February 4, 2015: Success is the result of learning from both failures and triumphs; an unrelenting quest for perfection and persistence. This is the firm belief of Vikram Desai, owner, Desai Electronics Pvt Ltd, (DEC) who never got disheartened by the impediments in his life. Instead, he fought adversity and carved a niche for DEC in the electronics industry. Though he knew nothing about capacitors, he nevertheless ventured into the field and built a company that is today a name to reckon with in the industry. In conversation with Shweta Sengar of Electronics Bazaar, Vikram Desai shares his stories of survival and eventual success
Childhood and early days
I hail from a business family. My grandfather started a beedi business in 1905, which continues to flourish in the hands of my cousins, although I am no longer a part of it. My father, Manubhai Desai, quit his education to join the Freedom Movement and spent a year in the Yerwada and Sabarmati jails. After being released from prison, he got married and joined the family beedi business. As a kid I often wondered why my parents had to be in the beedi business and not in mithais. I was so madly fond of sweets and still am, but now that fondness encompasses all the sweet things in life.
I am by nature, very restless. My mother is a strict disciplinarian even today, unlike my father. I do not remember if he ever lost his temper; a trait I could well apply to myself. Under the watchful eye of my mother, we three brothers did reasonably well in academics. It bore rich dividends later in life, for all of us. My younger brother is a cardiologist in Rhode Island (US) and the youngest is a businessman in Los Angeles (US).
Unlike today’s children who are so exposed to myriad opportunities and know what they want to do, I remained undecided and consequently changed many courses before I settled into my present business. I thought of pursuing mathematics after high school, medicine while in college, but eventually wound up graduating in civil engineering from COEP, Pune. After completing my masters from Stanford University, I wanted to pursue a doctorate programme, but could not resist a lucrative job offer to work for Amelco Corporation on the Queen Mary luxury liner that was being converted to a floating museum under the direction of Jacques Cousteau.
During my years in COEP, my friends and I used to enjoy listening to Acharya Rajneesh. The lectures would typically last an hour, but the discussions that followed would go on for more than three to four hours. During those heady days, I was quite drawn to existential writers like Herman Hesse, Albert Camus, etc. I used to listen to talks by J Krishnamurti and other thinkers of the time.
After returning from USA, my parents were insistent on my getting married. Hence, they arranged for me to meet Situ and I must say I was floored by her sweet looks, at first sight. Our parents got us married within a fortnight! Then began the process of discovery during which I got to know more about my companion. Situ is an artist by nature, loves to cook, is an avid birdwatcher, a great dancer and above all, is great at pampering all around her. She is the hidden strength behind where DEC is right now. We are proud parents of two sons. My elder son, Kunal, is a neurologist in the US, though cricket remains his first love. He is an all out sports buff and loves music and dancing. He is married to Amanda who is a documentary film producer. Her documentaries are telecast on the National Geographic and Discovery channels. My younger son Rohan is an enthusiastic wildlife photographer. But recently, he has been showing interest in business and is doing a post-graduate programme in Family Managed Businesses at the S P Jain Institute of Global Management.
Joining the family business
My parents were not keen on me starting a new business and persuaded me to join the family business. Hence, I joined the family business after a stint with Shapoorji Pallonji & Co Ltd and Engineers India. The beedi business was flourishing with my uncles and my cousin managing it in a very tradition-bound way. So there was little scope for innovation or new ideas. This gave me ample time and therefore I developed hobbies like playing bridge, trekking and travelling around the world. I caught up with my reading again. However, after some time, restlessness got the better of me and in 1979, I decided to quit.
Starting Desai Electronics was never my dream
Mahindra & Mahindra Ltd had a film capacitor division, which had closed down and was for sale. Considering that I knew nothing about capacitors, I still went ahead and bought it, since electronics was considered a sunrise industry with a great future. Little did I realise that this plant’s operations had been throttled by myriad government controls and regulations. Our government’s policy was contrary to that of nations where electronics flourished. The initial years were very difficult. There were severe restrictions on the import of raw materials and equipment. The market was quite small and was serviced by a large number of players with small capacities. In the telecom sector, ITI was the major customer, whose specifications were far too stringent and payment terms far too uncertain. Demand from the rest of the electronics sector was low. I could not imagine any capacitor manufacturer making money at that time. A few, including the largest in India (Saha-Keil) had to close down.
On the manufacturing front, the technical knowhow received from M&M was highly inadequate to meet the specifications of the customer. The result was, predictably, disastrous. By 1985, the entire capital was eliminated by losses. It was hard for me to confront such a gaping financial hole in my life. It hurt my pride as I had quit a very lucrative family business since it was not challenging enough and I had taken on something that appeared to be much beyond my capabilities. Thoughts of throwing in the towel and moving back to the US flooded my mind.
During these initial years when DEC was facing day-to-day difficulties, I began to work on understanding the technology of film capacitors. I began reading up all published literature on film capacitors. It was as if I was on a mission to earn a doctorate thesis on film capacitors. I also tried to negotiate the purchase of technical knowhow from GE, Siemens and Thompson, but it was too expensive for the small volumes DEC had. So there was no choice but to develop the technology and machines on our own. This proved to be a boon in disguise. Eventually, at DEC, we developed metallised polypropylene capacitors for lighting, fans and motors and for power factor improvement applications. We built the whole plant in-house, right from the winding to testing machines. These were quite inexpensive semi-automatic machines which were suitable for low volumes. Thus began the turnaround of DEC.
