-aged, with modest qualifications like a simple undergraduate degree, who feel fortunate to have a job that is reasonably secure. They are insecure about their employability—which, outside the company, is usually low. They are willing to do whatever it takes to be in the good books of Lalaji and his trusted lieutenants. They are intelligent, sincere and willing to make self-sacrifices in the interest of the company.

The other kind are the young and ambitious ones, who have a decent educational pedigree. They might have been hired from the campus of a premiere institute or may have worked in a professionally managed company for a few years before being hired by the Lala company. They are supposed to bring fresh blood, energy and ‘professionalism’ to the company. They are smart, ambitious and willing to work hard to grow their career.

The scions: the inheritors

Scions are inheritors—typically, the third generation or later. The family is beyond the stage of financial insecurity by the time they are born. They have, therefore, not seen the struggles of their forebearers. They always have and will continue to enjoy all the comforts and luxuries that come with having an ultra-high net worth.

Impatience for quick results, feelings of entitlement, lesser regard for authority, legacy and tradition—are some of the key traits of a typical scion.

The family: uncles, siblings, cousins and wives

Various types of family structures exist. In families, where the founder is one person and has one child, the ownership is vested in the founder (Bauji) and his son (Lalaji). In another instance, where Bauji may have two or more children, the latter automatically become co-owners. Let us add a third layer of complexity: a situation where Bauji’s brother is a co-founder and both of them have two or more children. Here we have uncles, siblings and cousins who are co-owners, working in the business. When you have many family members across generations, sometimes living in one large house, a lot happens.

Rivalry among family members is fuelled by insecurities and egos. Everyone is vying for a piece of the largesse and for more power, better roles, greater control. Passive family members who are not involved in operations of the business may suffer from the constant anxiety of missing out. Gossip about the other members of the family and plans on how to upstage or outsmart them are a continuous affair.

The wives might be regulars at high-profile events, parties and gatherings. They are forever decked with jewellery and flaunting the latest brands to keep up their image. They travel abroad more often than they go to the bank. They may take up hobby projects like charities, social work, interior decoration, and fashion/jewellery designing. An important agenda of theirs is to show who the boss in the family is and who has the most spending power. The patriarch and matriarch, who are powerful and well-respected, can generally keep the peace in the house. But if they are feeble or frail, then they tend to end up as helpless bystanders watching the rivalry unfold, often in ways that defy the family values that they stood by and were proud of.

3

Meet Lalaji: The Owner

Who is Lalaji?

LALAJI NEEDS NO introduction. He is the reason you are reading this book. You have encountered him before as an employer, a family friend or someone in the society you are envious of. Perhaps you are Lalaji, asking yourself what you can learn from this book.

Lalaji as an inheritor is the second-generation family business owner. He has learnt many things from his father, the founder patriarch. As his father ages, Lalaji’s power and influence on the business increases. He slowly emerges as a mighty and all-powerful person, who can take all big and small decisions that affect both the daily operations as well as the long-term strategy of the business. His attitude and behaviour may be inspired by his father and thus seem very similar. Or he may revolt against all that his father represents and break away from his tradition and legacy, thereby asserting his own freedom.

Even though each Lalaji thinks of himself as unique, they have many common characteristics. We will explore those throughout the book.

The case of Lalaji making the vendors wait

The year was 1995. The forty-year-old chairman and managing director (CMD) of one of India’s oldest business conglomerates based in northern India had set out on a modernization and automation drive. He had listed it as one of the two topmost priorities of the group. He was aware of the brewing competition from MNCs, after India had opened its doors to foreign investment. The CMD was a second-generation inheritor. His father, now in his seventies, had left the day-to-day operations to him.

His Chief Technology Officer (CTO) had set up the CMD’s meeting with the shortlisted vendors for the automation project. One of the vendors was from Bangalore and was required to come and make a final pitch in person before the CMD. The Chief Executive Officer (CEO) of the vendor, a British national working as an expatriate, had agreed to meet the CMD. The second shortlisted vendor was a leading Indian IT company, headquartered in Noida. This is how the conversation had transpired, a week before the meeting.

‘Sir, shall I keep the vendor meetings from 12 noon on Wednesday?’ asked the CTO submissively, knowing that the CMD came to office only around 11.30 a.m.

‘Why not 10 a.m.?’ asked the CMD.

‘Sir, won’t it be too early?’ the CTO enquired.

‘For whom? For you or for them? Let us start at 10 sharp. I have a busy day on Wednesday!’ said the CMD, losing patience.

‘Fine, sir. Shall we meet the local party first and the Bangalore party in the second half as the flight from Bangalore is 2.5 hours long?’ The CTO wiped the tiny beads of sweat from his forehead.

‘Why can’t they take the flight at 6 a.m. or come on the previous night? I will meet Bangalore chaps first. They are your first choice, while the Delhi vendor is a backup, right?’ The CMD said, raising an eyebrow.

‘Yes, sir. Shall do, sir,’ said the CTO as he walked out of the room.

On the day of the meeting, the three people representing the Bangalore vendor showed up at 9.35 a.m.—the CEO, VP of sales, and the Technical Lead. As they walked into the office, they saw that the front office was dark, and the floor was being swept. One of them asked, ‘Is it a holiday?’

The sweeper replied, ‘No. Why?’

‘Because no one seems to be here.’

‘Office starts at 10. People will start coming soon,’ the sweeper replied with an expression on his face that said it was strange that the visitors had shown up before opening hours, when employees themselves came much after 10 a.m.

The Technical Lead called the CTO, who said he was on his way and would be there in ten minutes. He showed up at 9.58 a.m. with a briefcase and a tiffin box, panting and sweating. He put his stuff on his desk and walked them to the waiting lounge of the CMD’s office.

After initial courtesies, the discussions wandered to office culture, how most people reached a bit late, including the front office executives. The visitors mentioned that they were nervous that they may have been delayed by 15-20 minutes due to heavy traffic on Delhi roads.

‘Oh no, sir, you guys made it before time,’ says the CTO, trying to cover up his embarrassment.

They chatted and chatted till there were no further subjects left and kept staring at each other’s faces in uncomfortable silence. It was 11 a.m. The CMD still hadn’t arrived. The secretary had been saying that he was on his way since 10.15 a.m. The foreigner asked, ‘Does he live very far?’

‘No, sir. Just 3 km away,’ promptly replied the CTO’s deputy, as if trying to make a