Lala Shri Ram


Lala Shri Ram
Born 27 April 1884
India
Died 11 January 1963 (aged 78)
Nationality Indian
Religion Hindu
Spouse(s) Phoolan Devi
Children Murli Dhar, Dr. Bharat Ram, Charat Ram
Parent(s) Madan Mohan Lall and Chando Devi

Lala Shri Ram (April 27, 1884 - January 11, 1963) was one among the first generation of Indian businessmen under whose leadership the DCM, the erstwhile Delhi Cloth & General Mill and North India’s first textile mill grew, diversified and achieved national prominence. Beginning as a humble worker in Delhi Cloth Mills at a young age, he not only turned it around in a matter of years but also went on to set up one of India's largest business houses - the DCM Group. Born into a family of modest means, Lala Shri Ram, in the 79 years of his life, built an industrial empire manufacturing a vast variety of goods like - textiles, sugar, chemicals, vanaspati, pottery, fans, sewing machines, electric motors and capacitors. He was not only a successful industrialst but a great educationist as well. Though a modestly educated himself, Lala Shri Ram set up some of the premiere academic institutes of the country such as Shri Ram College of Commerce (SRCC) and the Lady Shri Ram (LSR) College in Delhi. As a firm believer in human values, Lala Shri Ram scrupulously pursued a business policy which had its foundation based on intellectual integrity, devotion to duty, and a liberal humanism directed towards the well-being of all sections of Indian society.

Early Years

Born in the joint bania family of Delhi, who were the descendants from Jhajjar and earlier worked as koltwals under British rule, Lala Shri Ram had a very simple and ordinary childhood. Though the kotwals at the time of Lala Shri Ram’s birth were one of the leading businessmen of Delhi, they were certainly not wealthy by any means. The moderate wealth of the family coupled with the upbringing of joint family system did not allow Lala Shri Ram to live any extravagant life in his formative years, a trait that remained with him till his last days even after he became an industrialist of national repute. In 1890, when he was barely 6, Lala Shri Ram was adopted by the widow of his uncle, Girdhari Lall, who had no children. In the ensuing period, his parents, Madan Mohan Lall and Chando Devi were blessed with two more children, a girl, Kalavati and a son Shankar Lall.

Education

Lala Shri Ram learnt the basics of reading, writing and arithmetic at a municipal school in Bazar Sitaram in Delhi. Later in 1896, he was sent to Anglo-Sanskrit School at Charkhewalan from where he matriculated in 1900 with third division marks. The death of his grandfather, Bishamber Dass and the deteriorating health of his uncle Girdhari Lall, probably impacted his performance in the examination. Though he took admission in Intermediate course in arts, the urge to work overtook him and he left the course six months later. The deteriorating condition of the family’s fortunes was another reason why left his studies. Later in life, he would often joke, “I haven’t done too badly, have I, for a third- division matriculate.”

Family

In 1900 Lala Shri Ram got married to Phoolan Devi, the daughter of Bhagwan Dass, a filigree merchant of Dariba Kalan. They had three children namely, Murli Dhar, Dr. Bharat Ram and Charat Ram. The eldest son, Murli Dhar was entrusted to manage DCM’s cotton mill at Lyallpur (now Faisalabad) which eventually went to Pakistan. But in a tragic incident in 1949, Marli Dhar who had gone to Pakistan with his wife Swaroop Devi, died in a plane crash on his way from Lahore to Karachi. Dr. Bharat Ram and Charat Ram joined the business in DCM after graduating from St. Stephen’s College.

Tryst with Business

Beginning his career on a monthly salary of Rs. 25 as a shop hand at Mohan Brothers, a well-known textile retail firm in Chandni Chowk in Delhi, Lala Shri Ram first started saving for his entrepreneurial venture. He thus pooled his savings with those of his friend and started a stationery shop, which failed miserably. He then partnered with his brother-in-law (sister’s husband) and set up a ginning factory at Alwar, which again did not survive for long. Having failed in two of his entrepreneurial ventures, Lala Shri Ram took up a clerical job with a firm of contractors Rai Bahadur Singh and Sons of Rawalpindi, who used to supply tents for the coronation Durbar of 1911. This is where Lala Shri Ram impressed the owner of the firm, Boota Singh, who on finding out that he belonged to the family of one of the founders of Delhi Cloth and General Mills, chided Lala Shri Ram’s father for ignoring his son’s talent.

Initial Years at DCM

On Boota Singh’s request, Madan Mohan Lal, the father of Lala Shri Ram, who was the Secretary of DCM then agreed to allow him to join the company. Lala Shri Ram thus entered the company in 1909, which was not doing well at that time. But Lala Shri Ram would receive no salary. A lot was happening in DCM around this time. DCM had begun to do badly one more time. The momentum given by the Swadeshi movement petered out by 1907. The board noted in the company’s annual report for 1909, “the worst in the history of the cotton industry all over the world.” And there was a change of guard at DCM after 20 years. Madan Mohan Lall, Lala Shri Ram’s father, had replaced Gopal Roy as the secretary in 1906. The economic scenario worsened with the whole of North India slipping into a financial crisis in 1913. The two major mills namely Krishna Mills and Jumna Mill in North India also had to down shutters.

