Kishore Biyani FututrGroup

8/8/2019 Kishore Biyani FututrGroup

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Rewrite the rules but retain the values",-moto

Name Kishore Biyani FututrGroup CEO

Education Graduation in commerce

Industry Retail

Products Discount Stores, Supercenters

Country India

Company Future Group

Website http://www.kishorebiyani.com/

Summary The story of how a simple shopkeeper who started off by sold stonewash fabric to ordinary retailer and later became a retail-magnate himself. The story about Kishore Biyaniand his extraordinary stunt in the business with unconventional ideas. The man who retained Indian-ness inhis business concepts be it Pantaloons, Big Bazaar or Central. A must read for all enterprisingentrepreneurs. His favorite mantra-Rewrite Rules, Retain Values.

Kishore Biyani is the Group CEO of Future Group, one of Indias leading business houses with businessesin retail; capital and investment advisory services; consumer finance; insurance; brand development; retailmedia and logistics. Headquartered in Mumbai, the group has a footprint in 53 cities in India and employsover 25,000 people.

Back ground Kishore Biyani belongs to a trading family from Rajasthan settled in Mumbaifor more than 60 years now. He was born in a family of traders on August, 1961, graduated in commercefrom HR College, Mumbai in 1981 and initially joined his father's business. Biyani recalls that his fatherbelonged to the old school and was a conventional businessman.

Soon Biyani began to tire of the business and chose to start a yarn-manufacturing unit, which in those days

offered high margins. Of the Rs7 lakh needed, he put only Rs2 lakh, saved from his trading deals, in hisfather's business, and borrowed the rest from his family. A down-to-earth man, Biyani who lives with wifeSangita and two daughters, is a firm believer in the Indian value system. He is proud of being Indian andconsiders Indianness as the driving principle behind the enviable success of his company

Establishment of first Business Biyani began to tire of the business and chose to start ayarn-manufacturing unit, which in those days offered high margins. Of the Rs7 lakh needed, he put onlyRs2 lakh, saved from his trading deals, in his father's business, and borrowed the rest from his family.


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Pantaloon started in 1987 as Manz Wear Pvt Ltd. Biyani took the company public in 1991, changing itsname to Pantaloon Fashions (India) the following year, and then again in 1999 to Pantaloon Retail (India)Ltd. Today, the company has approximately 14,000 shareholders.

Biyani's company initially made trousers, which were sold to shops that stocked multi-brand clothes. Theresponse was decent though not overwhelming. The same year he set up a plant at the family's premises inMumbai installing machinery worth Rs20 lakh borrowed from banks.

The next step was to begin advertising. In the first year, Pantaloon Fashions' advertising budget was Rs17lakh on a turnover of Rs70 lakh leaving Biyani with a profit of Rs8 lakh. The next step was to positionPantaloon in the office and casuals segment with an all-India network.

At a crucial juncture when Pantaloon Retail needed funds to expand and set up its own retail shops to stockeverything under one roof, the Ahmadabad-based Arvind Mills, flagship of the Lalbhai group, asked him tomarket its denim brand. This helped bring in much-needed funds. In 1988-89, the launch of Pantaloon's

own brand, Bare Necessities, helped establish Pantaloon in the fashion industry.

Expansion of Business In 2001, Biyani evolved a pan-Indian, class-less model BigBazaar, a hypermarket chain, leading to the democratization of shopping in India. With Food Bazaar, asupermarket chain, he blended the look, touch and feel of Indian bazaars with western hygiene and it hasnow evolved into the favored destination for Indian homemakers.

The Future Group operates through six verticals: Future Retail (encompassing all lines of retail business),Future Capital (financial products and services), Future Brands (all brands owned or managed by groupcompanies), Future Space (management of retail real estate), Future Logistics (management of supplychain and distribution) and Future Media (development and management of retail media spaces).

The group's flagship enterprise, Pantaloon Retail, is India's leading retail company with presence in food,fashion and footwear, home solutions and consumer electronics, books and music, health, wellness andbeauty, general merchandise, communication products, e-tailing and leisure, and entertainment.

The company owns and manages multiple retail formats catering to a wide cross-section of the Indiansociety and its width and depth of merchandise helps it capture almost the entire consumption basket of theIndian consumer. Headquartered in Mumbai, the company operates through 3.5-million square feet of retailspace, has over 100 stores across 25 cities in India and employs over 12,000 people.

Lines of Business The company is present across several lines of business which havevarious formats:

Fashion Pantaloons(40), Central (7), Brand Factory (6), Blue Sky, Top 10, Fashion Station, BigBazaar (90), Lee Cooper (JV) (31), Planet Sports & Sportswear formats (54)Food Food Bazar (135)General Merchandise Big Bazaar, Shoe Factory (17), Navras, Electronics Bazaar (90), Furniture Bazaar(85), KB'S FAIR PRICE (72)Electronics eZone (37), Electronic Bazzaar, STAPLES(JV) (2)


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Home Improvement Home Town (7)Furniture Collection (13), Furniture Bazaar, Home BazaarE-Tailing www.futurebazaar.com (Online Shopping)Books & Music Depot (112)Leisure & Entertainment Bowling Co., F123

Wellness Star & Sitara, TulsiTelecom & IT Gen M, M Bazaar, M-Port, ConvergeM, Future AxiomConsumer Durables Koryo, Sensei ,IPAQServiceE Care , H Care, Future Money (120)Malls Central (Bangalore, Hyderabad, Pune, Mumbai, Vadodara, Gurgaon, Indore) Other SpecialtyFormats (97)These are the major outlets of Future Group. Kishore Biyani as a whole (Future Group) have entered andtopped their Business Categories.1] Consumer Finance2] Retail Real Estate Development3] Retail Logistics

Company Timeline 1987 Company incorporated as Manz Wear Private Limited. Launchof Pantaloons trouser, Indias first formal trouser brand.

1991 Launch of BARE, the Indian jeans brand.

1992 Initial public offer (IPO) was made in the month of May.

1994 The Pantaloon Shoppe exclusive menswear store in franchisee format launched across the nation.The company starts the distribution of branded garments through multi-brand retail outlets across thenation.

1995 John Miller Formal shirt brand launched.

1997 Company enters modern retail with the launch of the first 8000 square feet store, Pantaloons inKolkata.

2001 Three Big Bazaar stores launched within a span of 22 days in Kolkata, Bangalore and Hyderabad.

2002 Food Bazaar, the supermarket chain is launched.

2004 Central - Indias first seamless mall is launched in Bangalore.

2005 Group moves beyond retail, acquires stakes in Galaxy Entertainment, Indus League Clothing andPlanet Retail. Sets up Indias first real estate investment fund Kshitij to build a chain of shopping malls.

