It’s easy to spot Madhur Daga’s passion. Articulate and spirited, the executive director of Orient Bell Limited (OBL) is a great interview subject in any case. But, it’s when talking innovations and patents that he gets most animated. Little surprise then that Orient Bell, has four patent-pending tile products, the uniqueness of which Daga is wont to explain in vivid details. Much like OBL’s tiles have laid out floors in buildings such as the Rashtrapati Bhavan, the company seems to be patterning its rich 40-year old history with bold strokes of growth with acquisitions, contract manufacturing and a pipeline of imaginative products. OBL also stands out for its well-articulated anti-bribery and whistle blower policies. In a conversation at his company’s Greater Kailash showroom in New Delhi, Daga talks freeely on much of this.

 The past three years have been very significant for us. To begin with, we made our first acquisition in December 2010 when we bought over Bell Ceramics, a tile player with a strong base in the West, and a network in the South for `120 crore. Orient Ceramics, which is what we were called then, was primarily a North India company. It’s why the Bell deal was so compelling for us—overnight, we became a pan India player with three manufacturing bases in Hoskote, Secunderabad and Dora. Anyone who knows about the tile business will tell you that since tiles are so heavy, no one has been able to figure out a cheaper way (other than incurring a huge amount of freight charges) to send tiles from Point A to Point B. You have no choice but to be close to your consuming geography.

The south and the west of the country are both deep, rich consumers of tiles, and buying Bell Ceramics gave us a way to tap this demand with the lowest time to market, and lowest freight costs.Needless to say, the integration was a challenge. Human beings are generally resistant towards change. But, I’ve figured out that education is what beats that anxiety. To educate the people about what the future has in store for them, it’s important to talk to them, to engage with them. We did exactly that.

It’s great to be professionally managed but with that if the entrepreneur demonstrates interest in the business, it creates an instant and abiding engagement.

Also, one of the things that really helped, I think, was that apart from our management teams going to the plants, I would make it a point to visit them once a month. I still do. For the Bell team, that was a surprise. The earlier promoter family wasn’t involved in the plant. They had several other business interests, including running the Hyatt hotels, and the Four Seasons in Goa. Their energies were focused on that business, and Bell was actually on autopilot; it wasn’t a priority. The employees never saw the promoters.

You know, it’s great to be completely professionally managed but with that if the promoter demonstrates interest in the\ business, it creates an instant and abiding engagement. Because the people at the plants saw me every month, and knew I took the time out to visit them even though I lived in Delhi, not only did it create the bonding we wanted, they also realised how central their efforts were to the company. Through this integration, I’ve learnt a key business lesson—communication can change businesses and transform companies.

Because we communicated clearly, and often, we could articulate that we weren’t going to lay people off. We didn’t want to eliminate or eradicate jobs. Instead, the company was bought because we believed in the synergies there were, and the competence of the team at Bell. When you are transparent and let people know what lies in store for them, they respond positively. At the same time, within a few months, people understood we were not very tolerant to those people who became stumbling blocks to a smooth integration. Those people were let go off. When you take action towards people justifiably, it sets a good precedent.

Another thing that worked in the integration process was the company being renamed Orient Bell. The Bell brand had a lot of goodwill in areas where Orient wasn’t strong. So, we had a choice, either we could invest money in making the Orient brand stronger in our new markets, or we could invest a little bit of money in making sure the Bell brand sustains and strengthens. We decided to name the company Orient Bell. It demonstrated our respect for Bell, and the company became a permanent part.

