Living Up To Being A 'Hero'
5th June 2016 Paul Andrews
The Hero Group is one of India’s best-known brands, with a proud history that goes back to the 1950’s, when Abhimanyu Munjal’s grandfather started a business making bicycles.
By the 1980’s, Hero was the biggest bike maker in the world, and caught the eye of the management team at Honda when they were looking for a joint venture partner to help manufacture motorcycles.
Abhimanyu Munjal takes up the story: “They wanted local knowledge and technical know-how; what they didn’t expect to find was an India business that was already more advanced in ‘Just-In-Time’ manufacturing processes than they were. When they came to our factory they found no inventory. We didn’t store finished goods, and we didn’t store raw materials. They told us this was ‘Just-In-Time’ but as far as my grandfather was concerned, it was just smart business practice.”
“And that’s why they gave us the contract, even though we weren’t the biggest player. The first motorbike rolled off the production line in 1984, and today we are the largest manufacturer of two-wheelers in the world, making about 6.8 million motorcycles a year, and we’re well on the way to becoming a global brand.”
There are five members of the current generation working in the Hero Group, and the family has empowered each of them to come up with their own idea for a business, to sit under the Hero umbrella.
“We were all given that chance, the family has faith in us and gave us the freedom to create something of our own, as long as we meet certain criteria in terms of investment returns, and so on.”
As a result Hero has become extremely diversified, from renewable energy to education, electronics, as well as the original motorbike business, and, in Abhimanyu’s case, financial services.
“After university in the UK, I worked for two international banks for a couple of years before joining Hero in 2007. But it then took me five years to find my passion. I started with an idea for an insurance business, which didn’t work, then I was in the auto components division for a while, but I knew it wasn’t my real niche. So I went to my family, and asked them for money to set up a ‘next generation’ approach to financial services. They considered it, and reluctantly agreed, and that’s how Hero Fincorp was born. Since then, I’ve been involved in every part of the business from designing the strategic plan, to hiring every single employee. And in the last four years we have been incredibly successful.”
There’s clearly an advantage having the Hero name behind the business, but there’s a big responsibility too: “It’s scary sometimes, how much one wrong decision can dilute the brand. People think it’s easy for people in our family, but there’s so much more riding on everything you do, and it would be a much bigger deal to fail as part of the Hero Group than to fail as a small independent start-up. The outside world looks at you very differently too, and they’re watching your every move so you’re juggling a huge number of different expectations –your family’s, your employees’, and the external world’s as well.”
But being part of a successful family business has enormous advantages too: “The fast decision-making, the nimbleness, the agility of the company are all major positive factors, as it the engagement your employees feel because they’re part of ‘the family’. But on the other hand, change management is a challenge – the family may be reluctant to do things differently because they’ve been doing it that way for 30 years. But life is dynamic. It’s not the same as it used to be. Our generation wants to go digital, use more technology, take more risks. And in many ways it’s easier for our generation because technology is a fantastic enabler, which makes it easier to do business at a lower cost. That’s why I love what I do: success is the most addictive drug in the world. There’s nothing like it.”
About the Authors - This insight was part of the PwC global report, The Next Generation of Family Business Leaders which was published in 2016 and has been reproduced with their permission. You can read more of the report here