Interview with Sandeep Maini, Chairman, Maini Group

Growth with Values

Sandeep Maini, scion of the Maini family, is Chairman of the Rs. 500-crore Maini Group, manufacturers of high-precision components, material handling equipment ,warehousing systems and battery-operated vehicles. Best known for REVA, ‘“the electric car made in India for the world” in the words of the Maini patriarch and Group founder Dr. Sudarshan K Maini, the Maini Group extends its global trajectory as a leading exporter of automotive and aerospace components, and its domestic growth curve via material handling and storage, which surge ahead in tandem with Indian e-commerce’s own rapid growth. In this interview, Mr. Maini discusses his company’s journey, values and operating philosophy.

Dr S K Maini was a visionary entrepreneur. He ventured where few in 1970’s India dared to tread – into manufacturing high-precision industrial components.  What was his vision and what were the Maini Group’s early success factors?

My father, Dr. S K Maini, was working towards a professional degree and career. After graduating from the Institute of Technology, Banaras Hindu University, he went to the UK to study further, on a Burmah-Shell scholarship. Upon his return, he worked at GKW and Precision Fasteners before joining  the German engineering company Mico ( now called Bosch ) which was already established in Bangalore. There, very early on, he became the first Indian to replace a German Production Manager.

At the time, Indian professionals in foreign companies rarely, if ever, rose from executive to directorial board level. So when Dr. Maini, as a well-known and respected professional, was ready for greater achievement and growth, he took the first step of setting up his own manufacturing unit in 1973, as a supplier to Mico: Maini Precision Products  (MPP). And thus began the Maini Group story.

The fledgling company’s first product was a fuel injection tool for manufacturing diesel fuel systems. Initially, the tool was made for Mico’s India operations. However, as someone whose own rigorous quality standards lived up to those of his German client’s, before long, Dr. Maini was exporting the injection tools directly to Mico’s parent company, Bosch, in Germany.

In 1973, MPP started manufacturing in a rented 2,000 square foot shed in Bangalore’s industrial area, Peenya. Mico helped with machinery and their existing cast iron rod suppliers. The support was encouraging but growth from then on was spurred by Dr. Maini’s own business acumen and foresight.  

In 1994, thanks to its sustained focus on high-quality engineering production, MPP became the first Indian company to supply high-precision components to American auto giant General Motors.

Dr. Maini's vision for the Group was holistic growth, with ethics and excellence, which encompasses our core objectives and values.

You now have companies in metal and plastic components, consumer and industrial automotive and industrial appliances. What is the Group’s mission and what does success look like?

We have three core businesses: precision components and systems, material handling and warehousing solutions and electric vehicles.   Maini Precision Products is our flagship company, where we are global partners of the major automotive and aerospace components manufacturers, for components and sub-assemblies. Maini Materials Movement offers total solutions in Material handling. This includes in-plant loading and unloading, transportation, stacking and storage equipment. Armes Maini Storage Systems designs , manufactures and installs a complete range of warehousing solutions for all industry sectors. Our mission for the next decade is to continuously innovate using appropriate technology to improve the Indian Brand globally through products and solutions that exceed world class excellence.

The Maini Group is best known for the Reva electric car – which put you on the global map as an innovator. How has the Reva company sale to Mahindra panned out?

We started the electric vehicle program in 1996. We developed competencies in electric powertrain, battery, battery management systems and controls, battery chargers and telematics.

Keen that Reva should continue to be a success, we were on the lookout for a partner whose thoughts and values would resonate with ours. We also preferred to see an Indian engineering company take our creation forward, knowing the transition would be easier if the new owner shared our values and traditions and understood what we’d done as a family. The Mahindra Group shared similar values with the Maini Group. This led to the Mahindra Reva partnership. Reva's technology and innovation road map combined with Mahindra's strengths in manufacturing, supply chain and distribution set an ideal foundation for the growth and success of the company.  

Your customers are mainly overseas. How do you compete globally? Who are your competitors?

Quality, reliability and domain knowledge of what  works internationally: these are our differentiators. From the beginning, we were focused on quality. By working with the best customers, we developed the ability to meet the most exacting requirements. We became the largest exporter of high-precision products, by setting ourselves apart as a reliable partner, one who understood international business. On time supplies year after year established our credentials as a reliable partner. Logistics and just in time supplies to customers 10,000 miles away eliminated the advantage of local suppliers.

Since we manufacture to customers’ drawings and requirements, our competition is global. Acquiring a business for a particular component or an assembly means that we need to be the best in the world for that particular component.  