2006 Future Capital Holdings, the companys financial is formed to manage over $1.5 billion in real estate,private equity and retail infrastructure funds. Plans forays into retailing of consumer finance products.Home Town, a home building and improvement products retail chain is launched along with consumer


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durables format, Ezone and furniture chain, Furniture Bazaar. Future Group enters into joint ventureagreements to launch insurance products with Italian insurance major, Generali. Forms joint ventures withUS office stationery retailer, Staples.

2007 Future Group crosses $1 billion turnover mark. Specialised companies in retail media, logistics, IPR

and brand development and retail-led technology services become operational. Pantaloon Retail wins theInternational Retailer of the Year at US-based National Retail Federation convention in New York andEmerging Retailer of the Year award at the World Retail Congress held in Barcelona. Futurebazaar.combecomes Indias most popular shopping portal.

2008 Future Capital Holdings becomes the second group company to make a successful Initial PublicOffering in the Indian capital markets. Big Bazaar crosses the 100-store mark, marking one of the fastestever expansion of a hypermarket format anywhere in the world. Total operational retail space crosses 10million square feet mark. Future Group acquires rural retail chain, Aadhar present in 65 rural locations.

There is no secret behind Biyani's success. Rajesh Gupta, who has lived abroad for years and does his monthly

shopping at Food Bazaar (despite other malls being more prominent in the South) says, "Food Bazaar and Big Bazaar

are the closest to global brands like Carrefour and Walmart in India in terms of value for money." He adds, "The so

called hypermarkets in India are nothing but a giant hoax."

Biyani, the son of a Mumbai-based textile merchant, graduated in commerce from HR College, Mumbai in 1981 and

initially joined his father's business. Biyani recalls that his father belonged to the old school and was a conventional

businessman. Being a cloth trader he could never associate fabrics with fashion.

Soon Biyani began to tire of the business and chose to start a yarn-manufacturing unit, which in those days offeredhigh margins. Of the Rs7 lakh needed, he put only Rs2 lakh, saved from his trading deals, in his father's business,

and borrowed the rest from his family.

Pantaloon started in 1987 as Manz Wear Pvt Ltd. Biyani took the company public in 1991, changing its name to

Pantaloon Fashions (India) the following year, and then again in 1999 to Pantaloon Retail (India) Ltd. Today, the

company has approximately 14,000 shareholders.

Biyani's company initially made trousers, which were sold to shops that stocked multi-brand

clothes. The response was decent though not overwhelming. The same year he set up a plant

at the family's premises in Mumbai installing machinery worth Rs20 lakh borrowed from

banks.

The next step was to begin advertising. In the first year, Pantaloon Fashions' advertising

budget was Rs17 lakh on a turnover of Rs70 lakh leaving Biyani with a profit of Rs8 lakh.

The next step was to position Pantaloon in the office and casuals segment with an all-India network.


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The group's flagship enterprise, Pantaloon Retail, is India's leading retail company with

presence in food, fashion and footwear, home solutions and consumer electronics, books

and music, health, wellness and beauty, general merchandise, communication products, e-

tailing and leisure, and entertainment.

The company owns and manages multiple retail formats catering to a wide cross-section of

the Indian society and its width and depth of merchandise helps it capture almost the entire

consumption basket of the Indian consumer. Headquartered in Mumbai, the company

operates through 3.5-million square feet of retail space, has over 100 stores across 25 cities

in India and employs over 12,000 people.

The company has also launched Central, a first of its kind, seamless mall located in theheart of major Indian cities. Some of it's other formats include, Collection I (home

improvement products), E-Zone (consumer electronics), Depot (books, music, gifts and

stationaries), aLL (fashion apparel for plus-size individuals) and Blue Sky (fashion

accessories).

Some of the group's subsidiaries include Home Solutions Retail India Ltd, Future Bazaar

India Ltd and ConvergeM Retail India Ltd, which leads the group's foray into home

improvement, e-tailing and communication products, respectively. Other group companies

include, Pantaloon Industries Ltd, Galaxy Entertainment and Indus League Clothing. Ithas also entered joint venture agreements with a number of companies including ETAM

group, Gini & Jony, Liberty Shoes and Planet Sports, a company that owns the franchisee

of international brands like Marks & Spencer, Debenhams, Guess and The Body Shop in

India.

Future Capital Holdings, the group's financial arm, recently raised $1.1 billion in private

equity funds for investment in retail real estate and consumer-related industries. Apart

from asset managment, it also plans to get into insurance, consumer credit and offer other

financial products and services.


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Kishore Biyani is the Managing Director of Pantaloon Retail (India) Limited and the Group

Chief Executive Officer of Future Group. He has led Pantaloon Retails emergence as the

Indias leading retailer operating multiple retail formats that now cater to almost theconsumption basket of a large section of Indian consumers.

Kishore Biyani led the company`s foray into organised retail with the opening up of thePantaloons family store in 1997. This was followed in 2001 with the launch of Big Bazaar, auniquely Indian hypermarket format that democratized shopping in India. It blends the look,touch and feel of Indian bazaars with aspects of modern retail like choice, convenience andquality. This was followed by a number of other formats including Food Bazaar, Central andHome Town.

The year, 2006 marked the evolution of Future Group, that brought together the multipleinitiatives taken by group companies in the areas of Retail, Brands, Space, Capital, Logistics andMedia.

Kishore Biyani was awarded the Ernst & Young Entrepreneur of the Year 2006 in the ServicesSector and the Lakshmipat Singhania - IIM Lucknow Young Business Leader Award by PrimeMinister, Dr. Manmohan Singh in 2006. He was also awarded the CNBC First GenerationEntrepreneur of the Year 2006.

Kishore Biyani was born in August, 1961 and is married to Sangita and they have twodaughters. He recently authored a book, It Happened In India that captures his entrepreneurialjourney and the growth of modern retailing in India.

The makeover of 26, Residency Road is almost complete. On this Thursday morning,Bangaloreans walking down this tree-lined avenue slow down to stare at the megalith that hasreplaced the old Victoria hotel. It's a sharp, new mall. The sort with escalators and huge greymetal flanks clamped to the walls outside.


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All around it, people are zipping around in what can only be termed as desperate hurry.Labourers are clearing the dirt from the cobblestones that surface the driveway. Nearby, amason is relaying a slab at the fountain. Truckloads of merchandise are arriving. Mostonlookers take all this in, correctly conclude that the store is about to open, and walk on.

Other, more observant, watchers notice a somewhat nondescript man sitting on a ledgebetween the fountain and the steps that lead up to the mall. He doesn't seem to be doing much.Every few minutes, he pulls out a cellphone - one of three he carries - to ask about the latestelection results, and how the stockmarkets are doing. For, on this Thursday morning, the finalelection results are being tallied, and it looks like the Congress might win after all. But thereare more interesting sights that engage everyone's attention, and the man escapes most people'sscrutiny.