On joining DCM, Lala Shri Ram was initially given the responsibility of handling the accounting department. He would walk from home to the mill. He would invariably be the first to enter and the last one to leave the compound. He would scrutinize the accounts for some time and they go to the mill. This helped him forge an unbreakable bond with workmen. No wonder, Lala Shri Ram knew the names of almost all the workmen, who were in few hundreds in number.

Lala Shri Ram soon acquired a firm grip on the commercial aspects of the business, a quality which earned him in his formative years in DCM a responsibility of managing the company’s ginning mill which was not doing well. There was too much ginning capacity around the cotton fields of Punjab. Lala Shri Ram took up the challenge with gusto. To motivate the workers, he mooted an incentive scheme for them, which was not approved by the board due to the dwindling fortunes of the company. Still, this would become the hallmark of Lala Shri Ram’s way of work in the years to come. After the ginning mill, Lala Shri Ram had little difficulty in persuading his father and the DCM board to let him take charge of other departments as well: Engineering, carding and spinning. By 1912, Lala Shri Ram had become the de facto secretary of DCM. He was a workaholic and knew the mill inside out and had a head for business.

First World War: Turning Point

The first World War for the first time brought the business acumen of Lala Shri Ram to the fore. It was around this time, Lala Shri Ram decided to divert the Dosuti (generally used for making coarse garments) and Niwar (generally used for making cots) for making tents and supply the same to the Indian army. He saw a business opportunity to serve the Indian defence for two reasons: one the army contracts were large and profitable and two, the railway authorities gave preference to the transport of goods for military use. Realising that all the major contracts for the army were arranged and supplied through middlemen, Lala Shri Ram came up with a grand proposal that DCM should take up an additional role of a middleman. A three-way partnership was thus formed among DCM, Diwan Chand, who had a going organization for the supply of army’s requirements, and Madan Mohan Lal who was the father of Lala Shri Ram. As per the agreement, DCM would produce tents, Lala Shri Ram in his own capacity would procure additional items as needed by the army and Diwan Chand would continue to supply these items to the army. The profits from these three streams would be pooled in and shared in the ratio of 50% to DCM, 30% to Diwan Chand and 20% to Madan Mohan Lal. DCM’s profits from the army contracts thus soared opening a new chapter in the history of the company. The company had enough money to modernize and expand as well. With higher profits, the DCM share price too began its northward journey, rising from a face value of Rs. 250 to about Rs. 1000. It was time for the Kotwals to stand up and get counted amongst the city’s wealthy people. From a few thousands, their worth was now in lakhs. Lala Shri Ram had arrived in life.

Evolution of the Company

A major fire in the DCM factory in April 1920 provided Lala Shri Ram an opportunity to begin the reconstruction of the mill. He replaced the old machinery with new. Emboldened by the success, Lala Shri Ram in 1923 put up another proposal to set up a bleaching plant and a dyeing plant with state-of-the-art facility. His idea was to transform the company from a 19th-century outfit to a modern 20th century company. The two plants, which went on stream in 1924, made DCM a self-sufficient in yarn. The same year, Lala Shri Ram went to the board with another proposal to set up a new mill adjacent to the existing mill and the mill was ready within a year by 1925.

Over the years, DCM grew and diversified into the following businesses under Lala Shri Ram: 1932 entered the sugar business 1934 provided financial support to revive Bengal Potteries situated in Kolkata 1934 set up Pakistan’s first’s textile mill, Lyallpur Cotton Mills at Lyallpur (now Faisalabad) 1938 took over Jay Engineering Works which manufactured Usha sewing machines 1940 set up DCM Chemical Works 1945 became the first company to make fertilizer in the north 1948 set up first textile mill of independent India on Najafgarh Road in Delhi - Swatantra Bharat (Independent India) Mills

Mill in Pakistan

Lyallpur Cotton Mills set up by Lala Shri Ram in Pakistan was nationalized after the 1965 war with India and was run by the Pakistani government. But it fell on bad times and the factory was mothballed. Later, the company was sold for its real estate.

Business Principles

Lala Shri Ram believed that a good manager is one who knows the work his people do; and that can happen only when he dirties his hand on the machines working alongside them. This also helps the manager empathize with the worker. Thus, Bharat Ram entered the factory from the same gate as the other workers, cleaned and mopped the floors, worked the machines and put in hard manual labour. Once Lala Shri Ram advised the famous Kirloskar of the Kirloskar Oil Engines, “In business, you should never rely on one or two markets. Diversify your market, and spread it over a large area, so that if sales in one area slow down, the other areas can sustain us.” His advice on financial matters was equally sound, “Don’t rely on limited sources of raising finance.” On another occasion, Lala Shri Ram wrote to a CEO of one of his companies while responding to a proposal for a fresh investment in a lucrative business, “In life we must have some goal; our goal should not be to make money at the cost of our regular business. The proposal must definitely mean the diversion of the energies of all of you. No doubt in whatever we do the money motive is there, but there is a better motive and that is to serve the country by producing things which have not yet been produced. If I had cared in my life to get rich quickly, I might have perhaps taken to speculation and stock exchange and become either a multi-millionaire or a beggar.” His views on mamaging the operations were also very clear: “My lifelong experience is that it is better to have a bigger turnover at lower costs and lower prices to the benefit of the manufacturer, the dealer, the agent and the customer.”

