YC Deveshwar's climb to corporate success

YC Deveshwar's climb to corporate success

 

He was born on 4 February 1947 to Chander Deveshwar. He received his BTech Degree in Mechanical Engineering from the Indian Institute of Technology, Delhi in 1968 and immediately landed a job at ITC (earlier known as the Indian Tobacco Company) as a management pupil (trainee in today's lingo). It was the first step in a slow climb to the top, one which would familiarize him with virtually every major city in India. In 1972, he was appointed MBO advisor to corporate headquarters in Kolkata. In 1974, he took over as factory manager in ITC's Packaging and Printing Plant in Chennai. Four years later, he became the general manager of ITC's Packaging and Printing Division.

 

The biggest turning point for this entrepreneurial career professional however came in 1984 when he joined ITC's board of directors, taking charge of Welcomgroup (Hotel Division) as its chairman. Building flagship hotels in Delhi and Mumbai, he used his wide social network to make the hotel chain the place for happening people. Today, some of the hotels are run in partnerships with leading international chains (such as Sheraton), others are fully run by ITC, and the branding has changed from Welcomgroup to ITC. Yogi's passion for the hotel chain is evident in the fact that once he got the job, he actually enrolled at USA's Cornell University for the Advanced Training in Hoteliering and Services course.

 

Few CEOs bother with formal functional training once they are at the top. Yogi then pioneered the first private sector Degree Institute of Hotel Management, the Welcomgroup School of Hotel Administration, Manipal and received the Hotelier of the Year Award in 1986 for his outstanding contribution.

 

1991 saw two major turning points: the company appointed him chairman of ITC's Indian Tobacco Division and Indian Leaf Tobacco Development Division; the government handpicked him to be Chairman and Managing Director of Air India. ITC gracefully allowed him leave to spend more than half his time battling an unwinnable war. Though Yogi was not successful in turning around the declining fortunes of the national carrier, he tried to push forward the idea of merging Indian Airlines and Air-India and then privatizing them as a joint entity.

 

Back at Virginia House, Yogi took over as ITC's chairman 1996, at a time when the 84-year old company was neck deep in crisis. Former chairman KL Chugh had unfurled an array of diversifications (financial services and power, among others) in the face of strong resistance from parent company BAT (the UK based tobacco major has a 33% stake in ITC), who insisted that ITC stick to BAT's core businesses. During this period ITC became embroiled in a foreign exchange fracas. Almost the entire board, with the exception of Yogi and Bhaskar Mitter were taken into custody by the enforcement authorities, and the non-executive directors started questioning the transparency of ITC's operations.

 

On taking over as chairman, Yogi had to use all his skills and fight a messy battle with BAT - the single-largest shareholder in ITC - to regain management control of the Indian company; rebuild ITC's reputation among the media and the investor community; get out of the financial services business by selling off ITC Classic to ICICI's KV Kamath; and refocus management's attention to actually running ITC. Promising businesses such as hotels, and paper and paperboards had begun to suffer badly from lack of attention.

 

Partly the problem lay in the way the group's top management was structured. The board was directly responsible for executive decisions. For instance, there was a director in charge of tobacco, one in charge of finance, another in charge of financial services, one for paper and printing, and one for IBD. This led to serious turf battles; since tobacco was the main earner the director in charge obviously wielded a fair clout. As it happened, he was also close to BAT.

 

Yogi not only managed to stave off BAT's takeover attempt, but also restructured the company. The number of executive directors was reduced and the board became the strategic management arm of the company, and not the executive one. Executive decisions were left to the various business divisions, headed by a chief executive-led divisional management committee.

 

"We developed a decentralized structure with distributed leadership," Yogi explains. He also changed the way in which ITC looks at each of its diversifications. Each is now carefully incubated before being launched. And more important, each one of them is based on a blend of skills that the company already has. Yogi likes to call the new ITC "a holding company with a venture capitalist mindset".