That seems to be something of a running motif throughout Kishore Biyani's life. Ask peoplewho India's largest retailer is, and chances are they will say B.S. Nagesh of Shoppers' Stop or

RPG Retail's Raghu Pillai. And yet, it is Biyani who is the largest player in the Indian markettoday. This June, when he announces the 2003-04 results of his company Pantaloon Retail, histopline will be about Rs 650 crore. A clear Rs 100 crore more than RPG's, the second largestplayer in the Indian market. Shoppers' Stop is in third place with revenues of Rs 400 crore.

Back in 2002, when Businessworld last wrote about him, the 'bania' from Mumbai was inmuch the same position as the Congress Party was before the elections. No one took himseriously. Biyani hung around the periphery of the retail industry, which was dominated bypersonalities like the suave Nagesh, unlike whom, he was taciturn to the point of being tongue-tied. He fidgeted constantly during formal meetings, which made the task of carrying out anyserious conversation with him quite an ordeal. Little wonder, he seldom received invitations tospeak at industry seminars.

No one quite liked him either, because the man strongly believed - and said so bluntly - that his peers in the retail business were mere copycats. "Most Indian retailers tend to blindly copyfrom Western models. I am looking for a pan-Indian model of retailing," he would say toanyone who cared to listen. His search for the ideal model also meant that he took colossalrisks - something that scared away most financiers used to dealing with more conventionalbusinessmen. On top of that, Biyani made no bones about the fact that he liked to run a one-man show. "I use people as hands and legs. I prefer to do the thinking around here," he oncefamously said. As a result, both professional managers and investors avoided him. And fewpeople gave him any chance of succeeding.

Between then and now, a lot has changed. Biyani has moved centrestage. Today he has threehighly successful retail formats: the Big Bazaar hypermarket; Food Bazaar, that straddles thefood and grocery business; and his original Pantaloons apparel stores. The property opening inBangalore is his fourth model, a mall called Central. By the end of next year, he expects tohave 30 Food Bazaars, 22 Big Bazaars, 21 Pantaloons and four Centrals. Right now, he has 13Food Bazaars, 9 Big Bazaars (the 10th is opening next week in Nashik), 13 Pantaloons and oneCentral. Between them, Biyani's stores occupy 1.1 million sq. ft of retail space. By the end of


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next year, they will occupy 3 million sq. ft.

With the opening of Central, Biyani says his portfolio is complete. Even as his competitors likethe Rahejas (who own Shoppers' Stop) embark on new formats (food and grocery), Biyani saysthat his appetite for experimentation is now sated. "I will no longer try out newer formats. My

focus will be to consolidate our operations." Don't take him too literally, though. What hemeans is that he will continue betting on new opportunities ranging from gold to caraccessories, but not on quite the same scale as, say, his first Big Bazaar or his first FoodBazaar. Instead, he will concentrate on ramping up each of his four main formats.

Drawn by his growth, in the last two years well-known financial institutional investors likeGoldman Sachs and Citigroup Global Markets have picked up stakes in his firm. And when thestockmarkets looked buoyant just a few weeks before the poll results, the Pantaloon stock wasamong the best performing on the BSE. It quotes at Rs 311 today, up from Rs 51.25 a yearago. Things are going so well now that Biyani has stopped talking about selling out to foreignretailers when they come in.

"Things have really fallen into place in the last two years," he says. It is noon, and we arewalking through the mall. Inside, the whole place is a mess. There are less than 30 hours to gobefore Bangalore's newest and largest mall opens for business. And, so far, nothing is in place.The escalators are not working. The shelves are still coming up. The merchandise is stillcoming in. The stuff which has come in hasn't been unpacked yet. Cardboard cartons, plasticsheets lie everywhere. And yet, there is something oddly relaxed about Biyani's demeanour.He wonders about the stockmarket. Why is it rising? Can Manmohan Singh be the next PM?

Perhaps Biyani is in an unusually good humour because he knows that the chaos will settledown soon enough. Just like it has with his entire business. A big factor, he says, was Big

Bazaar Mumbai. The format was a huge gamble, says Bala Deshpande, who served as ICICIVenture's representative on the Pantaloon board. Around 2001, when the first Big Bazaaropened, Pantaloon's topline was Rs 180 crore. The company needed money to expand, but hadjust Rs 4 crore of profits. The share price was low (Rs 18), so it could not have raised muchfrom the bourses. Biyani would also have had to part with a lot of equity - his family and hehold 40% in Pantaloon today. Biyani took a Rs 120-crore loan that pushed his debt exposure toas high as 1.5. If Big Bazaar hadn't worked, he would have ended with huge debts and a loss.

But, as it turned out, the store clicked. In week one, the first Big Bazaar store pulled in over alakh customers, and did a crore in turnover. By the end of the first year, Biyani had openedthree more Big Bazaars. Riding on the hypermarket, Pantaloon saw its turnover of Rs 286

crore (2001-02) climb to Rs 445 crore (2002-03). Investors began to take notice. They alsobecame more comfortable with the idea of him being a maverick. Says Biyani: "Investors lookfor growth. And there are not many growth stories in Indian retail. Most companies aregrowing very slowly."


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It helped, also, that around the same time, Biyani began to pay a lot more attention to whatthe investors wanted. Says Deshpande: "As the new investors came in, they told him thathe needed to delegate in order to grow." And so, he went on a hiring spree. Biyani pulledin the head of Globus, Ved Prakash Arya, to handle operations; Jaydeep Shetty from Inoxto create new brands; Sanjeev Agrawal to handle marketing; Kush Medhora from Westside

to look after new store rollouts; Ambrish Chheda came in to look after Food Bazaar andhandle business development; Bina Mirchandani came in to look after the merchandising;V. Muralidharan came in from Lifestyle to head Central...

Persuading the professionals wasn't easy. Take Kush Medhora. Initially, he didn't want tojoin. "I thought the company was unprofessional from the way the first few stores looked. Ihad also heard that the company was a one-man show." But during the job interview,Biyani told him he wanted to abdicate everything except strategic planning and theselection of new locations. That helped Medhora make up his mind.

There is probably another reason why Medhora joined. He enjoys the adrenaline rush. His

job, opening new stores, keeps him on the road for 220 days in a year.