What technologies are you pioneering? Are you, for example, using fuel cells to power your industrial machines such as lifts and stackers?

We are now suppliers to most of the leading global automotive companies. In addition, we see an exciting future for our electric powertrain capabilities. Airport infrastructure is growing and we see greater and greater uptake for our e-carts and buggies. We have the capability to research, develop and integrate electric technologies – including fuel cells – when the commercials become meaningful. We are in the process of  developing and testing the relevant new technologies in our electric vehicles.

Thanks to the dramatic spread of e-commerce and the imminence of the Goods and Services Tax regime, warehousing, logistics and distribution together look ready to constitute the country’s next significant growth sector.

Ferretto Group, our Italian partner, has been in modern storage systems for 60 years. These systems include shelving, racking and mezzanine flooring, all designed in steel profiles. We are now ready to offer solutions to automate warehousing in the country.

Being a family business you have brought in professionals in your Group .What lessons and best practices can you share?

I would like to believe that we are moving positively towards a family-run but professionally managed business in various stages of transition depending on the size of the company. Being an engineering company driven by technology, it was important to bring in strengths in sales, marketing and finance to create a foundation for sustainable growth. We looked for professionals with strengths in these domains to augment the commercial aspects of the business. Having a core team that is a true sounding Board for the family has held us in good stead in the last decade.

Micro-management has given way to delegation, giving the family more time to think about strategy and growth, while operations are looked after by team members ably equipped to do so. The key here is to ensure that there is a regular review and audit process since I believe that there is a fine line between delegation and relegation, the latter leading to disastrous outcomes.

How large are your manufacturing operations, in terms of manpower?

The Group employs between 1,600 and 1800 people directly. We manufacture out of 14 units, located around Bangalore, including Nelamangala, Jigani, Bommasandra, Peenya and Chandapur.

How do you source and train manpower in technical manufacturing? What are the cost-efficient practices in this domain?

 Most of our technical staff have  ITI diplomas. We run a 12-month training calendar, including soft skills, technical and commercial modules. We look at engineers for specific roles. Our staff goes through a six-month probation and growth in competency is assessed is monitored at regular intervals. Process checks evaluate performance and the role of HR is to suitably deploy experienced technical staff, but also to source them externally as required.

What are your observations on the quality of technical education in India? Where should the focus be, for India to become a true global economic power? What are the gaps and how would you bridge them?

There is a big gap between what our technical institutions teach and where the industry has reached. Production associates are be trained in operating traditional machines while industry has moved on with high technology manufacture.. Unfortunately ITIs haven’t upgraded to keep pace with what the Industry requirements are and hence the enormous skill gap that exists in the country today.

Equally unfortunately, the resulting negative comments are directed at the ITI graduates, although they are not to blame. It’s the outdated curriculum that’s restricting them.

Users of technical manpower have to retrain and upgrade these graduates. They’re acquiring skills, not jobs. They don’t have the skills required for jobs. As employers, we do what we can, to re-skill the people we hire. But it needs to be done on the appropriate scale, for our workforce to be employable.

The concept of ITIs is excellent, but it has run its course. The ITIs have become white elephants. They’re facing the same problem as many other public sector enterprises. Their thinking is rigid, while the world has moved ahead. If they had the autonomy and could work directly with corporations, they would be able to re-invent themselves.

Given these challenges, how do you ensure the quality of your product?

In his day, Dr. Maini had only one warehouse, from which he supplied all his customers alike. He didn’t have dual standards for the same product – one for premium customers, another for local customers.  His maxim was: “The product is the same for everyone.” This maxim has imbibed our companies with an organizational quality culture.

Today, ‘good quality product’ is not the differentiator it once was. Today’s customer preferences have shifted to value addition, in terms of the processes we operate as well as ease of use for the customers themselves.

The right machines, the right tooling, and the right processes – all contribute to manufacturing quality. There is a substantial degree of automation – machines take care of most of the quality issues. For plant operators, though our production associates’ bandwidth of duties has become narrower, the competencies have become finer.  

What does a quality culture require? Do the Indian consumer, the Indian government, or the Indian industry; have a quality culture, in your opinion?    

Yes, but not a customer mindset. If we work towards having a customer mindset, the quality ignition will take place.

In India, we don’t give adequate importance to process, as results are in focus all the time, although in the Gita we are been told: “karmaṇye̒va adhikāraste̒, mā phale̒ṡu kadāc̣ana”, or in other words, “focus on the process”. We do in business exactly what we do in school and college, which is to focus on how to get 95% marks, i.e. on the result, not on the process. The result is that everything is in peaks and valleys.

