MD's resignation over political interference bodes ill
Business Standard / New Delhi Jun 23, 2010, 00:51 IST
The abrupt resignation of B M Vyas, managing director of Gujarat Cooperative Milk Marketing Federation (GCMMF), which owns the Amul brand, several months before his term was to expire, signals a storm brewing over one of the most successful business experiments that India can truly call her own. On the face of it, there is nothing amiss in Mr Vyas laying down the mantle, which he has been carrying for over a decade, and particularly when he has reached 60, the usual age of superannuation in India. There is also no reason to believe that GCMMF is devoid of a second-rung leadership and Mr Vyas is personally indispensable. Hence a properly planned succession should have been already in the works. But this is not how events have unfolded. The provocation for Mr Vyas to put in his papers is apparently the Gujarat government decision to appoint state auditors for GCMMF instead of picking one from the panel of private auditors maintained by the cooperative. This act of the state government appears to be mischievous as there are no serious charges of financial irregularities floating around in the public space. Thus, political interference, or the threat of it, is what appears to have prompted Mr Vyas to throw in the towel. The GCMMF board is made up of political bigwigs of different hues but a government move to destabilise something so closely linked to Gujarat’s pride as the Amul story cannot have been allowed to happen without a nod and a wink from the highest authority.
Parts of GCMMF’s present woes go back to the stubborn refusal of its visionary leader V Kurien to undertake proper succession planning and, instead, over-staying his welcome well into his eighties. The legendary father of India’s white revolution succeeded because he was able to function as a visionary manager without political interference in a cooperative setup, thus combining the best of professional management and stakeholder ownership. The lack of political interference enabled the Anand-type cooperatives to succeed when others didn’t. Plus, the absence of a need to keep outside shareholders happy enabled GCMMF and its constituents to cock a snook at competing private dairies. However, Dr Kurien weakened the organisation he created by sticking to the saddle and not handing over the reins in a professional manner to the highly regarded Amrita Patel. The subsequent differences between GCMMF and the National Dairy Development Board (NDDB), that Dr Patel has led with distinction, have left an avoidable trail of problems that have hurt the pride and performance of both the institutions. Mr Vyas, who succeeded Dr Kurien and operated with his mentor’s autonomy, has had the distinction of successfully introducing new value-added products like ice cream and not rely entirely on the sale of liquid milk. This helped GCMMF take on the challenge posed by NDDB and Mother Dairy. While GCMMF perfected the model in one state, NDDB secured the mandate to take the model national. If both the siblings created by Dr Kurien start to go downhill, then that would be a national tragedy which must be avoided at all cost.
Apropos the statement that Mr Vyas, who succeeded Dr Kurien and operated with his mentor's autonomy, has had the distinction of successfully introducing new value-added products like ice cream and "not rely entirely on the sale of liquid milk", it may be noted that sale of butter, milk powder, etc. were commenced during Kurien's time. The successful production of skimmed milk powder from buffalo milk ? the first time on a commercial scale (now 100 MTPD) anywhere in the world ? despite being strongly warned by foreigners that the R&D work on the same (buffalo milk) would end up in failure - is an incontrovertible fact.
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