It is this frenetic pace that drew him to Pantaloon. "We will be (worth) Rs 5,000 crore by2007," he says. "Such expansion is fun. In a way, we are creating history." Right now, heis running around - he is short of site engineers. His team has just one when it needs atleast another three. He is also interviewing aspiring Big Bazaar store managers. In a breakfrom regular retail recruitment, the company is hiring chartered accountants for storemanagers. Managing Big Bazaar is like financial tap dancing. The margins are slimmer.The business runs on faster stock turnarounds, and calls for a very different way ofthinking from the other stores. And so, Pantaloon is looking for people with an eye fornumbers. "Alternate Saturdays are holidays," Medhora grins, "and so that is when we do

our interviews."

As the company grows by leaps and bounds, it is discovering all the advantages of scale. Ineverything, from raising finances to negotiating rates, the economies of scale kick in. Togo from its current 1.1 million sq. ft of retail space to 3 million sq. ft by the end of 2005,Biyani estimates he will need an investment of about Rs 250 crore. Of that, Rs 32 crore hasbeen raised through a convertible debenture offer made in November 2003. Another Rs 60crore is being raised though debt. The current cash flows should take care of debt servicingwithout much problem. Meanwhile, the rapidly growing profits can be ploughed back tofund the expansion. The company has an EBITDA (earnings before interest, tax,depreciation and amortisation) of a little over Rs 65 crore. Right now, says C.P.

Toshniwal, chief of corporate planning, "Our turnover is around Rs 650 crore. But by nextyear, the turnover will be Rs 1,300 crore. So, we will have an EBITDA of Rs 130 crore, allof which help fund the expansion." In contrast, Shoppers' Stop will throw up Rs 24 croreas EBITDA this year.

Interestingly, even as Biyani gets more cash from his business, at the same time, he ismaking that cash work harder. In the old days, he says, "I would have paid Rs 7 crore-7.5crore for a 50,000-sq. ft store and I would have done an annual turnover of Rs 35 crore.


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Now, I spend about Rs 4 crore for a store of that size, and do a business of Rs 50 crore-60crore."

You can attribute that partly to the mall-making frenzy in this country. There is a shortageof anchor tenants in this country - at least ones that can pull customers in, and Biyani is

exploiting that. Not only is he able to negotiate lower rentals, he has begun insisting thatmall owners also develop the place for him. In the old days, he says, "We would buy theproperty, do the fittings and so on. Now, I just take a fully-appointed building from them."Day two. Kishore Biyani is standing on a scooter. The Businessworld photographer istrying to get some elevation into the photograph. From that unsteady perch, he is talkingabout why he thinks the best is yet to come for his chain. All his formats, he says, areseeing an interesting evolution.

Take Pantaloons. This is the brand that started Biyani's transformation into a retailer. Backin 1997, Biyani was manufacturing two brands, John Miller and Bare. Both werestruggling. Even though his products were good, and the pricing was competitive, high

distribution costs and margins were making the whole business unviable. And so hedecided to set up his own stores. That year, the first of these came up in Kolkata. At thisstage, the plan was that the company would open another 2-3 such stores, no more. RecallsKabir Loomba, who worked with Biyani as a chief operating officer (COO) in that period:"When the first store came up, we did not know when the second store would come up."But the Kolkata store was an eye-opener. Biyani had been hoping it would do about Rs 7crore in its first year. It did Rs 10 crore. Loomba feels this taught Biyani an importantlesson: the Indian market was under-retailed. This was when the aggressive retailexpansion started.

Over the years, Pantaloons has been through a few makeovers. And right now, it is getting

another one. Biyani is junking the old positioning of 'India's family store' and is planningto target the youth instead. His consumer insight is, like always, a shade radical: "Within afamily, people were thinking and dressing and acting very differently. Which is why I believe studying Indian consumers by demographics and psychographics is a waste oftime. We should look at communities: techies, metrosexuals, etc."

So, Pantaloons will now be about affordable fashion. ('Fashion from Pantaloons' is the newadline.) In the next two years, says Biyani, Pantaloons will be the Indian equivalent ofSpanish fashion retailer Zara.

Internationally, in this business of fashion retailing, while the margins on individual

garments are high, eventually, the margins are low. That is because the unsold stocks haveto be liquidated through heavy discounting. For instance, it takes 90-120 days to designand ship, say, a new line of fashion merchandise. This means two things. One, thecompany will always be forced to order in lots of 90-120 days, lest it runs out of stockhalfway. Two, if the fashion changes, the company is saddled with inventory which thenhas to be liquidated. Says Biyani: "If the margins on every garment are 50%, but I amgoing to sell half of them after a 12% markdown, my margins are already down to 44%."


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And so, the company is trying to crash the time to market from 90 days to about 21 days.

Zara has a neat model that lets it launch new lines in less than 21 days. What made it possible is that it had its own factories. Biyani is doing something similar. Fastermanufacturing, says Anshuman Singh, who looks after the supply chain, will let the

company keep less inventory, which will make it more responsive to market changes whilereducing the amount of stocks to be sold at a discount. At the same time, as fresh stocks hitthe market faster, sales will rise. By becoming much more responsive, says Biyani, "Wecan up our margins by 5-6%." Right now, he has brought the time lag down from 90 to 40days.

But fashion tastes in India don't change that fast. So the real question is: what will it take todrive disposability of clothes higher? According to retail consultant Devangshu Dutta, thatis price. "Pantaloons will have to really bring prices down, by half or so. But that mightcreate a problem between Pantaloons and Big Bazaar, for the latter is also based onapparel."

As it were, Biyani's new strategy for Big Bazaar also centres on fashion, but with avolumes orientation. It will retail what Biyani calls commoditised fashion - blue jeans,white shirts. Biyani is planning to buy these in very large numbers, drive prices down, andsell. Take denim. Recalls Singh: "Pantaloons has jeans from Bare at Rs 695 and above.Newport, priced at Rs 599, was the cheapest pair of jeans in the market. So, we contactedArvind Mills and asked if they could give us jeans at Rs 299 if we were willing to take100,000 units a month." That is where Ruf-n-Tuf came in. The brand had beendiscontinued when Pantaloon first contacted Arvind. From now on, it will be availableonly through Big Bazaar. There is a similar deal for T-shirts.

This will have to be a lean operation. Pantaloon will carry no stocks. They will lie with themanufacturer and replenished just in time. In businesses where there aren't any largemanufacturers, like plastics, leather, food technologies, Pantaloon is trying to engineer itsown low prices. For ketchup, it has an in-house label for Rs 38 as opposed to an industryaverage of Rs 58 for the same size.

And then, there is the format that fascinates and worries Biyani: Food Bazaar. Right now,of the company's topline of about Rs 650 crore, Rs 250 crore has come from Pantaloons,the apparel store, another Rs 230 crore from Big Bazaar and the rest (Rs 160 crore-170crore) is contributed by Food Bazaar. Biyani worries that Food Bazaar is growing too fast.He says: "I could double the stores I have and still face no problem. But it is important to

recognise that it should not be more than 30% of my topline." (That is why, he says, "Ihave underplayed food in Big Bazaar.")