Result orientation leads to knee-jerk reactions, without proper analysis and consultation. Planning a solution takes time and requires a lot of effort. We seem to have a mindset that says  we don’t need a process, because we’re super-intelligent individuals. In Denmark, where I trained in 1989, by contrast, I’ve seen fantastic production process output, because everybody is simply doing their job as a part of an orchestrated activity. Great quality is not about individual brilliance, but about the ability to orchestrate a process.

Process orientation and customer orientation – these are requirements for Indian businesses to achieve global success. These two between them cover everything that facilitates success.

Have you developed any trademark processes? As engineers yourselves, have you innovated in the  manufacturing process -- for example, in quality processes, waste management or customer satisfaction?

We continually innovate in our management process. For example, rather than general terms like “vision” and “mission”, our teams focus on keywords which help us identify and track the things that matter the most to us. The keywords include terms like: “customer-focus”, “profitable”, “global player”, “centre of excellence”, and “having fun”. These are not too high-level to be tangible, nor are they too detailed to grasp at the management level. Once the team buys in into these terms, we track how we are doing on what they signify.

The customer’s also looking for a reliable partner. Quality is an ideal, but reliability is something we can act upon. We have a “zero philosophy”, where we aim for zero-defective parts per million. As our processes are increasing in complexity, line-of-sight delivers only about 15% of the quality control. The reliability of machines then comes into the picture. We’ve instituted zero-defect awards, to promote a reliability culture.

We’ve also developed processes and internal competencies that could become our USP’s. We’re already among the top five-to-eight percent of global precision manufacturers. Globally, we’re also the largest exporter in our category,. We will use automation and technology to scale up competitively. Technology scale-up is required in order to avoid magnification of human error.  

How do these measures play into the brand and reputation of the Maini group? You are best-known for the Reva car; what would you like to be known for? Is brand important in a B2B business like yours?

Our electric buggy is also a B2C business. Brand is important in every business. Especially in today’s world, where communications, social media and networking play a large role in business success, brand is a vital asset. Our vehicles carry our brand on them – you’ll see “Maini” written on the airport buggies for instance. Yes, the Reva electric car became a household name which catapulted the Maini brand into public recognition. Our brand has thus always been associated with the ideas of value delivery, reliability, uncompromising quality, social responsibility, ethics, excellence and, of course, innovation. These values are reflected across our range of products, and they also rub off on one another.

Let’s talk about Corporate Social Responsibility or CSR. CSR has been a major focus for Dr Maini. What does it mean to you? Is the CSR law helpful or does it pose new challenges for industry?

My father fostered a culture of CSR long before it became a law. At the time, we weren’t even a corporation. It was then what I’d call ISR – Individual Social Responsibility.

When CSR is mandated, people finds diverse ways and means of fulfilling it. It ends up being CSR in name only, as for example, when someone merely writes a cheque to the PM’s Relief Fund.

To me, CSR is about the difference you can make as an individual and an organization to impact the life of the community in a positive way. It starts with the individual, and requires him or her to be willing to spend precious time, directly or indirectly, rather than writing a cheque.

It wasn’t called CSR earlier; it was ‘“giving back to society”’. My father started with small things, depending on what he could afford and the scope grew over time.

He didn’t believe that CSR should be a dole or charity. His idea was to proactively work in areas where he believed he could contribute. A simple donation is not, in my view, CSR, as it doesn’t make the connection that CSR should make, between the giver, the action itself and the beneficiary community.  

We’ve made education, environment and rural upliftment our focus. We’ve adopted 15/20 villages in one of the most economically challenged areas in Karnataka where the Gramothan Foundation  – which Dr. Maini set up to carry out our CSR initiatives  – works to make a difference in people’s lives.

Should CSR be linked to business activity?

Yes and no. We do use the competencies of our business, and our beliefs about giving back to society, in delivering CSR. For example, in the area of environment, we focus on waste management and restoring green cover. You can make use of your advantages to reach out, but I would not, for example, take an expensive soap to teach people about hygiene. I could indirectly leverage my business, but that cannot be the primary objective.

How would you describe yourself and the role you play in society? Let’s test out some terminology here – do you consider yourself a modern techno-preneur or a classic capitalist?

