Subhash Chandra, chairman of the Zee Group, started in the family business of converting whole grain into pulses and then dabbled in many other businesses before becoming a media baron. In an interview with India Knowledge at Wharton during the 2010 Wharton India Economic Forum, Chandra talks about his earliest experiences as an entrepreneur, the many challenges he faced and how he built the Zee television network. Chandra says that in all his businesses, he must be among the top two players, and that his biggest leadership challenge is to build the right team.
An edited transcript of the interview follows.
India Knowledge at Wharton: Let’s start by talking a little bit about your earliest days in business. What were the lessons you learned then that might benefit other entrepreneurs today?
Subhash Chandra: My earliest experience was to pick up my family business of converting whole grain into pulses, into split pulses. When I started that, our family had lost all of the [business’] capital. I was called back from college because they couldn’t afford my fees and everything [else]. The market was not giving us credit. But still I insisted that I would reinstate my family business. When I would go to the mandi [wholesale market] and there was an auction of chana [a pulse] for example, [even] when my bid was the highest, they would not sell it to me because they were afraid that they would not get paid. They would sell to the next bidder. But I would insist and I would say, “Why are you not selling to me?” They would say that they can’t wait for a long time to get paid. So I [would say], “You don’t worry. You don’t have to wait. You just weigh the thing. I’ll go to my shop, get your money, and then we will take delivery.” So what I did was I built the confidence of the people. If I had creditors worth 10 lakh rupees (US$21,750 at Rs45.98 = $1) and if I had US$2,000 coming as a receipt of the sale proceeds, I would put it in my bag and I would go to each shop. If I [had] to pay somebody US$500, I would give them US$100 there and then. So it became my reputation: Don’t go to his shop for recovery of money; as soon as the money comes he will come and pay. Then there was no stopping. Building the confidence of people taught me a lot.
India Knowledge at Wharton: You also were in the rice export business?
Chandra: That was later on, much later on.
India Knowledge at Wharton: And the oil business as well?
India Knowledge at Wharton: How do you identify new business opportunities? What are the things you look for when you decide this is a business you want to enter?
Chandra: Well, pulses, oil, and rice — they were not new. They were family trade, family businesses. But things that started later on — I think it’s simply being [clear about] your objective. What do you want to do? What do you want to achieve in life? I always pursued in my mind that I wanted to be either number one in any given business or a strong number two. If I am not either of the two I will exit that business. I have exited a lot of businesses, which people don’t know and people don’t talk about.
India Knowledge at Wharton: Could you give us some examples?
Chandra: I bought a factory that made hand tools — forged tool making. We couldn’t succeed. We were third or fourth. So I exited; sold the business. We started molding fiberglass. We started making bathtubs, ceiling fan covers … many things. But it was again one of many of us doing that. So I sold the business.
India Knowledge at Wharton: How do you evaluate the potential and the risk? What are the factors that you look for?
Chandra: I look for potential — [if] there is a demand for that product. That has to be first established. [Then], is it better than the product of a level [currently available in the market]? If these two match then I go for it. Essel Packaging is a classic example. When we set up the factory for laminated tubes in India in 1981, nobody would buy [from us]. Colgate and Unilever [and others] said there were [many other] suppliers. But we continued pushing because [ours] was a better product. A local brand started using it. Then the multinationals had to come.
India Knowledge at Wharton: Another very critical success factor in starting any new business for an entrepreneur is his ability to recruit the right people. No one can do everything themselves. What qualities do you look for?
Chandra: I have been poor in that respect. I learned over a period of time — over 30 years. Now what we pursue is talent. Talent is much more important for us than experience or even skills. The belief in our company is that experience can be gained and skills can be imparted. But talent — what is required for doing the job — you either have or you don’t have.
India Knowledge at Wharton: Could you give me any examples of mistakes that you have made of this type from which you learned?
Chandra: I would like to avoid that. I have made a lot of mistakes [in] hiring and I was labeled, rightly or wrongly, as a hire-and-fire man, which was not good.
India Knowledge at Wharton: If you take away the factor of recruitment, in the course of your business career, what would you say is the biggest mistake you have made? And what did you learn from it?