That flies in the face of conventional wisdom. Most retailers believe food is central to theirretailing operations. If you look at the rival hypermarket format Giant from the RPGstable, 50% of its revenues come from food. In contrast, Biyani doesn't want the share offoods to rise over 30%. He has a simple explanation: in India, cost of modern retailing isvery high, and food doesn't offer adequate margins. If cost of operations is 30%, food


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margins are just 12-14%. In contrast, apparel and non-food segments offer margins of 25-30%.

Part of his success is the ability to paint on a blank canvas. Incredibly, when Big Bazaarwas conceptualised, he put in place a team of four people, including himself, none of

whom understood the hypermarket business. And one of the first insights the team had wasthat all neighbourhood markets are the same - each of them has a bania, a dry cleaner and achemist. "We knew we would have to create that same mix of the mandi in whatever newformat we evolve."

Or take Food Bazaar. "I am going to change the face of food retailing in India," promisesBiyani. Right now, he is working on a new focus for Food Bazaar. He calls it 'farm toplate' - essentially, a plank to improve freshness in the products. Boasts Chheda, the chiefof business development: "The Ahmedabad Food Bazaar has a full-scale dairy set-up in place with a capacity to produce 1,000 litres a day. We make our own paneer andpasteurise milk. The company is also adding spice grinders and atta chakkis (flour mills)."

It's an example of how earthy entrepreneurs think differently. Says Biyani: "It is obvious toeveryone that what Indians prize most in their food is freshness. That is what I need to givemy consumers. But most managers take that as a mandate to set up a cold chain in thiscountry. But I wonder, why cannot I have a farm next to my store? Managers alwayscomplicate things. It is the MBA culture. B-schools teach you how to manage complexity,but I don't think that is necessary. Life is quite simple."

That flies in the face of conventional wisdom. Most retailers believe food is central to theirretailing operations. If you look at the rival hypermarket format Giant from the RPGstable, 50% of its revenues come from food. In contrast, Biyani doesn't want the share of

foods to rise over 30%. He has a simple explanation: in India, cost of modern retailing isvery high, and food doesn't offer adequate margins. If cost of operations is 30%, foodmargins are just 12-14%. In contrast, apparel and non-food segments offer margins of 25-30%.

Part of his success is the ability to paint on a blank canvas. Incredibly, when Big Bazaarwas conceptualised, he put in place a team of four people, including himself, none ofwhom understood the hypermarket business. And one of the first insights the team had wasthat all neighbourhood markets are the same - each of them has a bania, a dry cleaner and achemist. "We knew we would have to create that same mix of the mandi in whatever newformat we evolve."

Or take Food Bazaar. "I am going to change the face of food retailing in India," promisesBiyani. Right now, he is working on a new focus for Food Bazaar. He calls it 'farm toplate' - essentially, a plank to improve freshness in the products. Boasts Chheda, the chiefof business development: "The Ahmedabad Food Bazaar has a full-scale dairy set-up in place with a capacity to produce 1,000 litres a day. We make our own paneer andpasteurise milk. The company is also adding spice grinders and atta chakkis (flour mills)."


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It's an example of how earthy entrepreneurs think differently. Says Biyani: "It is obvious toeveryone that what Indians prize most in their food is freshness. That is what I need to givemy consumers. But most managers take that as a mandate to set up a cold chain in thiscountry. But I wonder, why cannot I have a farm next to my store? Managers alwayscomplicate things. It is the MBA culture. B-schools teach you how to manage complexity,

but I don't think that is necessary. Life is quite simple."

Interview

Born into a small trading family, India's retail czar, Kishore Biyani, replaced conventional

wisdom with "guts and instincts" to create Future Group, a $1 billion company that

includes Pantaloon Retail, a department store group; BigBazaar, the company's name for

hypermarkets; FoodBazaar supermarkets, and Central Mall, a more upscale aggregation

of merchandise. Known for his insights into Indian consumer behavior, Biyani alsorepresents an enigma to the country's emerging retail players, both domestic and foreign.

He offers some glimpses into what makes him tick in his recent biography titled, It

Happened in India: The Story of Pantaloons, Big Bazaar, Central and the Great Indian

Consumer, co-authored with Dipayan Baishya. The book has sold some 100,000 copies,

more than any other business book published in India so far. In an interview with India

Knowledge@Wharton, Biyani, who has often been called "the Sam Walton of India,"

talked about leadership, the Indian retail market and why he would never consider

collaborating with Wal-Mart, among other topics. Excerpts from the interview follow.

India Knowledge@Wharton: What does leadership mean to you?

Biyani: In the last six months, I have read many articles on leadership and met a couple of

experts on that subject. But I still could not find an answer to what, exactly, leadership

means.

There are two types of leadership. The first is all about thought leadership, which is

original thought, believing in it and making things happen based on those thoughts. The

second type is skills leadership, which refers to doing things consistently and in your own

style.

India Knowledge@Wharton: What part of leadership is inborn and what can be

developed?

Biyani:For me, leadership is all about thought leadership, not skills leadership.Skills


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leadership can be developed even after the age of 24 or 25, but thought leadership cannot

be developed after a certain age.

India Knowledge@Wharton: How do you define thought leadership?

Biyani: Thought leadership is about building scenarios and making them happen. I believe

everybody is a victim of systemic thinking and has their own mental syntax. First things

come first, and everything else is a reflection of where you started on that first thing. If you

change that syntax, things change. If you have a business school orientation, your syntax

of thinking will be in a particular direction. I am a businessman and entrepreneur, so my

syntax of thinking will be in a different direction. Each has a unique method of sequencing

to arrive at answers.

One would have to change everything to look at things differently. That is a very difficult

thing to do as we have our own mental maps. We are not trained to change mental models.

Business schools also have not been trained to do that. Business schools work on creating

efficiencies, creating productivity and managing consistency. But life is not like that. Life

is chaotic.

India Knowledge@Wharton: Leaders who are effective in one context may not be so in

another. What are your thoughts on this?

Biyani: Our measurement of effectiveness is a capitalistic approach based largely on how

successful leaders are in terms of balance sheet performance. But we must also look at

many other benchmarks. Leadership is all about making effective change, creating some

kind of paradigm shift by looking at the world or anything in a different way. The

environment around you keeps changing and you must keep creating new lenses to look at

things. Very few leaders are consistent throughout.

India Knowledge@Wharton: What is your biggest leadership challenge?

Biyani: I guess the biggest leadership challenge is always how you handle conflicts.

Secondly, there is no end to growth in leadership. The whole problem is people believethat if they have achieved something they have reached Mount Everest and then leadership

is over. But it is a continuous process.