Concern for People

Lala Shri Ram always believed that a factory could not survive with unhappy workmen. He was arguably the first businessman, with perhaps the only exception of Jamsetji Tata, to undertake labour welfare at a large scale. He not only built quarters for workers, but also ran a hospital for the employees. He constructed parks, gymnasiums and schools for the workers and their children. Apart from a provident fund, he helped open a special fund for the marriage of the daughters of the workers. He also helped create the Workmen’s Trade Union in DCM. For managers, Lala Shri Ram instituted a profit-sharing scheme if they met their targets. Such was his love for the workmen that when his second son, Dr. Bharat Ram got married in 1935, the entire DCM workforce was invited for the dinner. Further in 1938, when he returned from a trip to Euorope, he presented a European watch to each of the 6000 workmen of DCM.

Concern for Customers

Lala Shri Ram would often be heard saying, “A dissatisfied customer is worse than 20 satisfied customers.” In fact, even when he was new and just managing the accounts of DCM, Lala Shri Ram, on his way back home from the plant, would often stop at few cloth shops or dealers and enquire about the quality of DCM’s cloth and provide the feedback to the plant.

He stressed a lot on market development and customer feedback. Once after visiting an exhibition for potteries, he wrote to the CEO of Bengal Potteries, one of his companies, “I went to see an exhibition yesterday, but I found that the goods prepared at Benares University and the goods sent by Gwalior Potteries were far superior to our toys, cups etc.” He further wrote, “Regarding the teapots, sample of which have been received yesterday, people complain of the colour and roughness.”

Lala Shri Ram opened exclusive stores for DCM clothes in several cities making DCM a household name. His rationale was to get as close to the customer as possible.

His views on customer satisfaction was amply clear: “If we tell our customers beforehand what the defect are they will not be displeased with us and will know that we have treated them fairly. On the other hand, if we sell our things by telling them that they are absolutely first class and later on, when they will discover that the goods are defective, they will think we have cheated them.”

Contribution to Industry

His election in 1930 at the age of 46 as president of FICCI was the first intimation of his national stature. The same year under his leadership, FICCI resolved at its conference in Mumbai that it would not send a representative if the roundtable was not attended by Mahatma Gandhi. He also got Mahatma Gandhi inaugurate the annual general meeting of FICCI in 1931 where Lala Shri Ram appealed to the British businessmen to stop discriminating against Indians.

Lala Shri Ram was also instrumental in government granting protection to the domestic sugar industry by raising the duty on imported sugar in 1932.

As a great proponent of industrial research in India for the growth of Indian industry, Lala Shri Ram set up the Shriram Institute for Industrial Research in 1947 that became operational in 1950.

The Government of India in 1952 appointed him as one of the two members from the private sectors on the board of the public sector Sindri Fertlisers & Chemicals. Lala Shri Ram then went on to become the Chairman of the public sector firm in 1957.

Advocate of Quality Education

As early as 1921, Lala Shri Ram demanded free and compulsory education for all. During his life, Lala Shri Ram’s main emphasis was on vocational, technical and women’s education. In 1920, he had decided to conduct first experiment in vocation-oriented education by founding the Commercial Education Trust. Over the next 40 years the trust set up no less than seven schools including Shri Ram College of Commerce (SRCC) and the Lady Shri Ram College (LSR), both in Delhi. Both the colleges are recognised as one of the best academic institutes of the country.

Lala Shri Ram was also made a member of the seven-member committee of the Planning Commission that laid the blueprint for technical education in the First Five-Year Plan. Subsequently in 1955, he was also invited to the planning committee of the Administrative Staff College in Hyderabad and the National Institute of Management in Kolkata.

Contribution to Society

Lala Shri Ram’s desire to do something for the city earned him a rare recognition to be the first Indian to be elected as the Vice-Chairman of the Delhi Municipal Committee in the 20s. He was also one of the seven architects of the Bombay Plan of 1944-45. The others were JRD Tata, Birla, Ardeshir Dalal, Kasturbhai Lalbhai, Ardeshir Darabshaw Shroff and John Mathai.

Contribution to Art & Culture

After independence, once the princes stopped patronizing the classical artistes, Lala Shri Ram took up the responsibility with full dedication and commitment. He would often play host to many of the leading artistes of that era such as Pt. Uday Shankar, Ustad Ali Akbar Khan, Ustad Alauddin Khan, Pt. Ravi Shankar. Gradually his passion for the music, art and culture grew and encouraged his daughters-in-law to set up some of the leading institutes of the country namely Shriram Bhartiya Kala Kendra in 1952 and Shri Ram Centre for Performing Arts in 1958, both in New Delhi.

Knighthood

The British Government in recognition of his contribution to the society bestowed on Lala Shri Ram the prestigious knighthood in 1941. In was an honour that made him Sir Shri Ram.

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