Saturday, March 16, 2013

Calamity or Opportunity?

In the post titled "From Post cards to Chappatis" (Please click here to read it), I had mentioned about how marketing opportunities are en-cashed by the wizards who lead by examples.  Another such stalwart who is a role model for budding entrepreneurs was one who converted calamities like epidemics and wars into business opportunities to give a thrust to his marketing forays and built a business empire of his own.

A calamity is defined as a great misfortune or disaster, especially one that causes extreme havoc, distress or misery.  Epidemics in the form of dreaded diseases like Plague and Cholera have consumed millions of lives in the early part of 20th century.  Wars are no less severe in bringing such distress and pain.  Opportunity is defined as an appropriate or favorable time or occasion for an attainment of a goal.  Is it possible to convert such epidemics and wars into an opportunity?   Rai Bahadur Mohan Singh Oberoi has showed that calamities of epidemics like Plague and Cholera as well as wars can be converted into opportunities, with foresight and hard work.  Acting smartly during such adverse times, from a penniless hotel clerk he rose to become a pioneer in luxury hotel industry.  His life story makes an excellent case study for students of marketing.  It is true that every salesman who reads his case cannot become another Oberoi.  But the case can motivate them to think out of the box and see an opportunity even in calamities.

Mohan Singh Oberoi was born on 15th August 1898 in village Bhaun, near Rawalpindi, in the undivided Punjab.  He used to mention his year of birth as 1900, two years later, and it was believed that this was because he did not want to be seen as dating from 19th century.  He could study only up to Matriculation due to family financial constraints and worked in a shoe factory as a supervisor.  The factory too closed down due to losses but taught him to always wear shining shoes.  He was forced to move out of his village due to the deadly Plague that hit Punjab and killed thousands.  Recently married, he moved with his wife to Shimla.  He chose Shimla because it was the summer capital of the Britishers who were ruling the country.  His knowledge of typing and shorthand skills and well-knotted tie and shining shoes got him a job in Cecil Hotel in Shimla.  Some years later when his boss wanted to sell the Hotel, by then known as Clarkes Hotel, he mortgaged his wife's jewellery to buy his first hotel.  From then he went on adding more hotels and at his death  his empire comprised of 35 hotels spread over India, Srilanka, Nepal, Egypt, Australia and Hungary.

Calcutta's famous "Grand Hotel" was closed down in the aftermath of the Cholera epidemic in 1933.  More than a hundred foreign guests died in the outbreak of the disease.  The hotel remained closed for five years due to fear of the epidemic lying latent in its water supply system.  M S Oberoi found an opportunity here and took lease of the hotel by raising funds from relatives and friends. When hotel owners talked of Goodwill, he silenced them by arguing that he be paid compensation as the place only carried Illwill and not Goodwill due to its history of deaths due to Cholera!  He got the entire water supply system thoroughly cleaned and yet guests were unwilling to arrive.  He promised incentives like cheap or free boarding facility to attract customers.  By that time Second World War had started and Calcutta was the pooling place for troops to fight on the eastern borders.  The government had the authority to acquire any building for war purposes.  He apprehended  that the hotel could be a potential target.  He improvised 1200 beds at the hotel and approached the authorities with an offer to provide accommodation for the soldiers at rupees ten per soldier per day.  The offer suited the war managers as they were free of the botheration of managing rations and food supply.  The losses in room rents were made up by charging extra for other facilities provided to the soldiers.  This ensured full occupancy of the hotel during the war period as well as avoiding losing control of the hotel.  British Government honored him with the title "Rai Bahadur" in 1941.  In 1943, he started to secretly buy the shares of Associated Hotels of India Ltd.  They were the days of  "Share Certificates" (Demat was not yet born) and he walked into the Annual General Meeting  of that company with canvas bags full of share certificates and presented them to directors.  Controlling interest passed into his hands from Spencer & Co and his hotel chain expanded further. 

M S Oberoi is also credited with bringing many changes in the hotel industry and providing comfort to his guests at the hotels.  His introduction of chambermaids in 1957 with vacuum cleaners in their hands raised a furor and was debated even in Parliament.  Probably this led him to try his luck as a parliamentarian and he won a seat in the Rajya Sabha 1n 1962.  He won an election to become a member of the Lok Sabha in 1967 and returned to Rajya Sabha in 1972.  He lost four Hotels in Pakistan during the 1965 war, but raised money in Saudi Arabia to invest abroad in new hotels.  He chose this route due to tight money controls in force in India then.  His partnership with Inter-continental group in 1965 started the Oberoi Intercontinental.  From then on, he specialized in spotting and refurbishing run down and undervalued properties and expand his hotel chain.  His service to the industry was recognized by his peers by making him as the President of Hotel and Restaurants Federation of India.  He was awarded Padma Bushman in 2002.

He believed that "too often efficiency and high standards once established are taken for granted" and hence made personal checks of how his hotels were run.  Called "Conrad Hilton of India", his belief in business is summed up in his statement "You think of money and you cannot do the right thing.  But money will always come when you do the right thing".  He lived a full life and died on 3rd May 2002, at age 103.  Even by his admission of year of birth as 1900, he lived for 101 years and was active throughout his long life.  An active life this long is itself a great achievement, even if other successes are not counted.

10 comments:

  1. Sir your command on language is so good that a known story becomes more interesting to read

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  2. this article should be known to our youth

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  3. Innovative thinking,success among failures,determination and patience are reflected from the life of sri.M S Oberoi. This is a good example to be followed by young enterprenuers.

    umesh

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  4. sirji, Namaskar. I wonder, how and where are you getting these ideas? Murugavel

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  5. Wonderful narration of events of a great successful businessman. A real lesson not only for the business community but one and all to be successful in life.

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  6. Liked reading it..Thanks for sharing

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  7. Sir, Firstly I thank to you because this type of stories encourage me. You have great exprience..

    Brijesh kumar 04th batch BMSB

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  8. Sir,thanks for sharing such an inspiring post........

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  9. Dear Sir, the venturing spirit of Mr.Oberoi should be a great motivation for all of us... thank you very much for sharing such a wonderful story...

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