India Knowledge@Wharton: How have you developed leadership in your organization?


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Biyani: We have developed a very different style of leadership. We run a seamless

organization. We don't have structures; it is a non-hierarchical organization that works

with people coming together to do things.

It is also a very design-driven organization. We believe the structure has to be broken up tochange; the design has to be altered to change things. A design-driven organization has

flexibility and maneuverability. It is an amorphous organization that can be given any

shape and any direction anytime.

India Knowledge@Wharton: Can you give an example of how that works?

Biyani: We can chop and change anything we do, anytime. Nothing is constant for us.

Nothing is constant here. We believe in destroying what we have created.

India Knowledge@Wharton: In your book, you have described three types of

entrepreneurs. You say your father and uncles were "preservers" and you call yourself a

"creator" and a "destroyer."

Biyani: Most people are trained to be preservers. It is great to be a preserver. But for us,

whoever has to create has to destroy. Without destroying, you cannot create anything new.

That is also the law of nature. Look at the seasons. Everything gets destroyed to create

something new. But unfortunately, business does not take any cues from nature. None of

the business schools takes anything from nature. One cannot go against the flow of nature.

In our group, we don't follow business principles. We follow the principles of nature.

One of the biggest principles we follow, as I have said in the book, is to go with the flow.

We never do anything against the flow of nature. And when you follow the principles of

nature, ideas will get destroyed and recreated.

If you look at nature, human beings have not changed over a period of so many years.

Love, hate and all the other emotions are still the same. But we all complicate things. We

create segments, psychographics and other indices. It is a simple world, but we break it upand start looking at it through lenses that are very different. You will find all the answers

in nature.

India Knowledge@Wharton: How do you use these principles to build your business?

Biyani: Everything, everything is built on these principles. If you see our offices, we have


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designed them in such a way that there are no locks in any of the rooms. All the rooms are

transparent. Anybody can walk in. All over you can see openness and transparency, which

is reflected in everything we do.

India Knowledge@Wharton: Did you always believe in going with the flow, or did youdevelop this attitude along the way?

Biyani: It has evolved. Earlier, when we used to do this, we were called stupid. Now when

people see it has worked, they call me a maverick, or something like that, because they

have to label me. It is okay.

It is all about acceptance. When we got one thing right, people did not believe in us. When

the second thing was right, they did not believe in us. When we also got the third thing

right, they still did not believe in us. Finally, when the fourth thing was right, people

realized that if I got four out of four things right, everything could not have been a fluke.

Then people started believing in us. Now my thoughts are accepted.

India Knowledge@Wharton: What kind of challenges did you facewhen nobody

accepted your thinking?

Biyani: It was not a challenge. I strongly believed we needed to develop our own original

thinking. There has to be some fresh air blowing through our thought processes.

This country has a lot of talent, but unfortunately we are borrowing everything from the

West. But we also have to benchmark ourselves against some international standards.

India is a unique country and we have to look at our problems in an original manner. We

can use the West as a reference point or an inspiration, but we cannot ape it entirely.

India Knowledge@Wharton: In your book, you say you were inspired a lot by Sam

Walton's biography,Made in America. Which of his principles did you find the most

appealing? Do you think any of them could be applied in India?

Biyani: I was struck by Sam Walton's theory that the retail business is driven either by

efficient operations or by very good merchandising. The first thing to do is to get your

merchandising right. Operations can be gotten right anytime.

We followed that principle and worked quite a lot on merchandising. We have become a

merchandising-driven organization rather than one that is operations-driven. Look at any


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of the companies that are entering India -- they are all operations-driven. They want to

perfect their operations on Day One. They want to have control. That is one big difference

between them and us.

Secondly, it is all about passion. We realized that retailing is always done with passion. Itis not done with corporate imagery. Retailing is also about leading the group, leading the

cheerleaders, having Saturday meetings.

Walton's book also presents insights on how to manage the family, how to treat sons and

daughters, how to view the management and the family as two separate entities and how to

manage wealth.

Wal-Mart is the only organization I have seen that has gone against the law of nature. It

has broken one natural law, which says that when you keep growing bigger and bigger,

you get cut down.

India Knowledge@Wharton: Wal-Mart is now facing some opposition in India on a few

fronts.

Biyani: It is not opposition. Walton created an unbelievable design. One of the major

reasons they have survived is because they have treated the management and the family as

two separate entities.

Reliance has been divided into two. Wal-Mart has not really shown any signs of breakingup. But now we are seeing some signs of that. Nobody likes an extraordinarily large group.

Wal-Mart is huge, and bigger than [the gross domestic product of] many countries. You

cannot become bigger than a country! Then you are bound to get cut down.

India Knowledge@Wharton: What is happening in the retail environment? A number of

companies, including Reliance, have announced their plans to get into the retail business in

a big way.

Biyani: This is a question I am asked at least three times a day. The market is big. We area huge economy now, with an annual growth rate of 10%. India might be on the cusp of a

change, a tipping point where a lot of things can happen. We don't know.

We are an agrarian society where aspirations are not as high as in an industrialized nation

or society. We have a lot of challenges to face before becoming a consumer-driven society.


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With more and more players entering, we will come to have the answers a little sooner.

They can be change agents who bring a consumption-driven economy into the country.

More players coming in can create and increase demand. But can the Indian economy be

genetically changed into one that is spending-oriented? It is going to be a slow process.

India Knowledge@Wharton: Many international retailers like Wal-Mart and

Woolworths are entering India. How do you plan to handle the competition?

Biyani: Competition is competition is competition. We would always love Indian

competition because the money remains in India. Everybody is coming in with their own

agendas. It is good to have an Indian company as competition rather than international

competition.

India Knowledge@Wharton: Wal-Mart is likely to prove a formidable competitor. Are

you concerned that it will change the dynamic of the retail market in India?

Biyani: I don't know whether it could be the other way around. In the Indian mythological

epicMahabharat, Kansa (representing evil) was warned that somebody would be born to

destroy him!

India Knowledge@Wharton: Have you considered collaborating with Wal-Mart?

Biyani: Wal-Mart is too huge. Partnerships should be of equals. There is nobody like Wal-

Mart; there is no comparison. Wal-Mart's revenue is more than the total consumption ofIndia. Wal-Mart is a phenomenon unique to this era. The trick is in doing something on

your own, not in partnering with someone.

India Knowledge@Wharton: From where do you get your ideas?

Biyani: Ideas come from everywhere, from observations. In India, there are so many

opportunities and that can be trying. It is like [the Hindi film industry] making 140 movies

in a year -- something works, something doesn't.

India Knowledge@Wharton: In your book, you say you like to watch people shop. How

often do you do that?