We are businessmen, entrepreneurs and technocrats. I think we should avoid words that are segmenting and potentially judgmental. We make and sell things we believe in, and work to make this happen. So we’ve many objectives that we pursue at the same time  – including wealth sharing and job-creation. In addition, I am associated with other enterprises:  Gallery G, an art space and resource that promotes traditional and contemporary art, including work by upcoming artists, and the Raja Ravi Varma Heritage Foundation. There are many overlaps between a private business and social benefit. We have to operate ethically and correctly.

How you use what you have, and create new value, defines who you are.

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Interview published in The Directorial, Jan 2017

Book Review: Rise of Rural Consumers

Rise of Rural Consumers in Developing Countries

Vijay Mahajan, Sage 2016, ISBN: 978-93-860-4232-3

Pages: 168, Hardback, Rs.795

The massive global trend towards urbanization is calling for a review of the definition of the terms ‘rural’ and ‘urban’. ‘Rural’ continues to be used in the sense of ‘not urban’, which is to say, without access to services and goods that are taken for granted in the city. Traveling through a dozen countries with the largest rural populations in the world, Prof. Vijay Mahajan encountered overwhelming evidence of the overlap of definitions, whereby predominantly agricultural communities are accessing modern communications, financial services and most importantly, from the standpoint of this book, modern consumer products.

In particular, the stereotype that rural correlates with low income, is highly out of place. Mahajan notes that in India alone, almost a third of non-urban households fall into the middle-class or higher-income segments and in general, the rural middle class segment is growing at the cost of the rural poor due to reduction in absolute global poverty levels. This has large implications for companies who wish to expand their markets. Many companies have developed successful marketing strategies that help them access the huge latent demand in non-traditional, non-urban, segments. In particular, accessing these segments requires companies to reconsider their advertising media and messages and to incorporate a larger share of local cultural content. Successful companies are forging partnerships with NGOs and tapping into the trends that are increasing rural incomes. Graphic representations are provided to illustrate rural spending cycles linked to agricultural patterns, religious festivals, etc.

Many factors enhance the ability of the rural consumer at all levels to spend, including better infrastructure, more income increasing opportunities, more inward remittances from family members working elsewhere, and more philanthropy-driven programmes for skills, services and small businesses. But equally important is the ability of companies to create demand and aspiration, leading to a shift in consumption patterns, even where income may not have altered much. The book documents both types of developments, with a wide range of examples.

The book is well-supported with data, both systematically reported and anecdotal. The data reveal very interesting patterns. The top 20 countries, by rural population, include the US at the 9^th position with about 60 million people, as well as India at the top with about 900 million and Mexico at the bottom with 26 million. The global rural population of about 3 billion is expected to remain approximately robust over the next 3 decades despite urbanization, due to population growth. 

The examples of successful marketing and consumption growth that are documented most often come from global FMCG companies like Unilever, Coca Cola, P&G, and so on. These MNCs are leading the way in accessing new consumer bases. Advertising and brand communications are key to the success of companies who wish to make significant and successful inroads into this domain. Each of the MNC examples cited shows the power of large advertising budgets and the freedom given to the local business to develop and run communications that connect with their customers. The same global brands are visible across the rural world, be it Coca Cola or Pert or Dove or even L’Oreal.

This is not to say that there are no local players. Examples are given of Airtel reaching out to small farmers, Marico promoting Parachute coconut oil in the un-differentiated coconut oil market, and examples from other countries.

The author communicates palpable excitement in discussing the size and vibrancy of the rural world and the diversity of approaches towards garnering a share of the spending power. However, many of these practices are well-known and some of them are already eliciting other kinds of responses. The Lifebuoy hand-washing campaign for example, has a strong advertorial flavour. Similarly, creating salespersons for FMCG products in rural areas is a very effective low-cost model for last mile delivery, with inevitable spin-offs in terms of income gains for the salespersons. The conflation of necessary business growth activities with CSR is not a settled issue among CSR theorists or practitioners. These issues are not discussed.

The overwhelming focus on non-essential goods in the most successful rural marketing campaigns is also a matter that may attract comment. The growing focus on sustainable living is already altering consumer preferences in urban areas. Should this not also reflect in rural business strategies?  The most moving stories in the book come from the smaller local-scale programmes like the Taobao village-based enterprises in China, the “Infolady” IT-by-cycle initiative in Bangladesh, and the World Health Partners model for rural healthcare. Many of these are supported by philanthropic rather than marketing budgets. These issues remain unexplored.

Nevertheless, marketing professionals the world over would be interested in reading this book because of the wealth of stories it documents, and the great blend of data and description.