Fortunately, our strategy and our plans worked. Within the first year after the acquisition, Bell and OBL consolidation was in the black. Also, Bell which was in the red turned a corner. I think that was a tremendous achievement for us. But, the excitement at Orient Bell isn’t limited to merged balanced sheets, and positive numbers. I am a product development guy at heart. For me, no matter how good our balance sheet is, or how many cool write ups we get in the media, the most important bit is how you touch us through our product when you come to our showroom. Our customers don’t care who Madhur Daga is. They don’t care about our anti-bribery and whistleblower policy, all they care about is—do I want this product in my bathroom and bedroom? That’s my role at the company—to make sure our products are current and we stay with the time. So, we very proudly claim that we have four patent-pending tile technologies such as our Forever Tiles (our highly abrasive resistant, stain resistant and long-lasting), Germ Free Tiles (anti-microbial), Cool Tiles (invented to reflect back solar heat, and reduce a building’s cooling requirements), and Life Tiles (that removes noxious gases from inside a building). That is the excitement for me—this marriage of creative technology and creative design from our partnerships with design studios in Europe, and our local engineering. I’m glad that over the past few years, I’ve been able to focus more and more on products. Our CEO, Vijay Shankar Sharma, focuses on the strategy, and the operations. And, because I have him and his great team to do that, I can sit back and look at what we should develop next. Ultimately, you have to play to your strengths, and R&D is mine. That strength can differ from MD to MD, CEO to CEO. You have to know yours.

Beyond that, what gives me most satisfaction are the reinforcements we’ve made in the values we believe in. On the context of corporate governance, I can tell you unequivocally that we would be the best in the industry. I believe that. My father, who founded the company, brought us up to believe that no matter how much money you make or don’t make, you need a good night’s sleep. You cannot be going to bed thinking that regulators, or press reporters will be at your doorstep next morning. In the market and an environment like India, slipping up on corporate governance can very easily happen. You get tempted because apparently everyone does it. We have a simple acronym for the set of values we believe in—IQCAPP, which stands for integrity, quality, customers, agility, partners and performance.

Orient Bell has a simple acronym for the set of values the company believes in—IQCAPP, which stands for integrity, quality, customers, agility, partners and performance.

Our anti-bribery and whistleblower policies are a continuation of our focus on integrity. I don’t want people to think that someone in the company read something cool online, and we said, let’s do it. No, this is something that began in 1970 without a policy, then refined itself when we articulated our core values of IQCAPP, and then we felt a policy that puts forth our beliefs was important. See, in every company in any industry, especially in manufacturing, the purchase department has the most dirt thrown on it. We wanted to address that. Of course, I’m not saying that just because we have an antibribery policy, no one inour company will ever take a bribe. That’s impossible to claim—just because you have a lock at home doesn’t mean someone is not going to break it. But, laying the policy out has told everybody about the consequences of slipping up. Real disincentives are very valuable.

So, once the policy got formed in early 2012, and we got approval from our Board, it was circulated to all employees with a note from our CEO saying, “Go through it, your life depends on it.” We are very proud of having done this. We don’t want people to think that Orient Bell has implemented this because bribes were rampant in our company. That’s not true at all. The policy is pro-active. It shows the strength of our commitment to our people, and tells them, “Management believes in you, go do the right thing.” 

Now, when someone takes a bribe or thinks about taking one, he, at least, has the thought that he is breaking a golden tenet that in this company is written in blood and stone. There is no ambiguity. Often, people get tempted because there is no one to watch over them. We also have the Whistleblowers Policy, a five-page document that has also been approved by the Board. Anybody can write to the audit committee, or to the chairman directly, and be assured that their input would be completely anonymous, and their interests protected.

I’m confident that our people will feel empowered to do this. That is definitely in transition. If you ask me, is everyone in your company empowered? Yes, they are empowered but do they have the mindset to do it, to speak up, to stand out? Maybe not everybody! But how can I change that other than by reiterating and repeating that they can come talk to me. Things are changing—for example, I’ve had various executive assistants for the past 12 years. Over the past year and a half, this is the first time I have had an executive assistant who calls me by my first name. I love that. I have tried it in the past but then I can’t put a gun on our head and say, “Don’t call me sir!” Now, there are 10 people in the company who call me by my first name. There are 950 people who don’t but I won’t accept that it’s not because I don’t want them to.