Biyani: I do that every day. We are trained to do that. So, while we are at the airport we

are watching people, and then at the stores and the malls. We observe people anywhere


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and everywhere.

India Knowledge@Wharton: You have about 22 different retailing formats in your

organization. How do you evaluate whether a format is working or not?

We come to know within one month of launching a new format. We launch it and the

consumer tells us whether it will work or not. We get a feel for it while we are launching

it, but the consumer tells us everything else. It is like a movie. First day, first show, the

consumers tell you whether they like you or hate you. It is for you to notice and pick up

what they are saying.

India Knowledge@Wharton: It does take a lot of time and investment to make a movie!

Biyani: Until now, we must have developed about 24 to 25 different formats. We correct

some of them. Some have to be destroyed. I think we have destroyed one, Mela, though it

continues in some form. Within one month we decided that Mela (a small chain of home

furnishing stores) was not working. We changed its content. We thought we did not have

the competency for that. We got quite a few things wrong there. Fashion Station

(discounted private-label fashion merchandise) got everything right but still it did not

work. We are now destroying Fashion Station slowly and steadily.

India Knowledge@Wharton: What have you learned about forecasting consumer

behavior?

Biyani: India is such a diverse country. Every location is different. Every catchment area

is different. Consumers react very differently in different places.

If it is a gloomy day, I can forecast what the sales will be. If the day is a little darker, I

know sales will drop so much. If it is a brighter day, sales will be up. Mondays behave one

way, Tuesdays another.

We have a lot of data and research to support us and tell us how things move, both at the

broader level and the consumer-entry level.

India Knowledge@Wharton: In your book, you point out that consumers in various parts

of the country have their own peculiar styles of consumption. For example, consumers in

Gujarat buy their staples at one time for the whole year. That is not the case in Punjab or

West Bengal. Could you tell us more about the different patterns of consumption in the


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country?

Biyani: Everybody has their own way of looking at things. People in Gujarat buy their

staples in bulk, at one time, for the full year, because it ensures a consistent quality of

products for them.

Basically, we have not changed genetically. The north Indian still remains a wheat eater

and the south Indian is still a rice eater. But we track the changes as and when they happen.

It might take another three to four generations for a person to change himself culturally, for

a wheat eater to become a rice eater.

India Knowledge@Wharton: As you grow bigger, do you think the cost of failure gets

higher and higher?

Biyani: It all depends on how you design your organization. We have just restructured our

organization, and created an innovation and incubation group which works only on

developing new concepts.

We have a very low cost of innovation. We don't do research. We do not hire consultants.

We experiment and do everything on our own. We run the largest design company and are

very fast in our approach.

India Knowledge@Wharton: Tell us about the challenges you faced in the process of

building up your enterprise -- say, for example, at the time Pantaloon Retail went public

(1992).

Biyani: For us, it was always the sense of creating something new. We were the first retail

company to go public, so there was the thrill of [doing that]. I have read somewhere that

once you dream big and think big, you should share your gains with the public. So we

went public.

Once you go public, you realize that there are other issues involved. The size of our public

equity offering was very, very small (Rs. 2.25 crore, less than $1 million at the time). Wewould achieve that amount within 10 minutes of business now. We never thought we

would become this big. That is evolution for us. The classical mode for going public today

is very different. We have gone through our pains.

But how do you actually measure success? I don't know whether we are successful or not.


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India Knowledge@Wharton: What, according to you, is success?

Biyani: Success is when people start following you or start believing in your thoughts, and

whatever you do is accepted. The consumers tell you that you have done something right

when they keep coming again and again into your shop.

India Knowledge@Wharton: As you have grown in size, how have your organizational

systems kept pace with the growth?

Biyani: We have faced quite a lot of challenges here. New issues surface all the time. If

you ask us whether our systems are very strong, they are not. That will take a while. The

challenge is to create a balance between systems, processing, guts and instincts. As a big

organization, we have to bring in systems and processes, but we do not want to lose the

guts and instincts that have gotten us here.

We are now looking at some technology that can complement our guts and instincts. We

are tracking various trends around the world, and different events or happenings that could

have widespread cultural influences, economic influences and political influences. We are

able to record it now and will be able to simulate an environment to find out that if so

many things happen together, what would be their impact on society, and what businesses

and communication strategies could evolve around them.

India Knowledge@Wharton: In a retail organization, one of the biggest challenges is

how the supply chain responds to changes in market demands. As organizations grow

bigger, they quite often find it hard to avoid situations of either oversupply or insufficient

stock. How do you tackle these issues?

Biyani: This issue is always going to be around. As we are so consumer-centric, we know

whether a particular product will work or not. But I have not seen a single retailer who is

so perfect that he can readeverybody's mindand get everything about his products right.

Nobody can predict human behavior.

The supply chain concept has become the subject of much study, but it is not ascomplicated as it is being made out to be. Ultimately, the supply chain is all about

forecasting a demand for a particular product and ensuring that it is available. There is no

rocket science to it.

Everybody talks about supply chains, but I think the bigger issue is forecasting.


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Forecasting is a very, very difficult job. You can get into any analytical mode. But

ultimately your guts or instincts, together with some research and data, guide you. We train

our people accordingly.

India Knowledge@Wharton: How are the capital markets and investors responding toretail stocks?

Biyani: There is an acceptance of retail stocks. People believe that we are getting into a

consumerist mode, and retail is going to be a high-growth business.

India Knowledge@Wharton: Do you have any predictions on how the Indian business

environment will shape up?

Biyani: That is a closely guarded secret. It is a very difficult question. Things are changing

so much that your guess would be as good as mine. We are optimistic but we are

pessimistically optimistic. Both words are used to confuse people!

India Knowledge@Wharton: Your Future Group is growing rapidly, opening stores all

over the country. Are you happy with the group's progress so far?

Biyani: The human being is trained, or designed, to be happy in various situations. When

the Wharton School comes to us and conducts some study or writes an article, we are

happy. It is the permutation and combination of many small, small moments of happiness

that get triggered into a larger happiness.

I have a different philosophy. I believe that after every level you climb, you start seeing

things very differently. From each new height, things change, and then another journey

begins.

Secondly, whether we are accepted or not, we always take the next step. When things go

right, we are happy in the moment. We might fail, but that is not going to stop us. You

cannot factor each and every thing in life. It is all a journey.

India Knowledge@Wharton: Would you consider starting a retail chain internationally?

Biyani: Never. We are trained to be only marketing agents. We cannot deal in major

markets. We can only survive in chaotic environments. We cannot survive in cleaner

environments.