Chandra: I have made a lot of mistakes. I believe [in] a day you are supposed to take 20 decisions. My assessment — what I read in some books also — is that the best decision maker is 60% correct. And I don’t consider that I am one of the best. Nothing immediately comes to mind, which is startling. But, yes, one mistake I remember was in 1999 to believe in the stock market and get carried away.
India Knowledge at Wharton: You entered the theme park business. Could you help me understand your strategy and how you went about evaluating the opportunity and building that part of your operation?
Chandra: Well, Essel Packaging was out of the red by 1987 or 1988. I had this land [that I had] purchased [earlier] in Bombay (Mumbai). As I was unemployed, we were looking at what to do next. So [I thought of] this land and what could be done with it. An amusement park is one of the developments permissible in that area. I felt that in Bombay or even in India a lot of people do not have clean and healthy entertainment. So that’s why we built the amusement park.
India Knowledge at Wharton: A tremendous success, of course, in your career has been the launch of Zee Television. I wonder if you could help us understand the process through which you were able to enter this business. What were some of the challenges you faced in dealing with the government, for example, and what can entrepreneurs learn through your experience in this regard?
Chandra: The major challenge was that there was no regulation in India. This sector of television broadcasting was reserved for public sector. We used to see the Gulf War [being televised] on CNN in some of the hotels. When the legal advice was given [that I could not get into this business] I didn’t take that for an answer or a correct answer. I kept questioning them, “Why is CNN coming? Why is this happening?” They said CNN was from a foreign country. So I asked why I couldn’t start from a foreign country. So I succeeded because of not taking no for an answer and kept pursuing till I finally got the answer.
India Knowledge at Wharton: What were some of the elements that you had to put in place to build Zee to where it is today? And what kind of skills in yourself did you have to develop in order to transition to running a business of a different size and different dimension?
Chandra: Well, first and foremost, what helped me in making the business successful was that I always looked at every program which we used to commission. I used to commission the programs myself. I used to look at it as a viewer — not as a chairman of the television station. That helped me. And secondly, I [had] read in one of the magazines that a very successful director of Hollywood had said that if anybody knows what will work with the viewers — what kind of film will work and what kind of entertainment will work — he is fooling themselves. He said nobody knows what will work. So I pursued that theory, which made me successful. Subsequently, the business grew to a large size fairly quickly. A team was being built alongside.
India Knowledge at Wharton: To what degree does international competition restrain you from doing what you would like to do? How do you compete with large companies?
Chandra: We are competing with everybody. We are not intimidated by the big multinational companies.
India Knowledge at Wharton: What is your competitive strategy?
Chandra: I tell my people to be responsive to the viewers. To listen to them and what they are saying. Don’t think that whatever programming you are giving is the right programming. And don’t look at what competition is doing. You do your job. Let competition follow you. So today, the structuring we did of the business from the beginning is followed by everybody in the industry. Today, what program we do — Zee does — people follow that.
India Knowledge at Wharton: If you look at the media industry the world over, it seems to be in complete turmoil. The Internet, the absence of ability to charge for content, has created havoc even in places like the U.S. How do you see the global media landscape unfolding? And where do you see the opportunities in this landscape?
Chandra: The way the media industry is being run today will not be valid 10 or 15 years from now. We have to be very, very clear and adoptive towards consumer needs. Money will follow. If we chase money, it never comes.
India Knowledge at Wharton: In your keynote speech at the Wharton India Economic Forum, you talked about the role of media in raising people’s expectations and also the fact that this can create discontent among people who don’t have high incomes. What do you think is the solution for bringing about more inclusive growth?
Chandra: On one side, we are showing affluence on the screen and people want to have all those good things. On the other side, we should be showing them how only hard work can get you these things, that there are no short cuts to getting these things. So if we show both the sides we will be balancing our job.
India Knowledge at Wharton: Over the course of your business career, what would you say is the biggest leadership challenge that you have faced? How did you overcome it? And what did you learn from it?
Chandra: Basically, human resource development is the biggest [leadership] challenge. First, to select the right people; and, second, to nurture and develop them. We have yet to achieve excellence in that area. I have learned that it is a weakness, but we still have to fix it. We are working towards it.