In 1985, we were blessed with Kunal and two years later with Rohan. Our joy was also a strong driving force for the changing fortunes of DEC. By 1990, DEC was the only company with the technology to manufacture the 5mm pitch miniature capacitors required for push button telephones. A huge market was opened for DEC and since then, there has been no looking back.
We have always had a strong R&D department which keeps on improving the quality and reliability of our capacitors. It also develops application-specific capacitors to give DEC a competitive advantage. We are leaders in equipment building and now get them made to our design and specifications. We have the largest presence in capacitors for fan regulators in India, with companies like Anchor-Panasonic, Legrand India, Havells, GM Modular, Wipro, Honeywell etc, as our customers. A number of Chinese companies have tried to copy our capacitor design by the process of reverse engineering. They have made a small dent, but only in the unorganised sector, where we have only a marginal presence. We enjoy customers’ patronage in the premium sector, where quality and reliability matters. Our ability to compete with capacitors from China (there is zero import duty on capacitors), gives us a sense of pride and satisfaction.
The lighting industry has thrown open yet another big market for us. A large number of leading manufacturers in this segment including Philips, Osram, Havells, Wipro, etc, are our customers. We also have a sizeable presence in capacitors for energy meters. We plan to expand our reach in new application areas like power electronics.
Our strength lies in the mass production of capacitors. With the strong backing of our R&D team, DEC has been able to meet the changing requirements of customers. We received the first prize for ‘Overall Business Excellence’ from ELCINA-EFY in the year 2014. It was a moment of great satisfaction and celebration for all at DEC. Though these awards and accolades motivate us to move ahead, the satisfaction and trust of our customers is far more rewarding.
There’s no rule book for management
Business runs in the family, mine being the third generation. I have learnt the value of hard work from my father and self-discipline from my mother. At DEC, we follow all the proven methods of management such as lean manufacturing, Six Sigma, Kaizen, 5S, etc. But I must confess, I do not follow any rule book. I follow my instincts, developed over years of leading DEC from the front, taking everyone along. I am a very hands on person and spend a lot of time in the factory.
I learnt some important lessons during a prolonged strike at our factory some 20 years back, which brought DEC to its knees. The differences between DEC and the union leader were far greater than between DEC and the workers. I was rendered helpless in the face of violence. The only thing that worked for us was patience and persistence. After the strike, we resumed work without union involvement, a 20 per cent wage reduction and no increment for all employees till the losses were wiped off. That we reached such an agreement with the workers so quickly, took me by surprise. We then worked hard at putting the bitterness behind us. We increased worker contact right up to their families. I learnt what co operation could deliver, and live by this credo.
India is a very stratified society, with wide gaps between layers; whether between two generations, levels of management or degrees of wealth. It is the common thread of humanity that bridges these gaps. It promotes respect and dignity for all, irrespective of the value addition of that person to the company. I believe that winning the trust of all the stake holders is everything. We must commit and deliver more than we committed. Another lesson I have learnt is be yourself at all times.
I believe in the ‘Make in India’ drive
As a manufacturer, I believe that this initiative should begin by increasing manufacturing capacities. Capital is attracted to returns and repelled by risks and hardships in doing business. Entrepreneurs from all over the world will be attracted if it is competitive to manufacture their goods in India rather than elsewhere.
The agricultural sector too needs economies of scale and more use of technology. This will boost productivity and reduce cost. There is a dire need for the government to promote the large scale manufacture of labour-intensive goods. Our government fully recognises the need to improve infrastructure, simplify procedures for starting and running businesses and improve the management of tax/revenue collection and deployment. Improvement in law and order; dispensing of affordable, timely and impartial justice will improve the ‘ease of doing business’ in India. At an individual level, we need to inculcate self-discipline of the order found in Japan, Germany or the Scandinavian countries. I know that women in China enjoy one of the highest levels of respect amongst any country in Asia. I wish that more Indian women would join the work force and corporate world. Ladies constitute 55 per cent of the total workforce at DEC and this is a great example of how much women can contribute.
The journey so far has been satisfying
Nothing is more satisfying than to see the wonderful results of your efforts. Despite several hardships on the professional and personal fronts, I have no regrets and this has been a most gratifying journey. I have seen myself grow. It is of utmost importance for you to choose a field that you want to be in. Some learn this the hard way and for others, it is a cake walk; but in both the cases, believing in oneself is very important. I am 68 years old now. Though I am blessed with reasonably good health, I plan to retire in the next few years. Post retirement, I will take up community work and try to help in conflict resolution in the industrial belt in which DEC is located. I will continue to add value in terms of improving the health and education levels of the youth in our community.
These are a few of my favourite things…
Favourite music: Bollywood
Favourite food: Gujju and other Indian food
Favourite books: ‘The Art of Choosing’ by Sheena Iyengar, ‘Siddharth’ by Hermann Hesse and ‘The Alchemist’ by Paulo Coelho
Favourite films: ‘Rang De Basanti’ and ‘Mother India’
Favourite hobbies: Travelling and reading
Favourite holiday destination: National parks around the world
Political figures that I admire: Mahatma Gandhi and Shri Narendra Modi
Favourite actor: Aamir Khan
Favourite actresses: Nargis and Deepika Padukone
Role models: No one person, in particular
Message for young entrepreneurs
Know thyself and choose your space.
Remember: We all are born genetically predisposed in an environment over which we have little control, but our very being is defined by the choices we make to pursue our interests.
Always ask What can I do under the circumstances to promote my sustainable self-interest?
Business is all about value creation.
Winning trust is everything.
Commit and over-deliver.
Be yourself at all times.