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Tell us about your initial days and the choices you made . job, family business,

starting something on your own? How did it all lead to retailing? I completed my post graduate degree in marketing in 1983 and did not join the familybusiness. We were into textile trading at that point in time. Doing a job did not occur tome. I rather extend the family business by getting into fabrics to supply to the garment

industry. We had a plot of land in Tarapur so I started a factory, which manufactured yarnsto make fancy fabrics. Then over time we evolved from a garment manufacturer to a brandto a multi-format retail player. We did a lot of things on the way franchise retailing,multilevel marketing, a department store in 1997, hyper-marketingin 2001 and then into property funds. Now we believe we are firmly in the consumerspace.

Why did you not join the family business? Were you clear in your mind that you

want to be in textiles/garmenting business?No, I was clear that I wanted to do something different. I was called the black sheep of thefamily. I was not a conventional thinker and I questioned tradition. Many times, my views

were contrary to the popular view. I also became an atheist as I grew up. I dont go totemples but I would not displease my family if they tell me to come to the templeoccasionally. Though I must tell you that I go to Tirupati every three years. But tounderstand how Tirupati is changing. Tirupati represents a large section of society. Itrepresents how a typical Indian really is and behaves.

What is your biggest mistake, one youd like to correct? I dont think I would like to correct my mistakes. I believe that if you dont go through theprocess of mistakes you would not evolve. Unless you make mistakes you would not havelearnt so much. When I started in my yarn business, I faced huge labor problems and thefactory closed down and we were into debt we had to pay the debt. So one has to go

through the process of making mistakes.

What are your weaknesses?Many! One of my biggest weaknesses that I was able to overcome only 2-3 years ago wasmy inability to say no.

How do you manage your time between work and home? With so many things

happening, you must be a really busy person. How do you manage time? I don.t socialise, so I am home before 9:00 p.m. I am always there when my familymembers need me. They are 100% aware of this.I think work is all about complications. You create problems and you solve them and you

get busy. Work does not require so much time. I think its all in the mind when you say that.person who is managing a lot is busier..

If it was not the retailing business that you are in, what business would you have been

in?I would have been in some creative business. Once I look back I feel I want to dosomething where one can create and make a difference to a lot of people. Something thattouches the masses and that can influence a lot of people.


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Are you worried about MNC competition? Are you worried more about MNC or

Indian competitors?We are worried about any competition. Competition does not have any color, MNC oranything else. I believe that competition is always worrisome when the opponent is

psychologically very strong. Otherwise it does not matter, whether its Indian or foreign.Foreigners can be psychologically more vulnerable. Because they are in a differentterritory, and they do not know how to enter and exit.

But competition will make you more efficient?Its not the question of efficiency. Efficiency is within you. You should keep onimproving. You have to design your organization accordingly. Yes any competition willmake you more efficient but that is not the only way of becoming efficient.

If Wal-Mart offers to buy, at say, a 300% premium, will you sell? I dont know to be very honest. There is a theory which says that everyone has a price in

this world. Somebody will capitulate at a million. Somebody will break down at 25m,somebody at 50m. I think I will be at the highest level to break down. Its not aboutmoney, its all about what passion you have in life and what you want to do. I need to havesomething where I can deploy money or make my knowledge more effective or moreuseful. I cant spend a whole day withoutdoing anything.

How do you handle the information overload?We like to read the trends. Any social economic trends which will impact us in a farreaching way. So there is no information overload.Earlier I was a reactive person. I used to react to every information. I have become very

proactive in the past 3-4 years. Every information has a message. I read the bookTheAlchemisttwice and thrice and every time I read, it got a different meaning. The Alchemisttalks about something that is very interesting, you will always get an omen in your life,thats what I call opportunities - its for you to reason. If you look at everybodys lifejourney or career there would be enough omens which have come into everybodys life Idont regret any omen which I have missed.

Which books do you read?In the early stages of my life, I used to read a lot of Hindi literature (eg HarishankarParsai). Over time, I have read a number of books. In English I was into fiction as well ascomics. I must have read every comic in the world - Archies, Tintin, everything. Over the

past few years, I pick up a subject every year and finish it off in thatyear. Design was the last subject that I read . Design management. I am reading a bookFortune at the bottom of the Pyramid. On self improvement I have done a lot of reading.Anthony Robbins, Stephen Covey among others. I have read The Alchemista number oftimes. I am currently reading The Argumentative Indian.

How do you define success?To live well, to learn and to leave a legacy. I am living well, I am learning a lot, whether I


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leave a legacy or not - let us see.

How do you promote innovation?We are training people to use both sides of the brain - right and left. The rational side andthe creative. We are training people to think a different way I believe everybody is

innovative in our office. The biggest idea which we hit upon at Big Bazaar was theexchange mela and the idea came from the Bangalore office. Similarly .Big day idea. - wethought of making 26 January the biggest day in our organisation and every year wecelebrate it as .Big Bazaar day.. We are looking at Rs260m of business on a single day.Similarly such ideas keep coming and keep getting implemented. We have a very opensystem of sharing ideas and we believe in the theory of bottom up and top down. Even theplanning process is that way.

How do you manage employee aspirations? What are the challenges in attracting

quality employees and the motivating them to live up to the energy that you have?I had to change myself a lot to do something like this. I have transformed myself totally

when I came up with a theory which I worked upon myself. Out of every ten thoughts thatcomes to a human being, eight are negative. Thats a scientifically recorded fact. I was ableto convert nine out of every 10 thoughts to positivity.Once you are able to convert all your thoughts into positive thoughts its Nirvana. Forexample, I believe that every human being has something in him. If he has joined me andis not performing its my mistake. Other than that, I dont think thats a problem.Otherwise, if someone tells me he is not happy or he expects something more, I have toanalyze why he is asking for it. There is something definitely behind it. Is he beinginfluenced by his family or peer group, what is the reason? And if you come up with theright reason you will be able to find the problem also. The solution typically lies in thediagnoses of the problem.

How does the organizational planning process work? Now its a top-down, bottom-up approach. Its a big process now and it takes nearly amonth+ to come to numbers and it still continues for the next month of operations. Theforecast / planning period is one-year broken down into 52 weeks.

We dont work on long-term plans. We work on a three-year numbers-on square foots interms of top line, and in terms of categories broadly we work on numbers-on-a-matrixstructure for evolution of businesses.

How frequently do you refine your plans and targets?

We dont refine our yearly plan at all. Our accuracy levels on categoryForecasts are reaching very high levels of 90-92%.

What do you attribute this high rate of success/forecasts to?I think its all about people. Making them empowered and making themUnderstand. I remember 5 years ago, I used to be the key driver for the top down/ bottom-up planning. But now the line managers make plans which are prepared on store level andall of us agree to it. And that is why it works. First we used to stretch the targets a lot but


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once you start .owning. things are very different

Kishore Biyani FututrGroup

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